"Here’s how the scam works: Seemingly caring people join recovery-related online chat groups, answer addiction hotlines advertised online, or show up at fundraisers for addiction recovery. They typically say they’re in recovery themselves and are therefore uniquely qualified to help," Christine Vestal reports for Stateline. "People with addiction and their families often don’t want to ask their doctors or pastors for help because they’re ashamed and want to hide their illness. So, turning to a stranger can be appealing."
The scammers, who call themselves "patient brokers," usually sweeten the deal by offering free plane tickets and pocket money as well as waiving insurance deductibles. Patient brokers can make as much as $2,000 in commissions per patient, plus extra money when they re-enroll the same patients after relapse, Vestal reports.
"Within two to four weeks of a patient checking into a sober home where treatment is subpar or nonexistent, insurers may stop paying claims under standard protocols for that type of service, and the fraudulent operators dump their young clients on the street, prosecutors say," Vestal reports. Many then begin using drugs again and many end up homeless.
Some get lured into other fraudulent treatment programs, which insurers are required to pay for. "Past cases show that the cycle can continue until the insurance company stops paying on the patient’s 26th birthday, when the Affordable Care Act allows insurers to drop dependent care coverage under a parent’s policy," Vestal reports. In addition to spotty or nonexistent treatment, many of the fraudulent programs make extra cash by ordering excessive numbers of urine drug tests to extract more money from insurance companies.
Several states have enacted laws to outlaw patient brokering and crack down on the bogus treatment programs: Arizona, California, Florida, New York, Tennessee, and Utah. Donna Johnson, who lost her son after falling for a treatment scam in Florida, says she worries scammers are setting up shop in Maryland, and has persuaded state Rep. Karen Lewis Young to draft a similar bill, Vestal reports. Florida officials are talking to advocates in Georgia, North Carolina, New Jersey, Ohio and Pennsylvania about creating their own laws.
The anti-kickback laws work, according to Florida officials. The state enacted the nation's first such law in 2016, which has served as a template for other states' laws, Vestal reports. In Palm Beach County, for example, where fraudulent treatment programs were popular, drug overdose deaths dropped from 647 in 2017 to 400 in 2018, a nearly 40 percent decline.
There's a federal anti-kickback law, but it "only applies to federal health care programs and is not broad enough to address the full range of false marketing, insurance fraud and patient brokering that is occurring in the industry," Vestal reports.