In the largely unregulated but burgeoning market of recovery residences in Florida, one of the most egregious business scenarios involves a crossing of boundaries, with many sober home operators now opening up intensive outpatient programs (IOPs) in an attempt to secure insurance dollars.
“Unlawful practices have sprung up like weeds as more IOP licenses are issued in Palm Beach, St. Lucie and Broward counties,” says John Lehman, an advisory board member for the Florida Association of Recovery Residences (FARR), which in the state is trying to get sober home operators to adhere to national standards for recovery residence operations. “Everyone is chasing the insurance dollar.”
Since recovery residences can’t access insurance by definition, they don’t offer any clinical services. FARR’s concern is that the IOP expansion is spreading into the recovery residence world. “Established and brand new recovery residences are following behind this group and applying for their own IOP licenses,” Lehman says.
In October, Lehman and Mark Fontaine, executive director of the treatment provider-focused Florida Alcohol and Drug Abuse Association (FADAA), met with the office of the state Attorney General about unsavory practices that they see spilling over from the treatment world into the recovery residence world—notably patient brokering, kickbacks and insurance fraud.
This development could have been predicted two years ago, Lehman believes, when the Florida legislature drastically cut the substance abuse services budget, and the response from the state Department of Children and Families (DCF) was to reduce staff in the regional offices responsible for licensing and inspecting DCF providers.
For example, in Palm Beach County where the lion’s share of problems with recovery residences now exist, there were 48 DCF employees two years ago, where now there are two.
“So now all these recovery residences want to be treatment providers so they can submit claims to insurance, and their applications are getting rubber-stamped,” Lehman says. “You have people who never would have been approved two years ago getting a license to operate an IOP, which is to them a license to be reimbursed for drug tests that they used to do for $6 and now get reimbursed $1,500.”
Solid recovery residences are doing the same thing, Lehman says—“testing everyone who has an insurance card two to three times a week, and not testing anyone else.”
In California, a core of providers got together 20 years ago and recognized that they needed to be organized because legitimate sober homes were “being pilloried by neighborhoods, competing against people who were overcrowding their houses and not providing any recovery support,” says Dave Sheridan, a board member with the Santa Monica-based Sober Living Network.
The sober home industry in California had been mostly low- to mid-cost, but then, when high-end treatment in Malibu took off, high-cost sober homes established themselves, says Sheridan. The money from the insurance industry for treatment had dried up, but there was enough private-pay money so that Southern California along with South Florida became “high-end meccas,” he says.
Blurring the lines
Programs are competing with one another by offering clients “rent assistance” at their own recovery residences, and some have offered to pay cash to the potential patient if he/she enrolls in their IOP, says Lehman. “This is horrendous and everybody suffers, most importantly the client who is seen by this group more as a meal ticket than a vulnerable human being seeking hope,” he says.
FARR has certified 18 recovery residences so far, with another 21 residences in the pipeline.
In the Palm Beach County community of Delray Beach, despite Caron Treatment Centers’ winning a court decision to keep open a sober home that the city sought to shutter, the NIMBY (Not in My Back Yard) battle is still going strong. Representing FARR, Lehman is meeting in mid-November with Delray Beach Mayor Cary Glickstein, who ran for office on a platform of cleaning up the sober home industry. Lehman says he intends “to say we don’t need to be adversaries; we want to close the bad guys down too.”
In Florida, to be certified by FARR, a recovery residence must be level 1, 2 or 3 according to the level-of-care matrix advanced by the National Association of Recovery Residences (NARR), with level 4 facilities licensed by DCF as a clinical treatment program instead of a recovery residence. Florida’s approach is different from that of California, which is unique among states in licensing non-clinical residential treatment programs, so that level 3 in California falls in a gray zone.
California law is clear about where the dividing line is between recovery residences and treatment, says Sheridan. “Most providers are reluctant to cross it,” he says. In California, the Sober Living Network supports level 1 and level 2 NARR residences; the state licensure wall between recovery residences and treatment is just about at level 3, and definitely level 4, Sheridan says.