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Are drug rehab centers losing millions due to fraud?
Jun 26, 2018 · In the same way, sketchy rehab centers act like drug treatment cartels by inflating their claims, gouging insurance companies and learning underhanded tactics from other rehabs. The Fraud Fallout Like Rick and Drew’s story, some rehabs have been squeezed financially to the point they could no longer operate, closing their doors permanently.
Will drug rehab fraud affect your insurance premiums?
Unfortunately, some centers use unethical rehab practices to put money above their clients. Examples include fast, high turnover rates or slow turnover rate with little improvement over a long period of time. Both are dangerous, as they imply that the facility is more interested in your bank account than your treatment.
Is the for-profit rehab industry driving the culture of addiction treatment?
Feb 15, 2016 · Most famous for placing a poisonous snake in the mailbox of an attorney who opposed it, Synanon was founded by an AA member who believed that the steps needed to be applied by force and that people...
Are South Florida's drug treatment centers part of insurance fraud mill?
In the 1980s, Californian psychiatric drug specialist, Ronald K. Siegel, made the outrageous assertion that being drugged is a basic human “need,” a “fourth drive” of the same nature as sex, hunger and thirst. In 1980, a study in the Comprehensive Textbook of Psychiatry claimed that, “taken no more than two or three times per week ...
How do disreputable addiction treatment centers have skirted the laws and taken advantage of insurers?
Another way disreputable addiction treatment centers have skirted the laws and taken advantage of insurers is by patient brokering. Patient brokering involves hiring sales agents to convince prospective clients into traveling to a certain rehab facility. The sales agents get a kickback for each client referred.
Why is ECHO Recovery so hard?
Because the opioid epidemic and rehab fraud are making it more difficult for some people to receive addiction treatment, ECHO Recovery is working harder than ever to help as many Americans as possible find affordable addiction treatment, housing, and help.
What are the problems with addiction?
The availability of addiction treatment for patients is limited. The problems: 1 Insurance fraud 2 The out-of-network designations with higher patient responsibility 3 Increasing number of rehab centers falling into the out-of-network providers’ category 4 The impact of the opioid crisis demanding more services than are available in some areas
How many people die from opioids every day?
Opioid Epidemic Killing People and Prices. At a time when, according to the Centers of Disease Control and Prevention (CDC), 115 people die every day from overdosing on opioids, we need addiction treatment centers more than ever. The CDC also reports opioid-related deaths are still continuing to rise.
Is patient brokering illegal in Florida?
Patient brokering is illegal in some states, like Florida. Florida rehab facilities are forbidden to fly out-of-state clients in for treatment. They are not allowed to waive fees, copays or give any other monetary compensation for coming to their rehab.
Does Health Net pay for drug treatment?
Insurance companies like Health Net, which serves Arizona and California, are suddenly not paying claims for drug addiction treatment. Health Net was sued by nine drug and alcohol treatment centers last year for delayed or incomplete payments for policyholders’ addiction treatment.
1. Drug Treatment Centers Making False Promises
No addict wants to relapse. But the truth of the matter is that many will likely return to their favorite substance. It’s an unfortunate fact, but according to a study put out by NIDA, only one-third of respondents remained drug or alcohol-free a year after treatment.
2. Drug & Alcohol Rehabs Claiming False or Inflated Statistics
This pairs perfectly with our last predatory behavior. No substance abuse treatment facility has a 100 percent success rate. Odds are, at least one current or former patient is going to relapse at some point or withdraw from treatment.
3. Addiction Treatment Centers Putting Money Over Clients
It’s critical to keep in mind that rehab centers are businesses, after all. They need to make money in order to stay open. Unfortunately, some centers use unethical rehab practices to put money above their clients.
4. Drug Rehab Centers with Poor Security
When you enter a rehab facility, so do your medical records and private information. Therefore, it’s extremely important that rehab facilities invest in top of the line data security.
5. Alcohol Treatment Centers with Low Hiring Standards
Believe it or not, substance abuse within rehab facilities themselves is a huge issue. Facilities are constantly battling to keep substances out of their doors and away from patients’ hands.
6. Substance Abuse Rehabs Emphasizing Accommodations Over Care
A quick search of rehab facilities in your area will show that you plenty of centers offer all sorts of accommodations. From Olympic-size swimming pools to massage centers, some of these features sound pretty nice.
7. Treatment Centers Not Accepting Insurance
There’s no way around it, it’s nearly impossible to pay for treatment without some form of insurance. And even if you have the nicest, highest-quality insurance on the market, there’s no guarantee that your facility will accept it.
What does it mean when a treatment facility denies affiliations to other facilities or organizations?
When treatment facilities deny their affiliations to other facilities or organizations or inaccurately portray the services they provide, their status of accreditation, the types of conditions they treat, the credentials of their clinical staff, what insurance providers they accept, or misrepresent their facilities, locations and amenities in any way.
Why is awareness important in addiction?
Awareness is the first step in combating unethical addiction marketing practices, and greater awareness of these practices has led to new legislation, and increased scrutiny of addiction treatment providers by law enforcement , and even for-profit corporations such as Google.
What is lead selling?
Lead Selling: Paying brokers a per-head finders-fee or kick-back for referring patients to their treatment facility (e.g. financial compensation ($500-$1000 per patient) or special future consideration. This type of patient brokering is not only happening with patients new to treatment, but also in agreements made between recovery residences (e.g. sober houses) and treatment centers, or between two separate treatment centers.
What is Google Maps hijacking?
The hijacking of Google business or Google Maps listings through the suggested edits feature. Unaffiliated individuals can go into an organization profile and change listed phone numbers to reroute calls and online correspondences to other treatment programs or call centers, and change listed addresses to deceive patients of actual location.
What is a $10 drug test?
The process of billing insurance companies excessively for unnecessary treatment or services. This was commonly seen in urine drug screens, where $10 drug tests were being conducted every 2 days and billed at $1000 or more to insurance.
Is the practice of a patient's health information, such as their treatment plan or diagnosis, discussed in
The common practice of a patient’s health information, such as their treatment plan or diagnosis, discussed in a sales or marketing context, and shared with individuals outside the patient’s care team, without medical necessity or the patient’s consent. This is in violation of HIPAA and other patient privacy protection laws that work to protect sensitive health information of the individual.
How many defendants were charged in the Medicare fraud strike?
Last year, the DOJ announced a “National Health Care Fraud Takedown” whereby the Medicare Fraud Strike Force led a takedown resulting in 412 defendants being charged in 41 federal districts for health care fraud schemes resulting in $1.3 billion in false billings. Of those charged, over 120 defen-dants, including doctors, were charged for their roles in prescribing and distributing opioids and other dangerous narcotics. Allegations included billing for treatments that were medically unnecessary or never provided and paying kickbacks and submit-ting bills to federal health care programs.4One egregious case that has received nationwide press involved Kenneth Chatman, an addiction treatment facility and sober living home operator accused of a host of misconduct, and his associates that helped Chatman engage in a multimil-lion dollar fraudulent sheme.5 Chatman ran intensive outpatient treatment cen-ters and sober living houses in south Florida, often called the “Rehab Riviera” and known for its over-abundance of SUD-related facilities. Chatman’s businesses, however, did not provide legitimate treat-ment or recovery housing but instead, as the government accused, were run as flop-houses and brothels. Chatman purport-edly allowed residents to openly use illegal drugs and alcohol so long as he could keep billing their insurance for phony urine tests, unnecessary saliva tests, or bogus outpatient treatment services.
How much does the addiction treatment industry spend?
Not only has the incidence of substance use disorders (SUDs) increased dramatically with the opioid epidemic, but major changes in the industry itself have transformed SUD treatment into an industry with spending at an esti-mated $34 billion a year and growing.1 Indeed, official estimates forecast SUD treatment spending to grow to more than $42 billion in 2020,2 and this figure does not include the additional private spending on sober living and recovery housing.
What percentage of SUD treatment comes from public sources?
Fraud and abuse in SUD treatment are sub-ject to the same laws that combat general health care fraud and abuse, especially given that approximately 70 percent of spend-ing on SUD treatment comes from public sources.3 Below is a brief overview of the key laws that may be applied to misconduct by SUD operators, marketers, and other pro-fessionals when government and, in some cases, private insurance is being billed.
What are the illegal activities in SUD?
One of the most common types of illegal activity in SUD treatment involves kick-backs. Common schemes involve operators paying marketers for the referral of patients or giving prospective patients gifts, free airfare, housing, or insurance premiums to sign them up as patients and bill their insurance. Outpatient clinics may enter into illegal kickback arrangements with sober living houses and pay for “bed vouch-ers”—paying the sober living to house a patient for whom insurance is being billed. Operators also may receive kickbacks from outside laboratories for referring patients for urinalysis or other tests.The federal anti-kickback statute, 42 U.S.C. Section 1320a-7b et seq., is a pow-erful tool against this type of abuse. Subsection (b) provides criminal penal-ties for illegal remuneration and makes it a crime to knowingly and willfully solicit, receive, or pay any remuneration (includ-ing any kickback, bribe, or rebate) in exchange for referring a patient with fed-eral health insurance. The punishments include felony criminal liability, impris-onment up to five years, and fines up to $25,000. Meanwhile, Subsection (a) creates criminal penalties for false claims, which involve false statements in any application for benefits or payments to federal health care programs, among other misconduct. The punishments for false claims include misdemeanor criminal liability and fines up to $10,000. Furthermore, as discussed below, false claims create civil liability through federal and state false claims acts.In addition, health care fraud also may be subject to 18 U.S.C. Section 1347, which makes it a crime “(1) to defraud any health care benefit program; or (2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care ben-efit program.” Punishment for violations of this statute includes fines and impris-onment. Jail time depends on the severity of the case: (i) standard cases may involve up to 10 years of imprisonment; (ii) if the violation results in bodily harm, up to 20 years of imprisonment; and (iii) if viola-tion results in death, up to life in prison.In addition, states may have their own versions of these federal laws that apply to misconduct involving state-sponsored insurance plans.
What is the Kenneth Chatman case?
The Kenneth Chatman case also included guilty pleas for violations of the federal anti-kickback stat-ute, including offering bribes in the form of free or reduced rents and other benefits to prospective residents.6 Chatman and his associates also offered kickbacks and bribes to other sober homeowners to induce them to refer their residents to his outpatient treatment centers. He attempted to dis-guise those payments as “case manage-ment fees,” “consulting fees,” “marketing fees,” and “commissions” but, in reality, they were just payments for patient bro-kering and other kickbacks. In addition to Chatman’s 27-year sentence, other co-conspirators, including the co-operators of the complicit sober living homes, the medical directors and the clinical director of his treatment centers, and his wife, all have received jail time for their roles in the health care fraud, including their knowl-edge of or participation in the illegal kick-back arrangements.
What is patient brokering?
Patient brokering typi-cally refers to the illegal practice by sober living home operators of “selling” a patient to an outpatient treatment program , or oth-erwise referring the patient to a certain provider, in exchange for money or other remuneration.
Is the DOJ going after SUD?
Pursuant to the federal criminal laws out-lined above, the DOJ has been going after bad actors in the SUD industry. Recent prosecutions have targeted fraudulent bill-ings under the health care fraud statute, kickbacks, and patient brokering covered by the federal anti-kickback statute, and violations of other federal criminal laws.
How many people died from opioids in 2015?
In 2015, the year these mothers first sought help, nearly 52,500 people lost their lives to an overdose in the U.S, up nearly 40 percent from 2010. About 33,000 of those deaths were due to opioids, more than any year on record.
How old was Alison Flory when she was found?
PALM BEACH COUNTY, Florida — For the first responders who found her lifeless body one October morning, 24-year-old Alison Flory was yet another casualty of addiction here on the front line of Florida's opioid crisis.
Did John Chatman make a buck in Florida?
Rehab was not the first way Chatman tried to make a buck in Florida. In 2008, Chatman, a transplant from New York, pleaded guilty to federal charges for running a credit card fraud scheme. After that, he founded a car dealership that didn't go far. Then he had a gym, where, according to an account he posted online, he got interested in the journey to recovery.
Did Michelle Curran call Cigna?
In the spring of 2016, the incessant bills Michelle Curran received in the mail began to make her wonder. She called her insurance company, Cigna, but she said no one ever called her back. (Cigna said it could not comment directly on Curran's case for privacy reasons, but said it has since contacted Curran and is addressing fraud issues in Florida).
Is Florida in a state of emergency?
In May, Gov. Rick Scott officially declared Florida's opioid crisis a state of emergency. Legislators recently passed a bill that would increase penalties for brokering. It will give prosecutors sharper tools to crack down on what a grand jury last December found was rampant brokering and fraud across the industry.