Why are California Rehabs Being Shut Down?
Finding reputable addiction treatment in California can be difficult for someone ready to start their sobriety journey. On the surface, it would appear that drug rehab clinics are a booming business opportunity amid the worsening opioid crisis across the country. However, many California rehabs are drying up or closing down campuses. What’s going on?
A few different reasons lie at the base of the issue. Some are the fault of the drug rehabs themselves, while others are just bad luck. The worst-case scenarios are rife with fraud investigations and lawsuits.
A Quick Boom, Followed by a Quick Bust
Before Obama’s Affordable Care Act, insurance companies were not required to pay for drug and alcohol treatment. Most people who entered rehab paid out of pocket.
When the ACA took effect, it mandated that insurers were suddenly responsible for reimbursing rehab costs for patients undergoing treatment. This meant that health insurers were now paying exorbitant costs. These millions of dollars were for patients in drug and alcohol rehab. At first, this was an enormous boom to the rehab industry.
After a while, however, insurers tired of this new setup and began pushing back. This pushback involved dramatically cutting back reimbursements made to rehab centers. In at least one case, a lawsuit alleging serious instances of fraud came forward. (1)
Even without the allegations and fraud lawsuits, the endless well of insurance money dried up far too quickly for many rehab centers to manage. Rehabs were forced to cut back on staff, beds, and services in some locations and close others entirely.
Fraud and Kickbacks
Though these struggling rehab clinics hold state licenses and appear to be above-board, there are many concerns about fraud and other illegal practices under the surface.
For example, urine tests are the subject of concerns regarding some questionable business practices. Rehab clinics can and should perform frequent drug testing as a means of preventing slip-ups and relapses. However, clinics can run into danger when they perform excessive or unnecessary testing. This is especially the case when the rehab center owns the lab performing the drug tests.
Insurers worry this practice is nothing more than a means of generating even more income. When rehabs are ordering frequent tests, performing the testing in-house, and then charging insurance companies for reimbursement – there is cause for concern.
The Orange County Register reported in 2017, “In a federal lawsuit filed in Florida, United Healthcare accused Solid Landings of forging medical authorizations for urine tests to a company called Sky Toxicology, for which Sky paid Fennelly and Perry $30,000 per month each in kickbacks.”
The issue with excessive drug testing only scratches the surface of the problem with fraud and exploitation within California rehab centers.
California rehab centers have been the subjects of fraud investigations based on recruiting patients from out of state. (2) This is often accomplished through a process known as patient brokering (3). A rehab pays a third party a fee anywhere from $500 to $7000 or more to recruit a patient into its facility.
Patient brokering is unfortunately easy to accomplish in California because of the way insurance has been made available through the ACA.
A person can move to California, purchase in-state coverage through Obamacare, and enter a rehab facility all within a day or two. The ease of this process creates the temptation for rehab clinics, as businesses, to market their services to potential patients across the country to get them to come to California for their rehab care.
If patients who followed this process were then treated to effective and reputable care, there would likely not be much of an issue. However, because rehabs in California can be opened by nearly anyone with the resources to do so, there is a significant gap in quality between most commonplace facilities and centers that care about providing reputable addiction treatment in California.
Patients who slide into the system using this method may find they have chosen a facility with little oversight. Unfortunately, patients may be referred to a rehab that cares only about running up astronomical insurance bills instead of providing quality care.
How Can You Find Reputable Addiction Treatment in California?
With the understanding that many of these questionable – or outright illegal – practices occur under the surface and away from the eyes of patients, how can you be sure you are choosing a reputable rehab facility for yourself or a loved one?
NBC investigated and found several key points (4) that should be red flags to avoid in a rehab:
- Generic ads or landing pages that provide very little information about programs
- Any references to “referral fees” or brokers
- Free, rent, travel, insurance coverage, or other services that would not likely be free in a reputable facility
- Expensive lab tests on a frequent or daily basis
- Little interest in the patient’s medical and treatment histories
- Out of state referrals
Reputable rehabs, on the other hand, will be happy to share the details of each program they provide. They will also take detailed client histories and assemble all patient medical records and prior treatment records to make sure the program is a good fit.
If You Need Reputable Addiction Treatment in California, Start by Contacting Ocean Hills Recovery
With certification from the Commission on Accreditation of Rehabilitation Facilities (CARF), Ocean Hills Recovery provides the best addiction treatment California has to offer.
By choosing a reputable facility like Ocean Hills Recovery, you will have access to safe and efficient detox care, psychotherapy, twelve-step programs, and more. Using proven holistic treatment methods, Ocean Hills Recovery helps you work toward recovery and genuinely cares to make your journey safe, healthy, and sustainable.
About the author:
Nicole earned her doctoral degree in Psychology with an emphasis on marriage and family therapy at California School of Professional Psychology. Her doctoral thesis was a grounded theory study exploring the role of alienation and connectedness in the life course of addiction. She specializes in treating addiction and trauma. She is certified in DBT and EMDR, two of the most highly regarded evidence-based methods in psychotherapy. Dr. Doss is a strong LGBT advocate and provides open and affirming support to her LGBT clients.
Dr. Doss’s earlier education included graduating cum laude from the University of California, Irvine in June of 2007 with a Bachelor’s degree in Psychology. While there, she received honors recognition by Psi Chi and Golden Key honor societies.
Nicole has been working with alcoholics and addicts in our California drug and alcohol rehab center as an advisor and counselor for many years. She is passionate about providing quality counseling and care to her clients. Her main focus is on integrating the 12 Step and disease models of addiction with experiential therapeutic theory. She is married to Greg; they have two adorable sons together and an energetic yellow Labrador Retriever.