fraud control california drug rehabs

Fraud Control for California Drug Rehabs

Fraud Control for California Drug Rehabs

Addiction recovery facilities have been experiencing fraud in many California drug rehabs, and lawmakers are searching for ways to put an end to it. When the Southern California News Group investigated this issue, it came across several problems that need attention in this industry.

A major factor contributing to the fraudulent activity is that drug rehabilitation centers do not require a degree of any kind to in order to obtain a facility license. These rehabilitation facilities aren’t held to a standard or set of laws that ensure they are providing safe and affordable care to those struggling with addiction.

These reports of fraud have made it difficult for those searching for recovery. It is important to recognize what to look for when searching for trusted California drug rehabs. Thankfully there are reputable rehabs in California that hold accreditation, which establishes that they maintain standards of care and are not following any unethical practices.

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california drug rehab fraud control

Patient Brokering in Addiction Treatment

When someone addicted to drugs or alcohol is recruited by a representative and then traded to a treatment center in exchange for money, it is called patient brokering. Sometimes, these representatives will even offer potential patients cash to entice them to choose their services.

Not only are these rehab centers providing substandard care to patients, they also provide them with services they do not need. These facilities then bill the insurance companies in hopes of being sizably reimbursed for these inadequate services.

Patient brokering is symptom of fraud because the facilities have an incentive to keep patients addicted to substances. After the patients’ plans stop paying for the treatments, representatives release them from their facilities and refuse to continue to pay their insurance premiums.

Why Has this Happened?

Unfortunately, this problem has been on the rise because of the implementation of the Affordable Care Act. As new patients come to California for treatment, it is easy for them to sign up for health insurance because of the ACA. Since rehabs don’t require a degree to obtain a license, there are many licensed and unlicensed rehab centers that exist in California that take advantage of those searching for treatment.

The amount of fraud in California drug rehabs has continued to grow with the rise of people who need to obtain help from rehab facilitates. Officials with the Centers for Disease Control and Prevention state that approximately 2 million Americans are addicted to prescription opioids, and another 1 million more are addicted to heroin and other illegal substances.

Because of the factors listed above and the fact that insurance companies are required to pay for drug treatment under the ACA, rehab centers have begun to use “body brokers” to advertise online, on television and wherever they can to convince people from all over the country to come to Southern California for treatment. If these people have insurance, the rehab centers are willing to take them in. However, if they do not have insurance, the rehab centers will offer to pay their travel expenses to California where they can then use the ACA to obtain money from insurance companies.

The Scheme

Most patients are unaware they will be required to sign up for insurance when they agree to go to a rehab center. When they arrive at the rehab facility, the staff gets to work charging the insurance company for a myriad of services, such as detoxification and counseling services. One patient’s bills may even come to hundreds of thousands of dollars, but the patient could very well not be receiving any useful services.

These unlicensed rehab centers find other ways to make money from the insurance companies. Occasionally, residents of drug rehab centers are required to take drug tests from lab centers to ensure that they are sober. These labs may be owned by the same people who own the rehab centers and will likely overcharge for services.

This vicious cycle finally ends when the insurance company stops paying the bills. Then, the patient is thrown out onto the streets without ever having received the care they need.

The Consequences

A consequence of this system has been the homeless encampments that are growing in Southern California. These encampments are populated by people from all over the country who were sucked into the system by unscrupulous rehab centers and thrown out on the streets when their insurance stopped paying for them. In addition to that, those who have been released from rehab centers often end up in the emergency rooms, causing another crisis.

A Southern California news institution learned a lot about this current climate from a recent investigation. This study found that the Sacramento office that oversees California’s nearly 2,000 rehab centers only has 16 inspectors. They also learned that complaints against licensed rehab centers nearly doubled between 2013 and 2016. Every two weeks, a patient at a licensed rehab center passes away.

A Possible Solution for Fraud Control for California Drug Rehabs

The legislature in California has taken measures to make it more difficult to engage in patient brokering recently. In June, Senator Connie Leyva introduced Senate Bill 1156 requiring that rehab centers pay their patients’ premiums for an entire year. Although, patients wouldn’t necessarily need to be in treatment for that entirety, it holds the rehab facilities responsible for those patients for a longer period of time, making it more difficult to take advantage of those searching for help.

According to the bill, any rehab that pays a patient’s premiums would be required to inform the insurance companies and the Department of Health Care Services. If the patients are eligible for Medicare or Medi-Cal, they would need to inform the insurance companies as well. In the event that the patient qualifies for a public plan, the rehab facility would be reimbursed at the public plan’s rate.

This legislation is just one of pieces in overcoming the fraud in the substance abuse industry but it’s a step in the right direction.

Choosing a Reputable Rehab Facility

If you or a loved one need is searching for a trusted California drug rehab center, contact us today. Ocean Hills Recovery is accredited by the Commission on Accreditation of Rehabilitation Facilities, which is a third-party, nonprofit organization that evaluates patient outcomes and assesses the quality of services provided.

Patient brokering and advertising gimmicks are never used to sell our services. We're here to provide genuine help and get you started on your recovery journey.