Reforming the Addiction Treatment Industry

Join Hazelden Betty Ford in advocating for industry-wide quality standards, consumer protections and smart public policies to ensure patient safety and consumer confidence. Here’s a briefing on key reform proposals.
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From misleading sales tactics, deceptive advertising and unethical marketing practices to healthcare insurance fraud and patient brokering, the largely unregulated field of drug rehab is rife with deceptive and unscrupulous—even illegal—business activities. Industry reforms, professional standards and consumer protections can and must be put into place.

Far too many vulnerable people and families suffering from substance use disorder are being harmed by the unethical marketing and business practices of some addiction treatment providers and a lack of universal standards to ensure quality throughout the field.

As a result, it is more imperative than ever for the field to hold itself to the highest ethical, legal and quality standards in the health care industry, commensurate with the lifesaving work of helping people overcome the disease of addiction. It's also time to consider a regulatory framework to ensure minimum standards are upheld and that those who desperately need quality care can get it.

The stakes—patient safety and public confidence in addiction treatment—are high.

Ethical Business Practices

People needing drug addiction treatment and their families are often desperate for help and don't know where to turn or what to do, and are therefore vulnerable to those who seek to take advantage of them.

Growing market demand for addiction treatment, driven by the opioid crisis and expanded insurance coverage, has attracted unprecedented private investment and a rapid influx of new providers motivated by profit over people.

The specialized addiction treatment industry is now a $35 billion industry. By way of comparison, in 2003 it was only $21 billion, and it is expected to top $42 billion by 2020. As it continues to grow, any regulatory framework should be determined by this core value: treating all who have addiction with dignity and respect.

As a leading member of the National Association of Addiction Treatment Providers, the Hazelden Betty Ford Foundation is committed to a robust code of ethics, and our Recovery Advocacy team is focused on addressing the following unethical and dangerous emerging business trends in the industry:

  1. Excessive Consumer Billing and Insurance Fraud. In recent years, some consumers have been charged exorbitant amounts for urine testing and have been tested far more than necessary. Other disturbing trends include labs and doctors getting kickbacks from treatment programs and sober homes for fraudulent tests billed to insurers, and a greater number of rehab centers and sober homes that own their own testing labs.

    Urine tests are not the only aspect of treatment for which excessive and fraudulent billing occurs. Some insurance billing experts are reportedly using trial and error to find out which kinds of services are most ripe, or "hot," for overbilling. In addition, some patients have been encouraged to relapse so they can re-admit to treatment and generate additional claims and kickbacks.

  2. Deceptive Marketing. It is often not clear who is behind TV and online advertisements for addiction treatment, or who callers will get when they reach out for help. Some treatment facilities also deny their affiliations with other organizations or misrepresent the services they provide, the conditions they treat, the credentials of their staff or the insurance plans they accept.

    Some operators have also been known to create fake versions of websites and Facebook pages, or to bolster their reputation with fake customer reviews on social media, to get more calls. And some use online bait-and-switch techniques to get calls from people who actually are intending to call a different treatment center.

  3. Patient Brokering. Laws prohibiting commissions and kickbacks for patient referrals are not strong, or even existent, in many jurisdictions. As a result, some treatment centers pay a third-party "lead-generation" service for calls, turning patients into commodities. Patient brokers also monitor Twelve Step meetings, drug courts and the streets to find people they can send to inpatient or outpatient treatment centers that are willing to provide a kickback, regardless of the clinical appropriateness.

    In addition, brokers are wooing addicted patients into treatment centers and sober homes with promises of free travel and health care, spa-like accommodations, free rent, gift cards, trips to casinos and strip clubs, cash and drugs. And, when patients are not well-insured, some brokers will sign them up for insurance, often just to help them churn through the system and generate fraudulent claims (and kickbacks) as many times as possible.

Quality Standards

One factor contributing to unethical and illegal practices, and also the overall quality of addiction treatment in the United States, is the fact that some states have limited requirements for addiction treatment facilities, sober homes or the people who operate them. In this environment of under-regulation and dramatically expanding market demand, the market has seen an upswing in for-profit centers that offer exclusive, spa-like environments that "guarantee" success, but offer little in the way of evidence-based treatment, effective behavioral therapy or demonstrated outcomes.

To ensure quality, efforts must be undertaken to improve the nation's regulatory framework for addiction treatment. Reforms ought to bolster state licensure requirements; accreditation standards; clinician education qualifications; and access to comprehensive, evidence-based care and support that is coordinated and integrated with the rest of the health care system. The Hazelden Betty Ford Foundation has identified quality standards in collaboration with another nonprofit provider, Caron Treatment Centers, that can serve as a guide for such reforms.

Conclusion and Recommendations

Risky substance use and addiction—and related hospital costs, crime and lost productivity—cost society $500 billion a year, according to the National Center on Addiction and Substance Abuse. This public health issue is too important to individuals, families and communities to allow the status quo to continue.

It is time to restore faith and accountability in the addiction treatment field. It is time to establish quality standards and an enforceable regulatory framework to guide all treatment organizations.

It is time to ensure ethical, quality care for all people who seek help for addiction.

Therefore, we advocate for federal legislation:

  • Directing the Secretary of Health and Human Services to publish and disseminate a report assessing the adequateness and uniformity of licensure, accreditation and clinician education requirements for substance use disorder treatment providers nationwide.
  • Directing the Substance Abuse and Mental Health Services Administration (SAMHSA) to develop, publish and disseminate best practices for operating recovery housing that promotes a safe environment for sustained recovery from substance use disorder.
  • Empowering the Federal Trade Commission to investigate and prosecute deceptive marketing practices by addiction treatment providers and call aggregators, in response to complaints from consumers and businesses.
  • Directing SAMHSA to develop, publish and disseminate best practices for "interventionists" who help families and individuals access addiction treatment.
  • Direct the Department of Justice to define "patient brokering" in consultation with SAMHSA, with an eye toward future legislation.
  • Directing the Secretary of Health and Human Services to assess the adequateness and uniformity of addiction treatment education and training in medical schools.

We also support an assortment of legislation to improve addiction treatment quality by:

  • Encouraging greater integration of specialty addiction care with primary care and all of mainstream medicine.
  • Encouraging more comprehensive linkages to community-based recovery support throughout the continuum of care.
  • Incenting evidence-based practices and quality-based outcome measures and standards.
  • Bolstering the addiction treatment workforce.

Listen to a related podcast episode featuring Hazelden Betty Ford Foundation's former president and chief executive officer Mark Mishek discussing Consumer Beware: Not All Addiction Treatment Is the Same.

Read our press release on our Congressional testimony provided by Mark Mishek on the topic of treatment industry reform, and watch his interview on CNBC's American Greed.