Congress demands documents related to rehab industry’s ‘patient brokering’ of addicts

May 30--The U.S. House committee investigating the ugly underbelly of addiction rehab in America told eight call centers to cough up details about their business practices -- including whether they get paid for routing patients to specific treatment facilities, and if so, exactly how much.

The letters -- sent on Tuesday, May 29, to big and small companies in the treatment industry -- probe allegations of "patient brokering," where addicts are essentially sold to the treatment centers willing to pay the most for them, rather than sent to the treatment centers that might do them the most good. It also targets referral call centers and websites that are affiliated with treatment centers -- but don't necessarily disclose that relationship.

"The exploitative tactics employed by patient brokers and some call aggregators have been deployed amid a perfect storm," said the letters signed by six Congressmen. They noted that 115 people die from overdoses every day -- which is one every 13 minutes.

The eight companies must by June 12 provide documents and details -- copies of contracts with treatment providers, how many patients have been referred, to where, whether it helps sign addicts up for health insurance, if it owns websites and paid internet search engines for ad optimization, among other things.

Those companies are American Addiction Centers, one of the nation's largest treatment chains; Addiction No More in Texas; Addiction Recovery Now in Florida; Elite Rehab Placement in Michigan; Redwood Recovery Solutions in Florida; Solutions Recovery Center in Florida; Treatment Management Company in Georgia; and Intervention Allies in North Hollywood.

The companies contacted by the Southern California News Group said they do not engage in the unsavory practices outlined in the letters.

"I'm excited about this letter. It's about time," said Michael Cartwright, CEO of American Addiction Centers. "Anything that looks into bad practices around the treatment industry is something we're supportive of."

Cartwright continued: "I view this as a great opportunity to start a conversation with legislators. How about the feds getting in on the action in this area? We've worked to get laws passed in Florida, in Tennessee, and now in California -- it would be a lot easier if the federal government passed some meaningful regulations, rather than doing it state by state by state."

American Addiction Centers owns several websites that handle inquiries for its centers -- much as the revered Betty Ford Center has its own hotline, he said -- and Cartwright suspects AAC got the letter because of its national size and scope.

Others on the receiving end of the letters were less clear on why they're on the list.

"It doesn't apply to me," said Carmine Thompson, founder of Intervention Allies. "As I've tried to explain to the committee, I'm a private interventionist. I don't accept insurance. I have never received a referral fee from a treatment program, and I will not give a referral fee to a treatment program."

Daniel Callahan of Solutions Recovery Center in Florida said his company doesn't use phone rooms and doesn't pay brokers to round up clients from the streets.

"The old method of having people pounding the pavement, that method doesn't work anymore," Callahan said. "What I see Congress attempting with their inquiry is an attempt to patch a system that needs overhaul. The questionnaire is asking the wrong questions. The focus on patient brokering is flawed, there must be some guidelines for advertising and marketing a facility."

Callahan says a good reputation and good online presence helps to keep the business going.

Critics of the industry welcomed news of the ongoing probe.

"Looks like a great first step and it's significant to note that action is being taken," said Warren Hanselman of Advocates for Responsible Treatment in San Juan Capistrano. "Hopefully this is just the beginning of what could lead to legislation that cleans up the unethical operators of these organizations. People with addiction have enough problems to overcome on the road to recovery without being subjected to 'referral services' that have no moral values and sell them to the highest bidder."

In its probe, the congressional committee cites the Southern California News Group's ongoing investigation into abuses rampant on the "Rehab Riviera," among other probes.

"One of the ways that patient brokers can generate leads on potential clients is through phone hotlines that connect to call centers or call aggregators," the committee wrote to the eight companies. "Patient brokers are predominantly paid in one of two ways -- a per-head fee that can range from $500 to $5,000 for each patient who successfully enters a treatment center, or monthly treatment facility fees that are based on the broker meeting a quota of patients and can result in earnings in the tens of thousands of dollars."

Clients are sometimes offered perks such as "scholarships," free housing and medical treatment.

"It is unclear if these patient brokers or call aggregators have any medical background necessary training to assist or make medical decisions for potential patients," said the congressional letter. "Perhaps most disturbing is the allegation that some patient brokers follow these individuals with substance use disorder after their release and provide them with drugs to induce relapse so that the entire process can be repeated."

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