A Look at Problems in the Industry
The sunny peninsula of Florida is a haven for addiction treatment centers and sober living homes, but not all treatment programs are created equal. In fact, Florida addiction treatment (specifically) South Florida) has been plagued in recent years by problems that have threatened the reputation of all programs.
In this series, we’ll look at the state of Florida addiction treatment, including issues facing the industry, what’s being done to address those issues and how you can find a high-quality, reputable treatment program.
The addiction treatment industry is big business in South Florida, ranking below only construction, agriculture and tourism. Palm Beach County, a temperate paradise and playground for the ultra-rich, has become one of the top rehab capitals of America in recent years. But beneath the shiny veneer of hope and healing offered at some treatment centers is an underbelly of greed and insurance fraud.
How Treatment Centers Scam Insurance Companies and Clients
Corrupt treatment centers work hard to find clients with good health insurance. They sometimes pay good money to “body brokers” to find addicted individuals and refer them to the center. Some treatment centers will offer to pay clients’ sober living home rent if they need a place to stay during treatment. They may even offer to pay their insurance co-pay or deductible for choosing their program.
So, why the urgency to get people into treatment? It’s because a single client can be worth hundreds of thousands of dollars in profit for the treatment center, detox facilities, laboratories, sober living home and other related businesses. According to The Palm Beach Post, a 28-day stay at a residential facility can cost up to $30,000.1
But a 28-day stint in treatment is just the beginning. Several months of intensive outpatient treatment and a stay in sober living typically follow. Insurance companies often continue to pay for these services. The same goes for 60- and 90-day treatment programs, which are extremely profitable for rogue operators which often use questionable or ineffective treatment methods.
Relapse is big business for these fraudulent programs. According to the National Institute on Drug Abuse, relapse rates for addiction range from 40 to 60 percent.2 A relapse typically requires another stint in rehab, and it’s a common and profitable practice for corrupt treatment programs to deliberately keep clients in a perpetual cycle of remission and relapse in order to cash in by billing insurance companies for ongoing treatment.
Unnecessary Tests and Other Treatments Line the Pockets of Disreputable Programs
Urine testing is one of the most lucrative practices for treatment centers and sober living homes. Urine tests show whether a client is staying sober and whether they’re taking proper doses of their medications, such as methadone or buprenorphine, which are part of medication-assisted treatment for opioid addiction.
Insurance companies complain that clients are being tested too frequently, and many tests are often unnecessary. Indeed, while a simple urine test will confirm whether someone has been taking illegal drugs, some treatment centers send urine samples to a lab for additional testing. These additional tests can identify the specific drug that’s being taken and how much of it is in the client’s system.
A single full-battery lab test for a single client may cost several thousand dollars, and the client may be tested three times a week or more. Some sober living homes even test daily. Labs make millions of dollars on these tests and kick back some of the profits to the treatment program or sober home.
To make matters more complicated, it’s not uncommon for insurance companies to directly contact clients—many of whom are unemployed or have little income—down the road and demand repayment for unnecessary testing.
Disreputable treatment centers are also known to bill insurance companies for other services, such as massage, acupuncture, prescription medications and group counseling. Physicians at a disreputable treatment center will certify that these tests and treatments are medically essential, even though there’s a good chance the doctor has not examined the client.
Sober Living Homes: Kickbacks and Relapse
Insurance companies pay for treatment, drug testing and outpatient therapy, but they don’t pay for room and board at sober living facilities. When clients come to town for outpatient treatment, or when treatment ends after 30, 60 or 90 days, they need a place to stay. Unfortunately, these clients—particularly those with insurance—become pawns in a variety of scams.
To draw in clients with insurance, sober living home operators often offer perks like free rent, cellphones, gift cards and gym memberships. They or a treatment center may waive insurance co-pays and deductibles to make their facility more affordable out-of-pocket to those with no source of income. They make their money back through unnecessary and frequent drug testing and by referring relapsed clients to detox and treatment centers that pay a handsome bounty for each referral. Clients are so lucrative for unscrupulous industry players that some disreputable sober living home owners will pay “junkie hunters” or “body brokers” $500 for each individual they refer to the home.
Some corrupt sober living homes underhandedly encourage clients to use drugs, sending them into relapse. They know that relapse means another stint in rehab, which means more insurance billing and more money in their pockets.
Due to rampant drug abuse in these disreputable sober homes and the lack of safeguards, some clients end up overdosing. Overdose deaths in Palm Beach County quadrupled between 2013 and 2017. In Delray Beach alone, which has a population of just 60,000, rescue crews responded to over 1,300 overdose calls in 2016, and many of these were at sober homes. Countywide, almost 600 people died of an overdose in 2016.
John Lehman, director of the Florida Association of Recovery Residences, lamented the fact that corrupt players in the industry are painting everyone in a poor light. “So the good guys are having trouble keeping their beds full,” he says, “and the bad guys are saying, you want to shoot dope in the bathroom, go ahead.”3
Sober living homes don’t have to be licensed, and many experts cite this as part of the problem. As a result, lawmakers in 2015 created a voluntary certification process for Florida sober living homes, but they stopped short at requiring certification. According to NPR, that’s because two federal laws—the Americans with Disability Act and the Fair Housing Act—make it difficult for local communities to limit or regulate these facilities.
Deceptive Marketing Practices: An Important Piece of the Puzzle
Many of South Florida’s private treatment centers market their services aggressively across the U.S., particularly in the Midwest and Northeast. Nearly three-quarters of clients in private treatment programs in South Florida are from out of state.
A grand jury convened by State Attorney Dave Aronberg examined Florida’s massive substance abuse treatment industry. This jury found that deceptive marketing is a common practice that exploits vulnerable populations and damages the reputation of trustworthy treatment programs.
“We’re seeing this all over the place where people look to marketers for help in finding a treatment facility and instead they get steered to some place where the marketer has a financial incentive,” Aronberg told the Sun Sentinel.
It’s common for people to look online for substance abuse help, but scores of online treatment center referral sites use deceptive practices to steer clients to programs for which the marketer gets a kickback. For example, misleading banner ads make it appear as though a treatment program is in one city, when it’s actually across the state—or the country. The treatment center where the client ends up may bear no resemblance to the place they thought they were going. Some marketers “piggyback” on the names of reputable treatment centers by using Google keywords, which reroutes clients to their own marketing site. They then refer individuals to less-reputable treatment centers that pay the marketer for this dubious service.
Meanwhile, the people in crisis who are making the call believe they’re talking to a trained addiction professional who has their best interests in mind, when in reality they’re talking to an untrained telemarketer who gets paid for each referral. As a result, many people who need help with an addiction don’t get the kind of help they need, and in some cases, the “treatment” program does more harm than good.
The Role of the Affordable Care Act and Mental Health Parity Act in Fraudulent Activity
At the heart of the fraud and corruption in the South Florida treatment industry is the Affordable Care Act—more commonly known as Obamacare—and the Mental Health Parity Act, both of which passed in 2008. The Affordable Care Act bars insurance companies from denying coverage for pre-existing conditions and ensures children can stay on their parents’ insurance policy until they turn 26. The Mental Health Parity Act requires insurers to cover substance abuse treatment and was intended to ensure that people with addiction and other mental health issues are able to get the help they need.
But due to a lack of oversight, these laws unintentionally opened the door for massive fraud. To questionable operators, the opioid epidemic became a treasure trove of addicted people with insurance—in many cases, their parents’ insurance—that could make them money hand over fist. According to NBC News, substance abuse treatment in Palm Beach County went from a small network of treatment centers and sober living homes barely scraping by to a $1 billion business in just a few years.
According to State Attorney Aronberg, the entire treatment industry has been corrupted by easy money. “Unscrupulous actors have taken advantage of a well-intended federal law and a lack of any good law at the state level, to profit off people at the lowest stages of their lives,” Aronberg told NBC News.
Read on for part two of this series, Cracking Down: New Legislation Offers Hope for South Florida