Drug Counselor Accused of Robbing MassHealth of Nearly $1 Million

What looked like another routine press announcement from the Office of the Massachusetts Attorney General this February instead revealed a story with real consequences for taxpayers and for the integrity of the state’s healthcare system. In Boston, a statewide grand jury returned indictments against a Peabody-based alcohol and drug counselor and her two businesses, charging them with orchestrating a sophisticated scheme to defraud MassHealth — the state’s Medicaid program — out of more than $850,000 in payments for services that were never properly provided or were simply not eligible for reimbursement.

The indictment names 49-year-old Rachel Pezzuto of Peabody and her two companies, Recovery Journey Service, Inc. (RJS) and RJ Recovery LLC. According to the Attorney General’s office, the schemes at the heart of the charges spanned more than four years, stretching from early 2021 through the summer of 2025. During that time, MassHealth and managed care entities paid out $853,790 for what are alleged to be fraudulent claims submitted by Pezzuto and her business entities as if they were legitimate counseling and recovery services provided to members of the Medicaid program.

In charging documents, prosecutors allege that the defendants routinely billed MassHealth for services that were either never rendered, were not medically necessary, or were performed by individuals not qualified or authorized to deliver them. The pattern, as laid out by the Attorney General’s Medicaid Fraud Division, wasn’t a handful of billing mistakes — it was a deliberate and sustained effort to exploit the state’s largest health insurer for substantial sums of public funds.

Each defendant now faces multiple felony counts, including Medicaid False Claims, Medicaid Reverse False Claims, and Larceny over $1,200. These are serious criminal charges that carry potential prison time and hefty financial penalties upon conviction, reflecting the severity with which the Commonwealth views fraud against its healthcare programs.

To the average person, terms like “MassHealth” and “managed care entities” might be abstract bureaucratic jargon. But what’s really at stake is this: MassHealth is paid for with a mix of state and federal tax dollars that are supposed to help low-income families, the elderly, people with disabilities, and others get necessary medical care. When providers bill for services that never happened, or bill for services in ways that violate program rules, every taxpayer foots the bill and program integrity is undermined.

Indictments like these are part of a broader effort by the Attorney General’s Medicaid Fraud Division to hold healthcare providers accountable when they step outside legal boundaries. This division has jurisdiction to investigate and prosecute not only billing fraud, but also abuse, neglect, or exploitation of vulnerable patients in certain care settings. By bringing a case like this before a grand jury, the state is signaling that it intends to aggressively pursue fraud wherever it finds it.

For Pezzuto and her businesses, the next steps are now in the criminal justice system. They will have the opportunity to answer the charges in court, but the indictment itself already sets a legal and public record that the state believes there is probable cause to move forward. Beyond criminal penalties, courts can also order restitution — meaning that victims of the scheme, in this case the Commonwealth and MassHealth beneficiaries, could see efforts to recover some of the money that was allegedly taken improperly.

In the broader context of Medicaid and Medicare fraud enforcement, cases like this serve a few key functions. They deter other providers from engaging in similar schemes, they reassure taxpayers and beneficiaries that the state is watching over its public insurance programs, and they underscore the importance of compliance for anyone receiving payment from government healthcare programs.

As the legal process unfolds, this case will likely shine a spotlight not just on the specifics of one provider’s alleged misconduct, but also on the ongoing challenges states face in policing complex billing systems that handle billions of dollars in claims every year. For now, the indictments stand as a reminder that when public funds are misused, state watchdogs will pursue accountability — and that fraud against programs designed to help the most vulnerable can carry serious consequences.

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