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SPECIAL REPORT: Two states with an ocean view, and an ethical cloud

March 18, 2013
by Alison Knopf, Contributing Writer
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(Third and final in a series)

(Part 1)

(Part 2)

In Florida and California, two states where new addiction treatment programs crop up on a regular basis in an intensely competitive environment, it is the best of times and the worst of times for patients—depending on whether you have money. Patients frequently are recruited to treatment centers in these states from out of state, or even out of the country. And it’s not only because of the climate and the opportunity to enjoy beautiful ocean views while paying for treatment in a “luxury rehab.”

Business is booming also because of regulatory bodies that have minimal mandates for overseeing and monitoring private treatment programs. These are the programs where people who are not covered by Medicaid, with some insurance benefits but not enough to cover a monthly stay that could exceed $40,000, go hoping for recovery.

Florida’s Department of Children and Families (DCF), which is responsible for licensing and regulation of addiction treatment programs in the state, investigates when there is a complaint. The DCF press secretary, who responded to Addiction Professional’s questions in consultation with the director of Substance Abuse Policy and Planning, Kathy Goltry, says that regulations regarding patient brokering fall under insurance regulations.

“These are not under our agency,” says Erin Gillespie, the press secretary (she recently left the state agency). She suggested that AP discuss the issue of ethics with the Florida Alcohol and Drug Abuse Association (FADAA), the trade association representing treatment providers.

FADAA executive director Mark Fontaine is accustomed to such calls—from patients. “We get calls from parents who ask, ‘What do you know about this program? My daughter is there, I looked it up on the Internet, and something doesn’t sound quite right,’” Fontaine says. “Or they just want to know more about the program, and ask us for information.”

If the program is a FADAA member, Fontaine can share what he knows. “There’s a lot of competition in Florida, a lot of programs,” he says. “In state associations there are interactions between members, and there’s discourse and dialogue that takes place—people learn what others are doing.”

Sometimes Fontaine contacts DCF for information on a program, but the state agency “only knows about the programs they fund,” he says.

Ethical issues seen in many private programs, such as deceptive statements regarding insurance coverage, are a “huge concern” for anyone who wants to “build an environment where addiction treatment and recovery are part of the culture of the state,” says Fontaine. “We’ve been very articulate about the value of treatment, and the need to support treatment. But every time there’s a bad incident it reflects on the whole industry.”

Even FADAA doesn’t know the size of the treatment industry in Florida. “We don’t know how much is spent on treatment, and we don’t know how big the industry is,” says Fontaine. “Nobody does.”

Kickbacks and cures

In California, a big part of the problem lies in there not being a level of science or medicine applied to licensing, says David Lisonbee, president and CEO of Twin Town Treatment Centers, a private for-profit program in Los Alamitos. The state Department of Alcohol and Drug Programs (ADP) has a hands-off approach to a treatment industry that itself is unscientific, Lisonbee says.

“It’s always been a social model,” Lisonbee says of treatment programs. “The problem lies with the impotence in the state of California ADP.”

For example, Lisonbee says, there are providers in Malibu that promise a cure for addiction. “They’re outright misleading patients.”

There also are providers that pay bounties for patients—in the thousands of dollars—and the state says it is unable to prevent it because Medicaid money is not involved. Federal anti-kickback laws, which can land providers in prison, apply only to Medicaid and Medicare.

Some drug testing companies also “share” their profits with referring treatment programs, which is illegal when someone else is paying, such as Medicaid. Last year, Calloway Laboratories paid $20 million to settle fraud charges brought by the Massachusetts Attorney General in which MassHealth (the state Medicaid program) paid for drug tests that included the kickback costs. According to Attorney General Martha Coakley, Calloway induced sober home operators to order drug screens. The sober home operators were charged as well.

Michael Walsh, president and CEO of the National Association of Addiction Treatment Providers (NAATP), says treatment providers in Florida—where drug testing kickbacks also have been an issue—don’t know what is legal and what isn’t. As long as Medicaid and Medicare aren’t involved (or for that matter, any insurance company), and the patient is paying for the treatment and the drug test out of pocket, does fraud exist?

“I think this is a huge issue,” says Walsh. “There is a line, and the best advice is, don’t go near that line.” In cases where a treatment provider is approached by a drug testing lab and offered a payment for ordering tests, Walsh’s advice has been to say no. “Err on the side of caution,” he says.

But if Medicaid were not involved, who would prevent the added charges for kickbacks from being passed on to patients?

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