A spate of new laws will soon be changing the face of drug treatment in California after years of lax government oversight. Legislators and addiction advocacy groups argue the state’s neglect has allowed insurance fraud, sexual and physical assault, and even death to run rampant at these sites where many struggling with addiction once hoped to start new lives.
One such victim of this system is Timmy Solomon, who was profiled by The Orange County Register in 2017. Solomon is one of many addicts caught in a cycle of rehab and relapse that is exacerbated by some facilities taking advantage of the Affordable Care Act’s requirement that insurance pay for drug and alcohol treatment, according to the authors.
Timmy Solomon being arrested after relapsing – Image from The Orange County Register
This sentiment is echoed by Julia Phelps of the California Department of Health Care Services Substance Use Disorder Compliance Division, who argued that the increased insurance payouts led to insurance fraud, including paying addicts to attend counseling sessions or enroll in California insurance, which can then be billed by the treatment center, as well as the practice of “body brokering.”
Body Brokers, also called “patient recruiters” are people who “lure addicts with good insurance to come to California, stay in rehabs, and make millions off their insurance,” according to a December 2019 article by Susie Steimle. In some cases, the brokers give their victims drugs before sending them to rehab to ensure that they test positive, which in more than one case has led to overdose.
While the signs for Soba Recovery Center and Riviera Recovery are noticeable from the Pacific Coast Highway, there are actually more than 40 licensed rehabilitation centers and many more uncounted and unlicensed rehab facilities and sober living group homes in the Malibu area, earning this area the nickname of “Rehab Riviera,” according to The Orange County Register.
Passages Malibu – Image from Yelp
Some of these treatment centers like Passages and Promises Malibu are connected with glamorous celebrities like Lindsey Lohan, Britney Spears, and Marc Jacobs, and can cost upwards of $67,000 per month, according to an October 2007 article by Paul Pringle of the Los Angeles Times.
But rather than being driven by altruistic motives of helping others find recovery, Pringle argues that the California rehab industry is dominated by for-profit enterprises, whose policies and prices are often in sharp contrast with those of nonprofit addiction treatment centers like Hazelden/Betty Ford.
The for-profit model also encourages unscrupulous rehab operators to lead their clients to relapse, even providing them with drugs. Greg Williams, executive vice president of the nonprofit advocacy group Facing Addiction explained that “If I’m a Malibu rehab, I get to bill the insurance company when you come. Then when you come back, I get to bill the insurance company again. But if you stay well, I get nothing,” according to a 2019 article by Julia Lurie.
Further problematizing the high costs of oceanfront rehab are the no-refund policies at many of the centers located in Malibu. According to Pringle, many of the facilities in Malibu require a month’s payment in advance and refuse to refund any portion of the payment if the patient leaves treatment early, whether on their own or at the request of the treatment center.
“If I’m a Malibu rehab, I get to bill the insurance company when you come. Then when you come back, I get to bill the insurance company again. But if you stay well, I get nothing.” – Greg Williams – Facing Addiction
Additionally, anyone can run a rehab related business in California; no degree or training is required to get a license. In fact, according to The Orange County Register, 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.” Even as consumer complaints about licensed rehab centers doubled between 2013 and 2016, the state of California has only 16 inspectors, stationed in Sacramento, which The Orange County Register claims causes complaints 90 days to three years to be resolved.
It probably comes as no surprise then that 190 people have died at rehab facilities in California since 2010, according to Steimle. On average, someone dies “every two weeks while being cared for in a licensed rehab center in California,” according to The Orange County Register. More tragic, this number does not include the many addicts who die on the streets after being kicked out of their treatment programs.
Tammy Smick whose son Alex died while in rehab in Southern California – Image from The Orange County Register
These issues do not only concern addicts and their families, however, as “substance use and addiction – and related hospital costs, crime and lost productivity – eat up at last $468 billion a year,” according to The Orange County Register. This impacts taxpayers who support the local police and insurance users who suffer increased premiums as the other members place extra strain on the system.
Costs of fraudulent rehab facilities in California – Infographic from CNN
As the opioid crisis continues to grow throughout the United States, and criminal justice systems are trying to divert more prisoners into rehab than prison, the problems with fraud and failed regulation have become more dire. This trend culminated in the case of Christopher Bathum, founder of Seasons Malibu treatment center as well as a series of outpatient clinics and sober homes, who was convicted in 2018 of “sexually assaulting seven women in his care.” Bathum has been accused of committing millions of dollars in insurance fraud, according to a November 2019 article in Variety.
“Rehab Mogul” Christopher Bathum – Image from The Orange County Register
In 2019, however, California legislators were finally able to implement two laws to ameliorate some of these issues. According to a memo from the California Health and Human Services Agency, California’s Patient Brokering Law – SB 1228 works to end the practice of body brokering by making it illegal for treatment facilities to give or receive anything of value for referral of a client. The law imposes penalties of up to $200,000 and 10 years in prison for body brokers and fines of $2000 for each occurrence and the potential to lose licensure for the rehab facilities involved in these activities.
“We have more standards for hair salons than we do for rehab” – Laurie Girand – Advocates for Responsible Treatment
Two other laws, AB 3162 and SB 992 increase the penalties for operating unlicensed treatment facilities and require treatment licensee applicants to disclose financial interests in other treatment related services or facilities and to have relapse plans in place for all patients, respectively.
Laurie Girand of Advocates for Responsible Treatment argues, however, that these new laws “have barely scratched the surface” and are not stiff enough to prevent body brokers and shady rehab managers from profiting off people suffering from addiction. Her nonprofit organization is pushing for mandated criminal background checks and fingerprinting for rehab employees, more state inspectors, and to eliminate false advertising among treatment facilities. Ultimately Girand argues that we need increased regulation across the board, because as she sees it, “we have more standards for hair salons than we do for rehab.”
Yasmin Kazeminy 