Addiction Recovery Care of Kentucky (ARC) will no longer be the operator for the new substance abuse treatment center in Dickenson County, which was completed in January but has yet to open.
County officials announced in a news release Thursday that they have signed an agreement with a new company, Momentum Recovery and Wellness, which has an office in Louisville, Kentucky.
The announcement was made one day after ARC, which has been under an ongoing FBI investigation for more than a year, announced that it is being acquired by Ethema Health Corp., a Florida-based company.
The change in operators has been in the works for several months because it was taking too long for ARC to get the license from the state needed to get the facility up and running, said Dana Cronkhite, executive director of the county’s industrial development authority.
“Ultimately, we changed operators because we felt like the process wasn’t moving as quickly as we needed it to. We’re ready to open,” she said Thursday night.
Wildwood Recovery Center is a 112-bed residential recovery center for men in Clintwood. Construction is expected to start soon on a new health center that will be built next to the recovery center. Plans to open a facility for women at an old school in Nora have been put on hold until Wildwood is operating, according to Cronkhite.
The county has been working for five years to open the treatment center. Dickenson has one of the highest drug overdose death rates in the state coupled with one of the lowest worker participation rates, which leaders there attribute in large part to the substance abuse crisis.
The plan for Wildwood is to help people get off drugs so they can recover and then give them job skills that will lead to employment and economic growth, a process ARC has been successful with in Kentucky. That plan will continue with the new operator, according to Cronkhite.
Greg May, of Southwest Properties in Kentucky, remains the developer. May developed four addiction treatment centers in Kentucky, all operated by ARC.
ARC, a for-profit based in Louisa, Kentucky, announced in February that it had filed an application for a license to operate a residential treatment center from the Virginia Department of Behavioral Health and Developmental Services. In May, ARC CEO Tim Robinson said they expected to get license approval in September and open in early 2026.
A call to the state behavioral health department about the application process wasn’t immediately returned on Friday. Several previous attempts to talk to the department about the license application over the summer were also unsuccessful.
The application process will now start over with Momentum, Cronkhite said. She added that the county was never told whether there were issues with the application or how long the process normally takes.
Momentum Recovery and Wellness
Matt Boggs, chief financial officer for Momentum Recovery and Wellness, said Friday that the company has taken some steps toward filing an application for the state license.
“We have begun the initial process,” he said. “We’re still learning a little bit about how long it takes. It would be preliminary for me to give a projected opening date, but we certainly want to work as expeditiously as we can because we know there’s such a significant need.”
Boggs said his understanding is that the state gives priority processing to residential care so he’s hopeful that will mean the license will be approved as quickly as possible.
Momentum is a for-profit company whose CEO is Matt Brown, who was president and chief administration officer of ARC. Brown stepped down from that position in February.
Boggs said the two companies are “in no way affiliated.” He said they have been working to start the company for almost a year.
Wildwood will be the first treatment facility operated by Momentum, but Boggs stressed that those working for the company have many years of experience in the business.
“It’s a newly established company, but the individuals that will be working with us all have extensive experience in the behavioral health and addiction treatment space. … A lot of us have worked in other positions with other companies and operated successful facilities, including myself.”
Boggs, a native of eastern Kentucky, added that he worked for a large nonprofit in West Virginia for about eight years and he has helped develop multiple facilities in West Virginia, New Hampshire, Indiana and other states.
Cronkhite said county leaders are not worried about Wildwood being Momentum’s first facility.
“No, we do not have any reservations about working with them. … We have confidence in their collective experience and ability to perform,” she said.
Boggs said the company is looking for other opportunities, primarily in Virginia. It has formed an entity called Momentum Recovery Virginia LLC, which will operate Wildwood.
According to the State Corporation Commission’s Clerk’s Information System on its website, the entity was just formed on Oct. 14, and it is now registered to transact business in Virginia. It has a principal office address of 8401 Maryland Drive, Suite V, in Richmond.
The company has executed a lease for the property, he said.
Momentum’s goal with Wildwood is to operate a residential treatment facility that provides the tools of recovery to those who need it, help facilitate their return to the community and help them find employment, Boggs said.
Those at the company believe that the “recovery workforce” is one of the largest untapped workforce populations and a lot of those in recovery have skill sets that communities and states can use to improve their economic conditions, he said.
He noted that Southwest Virginia and Dickenson County have a disproportionately low number of substance abuse facilities compared to other parts of the state.
Asked if the recovery program would last a year, as was the ARC plan, Boggs said the length of the program often depends on the clinical needs of each person. But the company does believe that long-term recovery is the most effective treatment, he said.
The company expects Wildwood will create about 50 jobs and most of the employees will come from Dickenson County and Southwest Virginia, according to Boggs.
He said Momentum officials are thankful to the Dickenson County IDA, county officials and Southwest Properties for the opportunity to operate the center.
“We’re just so excited to be a part of it. We can’t wait to become a larger part of the Dickenson County community and really look forward to all the lives that are going to be saved through this facility,” he said.
Addiction Recovery Care
ARC was once the largest substance abuse treatment provider in Kentucky. In the summer of 2024, it had more than 30 facilities across the state. On Friday, the company was down to five residential treatment facilities, six traditional living centers, five outpatient clinics and a psychiatric hospital, according to a map of facilities on its website.
ARC officials have attributed the closings and loss of more than 300 employees to reduced Medicaid reimbursement rates in Kentucky that totaled 30%.
At the same time, ARC has been dealing with an FBI probe of possible health care fraud, according to a form on the FBI website asking for information from people who thought they had been victimized by the company.
A spokesperson for the FBI office in Louisville said in August that the investigation continues, but she could provide no further details. She did not respond to an email inquiry about the status of the probe on Friday.
ARC officials will not comment on the investigation except to say they continue to cooperate, which they repeated on Friday.
A spokesperson for ARC said last December that the investigation came after the company self-disclosed a potential overpayment due to incorrect coding to the Kentucky Department for Medicaid Services Division of Program Integrity.
Cronkhite said the switch to a new operator had nothing to do with the FBI investigation.
Asked if they had a comment about being replaced as the operator of Wildwood, Vanessa Keeton, ARC’s vice president of marketing, said: “We fully understand and respect the decision made by Dickenson County officials. They have been an absolute pleasure to work with throughout this process, and we are grateful for the positive relationship we’ve shared. We wish them continued success and all the best moving forward.”
Cronkhite said they worked with ARC officials for three years and learned a lot from them. She said ARC developed the recovery to work program that has become a life-changing model for many other facilities across Appalachia.
With regard to the acquisition of ARC facilities by Ethema Health, ARC said in a news release that it comes at a “transformative time” for behavioral health care in Kentucky. Ethema will operate ARC’s assets under its existing Kentucky brand, ARIA Kentucky.
The focus of the acquisition is to safeguard the well-being of clients, preserve the workforce and ensure continued access to compassionate, evidence-based care, according to the release.