The focus of attention by members of the Committee on Energy and Commerce’s Subcommittee on Oversight and Investigations last week wasn’t news to the treatment field. There are unethical sober home operators who for at least five years have been profiting off the miseries of people with addiction, and treatment programs flying under the radar that deliberately overbill for unnecessary drug tests, steal patients from other programs with bait-and-switch internet marketing tactics, pay patient brokers and more. The Dec. 12 hearing, “Examining Concerns of Patient Brokering and Addiction Treatment Fraud,” did shed light on these issues for many of the subcommittee members, however, who were not familiar with the abuses beyond what they had read recently in the mainstream press, and were not aware of the extent to which the treatment field and others are working to make changes. Treatment representatives from Florida and California, where abuses have been most pronounced, presented testimony, as did law enforcement officials.

It’s essential to root out the bad actors, said Douglas Tieman, president and CEO of Caron Treatment Centers. “It has become clear that many are putting profits ahead of the lives they’re supposed to be saving,” he told lawmakers. Patients and family members call an 800 number thinking they are talking to a treatment provider, but they’re talking to a marketer, he said. “It’s more like shopping for a time share,” he said.

“Patients and their well-being must be the top priority,” said Pete Nielsen, CEO of the California Consortium of Addiction Programs and Professionals. “Sober living is not nor has it ever been the same as residential inpatient treatment,” he said. “It is its own entity with different standards and goals.” Cooperative housing does offer a bridge to independent living, he said.

‘The Florida shuffle’

Many so-called sober homes in Florida are “nothing but flophouses,” said Dave Aronberg, state attorney for Palm Beach County — the only county in Florida that has a task force aimed at addiction treatment and sober home fraud. In what he referred to as “the Florida shuffle,” a patient gets a free one-way plane ticket to Florida, goes through treatment covered by insurance and, needing a place to live, is referred to a sober home. When those benefits are exhausted, the individual leaves the sober home. If the patient relapses, however, the patient gets treatment again, so rogue providers make sure drugs are accessible in those sober homes to ensure relapse and continued profits, he said. Seventy-five percent of private-pay patients in Florida centers come from out of state, said Aronberg. The Palm Beach County task force, formed last year, has so far resulted in 41 arrests, he said.

Alan S. Johnson, chief assistant state attorney and head of the Palm Beach County Sober Homes Task Force, said he wants the anti-kickback statute, which currently applies only to federally funded services by Medicaid and Medicare, to apply to the private sector. Noting that Florida has a patient-brokering statute, he said that the biggest problems are coming from “rogue actors in the treatment industry.”

Accreditation itself is no guarantee of quality, said Johnson. “There are some really bad places that we arrested that were accredited,” he told lawmakers. Parents from all over the country who are worried about their children in treatment in Florida call him, “but we can’t recommend a particular place,” he said. He does, however, recommend sober homes that are certified by the Florida Association of Recovery Residences, he said. “They’re not flophouses,” he said.

The scope of the problem

Rep. Diana DeGette (D-Colorado) wanted to know the scope of problems, such as patient brokers, unnecessary urine tests and billing for treatment that is not provided. “I’d like to know how a presumably licensed treatment facility can get away with this,” she said. “I don’t have any idea how extensive the problem is.” She pressed Johnson for numbers.

“We can’t put a number on it,” said Johnson. Of the 41 arrests in the last year, DeGette asked, how many were for different individuals or treatment centers? There were 12 treatment facilities, and sober homes, involved in the 41 arrests, he responded. “We look at it as a hub and spoke, with the hub providing treatment, and the spokes being sober homes,” said Johnson.

DeGette asked Nielsen how many rogue actors there are in California. “It’s hard to be able to boil down what’s actually happening,” he said. “They look like they’re good actors, but they’re rotten to the core.”

Asked why California doesn’t license or certify outpatient facilities, Nielsen replied, “That’s a very good question.” He noted that the state doesn’t even require a license for a drug and alcohol counselor to do private practice, “so anyone can hang up a shingle.” However, being in network with an insurance company is a good sign, he said. “We’re finding in California that it’s the out-of-network providers that are the real problem,” he said. 

Indeed, Florida treatment providers who seek out-of-state patients specifically look for those with out-of-network coverage.

NAATP’s new initiative

The hearing came just as the National Association of Addiction Treatment Providers (NAATP) is moving ahead with its Quality Control Initiative, in which it will not allow any members who don’t abide by ethical marketing and billing.

On Dec. 7, NAATP announced that it will implement its Quality Initiative, which will ultimately result in a winnowing of the membership.

Under a revised code of ethics, NAATP will define “prohibited acts including service misrepresentation, patient brokering, leads buying and selling, deceptive web presence, deceptive directory call aggregation, insurance billing abuse, payment kickbacks, and licensing and accreditation misrepresentations.” Any provider utilizing these will not be allowed to be a member. Providers who do comply may use the NAATP logo on their websites, and patients searching for treatment can be guaranteed that these providers are following the code of ethics.

Four categories of providers

Reached after the hearing, Tieman, who helped draft the NAATP initiative, told ADAW that even though the abuses have been going on for many years, many people — including treatment providers — didn’t know about it. “I thought those were outliers,” he said of the rogue providers. But in fact, the lines are blurry, with the bulk of not-for-profit providers falling under the category of not knowing they were doing something wrong, or the second category of doing it simply because they think everyone else is doing it and they need to do it in order to compete. Both of these categories can be brought around to ethical marketing and billing by education, said Tieman.

The third category is the for-profits that say that marketing and billing tactics “may or may not be wrong, but legally they’re defensible, and we’re going to go ahead and do it,” said Tieman. “This is where I put most of the private-equity” organizations, he said.

It’s important to note that the first three categories are based on marketing and billing issues, not clinical issues. All three types of programs provide excellent care. But the fourth group, which engages in “human trafficking,” are “the sociopaths of our industry,” said Tieman. These groups do not provide good care, and only exist to make money.

The “sociopaths” are probably not NAATP members anyway, but the private-equity organizations that provide good treatment may still not want to follow the new ethics guidelines. “Whether or not they will be swayed is unclear,” said Tieman of the private-equity-owned centers. These centers, which include giants such as Recovery Centers of America and American Addiction Centers, “might just decide there’s no real value in being a member of NAATP,” said Tieman.

NAATP Executive Director Marvin Ventrell agreed that Tieman’s categories are “representative of what goes on out there,” he said, and he says the largest chunk of the treatment industry is in the second and third categories. The “sociopaths” (the fourth category) and the “clueless” (the first category) are both “significant minorities,” he said.

“The two middle categories are both concerns,” said Ventrell. The second category, programs that think that have to market aggressively in order to compete, are one concern. And the well-resourced private-equity groups are an issue as well, “not because there are so many of them, but because they have a lot of power, they have a big footprint and the public sees them and gets an impression from them,” said Ventrell.

NAATP wants to address quality violations and push treatment to the “best levels of care seen in our country,” said Ventrell. “By approaching those two middle groups, we can do that.” This may mean NAATP, an association that charges membership dues based on facility size, gets smaller. That’s fine with Tieman and Ventrell. “We are perfectly prepared to lose revenue as a result of this,” said Ventrell. “It has been my view that that has always needed to be done. We’re now at that point.”

The Quality Control Initiative will result in several hundred facilities getting the “seal of approval,” said Tieman. “The value of this is that it will completely eliminate the fourth category — the fly-by-nighters,” he said. “And for the third group, we hope to be able to define ethical behavior.” That group can then choose to comply or not.

Saving smaller quality programs

The internet has radically changed the treatment field. Caron, for example, is a $100-million-a-year nonprofit, which last year gave away $10 million in charity care. But it also spent $12 million on marketing, said Tieman. That’s $10 million more on marketing than it spent five years ago. “We’ve been around 60 years, and never advertised before,” he said. “I would rather have spent that $10 million on charity care. But the board said, if you don’t have some presence in our key marketplaces, people won’t know about Caron.”

The real tragedy, said Tieman, is the small 40-bed programs that provide great treatment, are very affordable and will go under because they don’t have millions of dollars to spend on marketing, and therefore have patients “stolen from them every month” through brokering and other tactics. “Our main reason” for the quality initiative is to help these local providers “who are doing great work,” he said. Patients should be able to go to these programs, which are local, “instead of being sent a plane ticket to Florida.”

Bottom Line…

Treatment programs are cleaning up the industry, as Congress sheds a light on abuses.

SIDEBAR

Sober homes, ADA and FHA

Alan S. Johnson, chief assistant state attorney and head of the Palm Beach County Sober Homes Task Force, hopes Congress can “explore a way to make the states more comfortable with being able to require sober home certification.” Florida does not mandate sober home certification “because they are afraid of violating the ADA or the FHA,” he said, referring to the Americans with Disabilities Act and the Fair Housing Act. Aronberg stated that these two federal laws prevent the regulation or inspection of sober homes.

However, we checked with Sally Friedman, legal director of the Legal Action Center, who said the Palm Beach County prosecutors are incorrect. “It is not true that the ADA and FHA prevent the regulation or inspection of sober homes,” she told ADAW. “They prevent discrimination based on disability. Jurisdictions may enforce nondiscriminatory housing codes and safety standards. When they don’t, they allow residents to be placed in unsafe living conditions and create quality-of-life issues for neighbors. This failure to enforce problematic operations foments NIMBY [not in my back yard] responses.”