Peabody woman, companies indicted in MassHealth fraud case

The Massachusetts Attorney General’s Office (AGO) announced on Monday that Rachel Pezzuto, 49, of Peabody, and her two companies, Recovery Journey Service, Inc. (RJS) and RJ Recovery LLC (RJ Recovery), were indicted by a Statewide Grand Jury on multiple charges related to fraudulently billing MassHealth and MassHealth managed care entities (MCEs) for services they did not provide and for services that she and her companies were not qualified to render.

The AGO alleges that, as a result of her conduct, MassHealth paid more than $853,790 for fraudulent services between February 2021 and July 2025. Each defendant is charged with one count of Medicaid False Claims, Medicaid Reverse False Claims, and Larceny Over $1,200.

Pezzuto opened RJS and RJ Recovery in 2020 and 2022, respectively, to purportedly provide support and recovery services to individuals struggling with addiction. The AGO alleges that, despite advertising peer recovery coaching services, a service that is paid at a lower rate, Pezzuto and her companies billed MassHealth for psychiatric, psychotherapy, and evaluation and management services, which are paid at a higher rate. The AGO also alleges that, in many cases, these services were not rendered, including during times when there were no licensed clinicians on staff to perform these types of services.

The AGO further alleges that Pezzuto used the National Provider Identification (NPI) numbers of other licensed providers who no longer worked at RJS and RJ Recovery on claims she submitted to MassHealth for services not provided. In using licensed providers’ NPI numbers, the AGO alleges that Pezzuto knew that she was not entitled to the payments she received from MassHealth, yet she never disclosed this information to MassHealth or returned the money.

These charges are allegations, and the defendant is presumed innocent until proven guilty.

This case is being handled by Managing Attorney Katie Cooper Davis, Assistant Attorney General Kimberly Ang, Investigations Supervisor Shelby Stephens, and Investigator Kevin Todd, all of the AGO’s Medicaid Fraud Division. MassHealth provided substantial assistance with the investigation.

The AGO’s Medicaid Fraud Division is a Medicaid Fraud Control Unit, annually certified by the U.S. Department of Health and Human Services to investigate and prosecute health care providers who defraud the state’s Medicaid program, MassHealth. The Medicaid Fraud Division also has jurisdiction to investigate and prosecute complaints of abuse, neglect, and financial exploitation of residents in long-term care facilities and of Medicaid patients in any health care setting. Individuals may file a MassHealth fraud complaint or report cases of abuse or neglect of Medicaid patients or long-term care residents by visiting the AGO’s website.

The Massachusetts Medicaid Fraud Division receives 75% of its funding from the U.S. Department of Health and Human Services under a grant award totaling $6,458,176 for federal fiscal year 2026. The remaining 25%, totaling $2,152,724 for FY 2026, is funded by the Commonwealth of Massachusetts.