The scheme at the center of rehab fraud is not new, but two recent developments are making it much worse.įirst, the number of people who might need a stint in rehab – drug-dependent men and women like Solomon – is exploding. “They haven’t touched the surface of what’s going on.” Simple scheme “The costs get passed on to the rest of us in the form of higher premiums.įormer insurance investigator Herzog said the industry is only starting to become aware of the scope of the problem. “These are not victimless crimes,” Dave Jones, California’s insurance commissioner, said when asked about fraud in the rehab industry. That figure doesn’t include those who die on the streets after being kicked out of rehab while still addicted, or in hospitals, or at sober living homes.Ĭritics see the lack of oversight for the rehab industry – and the consequences it is having on addicts, communities and taxpayers – as a catastrophe playing out in the open. On average, somebody dies about every two weeks while being cared for in a licensed rehab center in California. That figure doesn’t include the amount spent out of pocket by addicts and their families, or money spent by all consumers in the form of higher premiums. Nationally, risky substance use and addiction – and related hospital costs, crime and lost productivity – eat up at least $468 billion a year, according to the National Center on Addiction and Substance Abuse.The state keeps official assessments only on paper and only in Sacramento, and detail on deaths inside rehabs is hard to come by because of privacy laws. It’s difficult to get unbiased information about rehabs.From 2013 to 2016, consumer complaints about licensed rehab centers nearly doubled, from 266 to 509 per year, according to state regulators.There are just 16 inspectors, working in an office in Sacramento, to monitor nearly 2,000 rehab centers in California.Some centers are run by ex-cons who earned certificates in rehab center management from prison schools, others by doctors who have had their licenses in the crosshairs of the Medical Board of California. No degree, medical or otherwise, is required to get a license. Almost anyone can run a rehab-related business in California.But because of the lack of regulation, there’s a huge potential for fraud.”Ī Southern California News Group investigation of the industry uncovered numerous issues: It’s ugly,” said Deb Herzog, a former federal prosecutor who has investigated the rehab industry for Anthem Insurance Co. Health services, including hospital emergency rooms, are strained by the volume of rehab patients. Police and emergency workers are diverted from other duties to deal with rehab-related complaints. Homeless camps throughout Southern California are peppered with drug addicts from around the country who have been wooed by local rehabs only to wind up on the streets. Victims of this broken system run far beyond addicts such as Solomon, who churn through the system year after year without kicking their habit. Industry insiders call the Los Angeles basin “Rehab Riviera.” (Map by Ian Wheeler, Orange County Register/SCNG) Points show the primary addresses of all non-medical alcoholism and drug abuse recovery or treatment facilities licensed and/or certified by the California Department of Health Care Services as of May 4, 2017. In all, the region is home to 1,117 licensed rehab centers, a number that doesn’t include thousands of unlicensed sober living homes where addicts live as families. And those cities aren’t distant outliers Pasadena, Murrieta, San Bernardino, Woodland Hills, Long Beach – all are among the dozens of communities in Southern California where 10 or more rehab centers have opened shop. 2 is Costa Mesa, with 102 centers and a population of about 110,000. Malibu has 47 licensed rehab centers and a population of fewer than 13,000 people, making it the city with the highest per-capita concentration of rehab centers in California, according to state data. Southern California, where the implementation of Obamacare makes it easy for recent arrivals to sign on for insurance, is on the front line of the conflict. Though many legitimate centers remain, critics and long-time insiders say a darker version of the industry is emerging, built around an illicit world of patient recruiters, fraud-driven clinics and drug-testing mills. Everything from the opioid epidemic and Obamacare to prison realignment and legal loopholes has created conditions in which unethical operators can flourish, using addicts to bilk insurance companies and the public out of hundreds of millions of dollars. Chronic drug users like Solomon are commodities, exploited by a growing world of drug and alcohol rehab operators who put profit ahead of patient care. As broke as he is, Solomon is worth hundreds of thousands of dollars.
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