Drug Addiction Rehabilitation Scams Profit Off of Addicts and Insurance

Fraud can take many forms in the addiction rehabilitation industry. Examples include illegal kickbacks, patient brokering, unfounded insurance claims, and subsidized insurance premiums.

Patient brokering occurs when a rehab or sober living facility pays illegal kickbacks for referrals to a certain facility, regardless of its appropriateness for the patient. This referral kickback can be as much as $15,000 per patient, although some marketers are paid a flat monthly subscription fee. Marketers act like headhunters, picking up addicts off the street, sometimes offering to share a cut of the referral money.

Some facilities submit addiction recovery insurance claims that do not meet the minimum standards required for reimbursement. For instance, a facility might bill a private insurance company for eight hours of therapy services for five days a week, but not even have a licensed therapist on staff. Facilities could submit hundreds of fraudulent claims to private insurance companies.

In some cases, facilities will even pay the insurance premiums for uninsured patients in order to bill private insurance companies for their services. This demonstrates how lucrative each patient can be to a facility.

Cotchett, Pitre & McCarthy, LLP is investigating the practices of several addiction rehabilitation facilities. If you have information regarding fraud, please contact CPM attorney Justin Berger.

The author wishes to acknowledge the research work of Megan Nash, a Healthcare Fraud Research Assistant at Cotchett, Pitre & McCarthy.


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