U.S. GOVERNMENT PUBLISHING OFFICE

28–931 WASHINGTON : 2019

EXAMINING CONCERNS OF PATIENT BROKERING 

AND ADDICTION TREATMENT FRAUD 

HEARING 

BEFORE THE

SUBCOMMITTEE ON OVERSIGHT AND 

INVESTIGATIONS 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

DECEMBER 12, 2017 

Serial No. 115–87 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

GREG WALDEN, Oregon 

Chairman 

JOE BARTON, Texas 

Vice Chairman 

FRED UPTON, Michigan 

JOHN SHIMKUS, Illinois 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Ohio 

BILLY LONG, Missouri 

LARRY BUCSHON, Indiana 

BILL FLORES, Texas 

SUSAN W. BROOKS, Indiana 

MARKWAYNE MULLIN, Oklahoma 

RICHARD HUDSON, North Carolina 

CHRIS COLLINS, New York 

KEVIN CRAMER, North Dakota 

TIM WALBERG, Michigan 

MIMI WALTERS, California 

RYAN A. COSTELLO, Pennsylvania 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

JEFF DUNCAN, South Carolina 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

G.K. BUTTERFIELD, North Carolina 

DORIS O. MATSUI, California 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

PETER WELCH, Vermont 

BEN RAY LUJA ́ N, New Mexico 

PAUL TONKO, New York 

YVETTE D. CLARKE, New York 

DAVID LOEBSACK, Iowa 

KURT SCHRADER, Oregon 

JOSEPH P. KENNEDY, III, Massachusetts 

TONY CA ́ RDENAS, California 

RAUL RUIZ, California 

SCOTT H. PETERS, California 

DEBBIE DINGELL, Michigan 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

GREGG HARPER, Mississippi 

Chairman 

H. MORGAN GRIFFITH, Virginia 

Vice Chairman 

JOE BARTON, Texas 

MICHAEL C. BURGESS, Texas 

SUSAN W. BROOKS, Indiana 

CHRIS COLLINS, New York 

TIM WALBERG, Michigan 

MIMI WALTERS, California 

RYAN A. COSTELLO, Pennsylvania 

EARL L. ‘‘BUDDY’’ CARTER, Georgia 

GREG WALDEN, Oregon (ex officio) 

DIANA DEGETTE, Colorado 

Ranking Member 

JANICE D. SCHAKOWSKY, Illinois 

KATHY CASTOR, Florida 

PAUL TONKO, New York 

YVETTE D. CLARKE, New York 

RAUL RUIZ, California 

SCOTT H. PETERS, California 

FRANK PALLONE, JR., New Jersey (ex 

officio) 

(III) 

C O N T E N T S 

Page 

Hon. Gregg Harper, a Representative in Congress from the State of Mississippi, opening statement ................................................................................. 1 

Prepared statement .......................................................................................... 3 

Hon. Diana DeGette, a Representative in Congress from the state of Colorado, 

opening statement ................................................................................................ 4 

Hon. Michael C. Burgess, a Representative in Congress from the State of 

Texas, opening statement .................................................................................... 6 

Hon. Greg Walden, a Representative in Congress from the State of Oregon, 

prepared statement .............................................................................................. 92 

WITNESSES

Douglas Tieman, President and CEO, Caron Treatment Centers ....................... 8 

Prepared statement .......................................................................................... 11 

Answers to submitted questions ...................................................................... 126 

Pete Nielsen, Chief Executive Officer, California Consortium of Addiction 

Programs and Professionals ................................................................................ 37 

Prepared statement .......................................................................................... 39 

Answers to submitted questions ...................................................................... 138 

Dave Aronberg, State Attorney, 15th Judicial Circuit ......................................... 45 

Prepared statement .......................................................................................... 47 

Answers to submitted questions ...................................................................... 153 

Alan S. Johnson, Chief Assistant State Attorney, 15th Judicial Circuit ............ 49 

Prepared statement .......................................................................................... 51 

Answers to submitted questions ...................................................................... 176 

Eric M. Gold, Assistant Attorney General, Chief, Healthcare Division, Office 

of the Massachusetts Attorney General ............................................................. 56 

Prepared statement .......................................................................................... 58 

Answers to submitted questions ...................................................................... 179 

SUBMITTED MATERIAL

Article entitled, ‘‘Standards for Sober Living Environments,’’ California Consortium of Addiction Programs and Professionals ............................................. 93 

Chart of patients’ rights submitted by Mr. Tieman .............................................. 101 

Charts submitted by Mr. Aronberg ........................................................................ 102 

Standards by Caron Treatment Centers ................................................................ 105 

Report entitled, ‘‘2017 Opioid Overdose & Death in Orange County,’’ Orange 

County Health Care Agency ................................................................................ 109 

Article entitled, ‘‘How some Southern California drug rehab centers exploit 

addiction,’’ Orange County Register, May 21, 2017 1

1 The article can be found at: https://docs.house.gov/meetings/IF/IF02/ 

20171212/106716/HHRG-115-IF02-20171212-SD007.pdf. 

(1) 

EXAMINING CONCERNS OF PATIENT 

BROKERING AND ADDICTION TREATMENT 

FRAUD 

TUESDAY, DECEMBER 12, 2017 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:16 a.m., in Room 

2322, Rayburn House Office Building, Hon. Gregg Harper [chairman of the subcommittee] presiding. 

Present: Representatives Harper, Griffith, Burgess, Brooks, Barton, Walberg, Walters, Costello, Carter, DeGette, Castor, Tonko, 

and Ruiz. 

Also Present: Representative Bilirakis. 

Staff Present: Jennifer Barblan, Chief Counsel, Oversight and Investigations; Samantha Bopp, Staff Assistant; Adam Buckalew, 

Professional Staff Member, Health; Kelly Collins, Staff Assistant; 

Adam Fromm, Director of Outreach and Coalitions; Ali Fulling, 

Legislative Clerk, Oversight and Investigations, Digital Commerce 

and Consumer Protection; Brittany Havens, Professional Staff, 

Oversight and Investigations; Katie McKeogh, Press Assistant; 

Kristen Shatynski, Professional Staff Member, Health; Jennifer 

Sherman, Press Secretary; Alan Slobodin, Chief Investigative 

Counsel, Oversight and Investigations; Everett Winnick, Director of 

Information Technology; Christina Calce, Minority Counsel; Chris 

Knauer, Minority Oversight Staff Director; Miles Lichtman, Minority Policy Analyst; Kevin McAloon, Minority Professional Staff 

Member; C.J. Young, Minority Press Secretary; and Theresa 

Tassey, Minority Health Fellow. 

OPENING STATEMENT OF HON. GREGG HARPER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MISSISSIPPI 

Mr. HARPER. The subcommittee will come to order. 

I want to thank each of the witnesses for being here with us 

today. 

The subcommittee today holds a hearing entitled, ‘‘Examining 

Concerns of Patient Brokering and Addiction Treatment Fraud. 

This is another chapter of the subcommittee’s ongoing extensive 

look at the opioid epidemic and the toll that it’s taken on countless 

lives across our Nation. 

2 

The most recent data from the Centers for Disease Control and 

Prevention notes that opioids killed more than 33,000 people in 

2015, more than any year on record. What’s worse, it’s estimated 

that 91 Americans die every day from opioid overdose. Not only has 

the epidemic lead to record numbers of overdoses and overdose 

deaths, but it has also resulted in an increased need for treatment. 

In a recent Washington Post article, it is estimated that there are 

2.6 million Americans with opioid addiction. 2.6 million. 

Sadly, today we are here to examine a newer side of the opioid 

epidemic that is impacting individuals who are seeking treatment 

for their substance use disorder. Earlier this year, news reports 

began surfacing of patient or addict brokers that profit by recruiting individuals suffering from a substance use disorder and luring 

them to treatment facilities and sober living homes, oftentimes in 

other states. The individuals who are brokered are lured into these 

schemes by promises of scholarships for treatment, a free plane 

ticket, free housing, along with other incentives such as free cigarettes, movie tickets, and even yoga. The patient brokers themselves receive generous financial kickbacks from facilities. The incentive is not to find an evidence-based treatment option that 

meets the needs of the individual, but instead to simply fill beds 

with heads. 

These brokers often send individuals to treatments in states with 

higher numbers of treatment facilities and sober living homes per 

capita, such as Florida and California. The sales pitch tout the 

warm, sunny weather of these states in luring individuals away 

from their homes and out of their states of residence. Florida and 

California to be the two states hit hardest by these practices. But 

that doesn’t mean that other states aren’t starting to face these 

challenges as well. Concerns have been raised that other states, including Arizona and Texas, are starting to face these issues. Some 

have said that this is already becoming a national problem. 

Whether it’s where the treatment facility or sober living home 

are physically located or it’s where the individual is recruited from, 

these schemes are happening all over our nation, frequently crossing state lines. That’s why we’re here today. This isn’t just a state 

issue. It has become and is becoming a national issue. 

These schemes are often very complex. They can include deceptive marketing practices, kickbacks, overbilling for treatment and 

urine drug tests, low-quality treatment or, in some cases, no treatment. The most concerning allegation is that patient brokers or, in 

some cases, people that work for a treatment facility or are affiliated with a sober living home, provide drugs to an individual so 

that they can relapse. This unethical practice keeps the individual 

in treatment and allows those involved in the scheme to restart the 

billing cycle and continue racking up bills. 

These practices are immoral but are even more monstrous because they prey on people that are already in a very vulnerable 

state. These individuals with substance use disorders get caught in 

a scheme that incentivizes relapse and profit rather than treatment 

and, ultimately, recovery. 

It’s important that we shed light on the fraud and abuse in the 

substance use disorder treatment industry. Make no mistake, we 

want those who are suffering from addiction to seek treatment and 

3 

the treatment that is most appropriate for them. We also want to 

ensure that when individuals or their loved ones are looking for a 

treatment option, that they’re well-equipped to find a legitimate 

provider that meets their needs so that they don’t fall victim to this 

inexcusable and unacceptable practices that are prioritizing profits 

over recovery and, in some instances, life. 

We thank our panel of witnesses for joining us this morning who 

are on the front lines of this issue and provide invaluable perspectives that we’ll hear from you today. 

My hope for today’s hearing is for us to learn about patient 

brokering and related fraud and abuse within the treatment industry. This discussion will help us identify potential solutions that 

will allow us to better protect individuals who are seeking treatment for themselves or their loved ones. 

We thank you for appearing before the subcommittee today and 

look forward to hearing your testimony. 

The chair will now recognize the ranking member, Ms. DeGette, 

for the purposes of an opening statement. 

[The prepared statement of Mr. Harper follows:] 

PREPARED STATEMENT OF HON. GREGG HARPER

The Subcommittee will come to order. 

Today is my first hearing as the Chairman of the Oversight and Investigations 

Subcommittee. I want to thank Chairman Walden for his confidence and look forward to working with Ranking Member DeGette, Vice Chairman Griffith and all 

members of the subcommittee in the coming year. 

Today, the Subcommittee holds a hearing entitled, ‘‘Examining Concerns of Patient Brokering and Addiction Treatment Fraud.’’ This is another chapter of the 

Subcommittee’s ongoing extensive look at the opioid epidemic and the toll that it 

has taken on the countless lives across our nation. The most recent data from the 

Centers for Disease Control and Prevention notes that opioids killed more than 

33,000 people in 2015, more than any year on record. What’s worse—it’s estimated 

that 91 Americans die every day from an opioid overdose. 

Not only has the epidemic led to record numbers of overdoses and overdose 

deaths, but it has also resulted in an increased need for treatment. In a recent 

Washington Post article, it is estimated that there are 2.6 million Americans with 

an opioid addiction. 2.6 million. Sadly, today we are here to examine a newer side 

of the opioid epidemic that is impacting individuals who are seeking treatment for 

their substance use disorder. 

Earlier this year, news reports began surfacing of ‘‘patient’’ or ‘‘addict’’ brokers 

that profit by recruiting individuals suffering from a substance use disorder and luring them to treatment facilities and sober living homes, often times in other states. 

The individuals who are brokered are lured into these schemes by promises of 

‘‘scholarships’’ for treatment, a free plane ticket, free housing, along with other incentives such as free cigarettes, movie tickets, and yoga. 

The patient brokers themselves receive generous financial kickbacks from facilities. The incentive is not to find an evidence-based treatment option that meets the 

needs of the individual, but instead to simply ‘‘fill beds with heads.’’ 

These brokers often send individuals to treatment in states with high numbers 

of treatment facilities and sober living homes per capita, such as Florida and California. The sales pitches tout the warm, sunny weather of these states in luring individuals away from their homes and out of their states of residence. Florida and 

California appear to be the two states hit hardest by these practices, but that 

doesn’t mean that other states aren’t starting to face these challenges as well. 

Concerns have been raised that other states including Arizona and Texas are 

starting to face these issues. Some have said that this is already becoming a national problem. Whether it’s where the treatment facility or sober living home are 

physically located, or it’s where the individual is recruited from—these schemes are 

happening all over our nation, frequently crossing state lines. That’s why we are 

here today. This isn’t just a state issue, it’s becoming a national issue. 

These schemes are often very complex. They can include deceptive marketing 

practices, kickbacks, overbilling for treatment and urine drug tests, low-quality 

4 

treatment or, in some cases, no treatment. The most concerning allegation is that 

patient brokers, or in some cases people that work for a treatment facility or are 

affiliated with a sober living home, provide drugs to an individual so that they will 

relapse. This unethical practice keeps the individual in treatment and allows those 

involved in the scheme to re-start the billing cycle and continue racking up bills. 

These practices are immoral, but are even more monstrous because they prey on 

people that are already in a very vulnerable state. These individuals with substance 

use disorders get caught in a scheme that incentivizes relapse and profit rather 

than treatment and, ultimately, recovery. 

It’s important that we shed light on the fraud and abuse in the substance use disorder treatment industry. Make no mistake, we want those who are suffering from 

addiction to seek treatment, and the treatment that is most appropriate for them. 

We also want to ensure that when individuals or their loved ones are looking for 

a treatment option, that they are well equipped to find a legitimate provider that 

meets their needs so that they don’t fall victim to these inexcusable practices that 

are prioritizing profit over recovery, and in some instances life. 

We thank our panel of witnesses for joining us this morning. You are on the 

frontlines of this issue and provide invaluable perspectives. My hope for today’s 

hearing is for us to learn more about patient brokering and related fraud and abuse 

within the treatment industry. This discussion will help us identify potential solutions that will allow us to better protect individuals who are seeking treatment for 

themselves or their loved ones. We thank you for appearing before the Subcommittee today and look forward to hearing your testimony. 

OPENING STATEMENT OF HON. DIANA DEGETTE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF COLORADO 

Ms. DEGETTE. Thank you very much, Mr. Chairman, and welcome. We’re happy to have you as the new chairman of the Oversight and Investigations Subcommittee. And in what I hope is not 

a rare incidence, I’m just going to associate myself with everything 

you said in your opening statement. I agree with you that this 

issue is a bipartisan and national concern. I’m glad that we’re having this hearing today. 

As we have been exploring in this subcommittee and the full Energy and Commerce Committee, we’re in the midst of the worst addiction crisis in the United states’ history. And substance use disorder has ravaged the families and communities. In Colorado, my 

home state, more people died from overdoses than from car wrecks 

last year, just to put this in some kind of context. 

And as people are seeking addiction treatment services for themselves and their loved ones, it really, really puts a punctuation 

point on the fact we need to make sure that they’re getting services 

that are useful and that are actually treating them and that we 

don’t have fly-by-night operations that are just taking advantage of 

families’ desperation. 

High-quality, evidence-based treatment, both inpatient and outpatient, is a key part of recovery from substance use disorder. And 

in a lot of cases, it does involve recovery residences also known as 

sober living homes. As SAMHSA said, properly managed recovery 

residences, quote, empower people by providing support as they 

transition towards living independent and productive lives in their 

respective communities. 

But, Mr. Chairman, as you said, some of these patient brokers 

and some sober homeowners and treatment providers are fraudulently exploiting coverage of addiction treatment services in order 

to defraud insurers. I’d really like to know, and I’m hoping our 

panel can help us today, just exactly what the extent of this probVerDate Nov 24 2008 14:58 Jan 15, 2019 Jkt 037690 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-87 CHRIS
5 

lem is or how widespread it is. I’ve seen the media accounts, like 

you have, and I was just as appalled as you were. But we really 

need to understand the scope of the problem so that we can determine what laws, rules, and regulations we need to look at to effectively deal with the issue. 

As you said, the reports say that patient brokers solicit desperate 

individuals and direct them towards deceitful providers who offer 

substandard treatment or sometimes even no treatment at all. 

They push people to live at these sham sober homes even though 

they know, in many cases, drugs and alcohol are readily available 

at these houses. And, of course, as you said, they’ve got these deceptive websites. They promise a vacation-like atmosphere in warm 

locales. They buy people airline tickets, and they help people get 

insurance just to cover the cost of these sham houses. So it’s a 

problem. 

The fraudulent treatment centers are no better. Reports suggest 

that these facilities treat patients as commodities, not people. For 

example, insurance companies told us that these centers require 

people to take daily urine tests for which the treatment facilities 

bill insurers thousands of dollars per day. How is it that a facility 

can bill thousands of dollars a day for urine tests, which based on 

all the reports, are almost never clinically necessary? Also, the facilities bill for addiction treatment that they do not actually provide. I’d like to know how a presumably licensed treatment facility 

can get away with this. 

And, finally, and perhaps most disturbing, we heard that patient 

brokers push individuals with substance use disorders to live at 

particular sober homes where they know the drugs and alcohol are 

available. So, apparently, the goal is to keep them addicted so that 

they can continue to get reimbursements. 

Now, as I said earlier, Mr. Chairman, I hope we can get a scope 

of this problem as it relates to drug treatment. I’d like to hear 

what the panel’s views are on how we can reduce this. What do the 

states need to police treatment providers and sober home living? 

What does optimal evidence-based treatment look like? And how do 

we ensure these families get it? 

I hope we can add some context to the problem because I really 

don’t have any idea how extensive it is. And I’m one that doesn’t 

think we should overreact but, on the other hand, this is a serious 

problem. 

With that, I know that Congresswoman Castor has a constituent 

here she’d like to introduce, and I’ll yield the balance of my time 

to her. 

Ms. CASTOR. Well, thank you, Ranking Member DeGette. 

I’d also first like to congratulate my friend and colleague, our 

new chairman, Gregg Harper. 

Congressman, you’re a very thoughtful Member of Congress. I’ve 

enjoyed working with you in the past and look forward to working 

with you on the oversight committee. 

I’d like to thank the State Attorney for the 15th Judicial Circuit, 

Dave Aronberg, and the Chief Assistant, Alan Johnson, for their 

work and welcome them here to the committee. They are the ones 

that have been at the forefront of protecting families and taking on 

this issue in the State of Florida, including leading to the adoption 

6 

by the state legislature of our patient brokering act. Thank you for 

being here today, and thank you for your public service. 

Mr. HARPER. The gentlelady yields back. 

The chair will now recognize Dr. Burgess for purposes of an 

opening statement. 

OPENING STATEMENT OF HON. MICHAEL C. BURGESS, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BURGESS. Thank you, Chairman. And let me add my congratulations to your position. You reference that we’re on the front 

lines of this debate, and the subcommittee that I chair, the Health 

Subcommittee, and your Subcommittee of Oversight and Investigations, yes, we are partners in this and very much on the front lines 

of this. 

I also want to thank Morgan Griffith for ably stepping in and 

keeping a firm hand on the tiller during the transition. That was 

very helpful as well. 

This hearing is important. We’re here to examine the possibility, 

the likelihood of unethical behavior in our substance abuse treatment system. In the past few years, Congress has worked to find 

thoughtful and effective ways to respond to the opioid epidemic. In 

fact, in the Health Subcommittee, we did have our first oversight 

hearing of the Comprehensive Addiction and Recovery Act. It’s 

been about a year since it was enacted, and we thought it was appropriate to take a look at how the agencies were responding to the 

legislation that Congress passed. 

And, additionally, we held sort of an open forum, a Members’ 

Day, where any Member, not just on the Health Subcommittee, not 

just on the Energy and Commerce Committee, but any Member of 

Congress, from both sides of the dais, could come and talk about 

problems that they were seeing in their districts. And we also were 

interested in hearing the solutions that people had in mind. So out 

of that very thoughtful day, where over 50 Members of Congress 

came and testified to the subcommittee, out of that exercise, we are 

looking forward to developing some legislation. 

I think the other lesson—and I do appreciate so much the testimony that was provided by our witnesses, and I appreciate them 

being here. You certainly opened or broached the subject that I had 

wondered about in the past, and that was seeing the law of unintended consequences was on full display with some things. And 

having been on this subcommittee now for 12 years, and having 

been on the Energy and Commerce Committee a like amount of 

time, certainly saw many of those things as they were enacted in 

2008, 2009, 2010, watched the rules come through the agency in 

2012 on setting the parameters with which several of you have acknowledged now becomes—it was done with the best of intentions, 

but now it’s adding to the problems. 

The Comprehensive Addiction and Recovery Act in the 21st Century Cures Act included provisions that increased access to treatment for individuals suffering from opioid addiction and providing 

communities with additional prevention grants. That’s a good 

thing. Now we want to be certain in this oversight exercise that 

that is all being used to the highest purpose for the patients it was 

intended to serve. 

7 

Thank you, again, Mr. Chairman, for the recognition. I’ll be 

happy to yield to any other member on this side of the dais or yield 

back to you. 

Mr. HARPER. The gentleman yields back. 

I ask unanimous consent that the members’ written opening 

statements be made part of the record. 

Without objection, will be entered into the record. 

Additionally, I ask unanimous consent that Energy and Commerce members not on the Subcommittee on Oversight and Investigation be permitted to participate in today’s hearing. 

Without objection, so ordered. 

Finally, we welcome non-Energy and Commerce Committee 

members who may be with us today. Pursuant to House rules, 

Members not on the committee are able to attend our hearings but 

cannot ask questions. 

I would now like to introduce our witnesses for today’s hearing. 

And I will start by yielding to Mr. Costello of Pennsylvania to introduce our first witness. 

Mr. COSTELLO. Thank you, Mr. Chairman. 

I am very proud to introduce Douglas Tieman, President and 

CEO of Caron Treatment Centers in Berks County, Pennsylvania, 

in my congressional district. I have visited the Caron Treatment 

Center and I can say with confidence that it provides lifesaving addiction and behavioral healthcare treatment. And they make a tremendously positive impact, both in southeastern Pennsylvania and 

across this country, with the services they provide and the leadership that they provide. 

I look forward to hearing Mr. Tieman testify this morning about 

standards for quality treatment, ways to improve our healthcare 

system to better treat the millions of Americans struggling with 

substance abuse disorder, and obstacles that Caron and other organizations face as bad actors, as Ms. DeGette has suggested or 

raised, as bad actors seek to take advantage of vulnerable individuals seeking help. 

Thank you, and I yield back. 

Mr. HARPER. The gentleman yields back. 

Today we also have Pete Nielsen, who is the CEO of the California Consortium of Addiction Programs and Professionals. Next 

is Mr. Dave Aronberg, the State Attorney for the 15th Judicial District in Palm Beach, Florida. Then we have Mr. Alan Johnson, the 

Chief Assistant State Attorney for the 15th Judicial Circuit in 

Palm Beach and the head of the Palm Beach County Sober Homes 

Task Force. And finally, we have Mr. Eric Gold, the Assistant Attorney General and the chief of the healthcare division for the Office of the Massachusetts Attorney General. 

Thank you all for being here today and providing testimony. We 

look forward to the opportunity to discuss concerns of fraud and 

abuse in the treatment industry, and I know it’ll be very helpful 

testimony. 

You’re aware that the committee is holding an investigative 

hearing. And when doing so, we have had the practice of taking 

testimony under oath. Does anyone have any objection to testifying 

under oath? 

8 

The chair then advises you that under the rules of the House and 

the rules of the committee, you’re entitled to be accompanied by 

counsel. Do you desire to be accompanied by counsel during your 

testimony today? 

Seeing no one, in that case, if you would, please rise and raise 

your right hand, and I will swear you in. 

[Witnesses sworn.] 

Mr. HARPER. Thank you. You are now under oath and subject to 

the penalties set forth in Title 18, section 1001 of the United states 

Code. You may now give a 5-minute summary of your written 

statement. 

You have a light system in front of you that’ll be green for 4 minutes. It’ll turn yellow for the final minute and red when it’s time 

to bring it in for a landing. So we look forward to that. 

So at this point, we will recognize Mr. Tieman for 5 minutes to 

summarize his opening statement. 

TESTIMONY OF DOUGLAS TIEMAN, PRESIDENT AND CEO, 

CARON TREATMENT CENTERS; PETE NIELSEN, CHIEF EXECUTIVE OFFICER, CALIFORNIA CONSORTIUM OF ADDICTION 

PROGRAMS AND PROFESSIONALS; DAVE ARONBERG, STATE 

ATTORNEY, 15TH JUDICIAL CIRCUIT; ALAN S. JOHNSON, 

CHIEF ASSISTANT STATE ATTORNEY, 15TH JUDICIAL CIRCUIT; AND ERIC M. GOLD, ASSISTANT ATTORNEY GENERAL, 

CHIEF, HEALTHCARE DIVISION, OFFICE OF THE MASSACHUSETTS ATTORNEY GENERAL 

TESTIMONY OF DOUGLAS TIEMAN 

Mr. TIEMAN. Representative Costello, thank you for the introduction and the service to our community. 

Mr. Chairman and distinguished members of the House Energy 

and Commerce Committee, thank you for the opportunity to testify 

on behalf of patients and families seeking help with their substance 

use disorder. 

As Representative Costello mentioned, I am the CEO of Caron 

Treatment Centers. We are a nonprofit addiction and behavioral 

healthcare provider based in Pennsylvania and Florida, with more 

than 60 years of experience in treating substance use disorder. We 

are one of the oldest and largest nonprofit addiction treatment centers in our country. And over the past six decades, we have helped 

more than 100,000 individuals begin a life of recovery. 

I personally have been in this field for 35 years, so I have some 

sense of perspective. During the first 30 years of my career, I was 

mostly proud of the treatment sector and the work that all of our 

peers in the field were undertaking to help families suffering from 

this chronic illness. However, in the past 5 years, I’ve become increasingly disappointed as it has become clear that many are now 

putting profits ahead of a life that they’re supposed to be saving. 

As stated, we’re all well aware in our nation that we’re facing an 

opioid epidemic and an addiction crisis. Opiates, along with alcohol 

and other drugs, are part of a chronic illness that is called substance use disorder, a disorder that affects one out of every three 

families in our country. 

9 

Substance use disorder is a chronic and progressive brain chemistry disease that, unless treated, oftentimes leads to death. Last 

year, 155,000 Americans lost their life to this disease. What you 

may not know is that of all chronic illnesses, substance use disorder is the most effectively treated, a fact to which the more than 

23 million Americans living in recovery today can attest, leading 

sober, productive lives. 

But here’s the problem. When the pain and suffering that a family is experiencing and they finally overcome what I call the misery 

index, it becomes so high that they finally overcome the stigma and 

denial and cobble together the necessary financial resources to seek 

help, the question is: Where do we go? For any other illness, it’s 

simple. You go to your doctor. They do an assessment and evaluation and send you on an appropriate clinical path. 

Rarely does that happen with substance use disorder. So they 

turn to the internet. And there are a whole host of abuses, such 

as call aggregating, website piracy, patient brokering, kickbacks, 

insurance fraud, and the list goes on. The bottom line is that when 

a suffering family looking for help reaches out on the phone and 

think that they are receiving clinical help, they are actually talking 

to a telemarketer who is incented by placing them in the place 

where they and the company they represent gets the biggest payback. This feels a whole lot more like vacation timeshare marketing rather than healthcare promotion. Deceptive and disgraceful. 

So what can we do? To restore trust in the treatment sector, I 

have four recommendations. The first is around law enforcement. 

We must enact the laws that are currently on the books. And we 

need to come up with other regulations that specifically address 

website accuracy and transparency. 

Number two, the treatment field needs to work with our associations to establish ethical standards for marketing, evidence-based 

treatment, and ethical billing. The National Association of Addiction Treatment Providers and the American Society of Addiction 

Medicine are already working towards that and, in 2018, we will 

have a list of those providers. More importantly, we will also have 

a list of those that are violating those policies. 

Three, we need to educate consumers so that they know where 

and how to get help. We need to work with government, particularly SAMHSA, so that there is an effective way to identify an appropriate treatment center. Caron Treatment Centers, along with 

Hazelden Betty Ford centers, has actually established such a mechanism. We also have a bill of rights, which you’ll see up on the 

screen, that we think everyone needs to be aware of so that they 

can know how to get help and what they can expect when they’re 

in treatment. 

And fourth, within the healthcare, we need to make sure that 

healthcare now includes substance use treatment so that when people go to the doctor, they are assessed and screened appropriately. 

We have a model. The UNAIDS PROJECT developed the 90-90-90 

goal, which means that 90 percent of the people with the AIDS 

virus get screened, 90 percent of the people screened get help, and 

90 percent of the people who get help get well. That’s what we need 

to have for addiction treatment as well. 

10 

The 23 million Americans who are living today are living proof 

that treatment works. I am one of those 23 million Americans. 

Thank you. 

[The prepared statement of Mr. Tieman follows:] 

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US House Committee on Energy and Commerce 

Subcommittee on Oversight and Investigations 

Hearing {{Examining Concerns of 

Patient Brokering and Addiction 

Treatment Fraud" 

Testimony of 

Douglas Tieman, President & CEO of Caron Treatment Centers 

December 12, 2017 
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Summary 

1. It is a privilege to be a trusted and integral part of a person's recovery from addiction. Most providers in the 

behavioral health and substance use disorder treatment sector take this responsibility seriously, and are 

fully invested in and dedicated to the recovery of our patients and their families. However, the state of the 

treatment sector today is disconcerting, as profiteering begins to outweigh this sacred trust offamilies in 

crisis. 

2. Regulations for substance use treatment providers vary state by state- and in some states regulations are 

virtually non-existent. This lack of regulation and standards within the sector makes it hard for families and 

individuals to identify quality treatment programs, and creates a fertile environment for deceptive business 

practices, fraud, patient neglect and, ultimately, treatment malpractice. 

3. As substance use disorder treatment providers, we have a responsibility to act in the best interest of 

patients and families to prevent any abuse. Our health care sector is developing quality controls for 

providers to identify and address ethical abuses including: Patient Brokering, Predatory Web Practices, 

Urinalysis Abuse, Up-charging and Overutilization, Bait & Switch Out of Network Schemes, Kickbacks, Clinical 

Misrepresentations, and Paid Call Center/Directory/Call Aggregation. 

4. Indicators of excellence in substance use disorder treatment include Accreditation, Qualified Clinicians, 

Evidence-Based Treatment, a Full Continuum of Care from initial assessment through recovery support 

services, and Sound and Ethical Business Practices. 

5. Initial Screening, Comprehensive Assessment, Withdrawal Management, Treatment Planning and 

Management, Treatment Transitions, and Comprehensive Continuing Care are all elements of essential 

standards of the addiction treatment continuum. 

6. Substance use disorder patients have the right to the same quality of care that is provided for other chronic 

diseases and recovery maintenance. 

1 I Testimony of Douglas Tieman Caron Treatment Centers, December 12, 2017 
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Opening 

Chairman Gregg Harper, Congresswoman Diana DeGette, members of the committee, I appreciate the 

opportunity to testify before you on the important matter of patient brokering and addiction treatment fraud. 

Today in America, one in three households live with addiction as part of their families. The clinical term for 

addiction is substance use disorder(SUD)- a chronic, treatable disease affecting the brain that is fatal when left 

untreated or under-treated. Yet, less than 11% of the nearly 22 million Americans who meet the criteria for a 

SUDs receive the specialized treatment they need to live in recovery.' The sad fact is, our health care systems, 

insurance providers, communities, schools and work places are ill prepared to deal with the scope of this 

disease, especially with the mounting issues associated with the opioid epidemic. In addition, the stigma 

surrounding this disease and the continued prejudice towards persons who suffer from SUDs and their families 

acts as barriers to making informed decisions about treatment and successfully connecting them with the 

ongoing care they need to live full, productive lives." We know that the treatment and management of SUDs 

works because of the more than 23 million Americans living in recovery today."' 

With 60 years of experience in the addition treatment sector, Caron Treatment Centers knows that quality 

treatment works. Caron has provided the care needed to help thousands of patients and their families begin 

lifelong recovery. Although there is a woeful lack of addiction treatment outcome studies, Caron has been a 

leader in developing research to generate and implement evidence-based programs. As a non-profit treatment 

provider, Caron is not bound by investor or profit motives. This frees us to invest in treatment, research, 

prevention, and charity care, all in the best interest of the patient. With our focus on patient-centered care, 

treatment protocols, outcome measures, and research, Caron has helped set the standard of care for quality 

treatment. 

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It is a privilege to be a trusted and integral part of a person's recovery from addiction. Most providers in the 

behavioral health and addiction treatment sector take this responsibility seriously, and are fully invested in and 

dedicated to the recovery of our patients and their families. However, the state of the treatment sector today is 

disconcerting, as profiteering begins to outweigh this sacred trust of families in crisis. 

Background 

As the nation's addiction and overdose crisis has escalated, we have seen a rapid increase in profit-driven rather 

than patient-focused care. While every organization, whether for-profit or not-for-profit, must be in a solid 

financial position to offer its services effectively, all of us are medical providers treating a disease. Increasingly, 

this focus on revenue and profit has led to poor or inappropriate treatment for individuals and their families. 

Someone suffering from an SUD should have the same opportunity for high quality, evidence-based health care 

that is routinely offered for other chronic diseases such as heart disease and diabetes. We should never lose 

sight of that- quality of care comes first. 

Furthermore, the combined storm of the opioid crisis, the increase of private equity dollars in SUD treatment 

providers (i.e. $2.9 billion in 20161'), and the accessibility of treatment through the Affordable Care Act has been 

accompanied by an increase in unethical practices across the continuum of addiction treatment. I am deeply 

troubled when I see facilities cutting corners in treatment and pushing ethical boundaries in marketing and sales 

practices. 

Regulations for addiction treatment providers vary state by state- and in some states regulations are virtually 

non-existent. This lack of regulation and standards within the sector makes it hard for families and individuals to 

identify quality treatment programs, and creates a fertile environment for deceptive business practices, fraud, 

patient neglect and, ultimately, treatment malpractice. 

3 I Te.stimony of Douglas TiemanJ Caron Treatment Centers, December 12, 2017 
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It can be difficult to make the distinction between ethical and unethical treatment centers when looking from 

the outside. This is especially true for those seeking treatment for the first time and are in a state of crisis or 

desperation. Many turn to the internet to find a treatment center. Instead of finding accurate and thorough 

information about their disease and treatment, they are often inundated by call aggregators who take 

advantage of their desperation, sometimes with tragic results. Call aggregators are essentially collecting leads 

for treatment centers who are willing to pay a price for every generated lead. These aggregators may prescreen 

potential patients for insurance coverage and location placement and then ultimately sell the patient's 

information to the highest bidder.' Call aggregators are not referring patients based on their individual medical 

needs, but on their insurance plans. 

In addition, addiction treatment centers are competing for the more than $36 billion that will be spent on SUDs 

in 2017'', leading to increasingly aggressive marketing efforts. These include emphasizing the amenities available 

to patients, rather than the clinical modalities and quality of care provided, and thereby doing a disservice to the 

public. Features such as proximity to the beach, sheet thread counts, and a spa environment, while nice, have 

little to do with appropriately credentialed staff, verified research, access to medications, course of care, and 

treatment outcomes. Many individuals and families seeking treatment are left with the question: Is this health 

care or a vacation time share? 

As a treatment provider, we understand how difficult it is for patients and their families to find and receive the 

care they need. From overcoming issues of stigma and denial, to lack of understanding about the medical 

aspects of this disease, to restrictions based on location and lack of resources, patients and families have many 

barriers to overcome when seeking treatment. As a sector, we need to do a better job for patients and their 

families. 

4 I Testimony of Douglas Tieman~ Caron Treatment Centers, December 12, 2017 
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Defining the Problem 

Beyond our individual efforts, Caron has partnered with other like-minded reputable treatment centers to begin 

to address the unethical and illegal practices within our sector. Caron has worked diligently with other 

treatment providers to help draft and support the National Association of Treatment Providers (NAA TP) Quality 

Control Initiative. This program identified and seeks to address the following specific ethics abuses'0: 

Patient Brokering- An illegal act where a patient, or a lead relating to a prospective patient, is traded to 

a treatment provider in exchange for money and/or perks. In some cases, a "broker" will approach a 

provider with a lead on a prospective patient, soliciting a kickback in exchange; In other cases, a 

program or sober home will recruit a third party to send patients to their facility in return for a kickback 

or fee. 

Predatory Web Practices- Manipulation of websites or online search results designed to deceive 

prospective patients and families, or to obscure the source of treatment advice provided. This can take 

the form of hijacking Google search results for specific treatment provider names or by utilizing complex 

corporate ownership trails to obscure relationships between online treatment referral sources and the 

providers owned by the same parent company. This may be done by changing, disguising, or hiding the 

phone number associated with a specific provider to that of a competing provider or call aggregator 

with the intent of redirecting prospective patients. 

Urinalysis Abuse- A form of insurance fraud in which a treatment provider or recovery residence 

performs unnecessary urinalysis tests on patients. The provider then bills the patient's or the patient's 

family's insurance plan for the tests. 

Up-charging and Overutilization- Any form of fraudulent servicing that manipulates the fee-for-service 

model to perform excessive or unnecessary services to increase the amounts billed to patients or 

insurance providers. 

5 I Testimony of Douglas Tieman, Caron Treatment Centers, December 22, 2027 
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Disguised "Treatment'' Billing- A bill-packing scheme using deliberately unusual or unclear terms on 

billing forms to describe unnecessary or excessive charges with the intent to obfuscate or reduce billing 

transparency. 

Bait & Switch Out of Network Schemes- A scheme where a provider may advertise or report to 

potential patients that it accepts certain insurance coverage plans and confirms that treatment will be 

regarded as in-network while deliberately obscuring certain complications that may lead to a patient 

choosing to seek addiction treatment elsewhere. In some cases, individual doctors contracted to see 

patients at a given facility may be "out-of-network," even when the facility itself is in-network. In other 

cases, patients may find a treatment facility on their insurer's list of in-network facilities, but are told by 

the provider themselves (often after the billing process is complete) that they do not accept the specific 

form of insurance program the patient carries, resulting in a bill that includes non-negotiated rates. 

Kickbacks- An illicit remediation of money or perks provided in exchange for a patient referral, often 

via patient brokering. 

Clinical Misrepresentations- Descriptions of medical services that do not match the capabilities of the 

facility or present the services offered inaccurately. 

Paid Call Center/Directory/Call Aggregation- A potentially predatory web practice where a highly 

efficient search engine optimization (SEO) website is established by an organization owned by the 

parent company of multiple treatment centers. These sites often advertise "free consultations" that can 

help place a prospective patient at a treatment facility with available beds. In reality, prospective 

patients or families may end up reaching call centers that only search the facilities owned by the parent 

company, and cannot guarantee a good geographic or clinical fit for the patient. Additionally, the free 

consultations offered may be conducted by call center staff who are not clinically trained to assess a 

potential patient's appropriate treatment level of care. 

6 I Testimony of Douglas Tieman, Caron Treatment Centers, December 12, 2017 
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To put this in context and to demonstrate how pervasive these problems are, it is important to note that 

unethical marketers have taken advantage of Caron, as well. Caron's name, built on innovative, evidence-based 

addiction treatment, research, and prevention practices for 60 years, has been used to lure unsuspecting 

individuals to other websites where someone seeking treatment is provided phone numbers not affiliated with 

Caron Treatment Centers. We learned of these issues through individual reporting directly to Caron facilities and 

by our own diligent efforts to search and report inconsistencies found online. 

The Internet is a source of information and referrals for Caron. For Caron's FY17, Caron.org and 

CaronOceanDrive.org, Caron's two owned and managed websites, averaged nearly 105,000 visits per month, 

along with an average of 1,150 online live chats and over 2,500 inbound calls per month. 

While Caron does utilize and internally manage web-based marketing, we have refused solicitations from call 

aggregators to engage their services. Unfortunately, it is impossible to know how many individuals and families 

thought they were contacting Caron, only to be misdirected to another facility due to false and unethical online 

marketing. 

7 I Testimony of Douglas Tieman, Caron Treatment Centers, December 12, 2017 
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Piracy of Caron Philadelphia 

This is a screen shot of when Caron's Google local listing for our 

Philadelphia Regional Office was "hijacked" Another entity claimed 

Caron's listing, changed the phone number, and calls were routed to 

an unknown call center that turned out to be a lead aggregator. We 

were unable to determine the call center name or what entity 

changed the number, but Caron was able to switch the number back 

The screen shot below highlights the non-Caron number that was 

included with the correct Caron Philadelphia location information, 

Caron Treatment Centers 

Caron Treatment Centers 

8 I Testimony of Douglas Tieman, Caron Treatment Centers, December 12, 2017 

Address: ~50 Plymouth Rd Suite 301. 

Ptynwuth Meeting. PA 19462 

Phone: (484) 218-3148 

Suggest edit 

Add missing information 

Add business hours 
20 


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Piracy of Caron New York 

Please note in the image in this instance that there are three different phone numbers in this screen shot that 

was sent to Caron's leadership from our Caron New York office on 11/09/2017. None of the phone numbers 

included in the listing are affiliated with Caron Treatment Centers. Melissa Gettler, VP of Marketing at Caron, 

called the number pictured in the middle. The person who answered told Ms. Gettler that they work for or with 

DrugRehabs.org. 

Caron did not set up the directory, nor did we request to be 

included in it. Caron was advised by our search engine 

optimization (SED) partner that this is a byproduct of "lead 

aggregators". He shared with Caron that, "Sites like this are 

like my arch enemy. They basically take every recovery 

facility listed in the US and create profiles for them, but their 

main intent is to get people to call the number listed (which 

isn't the number to the facility listed, it's a call aggregator). I 

have tried contacting sites like these for another treatment 

provider in the past to get info either removed or even just 

edited and have had absolutely no luck (not even a 

response}." 

As Caron prepared to provide this testimony today, we came 

across more distressing examples. In what appears to be a HUD-related recovery housing policy brief, 

recoverv.org is listed among the resources. The brief was found at: https://www.hudexchange.info/ 

9 I Testimony of Douglas Tieman, Caron Treatment Centers, December 12,2017 
21 


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resources/documents/ Recovery-Housing-Policy-Brief.pdf by following a link from here: https://www. 

hudexchange.info/resources/documents/Recovery-Housing-Policy-Brief.pdf. 

When followed, the link 

from the resource page of 

the policy briefing leads to a 

page on the recovery.org 

website. From there, we 

entered ucaron" in the 

website's search bar and 

found several listings for 

HUD and the U.S. Interagency Council on Ilomelessness also intend to provide more 

guidance regarding the alignment of Recovery Housing programs within communities' 

overall approach, strategies, and systems for addressing substance use. 

VII. Resources 

• Substance Abuse and Mental Health Services Administration: www.samhsa.gov/ 

(see Recovery and Recovery Support and Bringing Recovery Supports to Scale 

Technical Assistance Center Strategy) 

• Jl.<cii~l:lx-<>tli;,.W\vi.Mm.9WfroJ>;~...wvtw.\Wmesl 

• National Alliance for Recovery Residences: www .narronline.org 

• CSH: Substance Use and Housing National Leadership Forum Convening 

Report: www.csh.orWresources/substance-use-and-housing-national-leadershipforum-convening-reportl#;;thash.LFSMh5B4.dpuf 

• World Health Organization Quality of Life Measures: 

www.who.int/mentaJ healthipublications!whoqol/enl 

Caron, prominently including phone numbers that do not connect callers to Caron. It is important to note that 

the recovery.org website is owned by a treatment center not affiliated with Caron. 

In addition to the issues of call aggregation, in many cases patients are not receiving the care they desperately 

need. In some cases, treatment centers are ill-equipped to address a patient's specific clinical and medical 

needs. Sometimes patients and their payers are charged for unnecessary diagnostic and medical services. In 

other instances, unethical treatment providers and sober homes may collude to bill for services that were never 

actually provided. We have a strong partnership with Independence Blue Cross of Philadelphia (IBC) and have 

been working together on different ways to address this crisis. IBC notes that in many instances their 

investigations have found brokers working with sober homes to enroll patients with SUDs in Affordable Care Act 

(ACA) exchange plans using false information to ensure a higher reimbursement than they might otherwise 

receive under government programs. Specifically, in IBC's comments to the Centers for Medicare and Medicaid 

Services (CMS) this year, IBC highlighted a scheme of financially linked non-profits making premiums payments 

10 I Testimony of Douglas Tieman, Caron Treatment Centers, December 12., 2.017 
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on behalf of 86 individuals who were not eligible for their coverage (lived outside the coverage area). In some 

cases, premium payments were made with prepaid debit cards to hide the identity of who is paying for them. A 

special investigation by STAT and the Boston Globe reported, "The fraud is now so commonplace that brokers 

use a simple play on words to describe how it works: "Do you want to Blue Cross the country?""" 

Working in the Solution 

An individual or family in crisis should not have to guess and hope that the information they find on the internet 

is correct. As an addiction treatment provider, Caron believes we have a responsibility to act in the best interest 

of patients and families to prevent any abuse. If the addiction treatment sector wants to be recognized as a 

legitimate field in today's health care, then we need to act like one. Caron is working with other leading 

treatment providers to define a standard of ethics and outcomes that will help families in distress determine 

which providers are acting in good faith. In Defining a Center a( Excellence: An Addiction Treatment Model, a 

white paper co-authored by Caron Treatment Centers and Hazelden Betty Ford Foundation, the criteria 

necessary to deliver quality addiction treatment include:;' 

Accreditation -It is important to maintain state licensure and accreditation from national regulatory 

organizations such as the Joint Commission (JCAHO) or the Commission on Accreditation of 

Rehabilitation Facilities (CARF), to meet rigorous standards for quality care, organizational performance, 

and meet these expectations at the highest standard of care. 

Qualified Clinicians- Well-trained and accredited therapists, psychologists, psychiatrists, and 

physicians, all with the appropriate degrees and licensure, are critical to providing quality care and 

should be on staff at treatment centers. 

Evidence-Based Treatment- Behavioral therapies are shown to be effective in addressing SUDs, 

including Cognitive Behavioral Therapy (CBT), Dialectical Behavioral Therapy (DBT), among others. 

11 I Testimony of Douglas Tieman, Caron Treatment Centers,~ December 12, 2017 
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Care for Co-Occurring Disorders- Psychologist, psychiatrists, and physicians should be part of the 

patient's treatment team. 

Full Continuum of Care- Patients require a full range of services from treatment providers, including 

the ability to assess, treat, and provide recovery support services. 

Sound and Ethical Business Practices- Marketing, advertising, and promotional activities should be 

ethical, truthful, and legal. This applies to billing and insurance practices, as well. 

In addition, Caron suggests that treatment centers provide verifiable outcomes, making this information 

available to all prospective patents and their families. 

The Caron Patient's Bill of Rights 

A patient's journey to recovery is not easy. It is complicated by a health care model that is broken. As a chronic 

disease, addiction has periods of remission and relapse, marked by acute episodes. Treatment for SUDs typically 

begins with an acute onset or episode of symptoms, resulting in an emergent event that could include a visit to 

the emergency room. That patient may then be sent for medically-managed withdrawal, more commonly 

referred to as "detox". In most cases, a patient will be released from detox without proper evaluation, diagnosis 

or treatment for addiction and other co-occurring disorders. This insufficient and inadequate treatment typically 

results in a relapse of symptoms, another emergency room visit and, even death. 

An outline of what we can and should expect from the appropriate treatment of addiction for individuals with 

SUDs can serve as a benchmark for physicians, payers, policymakers, patients and their families alike as they 

seek to provide, pay for, regulate, and receive the highest quality care.' Based on feedback from Caron's team of 

clinical experts, as well as information from other sources, Caron recommends the following elements be 

implemented as a guide to the essential standards of the addiction treatment continuum:'' 

12 f Testimony of Douglas Tieman~ Caron Treatment Centers~ December 12, 2017 
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1. Initial screening to gather information, 

2. Comprehensive assessment to create a patient-centered treatment plan, 

3. Withdrawal Management to medically supervise detoxification to manage symptoms and stabilize 

overall health, 

4. Treatment Planning and Management to review and modify treatment to build a solid foundation for 

recovery/ 

5. Treatment Transitions to provide support during changing levels of care, and 

6. Comprehensive Continuing Care to sustain recovery and provide the tools necessary to maintain it. 

Receiving treatment for an adequate period of time Is critical. Research Indicates that most addicted individuals 

need at least 3 months in treatment and that continuing care is an essential part of ongoing recovery.';; As with 

other chronic illnesses, recovery from addiction is a long-term process and may require multiple episodes of 

treatment. 

To achieve this patient experience, patients and their families need to be informed about and understand the 

level of care and quality of treatment they have the right to receive. Consequently, Caron has developed a 

Patient's Bill of Rights that we encourage all serious addiction treatment providers to immediately adopt. 

The Caron Patient's Bill of Rights states:'m 

Patients have the right to be treated with the honesty, dignity, and respect that any person with a lifethreatening, chronic illness should be afforded. 

Patients have the right to know what to expect from treatment including: 

o Involvement in the development of their treatment plan, 

o How the treatment is measured and evaluated, and 

13 I Testimony of Doug los Tieman, Caron Treatment Centers, December 12, 2017 
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o The expected outcomes of that treatment. 

Patients have the right to be treated by physicians, psychiatrists, psychologists and other licensed 

and/or certified professionals as needed throughout their continuum of care. 

Patients have the right to receive researched and evidence-based treatment on demand. 

Patients have the right to be treated for co-occurring behavioral health conditions simultaneously. 

Patients have the right to an individualized, outcomes-driven treatment plan that includes: 

o Complete medical evaluation and biopsychosocial assessment to determine level of care, 

o Medically-managed detoxification, 

o Intensive counselling including of medically- or clinically-appropriate inpatient and/or outpatient 

therapy, including appropriate lengths of stay and therapeutic sessions, 

o Medications, 

o Ongoing aftercare and recovery support services, and 

o Relapse prevention, intervention and management. 

Patients have a right to have access to treatment for their families and loved ones. 

Patients have the right to be treated in a setting that is safe and committed to ethical practices. 

Access to Medications to Treat Substance Use Disorders 

Addiction is chronic disease and all tools, including medications, should be considered for treatment. 

Medication-Assisted Therapy (MAT) is medication to treat and manage SUDs. At Caron, we are committed to 

removing obstacles that obstruct access to one's sustainable and progressive recovery journey. To that end, 

Caron utilizes evidence-based principles to guide addiction treatment. 

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Given the prescription opioid and heroin epidemic we are currently facing as a society, Caron understands and 

endorses the utilization of MAT as another important tool in treating this chronic, progressive, and potentially 

fatal disease. 

Whether a treatment facility or licensed prescriber chooses MAT in the form of Methadone, Buprenorphine 

(e.g., Suboxone), or injectable Naltrexone Extended Release (Vivitrol) to address opioid use disorders, it is 

important to stress that medication alone is not a panacea. Medication must be used as a supportive tool and 

managed by a qualified health care professional in collaboration with treatment specialists as part of a 

comprehensive therapeutic program. 

At Caron, we utilize a multi-disciplinary approach to address the co-occurring disorders often found with 

substance use. This extensive approach also incorporates various treatment modalities, such as Cognitive 

Behavioral Therapy (CBT) and Dialectical Behavioral Therapy (DBT), as well as utilizing psychological testing, 

medical evaluations and 12-Step integration. Therefore, it is imperative that health care professionals not lose 

sight of the clinical protocols needed for patients to succeed. In other words, it's essential to ensure that MAT is 

only one facet of a comprehensive treatment and recovery plan. 

Of the available FDA-approved MAT strategies, Caron utilizes Naltrexone Extended Release (XR) or 

Buprenorphine maintenance. Through a diligent and thoughtful process, Caron's medical and clinical 

professionals chose Naltrexone XR as a primary choice because it is a non-mood altering opioid receptor 

antagonist with no euphoric effect, no withdrawal syndrome and no abuse or overdose potential. It is 

administered as a monthly injection, thus, increasing compliance. Additionally, if a patient relapses on heroin or 

opioid prescription medications while taking Naltrexone XR, he or she would not be in imminent danger of 

respiratory arrest. 

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We have an ever-growing referral database for addiction medicine specialists who will continue administering 

Naltrexone XR after discharge from Caron. If Naltrexone XR is not the right choice for the patient, we begin 

Buprenorphine maintenance and refer to an addiction medicine specialist in the outpatient setting to continue 

Buprenorphine MAT. 

It's important to understand that if you administer Methadone, Buprenorphine or Naltrexone XR in the face of 

active heroin or other opioid use, you will precipitate withdrawal and the need for medical management. We 

need to give doctors and patients choices for MAT, because no one solution is best for all. 

From day one, Caron's medical professionals begin the conversation with our patients about cravings and 

relapse risks, and continue to address these issues throughout our patients' episode of care. We educate all 

patients about the disease concept of addiction and the importance of implementing evidence-based practices 

to sustain a meaningful and healthy recovery.''' 

Continuum of Care to Support Recovery 

Because addiction is a chronic disease, treatment does not end when a patient leaves an inpatient or outpatient 

provider. To fully support recovery maintenance, a long-term management plan must be in place for each 

patient. This includes accessibility to MAT, if appropriate, continued counselling and, in some cases, longer 

lengths of care including extended care programs, structured sober living, and sober living as defined below: 

Extended Care Programs are an opportunity to live in a drug-free, healthy environment with staff and inhouse recovery meetings. This type of housing often includes ongoing treatment and additional 

structure. 

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Structured Sober Living is similar to Extended Care Programs, but with less intensive programming and 

treatment with a residence-related outpatient counselor off-site. Residents can work or go to school, 

and may stay for three to six months, sometimes up to a year. 

Sober Living offers very little structure in a recovery supportive environment. Some community 

recreation and house meetings may be available. Any additional treatment or therapy is found outside 

of the residence and from various providers. 

At Caron, a patient's treatment team makes sure everyone who completes treatment at a Caron facility has a 

support system in place, an accountability plan established, and the necessary tools needed to maintain 

recovery for life. Family members also receive a continuing care plan to support their own recovery. 

Caron considers several factors when vetting transitional living arrangements prior to referring our patients: 

Are the staff and leadership of the recovery residence clinically aligned with Caron's treatment and MAT 

philosophies? It is of the utmost importance that the residence will follow and support Caron's 

recommendations for patients leaving inpatient treatment. 

Is the recovery residence affiliated with a strong outpatient treatment provider? 

Does the recovery residence collaborate with an appropriately credentialed psychologist and 

psychiatrist when applicable? 

Partnering with the right recovery residences means Caron will be advised about the progress of our 

former patients and that the safety net of returning to treatment is available should an individual need 

stabilization or a more structured level of care to ensure ongoing recovery. 

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Caron believes in visiting sober living facilities and inviting their staff to visit our treatment facilities, as well: 

We ask questions about their programming and educate them about Caron's as part of finding the right 

fit for our patients. 

When Caron staff visits recovery residences, we ensure the physical environment is safe, nurturing, and 

embracing of alcohol- and drug-free living, including the surrounding area or neighborhood. 

Caron also explores the surrounding recovery community for support, such as 12-Step meetings, job 

networking opportunities, and other quality of life encouraging factors to help Caron's post-treatment 

patients build or rebuild their lives. 

Recovery residences that meet these terms for Caron tend to develop a proven track record among our former 

patients, and we are often pleased to find them supporting each other in ongoing recovery in these 

communities. 

In Conclusion 

In the midst of an addiction and overdose death public health emergency projected to claim 64,000 lives this 

year due to drug use and likely 88,000 more as result of excessive alcohol use," it is unconscionable that some in 

this health care sector continue to take advantage of individuals and families in crisis. While no single type of 

treatment for substance abuse is appropriate for everyone, the lack of standards in our sector makes it difficult 

for patients and families to know what good treatment looks like and how to find it. Matching interventions, 

treatment settings, and services to a patient's particular diagnosis and needs is critical to his or her ultimate 

success in returning to productive functioning in the family, workplace, and society."' 

A model strategy to consider as we address our nation's SUD public health crisis is the 90-90-90 treatment target 

plan of the United Nations Programme on HIV/AIDS (UNAIDS). There is indisputable evidence regarding the 

18 I Testimony of Douglas Tieman~ Caron Treatment Centers, December 12, 2017 
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remarkable success over the past two decades in reducing HIV associated morbidity, mortality, transmission, 

stigma and improving the quality of life of people living with HIV. However, a high rate of new infections 

continues to fuel the HIV epidemic.";; The target of the 90-90-90 strategy is that by 2020: 

90% of people who are living with HIV will be screened and diagnosed. 

90% of all people who are diagnosed will be appropriately treated. 

90% of those who are treated will have viral suppression, meaning the amount of virus in an HIVpositive person's blood is reduced to an undetectable level. 

UN AIDS emphasizes that the only way to achieve this ambitious target is through approaches grounded in 

principles of human rights, mutual respect and inclusion, and it will be impossible to end the epidemic without 

bringing HIV treatment to of/ who need it."m 

To end this addiction crisis, the SUD treatment health care model needs to be fixed. If our country hopes to end 

the addiction and overdose public health emergency, first, we must reduce the stigma surrounding the diagnosis 

of chronic SUDs. Second, we must ensure that SUD screening is routinely performed, similar to regular height, 

weight, and blood pressure checks. Plus, it is imperative that these screenings be completed by clinically or 

medically trained experts, not by internet marketers or call center operators. With improved screening, the 

chances for referrals to appropriate levels of care and treatment improves. Third, the addiction health care 

model requires a system that funds all levels of treatment to ensure access for all who need it, supported by the 

enforcement of penalties to prevent fraudulent billing. lastly, we must certify evidence-based treatment 

standard practices and outcomes, and treatment providers to safeguard that individuals and families seeking 

SUD care are receiving the medical attention needed to manage recovery of this chronic disease. In other words, 

we must approach and inform SUD treatment as we would any other public health epidemic. We need to fix the 

system that we are all here to provide testimony on today. A system that is currently taken advantage of to 

19 I Testimony of Douglas Tieman, Caron Treatment Centers, December 12~ 2017 
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provide fraudulent, deceptive, and misleading addiction information and treatment to lure people who are in 

crisis into facilities that are not concerned about recovery for life. 

Evidence-based, quality treatment is available and millions of Americans live in recovery through effective 

chronic disease management. According to the National Institute on Drug Abuse (NIDA), there are more deaths, 

illness, and disabilities from substance use than from any other preventable health condition.';' Caron stands 

with other treatment providers in support of the efforts of NAATP, the American Society of Addiction Medicine 

(ASAM), IBC, advocacy groups, and patients and their loved ones to identify and address the ethics abuses 

plaguing our sector of health care. Despite, or because of, Caron's history, innovative experience, knowledge, 

resources, ethical standards, research, and leadership, we have not escaped becoming a target of unethical 

marketing practices. As an SUD treatment provider, Caron believes we have a responsibility to act in the best 

interest of all patients, families, and ethical treatment providers to take steps to prevent further abuses in our 

sector. 

In addition to the Caron Patient's Bill of Rights and Center of Excellence Addiction Treatment Model, we propose 

educating the treatment industry sector to implement a consistent ethical perspective to define ethical 

treatment and marketing practices. Caron recommends educating the public about addiction as a chronic 

disease, patients' rights, and what to look for in an SUD treatment center. We support transparency of 

relationships between providers and call aggregators, as well as enforcement of existing state and federal 

penalties for deceptive marketing, kickbacks, and patient referral practices. We strongly encourage bringing an 

end to patient brokering and human trafficking under the guise of SUD treatment and recovery housing with 

enforcement of heavy penalties. We encourage the passage of necessary state and/or federal regulations to 

make it illegal to knowingly provide false or misleading information about substance use treatment providers 

intended to lure or misdirect individuals or family members seeking care. Treatment providers at all levels of 

20 I Testimony of Douglas Tieman, Caron Treatment Centers# December 12, 2017 
32 


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care and recovery support services should be appropriately credentialed or licensed, and inspected by unbiased 

entities. Finally, we need to identify or expand prohibitions on referrals between licensed treatment providers 

and recovery residences that do not meet minimum standards of care and safety. 

In closing, all treatment providers must collaborate to rebuild trust in our communities and in the nation. As 

health care providers, our cooperation is needed to assist in addressing this public health emergency to define 

quality care, effective treatment, and recovery outcomes. Thank you for the opportunity to present this 

testimony to the US House of Congress Committee on Energy and Commerce Subcommittee on Oversight and 

Investigations. 

Respectfully submitted by 

Douglas Tieman, President & CEO 

Caron Treatment Centers 

21 I Testimony of Douglas Tieman, Caron Treatment Centers, December 12, 2017 
33 


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Patients have the right to: 

L Be treated for the life-threatening, chronic disease 

of addiction with honesty, respect and dignity. 

2. Know what to expect from treatment, and the 

likelihood of success. 

3. Be treated by licensed and certified professionals. 

4. Evidence-based treatment 

5. Be treated for co-occurring behavioral health 

conditions simultaneously. 

6. An individualized, outcomes-driven treatment plan. 

7. Remain in treatment as long as necessary. 

8. Treatment for their families and loved ones. 

9. A treatment setting that is safe and ethical. 

22 I Testimony of Douglas Tieman, Caron Treatment Centers, December 12, 2017 
34 


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What to Look for in an Addiction Treatment Center 

Choosing a drug or alcohol rehab center is an incredibly important decision 

with many factors to consider. 

Before choosing a treatment center, ask the following questions: 

Does this treatment center treat addiction as a chronic disease and, as such, strive for continuity of 

care? 

Does the center provide on-site assessment? 

Will the facility develop a comprehensive treatment plan for the patient: one that will be 

constantly monitored, updated and modified as treatment progresses? 

Is the facility safe? 

How experienced and credentialed are members of the treatment team? 

Is the facility location ideal for the patient? 

What will treatment cost? Is the cost covered by my insurance or non-reimbursed medical plan? 

Are financial aid or financing options available? 

Is the program geared toward the patient's age, gender and addiction severity? 

Is the center able to provide comprehensive treatment to address all aspects of addiction? 

Does the center collaborate with hospitals and research groups to keep it on the leading edge of 

addiction treatment practices? 

What treatment approaches does this program use regarding detoxification; abstinence; individual, 

family and group therapy; medication-assisted treatment; cognitive-behavioral therapy; 

endorsement or inclusion of 12-step programs or other mutual-help groups; relapse education and 

prevention; and long-term recovery? 

Is the facility equipped to assess and treat co-occurring disorders? 

Does the center have programs in place to include or treat a patient's family? 

Is the family involved in decision-making, the treatment process and the recovery phase? 

What type of ongoing treatment does the facility provide? 

Does the program provide outpatient, inpatient, residential and short-stay options, and recovery 

care? 

Is the center included on the state's licensure website, such as the Department of Health? 

Has the program received any major citations? 

Is the treatment center facility and location accredited by an independent behavioral health body 

demonstrating the provider's commitment to continuously improve service quality and to focus on 

best practices in treatment? 

For help finding a program that suits your needs, please t.Q!lt!Q; Caron Treatment Centers. 

www caron.org I 800-678-2332 

23 I Testimony of Douglas Tieman, Caron Treatment Centers, December 12, 2017 
35 


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Endnotes 

1 Substance Abuse and Mental Health Services Administration. {2017). Key substance use and mental health indicators in the 

United States: Results from the 2016 National Swvey an Drug Use and Health (HHS Publication No. SMA 17-5044, NSDUH 

Series H-52). Rockville, MD: Center for Behavioral Health Statistics and Quality, Substance Abuse and Mental Health 

Services Administration. Retrieved from https://www.samhsa.gov/data/ 

"American Society of Addiction Medicine. (1992, October 19). Principles of Medical Ethics [Public policy statement]. 

Retrieved from https://www.asam.org/advocacy!find-a-policy-statementlview-policy-statement/public-policystatements/2011/12/15/principles·of.medical·ethics 

m Feliz, Josie. {2012, March 6). Survey: Ten Percent of American Adults Report Being in Recovery from Substance Abuse or 

Addiction [Press release]. Retrieved from https://drugfree.org/newsroom/news-item/survey-ten-percent-of-americanadults-report-being-in-recoverv-from-substance-abuse~or-addiction/ 

iv Whalen1 Jeanne and Cooper, laura. {2017, September 2). Private-Equity Pours Cash lnta Opioid-Treatment Sector. 

Retrieved from https://www.wsj.com/articles/opioid-crisis-opens-opportunities-for-private-equitv-firms-1504353601 

v Knopf, Alison. (20151 March 21). Treatment centers pay lead generator up ta $1~000 for a call from a prospective patient 

[Article]. Retrieved from http://www.alcoholismdrugabuseweekly.com/m-article-detail/treatment-centers-pay-leadgenerator-up-to-1000-for-a-call-from-a-prospective-patient.aspx 

vi Substance Abuse and Mental Health Services Administration. Projections of National Expenditures for Treatment of 

Mental and Substance Use Disorders, 2010-2020. HHS Publication No. SMA-14-4883. Rockville, MD: Substance Abuse and 

Mental Health Services Administration, 2014. 

"' Ventrell, Marvin. (2017, July 6). NAATP to Launch Enhanced Ethics Compliance and Consumer Protection Initiative [Slog 

post]. Retrieved from https://www.naatp.org/resources/news/naatp-!aunch-enhanced-ethics-comoliance-and-consumerprotection-initiative/jul-6-2017 

viii Armstrong, David and Allen, Evan. (2017, July 7). Desperate far addiction treatment, patients are pa~tYnS in lucrative 

insurance fraud scheme [article]. Retrieved from https:l/www.statnews.com/2017/07/07/opioid-insurance-fraud/ 

24 I Testimony af Douglas Tieman, Caron Treatment Centers, December 12, 2017 
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ix Caron Treatment Centers and Hazelden Betty Ford Foundation. (2016, April16). Defining a Center of Excellence: An 

Addiction Treatment Model (White paper]. Retrieved from https://www.caron.org/media-center/news-researchlthoughtleadership/defining-a-center-of-e)(cellence 

'American Society of Addiction Medicine. {2017, February 17). Standards of Care for the Addiction Specialist Physician 

[Document]. Retrieved from https://www.asam.org/docs/default-source/pub!ications/standards-of-care-fina!-designdocument.pdf 

Kl Caron Treatment Centers. (n.d.}. Evaluations & Treatment Planning [Description of services]. Retrieved from 

https:/Jwww.caron.org/what-to-expect/eva!uations-and-treatment-planning 

"; NIDA. {2012, December 1). Principles of Drug Addiction Treatment: A Research-Based Guide (Third Edition). Retrieved 

from httos://www.drugabuse.gov/publications/principles-drug-addiction-treatment-research-based-guide-third-edition 

,;u Caron Treatment Centers (2016, September). Patient's Bill of Rights [Memorandum]. Retrieved from 

https:ljwww.caron.org/lp/patients-bill-of-rights 

xlv Garbely, Joseph. {2017, July 20}. Coren's Position on Medication Assisted Treatment (Position statement]. Retrieved from 

https://www.caron.org/media-center/news-research/thought-leadership/carons-oosition-on-medication-assistedtreatment 

""Centers for Disease Control and Prevention. (n.d.). Fact Sheets- Alcohol Use and Your Health [Fact sheet]. Retrieved from 

https://www.cdc.gov/alcohol/fact-sheets/alcohol-use.htm 

""1 NIDA. (2012, December 1). Principles of Drug Addiction Treatment: A Research-Based Guide (Third Edition). Retrieved 

from https://www.drugabuse.gov/publications/princip!es-drug-addiction-treatment-research-based-guide-third-edition 

""11 Bain, L. E., Nkoke, C., & Noubiap, J. J. N. (2017). UNAIDS 9~9~90 targets to end the AIDS epidemic by 2020 are not 

realistic: comment on "Can the UNAIDS 90-9!}-90 target be achieved? A systematic analysis of national HIV treatment 

cascades." BMJ Globol Health, 2(2), e000227. http:/ldoi.org/10.1136/bmjgh-2016-000227 

""111 UNAIDS. (2017, January 2017). 90-90-90 -An ambitious treatment target to help end the AIDS Epidemic [Report]. 

Retrieved from http:ljwww .u naids.org/ en/resources/ docu ments/2017/90-90-90 

,;, NIDA. (2017, March 23). Health Consequences of Drug Misuse. Retrieved from https://www.drugabuse.gov/relatedtopics/health-conseguences-drug-misuse 

25 I Testimony of Douglas Tieman, Caron Treatment Centers, December 12, 2017 
37 

Mr. HARPER. Thank you, Mr. Tieman, for that incredible testimony. 

Mr. Nielsen, we now recognize you for 5 minutes for the purposes 

of an opening statement. 

TESTIMONY OF PETE NIELSEN 

Mr. NIELSEN. Good morning, Chairman Harper and Ranking 

Member DeGette, as well as the entire subcommittee. My name is 

Pete Nielsen, and I am the CEO of CCAPP, the California Consortium of Addiction Programs and Professionals, the largest statewide consortium of community-based substance use disorder treatment agencies and addiction-focused professionals, providing services to over 100,000 Californian residents annually in residential, 

outpatient, and private practice settings. 

CCAPP has actively supported residential recovery for over 30 

years. We are responsible for credentialing and professional oversight of tens of thousands of addiction treatment and prevention 

professionals in the most populous state in the Nation. We have 

also published and disseminated standards for sober living facilities. 

At this time, I would like to ask the chairman permission to submit a copy of these standards for the record. 

Mr. HARPER. Without objection. 

[The information appears at the conclusion of the hearing.] 

Mr. NIELSEN. There is, indeed, a nexus between sober living and 

fraud in the treatment industry. They can easily be approached as 

two separate issues, yet they merge when treatment centers engage 

in unsavory marketing practices, prey upon the vulnerable, and 

offer sober living as a part of the deal. 

At some call centers where the process of enrollment for treatment and recovery often begins, workers are paid bonuses for performance based on how many admissions they sign up and marry 

the high pressure sales tactics on very desperate callers. The sales 

environment is high pressured and all about getting heads in beds. 

As a result, marketers should be properly educated and properly 

even—or potentially even credentialed. The better trained, better 

organized, and better coordinated our industry is, the better our 

services will be. And not only will consumers benefit, but so will 

all of society. 

The first step in ending fraud is to assure that all involved in 

the industry meet certain standards, both in terms of knowledge 

and ethics, bad actors using the stigma of addiction against people 

they claim to care for. 

Before anything else, a patient and their caretaker must find the 

right environment and best suited treatment protocol. This includes proper screening and evaluation. Simply because someone 

meets the eligibility requirements of the facility, this does not automatically mean the facility is right for them. In a treatment facility, every employee, from the janitor to the manager, the patient 

and their well-being must be top priority. 

Those struggling with addiction are often in need of a stable environment. Cooperative housing offers a bridge to independent living, which is a critical piece of the puzzle. Sober living environments, or SLEs, is a term used to describe a specific type of housVerDate Nov 24 2008 14:58 Jan 15, 2019 Jkt 037690 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-87 CHRIS
38 

ing. Sober living is not, nor has it ever been, intended to be the 

same as residential inpatient treatment. It is its own entity with 

its own set of standards and goals. 

The difference between residential addiction treatment and sober 

living is there are typically no clinical services offered in sober living. It is more so about an environment of recovery and cooperation 

and communal living to support recovery. 

In order to ensure that consumers are protected and fraud reduced, CCAPP recommends standards be followed in five categories 

for SLE in California. We recommend standards for physical environment, for management, for record keeping, for house rules, and 

for residency requirements. Physical environment standards can include aspects such as design and upkeep. Also, good neighbor policies assure the home and its residents are accepted as part of the 

community. The person in charge of the facility shall be clearly 

identified to all residents and on the premises to function properly 

and achieve management efficiency. 

House rules must exist. These rules must be clearly defined: 

completion of formal alcohol and drug recovery program or documented stability in a self-help group and willingness to abide by 

house rules. 

In California, Assembly Bill 285 was introduced earlier this year. 

And this bill would offer drug and alcohol-free residents a—and to 

have proper oversight. 

Again, I reiterate to—and thanks to the subcommittee for addressing this critical issue and for inviting me to testify on behalf 

of CCAPP. 

[The prepared statement of Mr. Nielsen follows:] 

39 


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Testimony of Mr. Peter Nielsen 

Chief Executive Officer 

California Consortium of Addiction Programs and 

Professionals 

"Examining Concerns of Patient Brokering and 

Addiction Treatment Fraud." 

Before the 

Subcommittee on Oversight and Investigations 

House Energy and Commerce Committee 

December 12, 2017 
40 


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Good morning Mr. Chairman Harper, and ranking member DeGette, as well as to the entire 

subcommittee. My name is Pete Nielsen, and I am the Chief Executive Officer ofCCAPP, the 

California Consortium of Addiction Programs and Professionals. CCAPP is California's largest 

statewide consortium of community-based for profit and nonprofit substance use disorder 

treatment agencies, and addiction focused professionals, providing services to over 100,000 

California residents annually in residential, outpatient, and private practice settings. Our home 

office in Sacramento is represented by Energy and Commerce Member Doris Matsui, and our 

entire congressional delegation has been active in the fight against addiction, both before and 

during the opioid crisis. The Golden state of California is represented on this subcommittee by 

three distinguished members, Mr. Ruiz, Mr. Peters, and Ms. Walters, whom I thank for their 

service and their commitment to the people of California. 

CCAPP represents the social model approach to recovery and has actively supported residential 

recovery for over 30 years. We have a long history of excellence in the provision of training, 

technical assistance and advocacy for programs throughout California. We have published and 

disseminated standards for sober living facilities, and we are also responsible for the 

credentialing and professional oversight of tens of thousands of addiction treatment and 

prevention professionals in the most populous state in the nation. At present, compliance with 

CCAPP's Sober Living Environment standards is voluntary. 

Throughout the entire addiction treatment and recovery process, focus on patient centered care is 

critical. A patient cannot be treated as a commodity, which is unfortunately what we are seeing 

in many cases in the current environment. Bad actors are using the stigma of addiction against 

the people they claim to care for. Vulnerable people and their loved ones must be protected from 

those who seek to profit, regardless of client need, medical criteria, or human decency. When 

seeking out the right environment for a loved one, before anything else, the right environment 

and best suited treatment protocol must be guiding principles, not afterthoughts. There should be 

no profit motive involved these decisions. 

Sadly, addicts who seek treatment are often victimized by being sold to the highest bidder, and in 

our state this is perfectly legal. People entering treatment are vulnerable physically and mentally. 

Their loved ones are often so desperate to find safe haven and end the chaos of addictive 

behavior that they make excellent targets for scam artists and so called "interventionists" who 

will apply aggressive sales tactics, telling patients and families the addict will die if they do not 

act upon the referring agent's directive. Add into these scenarios unlicensed, unscrupulous sober 

living homes that are willing to bill individuals and insurers without shame and you have a 

perfect storm for abuse, waste of resources, and tragically poor recovery rates. 
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Sober Living Environments (SLE) is a term generally used to describe a specific type of housing. 

SLE's offer a housing alternative to individuals who are recovering from alcohol and or drug 

addiction. Because these homes are residences, not treatment programs, they are not subject to 

licensing by any State agency and are not subject to any required certification or accreditation. 

Other terms used to describe such housing are "recovery residences" "cooperative housing for 

recovering people", "resident-run housing", "sober cooperative living", and "alcohol, drug free 

living centers." All of these arrangements have something in common in that they are intended 

for cooperative living of individuals who are recovering from alcoholism or drug addiction. 

Resident responsibility for the environment sets it apart from formal recovery programs. Sober 

living is not, nor has it ever been, intended to be the same as residential treatment. It is its own 

entity, with its own set of standards and goals. 

Sober living environments can be found in a variety of settings and can serve a multitude of 

purposes. It is imperative that we understand this, as they are not "one size fits all." In some 

cases, they serve as a place to live while a consumer receives outpatient treatment at a separate 

clinical setting. It is these environments that are the subject of many investigations, especially in 

Florida and California. In other cases, they can serve as a "recovery residence," where people go 

to live upon completing residential treatment at a separate facility. 

There is a great need for sober living in our communities. Many persons who attend or graduate 

from organized programs do not have a home to go to, nor can they afford individual housing, 

which is recovery conducive. Cooperative housing offers a bridge to independent living, which is 

a critical piece of the sobriety puzzle. Those struggling with addiction are often in need of a 

stable environment, which sober living facilities seek to provide. 

As in any cooperative environment, a sober living house needs rules. Rules may include curfew, 

smoking rules, chores, payment of rent, and attendance at house meetings, and must include 

prohibition of any use of alcohol and or drugs for which a prescription is not in existence. A 

sober living home may or may not have paid staff. The role of the staff must be clearly for 

management of the housing and not for management of individuals. The environment must be 

recovery conducive and space should be adequate to accommodate each individual comfortably 

and with dignity and respect. 

Attention should be given to the health and safety of all residents and therefore the home should 

meet minimum fire and health standards. CCAPP recommends standards be followed in five 

categories for any SLE in California. This document, "CCAPP Standards for Sober Living 

Environments," has been submitted for the record. This document includes standards for the, 

Physical Environment, for Management, for Record Keeping, for House Rules, and for 

Residency Requirements. 

Physical Environment standards can include aspects such as design and upkeep. Design should 

encourage residents to contact each other incidentally, informally, and without status barriers. 

Space should be available for all residents to meet for community meetings. Upkeep and 

appearance: Repair, maintenance, cleanliness, and attractiveness are critical elements in the life 

of the house. The upkeep and appearance of the house are a metaphor for the lives of the 
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residents. This includes grounds and driveways surrounding the home. Residents should feel the 

place is their own. Also, good neighbor policies assure that the home and its residents are 

accepted as part of the community. This means that residents will be mindful of noise levels of 

conversations, and designated smoking areas that will not affect the neighbors. There must be 

fire safety standards in place. 

The person in charge of the facility shall be clearly identified to all residents and on the premises 

This should be an individual or designated individual within the group. This person shall be 

responsible for the maintenance and safety of the building. The manager should be the keeper of 

the "good neighbor" policy and liability insurance and copies should be available and visible in 

the home. At a minimum, someone must be responsible for the safety of the building, someone 

must be available to maintain records, to collect rent, and to register and check-out residents, and 

to maintain rules of the house. The manager in charge of the residency shall maintain formal 

records. Records fill several important roles: they allow management to track the person served 

and provide a sense of order. The following record keeping standards are applicable to SLE: 

To function properly and achieve maximum efficiency, House Rules must exist. These rules 

must be clearly defined. Optional rules will depend on the needs of the population to be served, 

should not be over burdensome, and must be consistent with residency needs. 

To begin with, no drinking of alcohol or items containing alcohol or using illegal drugs are to be 

tolerated at any time. Mandatory attendance at a weekly house meeting should also be a 

universal constant. 

Residency Requirements are also critical. The residency requirements must be clearly defined 

and at a minimum should include: A desire to live a clean and sober life style; Completion of a 

formal alcohol or drug recovery program, or documented stability in a self-help group; A 

willingness to abide by all the house rules; and a signed residential agreement on file for each 

resident. 

The substance use disorder treatment and recovery process is highly complex, and as a result, so 

is the industry that provides these services. The better trained, better organized, and better 

coordinated our industry is, the better our services will be- and not only will consumers benefit, 

but so will all of society. Any potential legislation must be crafted to support the industry and its 

good actors, while at the same time weeding out the bad actors. In the end, the goal is to have an 

industry that is ethical and strong enough to support itself with minimal oversight. 

In California, the bill AB 285 was introduced earlier this year as the Drug and Alcohol-free 

Residences Act. This bill would define a "drug and alcohol-free residence" as a residential 

property that is operated as a cooperative living arrangement to provide an alcohol and drug free 

environment for persons recovering from alcoholism or drug abuse, or both, who seek a living 

environment that supports personal recovery. It would authorize a drug and alcohol-free 

residence to demonstrate its commitment to providing a supportive recovery environment by 

applying and becoming certified by an approved certifying organization that is approved by the 

State Department of Health Care Services. It provided that a residence housing persons who are 
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committed to recovering from drug or alcohol addiction is presumed to be a drug and alcoholfree residence if the residence has been certified by an approved certifying organization. The bill 

would require an approved certifying organization, such as CCAPP, to maintain an affiliation 

with a national organization recognized by the department, establish procedures to administer the 

application, certification, renewal, and disciplinary processes for a drug and alcohol-free 

residence, and investigate and enforce violations by a residence of the organization's code of 

conduct, as provided. The bill specifies that there would be documentation that an operator who 

seeks to have a residence certified is required to submit to an approved certifying organization. 

A certifying organization would be required to maintain and post on its web site a registry 

containing specified information of a residence that has been certified pursuant to these 

provisions, and would require the department to maintain and post on its Internet Web site a 

registry that contains specified information regarding each residence and operator that has had its 

certification revoked. The bill would deem the activities of a certified drug and alcohol-free 

residence a residential use of property under specified circumstances. 

This bill would require that a state agency, state-contracted vendor, county agency, or countycontracted vendor that directs substance abuse treatment, or a judge or parole board that sets 

terms and conditions for the release, parole, or discharge of a person from custody, to only first 

refer that person to a residence listed as a certified drug and alcohol-free residence on a registry 

posted by an approved certifying organization, provided there is availability in such a residence. 

At some call centers, workers are paid bonuses for "performance," based on how many 

admissions they sign up, and many use high-pressure sales tactics on very desperate callers. 

Once a potential client is on the phone, it's up to the call center employee to convince them that 

they should travel to the treatment center the call center is representing, whether or not going 

away from home was the person's intention, and whether or not the treatment center provides the 

right therapies and environment that best suits the consumer. 

If the members of this committee can take away just one point from my testimony, please let it 

be this- all of our standards, our recommendations, our efforts- they all have one primary goal 

above all else: to protect the consumer. I believe this committee shares our commitment to this 

pursuit. I believe it is the very reason for this hearing. All of our best practices, and all of our 

efforts day in and day out, exist so that a vulnerable population with a terrible disease receive all 

the possible protections at our disposal. 

CCAPP is promoting common sense legislation to prohibit patient brokering in our state and to 

provide voluntary certification for recovery residences that is tied to referrals and funding from 

public sources. By eliminating the profit motive for referring agents and "starving out" poor 

sober living by denying them referrals and participation in any public funding streams, we 

believe we can stop the "Florida model" from transplanting to California and other states. In 

doing so we are confident we will save more lives, reunite more families that have been torn 

apart by untreated or poorly treated addiction, and make more communities safer in the process. 
44 


28931.032

Again, I reiterate my thanks to this subcommittee for addressing this critical issue, and for 

inviting me to testify on behalf of CCAPP. 
45 

Mr. HARPER. Thank you very much. 

Mr. Aronberg, we now recognize you for 5 minutes for the purposes of an opening statement. Thank you for being here. 

TESTIMONY OF DAVE ARONBERG 

Mr. ARONBERG. Thank you. 

Good morning. My name is Dave Aronberg. I’m a state attorney 

from Florida’s 15th Judicial Circuit, which covers all of Palm Beach 

County. 

As the chief law enforcement officer for a county at the forefront 

of the national opioid crisis, I want to thank you, Mr. Chairman 

and all the committee members, for your leadership in confronting 

this unprecedented epidemic, and also for your advocacy of the 

much-needed 21st Century Cures Act. 

Because of Palm Beach County’s tropical climate and long-established drug treatment industry, we’ve always been a destination for 

people with substance use disorder. This is the Florida model. In 

theory, you have someone battling addiction, oftentimes it’s heroin. 

They’ll come down to Florida to get inpatient detox and other treatment. Insurance will cover 3 to 7 days of detox and then about 10 

days of inpatient treatment. It used to be 28 days, but insurance 

has cut back. Then they’ll go to outpatient care. 

Outpatient care is—those acronyms just mean 4 to 6 weeks, paid 

by insurance, of group counseling and urinalysis. And then to live 

in a sober home while they’re doing that. The sober home, as said 

previously, there’s no treatment there. It’s just a group living place, 

6, 8, 10 people living together in a drug-free, supportive environment. And then, hopefully, after the insurance runs out, that individual is now sober and can go home. That’s in theory. 

Together, the Affordable Care Act and the Mental Health Parity 

Act provide coverage for rehab on a traditional fee-for-service basis, 

with no yearly or lifetime limits, and with relapse always covered 

as an essential health benefit. 

In recent years, however, we’ve had a surge of unscrupulous individuals enrich themselves by misusing well-intended Federal laws 

to prey on opioid addicts who are often willing to participate in patient brokering, illegal kickbacks, and insurance fraud, in exchange 

for illicit benefits, such as cash, free rent, transportation, and even 

drugs themselves. This is the Florida shuffle. This is the reality on 

the ground. Everyone’s getting rich. 

You have a patient coming down to Florida, sent by a marketer 

with a free plane ticket, and then going into an inpatient facility 

that kicks back money to the marketer, then going into an outpatient facility where kickbacks occur, and then living in a sober 

home, often for free, because the sober home owner will get a kickback from the outpatient care center. And the lab even makes 

money on kickbacks because urinalyses are very lucrative. And everyone’s making money, except there’s one area that’s not profitable. And that’s sobriety. We are incentivizing failure. This is a relapse model, not a recovery model. 

What’s also important to note, is that when it comes to the sober 

home area, the Americans With Disabilities Act and the Fair Housing Act together prevent the regulation or inspection of these resiVerDate Nov 24 2008 14:58 Jan 15, 2019 Jkt 037690 PO 00000 Frm 00049 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-87 CHRIS
46 

dences. And so many are little more than flophouses where drug 

abuse, human trafficking, and other crimes are prevalent. 

It’s hard enough to remain sober as it is for someone battling addiction, let alone knowing that their sobriety is going to cost them 

their free rent, their free gifts, their transportation, their friends, 

and now they got to move back home, in a chilly climate, and live 

with their parents and find a job. And this is why 75 percent of 

all private-pay patients in Florida rehab, come from out of state, 

and they rarely leave. Too often, they leave in body bags and ambulances. 

In July 2016, our office formed a task force to crack down on this 

fraud and abuse. We have since made 41 arrests. We also 

impaneled a grand jury and created two additional citizens’ task 

forces to recommend changes to Florida law that led to the passage 

of an important act that Congresswoman Castor mentioned. But we 

can’t fix this problem alone. We need your help, and that’s why 

we’re making the following recommendations. 

First, address private insurance abuses by adopting the ACA’s 

outcome-based reimbursement model used in the Medicare program instead of the current fee-for-service reimbursement model. 

This would reward the best recovery centers while shuttering rogue 

operators. It could also improve patient outcomes as providers will 

be incentivized towards a longer term, lower-level continuum of 

care rather than ineffectual short bursts of intensive forms of treatment with no followup. 

Second, address the abuses in the sober home industry by clarifying the ADA and FHA to allow states and local governments to 

enact reasonable regulations for the health and safety of vulnerable 

sober home residents. DOJ and HUD attempted to issue such a 

clarification last year, but their joint statements seem to miss the 

point that the very Federal laws designed to protect individuals in 

recovery are instead being used to shield those who do them harm. 

Chief assistant Alan Johnson, who heads our Sober Homes Task 

Force, will provide our other three recommendations. 

And I want to thank you, members of the committee, for your 

time. 

[The prepared statement of Mr. Aronberg follows:] 

47 


28931.033

TESTIMONY OF DAVE ARONBERG, STATE ATTORNEY, 15TH JUDICIAL CIRCUIT, 

FLORIDA 

My name is Dave Aronberg. I'm the State Attorney for Florida's 151

h Judicial Circuit, which 

covers all of Palm Beach County. As the Chief law Enforcement officer for a county at the 

forefront of the national opioid crisis, I want to thank you, Mr. Chairman, and all of the 

committee members, for your leadership in confronting this unprecedented epidemic. I also 

applaud your advocacy of the 21" Century Cures Act, which will speed the discovery and 

development of new cures and treatments, including alternatives to the addictive prescription 

painkillers that have led to so many needless deaths. 

Because of Palm Beach County's tropical climate and long established drug treatment industry, 

we have always been a destination for people with substance use disorder. [See PowerPoint 

Slide #2.] In recent years, however, we have seen an influx of unscrupulous individuals who 

enrich themselves by exploiting those in recovery. These opportunists are misusing wellintended federal laws to prey on opioid addicts, who are often willing to participate in patient 

brokering, illegal kickbacks and insurance fraud in exchange for illicit benefits such as cash, free 

rent, transportation and even drugs themselves. 

This is the Florida Shuffle. [See PowerPoint Slide #3.] It starts with deceptive marketing 

practices, offers or inducements, such as a free one-way plane ticket to a Florida rehab center. 

Today, 75% of all private-pay patients in Florida drug treatment centers come from out of State, 

and for too many of them, they leave our community only in ambulances or body bags. Once in 

Florida, the patient goes through a course of treatment covered by insurance. Together, the 

Affordable Care Act (ACA) and the Mental Health Parity and Addition Equity Act of 2008 provide 

coverage for drug rehabilitation on a traditional fee-for-service basis with no yearly or lifetime 

limits and with relapse always covered as an essential health benefit. During outpatient phases 

of treatment, the out-of-state patient, in need of a place to live, will be referred to a sober 

home, which is a group home for individuals in recovery. The Americans with Disabilities Act 

(ADA) and Fair Housing Amendments Act (FHAA) together prevent the regulation or inspection 

of these residences, and so many are little more than flophouses where drug abuse, human 

trafficking and other crimes are prevalent. When insurance benefits are exhausted, outpatient 

care ends and the individual leaves the sober home. A relapse, however, will trigger a new 

round of treatment, so rogue providers seek profit through endless failure rather than sobriety. 

In July 2016, our office formed a Sober Homes Task Force to crack down on the fraud and abuse 

in the drug treatment industry. Our Task Force has since made 41 arrests, mostly for illegal 

patient brokering, which is a third-degree felony in Florida punishable by up to 5 years in 

prison. We also work with the U.S. Attorney's Office for the Southern District of Florida to 
48 


28931.034

target insurance fraud, which led to the recent federal conviction and 27-and-a-half year 

sentence for drug treatment and sober home kingpin Kenneth Chatman. 

As we succeed in arresting rogue providers and shutter corrupted facilities, we have seen the 

criminal element leave Palm Beach County for other communities unaware of the Florida 

shuffle. We have held training sessions for prosecutors and law enforcement officials 

throughout the State and we're offering our assistance to jurisdictions throughout the country. 

On the legislative front, our office empaneled a Grand Jury and created two additional citizens' 

Task Forces to recommend changes to State law, leading to the 2017 passage of Florida House 

Bill 807, which tightened enforcement and oversight of the drug recovery industry. 

But local and State law enforcement cannot solve this problem alone. We need the federal 

government to fix federal laws and regulations that exacerbate the national problem and tie 

our hands at the local level. My Chief Assistant, Alan Johnson, and I offer five 

recommendations: 

First, address private insurance abuses by adopting the Affordable Care Act's outcome-based 

reimbursement model used in the Medicare program instead of the current fee-for-service 

reimbursement model for private pay drug rehab. This would reward the best recovery centers 

while shuttering rogue operators. It could also improve patient outcomes, as providers will be 

incentivized towards a longer term, lower-level continuum of care rather than ineffectual short 

bursts of intensive forms of treatment with no follow up. Studies have shown that a more 

effective and less expensive approach is to provide decelerated care over 12 months instead of 

an unending Sf;!ries of intensive 7 to 14 day inpatient stays followed by intensive outpatient 

treatment for 4 to 6 weeks marked by over-testing and overbilling. 

Second, address the abuses in the sober home industry by clarifying the Americans with 

Disabilities Act and Fair Housing Act to allow states and local governments to enact reasonable 

regulations for the health, safety and welfare of vulnerable sober home residents. The 

Department of Justice (DOJ) and the Department of Housing and Urban Development (HUD) 

attempted to issue such a clarification last year, but it was unhelpful. Entitled "State and local 

land Use laws and Practices and the Application of the Fair Housing Act," the Joint Statement 

seemed to ignore the realities on the ground that the very federal laws designed to protect 

individuals in recovery- the ADA and the FHAA --are instead being used to shield those who do 

them harm. Chief Assistant Alan Johnson will now offer three additional recommendations. 
49 

Mr. HARPER. Thank you for your testimony. 

The chair will now recognize Mr. Johnson for 5 minutes for purposes of his opening statement. 

TESTIMONY OF ALAN JOHNSON 

Mr. JOHNSON. Thank you, Mr. Chair, members. Thank you for 

the opportunity. 

As we succeed in Palm Beach County in arresting and prosecuting rogue providers and shuttering corrupt facilities, we’ve 

seen the criminal element leave Palm Beach County for other communities and states that may not be aware of the Florida shuffle. 

We have held training sessions for prosecutors and law enforcement officers throughout Florida, and we’re offering our assistance 

to other jurisdictions throughout the country. 

However, there are a number of roadblocks facing local, state, 

and Federal prosecutors in effectively combatting these abuses. The 

following are several concrete steps that can close loopholes in the 

law, protect the vulnerable patients with substance use disorder 

from exploitation, and assist prosecutors in their efforts to reign in 

the corruption that has plagued the treatment industry. In the interest of brevity, I’ll highlight these recommendations. My written 

testimony is more detailed. 

Currently, under the Federal Anti-Kickback Statute, which is 

known as AKS, Federal agents and prosecutors only have jurisdiction to pursue kickbacks related to federally assisted insurance programs, such as Medicare and Medicaid. Patient brokering abuses, 

regardless of whether the insurance is public or private, hurts patients and increases the cost of healthcare to everyone. In other 

words, the same public purpose behind the Anti-Kickback Statute 

applies equally to both federally funded and private treatment. The 

private industrywide fraud has been estimated in the billions of 

dollars. I know you know that. The human cost of substandard care 

motivated by greed is incalculable. 

We ask that this committee explore an amendment to the AKS, 

the Anti-Kickback Statute, that would bring this law enforcement 

tool to bear on the rampant exploitation occurring in the privatebased sector. At a minimum, jurisdiction should be extended to private insurance contracts obtained through the ACA exchanges. 

Second, we ask that the bona fide employee safe harbor, BFE it’s 

known as, within the Anti-Kickback Statute be modified. Now, 

Florida, along with many states, has patient brokering statutes 

that adopt the Federal safe harbors like bona fide employee. 

Currently, rogue actors in the treatment industry are hiring marketers as employees to circumvent the Federal Anti-Kickback and 

state patient brokering statutes. Employers are paying bonuses 

and commissions based on the value or the volume of the patients 

their employees refer. Many of these marketers who are employees 

have no credentials in traditional marketing, are recovering addicts 

themselves and, in many cases, own sober homes where they steer 

the residents to the employer’s facilities. 

The bona fide employee exception needs to be clarified in two 

ways. First, an employee should not be permitted to receive bonuses and commissions on the basis of the value of the services or 

50 

the volume of the customers they refer. The delivery of healthcare 

is not the same as selling automobiles or computers. 

This can be achieved by applying the safe harbor rules in the 

Federal statute regulating independent contractors to apply to employees. For example, independent contractors under the Anti-Kickback Statute cannot be paid on the basis of the volume or value 

of their referrals. This rule should apply to employees as well. By 

making a marketer an employee should not absolve the employer 

and the employee from liability for these abuses. 

Additionally, the bona fide employee safe harbor exception to the 

Anti-Kickback Statute allows an employer to pay ‘‘any amount to 

an employee for the employment in the provision of covered items 

or services.’’ This safe harbor should be clarified to mean that any 

payment to an employee must be for the performance of services 

that are actually covered by the applicable Federal program. And 

this would flow down to the states as well in their patient 

brokering statutes. 

While the current wording of the statute is clear to us, Federal 

courts continue to disagree as to the meaning of the phrase, and 

it’s hurting our oversight of these abuses. 

Third, an increased effort should be made to use appropriate 

Federal agencies to go after the corrupt marketers and marketing 

schemes. This is a national problem, and thousands of families 

throughout the country are affected by false and fraudulent misrepresentations. State and local agencies do not have the resources 

or jurisdiction to go after large interstate marketing operations. 

Lastly, and perhaps most importantly, the rules regulating the 

application of the ADA and FHA, as they pertain to sober homes, 

need to be clarified to allow standards to be required for the protection of the residents. There are standards out there. Oxford House 

is recognized by Congress, as well as the National Alliance of Recovery Residences. 

Running out of time, so thank you very much. 

[The prepared statement of Mr. Johnson follows:] 

51 


28931.035

TESTIMONY OF ALAN S. JOHNSON, CHIEF ASSISTANT STATE ATIORNEV, 15TH 

JUDICIAL CIRCUIT, FLORIDA 

My name is Alan Johnson. I'm Chief Assistant State Attorney, lS'h Judicial Circuit in and for 

Palm Beach County, Florida. One of my duties is to supervise both the civilian and law 

enforcement sides of the Palm Beach County Sober Homes Task Force. 

As we succeed in arresting and prosecuting rogue providers and shuttering corrupt facilities, we 

have seen the criminal element leave Palm Beach County for other communities that may not 

be aware of the Florida Shuffle. We have held training sessions for prosecutors and law 

enforcement officials throughout Florida and we're offering our assistance to other jurisdictions 

throughout the country. Our Task Force has also worked with the U.S. Attorney's Office for the 

Southern District of Florida to target insurance fraud, which led to the recent federal conviction 

and 27 year prison sentence for drug treatment and sober homes kingpin Kenneth Chapman. 

However, there are a number of roadblocks facing local, state and federal prosecutors in 

effectively combating these abuses. The following are several concrete steps that can close 

loopholes in the law, protect the vulnerable patients with substance use disorder from 

exploitation, and assist prosecutors in their efforts to reign in the corruption that has plagued 

the treatment industry. 

EXPAND THE FEDERAL ANTI-KICKBACK STATUTE (AKS) TO INCLUDE PRIVATELY FUNDED 

TREATMENT: 

Federal law prohibits offering or paying, soliciting or receiving, anything of value (i.e., 

kickbacks) for patient referrals. Currently, the Federal Anti-Kickback Statute only applies to 

schemes involving federally assisted programs, such as Medicare and Medicaid. Patient 

broke ring abuses, regardless of whether the insurance is public or private, hurts patients and 

increases the cost of health care to everyone. Kickback schemes can freeze competing 

suppliers, cause overutilization of services, harm competition and the freedom of choice. Antikickback statutes, both state and federal, are designed to prevent (1) corruption of medical 

judgments, (2) overutilization of services -unnecessary billing, (3) unfair competition, (4) 

increased costs to the system and (5) patient steering. 

In other words, the same public purpose behind the AKS applies equally to both federally 

funded and private treatment. Currently, federal law enforcement and prosecutors have only 

limited jurisdiction to investigate and prosecute bad actors defrauding private insurance 

programs. Federal prosecutors are limited in their ability to prosecute corrupt marketers and 

patient brokers whose schemes do not involve federally-assisted programs. The private 

liPage 
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28931.036

industry-wide fraud has been estimated in the billions of dollars. The human cost of 

substandard care motivated by greed is incalculable. We ask that this committee explore an 

amendment to the AKS that would bring this law enforcement tool to bear on the rampant 

exploitation occurring in the private pay sector of substance use disorder treatment. At a 

minimum, jurisdiction should be extended to private insurance contracts obtained through the 

ACA exchanges. 

Local and state law enforcement agencies cannot fight this battle alone, especially against well 

funded regional and national criminal networks. 

MODIFY THE BONA FIDE EMPLOYEE (BFE) SAFE HARBOR WITHIN THE AKS. 

There are a number of exceptions to the AKS (adopted by most state patient broke ring 

statutes) that create safe harbors for treatment facilities. One such safe harbor is the Bona Fide 

Employee exception (BFE). Hiring an employee is often used as a method to disguise kickback 

schemes. Under the Bona-fide Employee Exception, the AKS does not prohibit, " ... any amount 

paid by an employer to an employee (who has a bona fide employment relationship with such 

employer) for employment in the provision of covered items or services [.]" 42 USC§ 1320a7b(b)(3)(B). 

According to a 1991 OIG opinion, the thinking behind this safe harbor is that the employeremployee relationship is unlikely to be abusive, in part because the employer is generally fully 

liable for the actions of its employees and is therefore more motivated to supervise and control 

them. Our experience shows the opposite; many employers are fully invested in the brokering 

schemes, oftentimes hiring recovering addicts to put "heads in the beds." We ask that the 

current BFE be amended to exclude employees from being paid bonuses or commissions based 

on the value or volume of referrals that they generate. 

In addition, we ask that the phrase, " ... for employment in the provision of covered items or 

services" be clarified to mean that any payment to an employee must be for the performance 

of services that are actually covered by insurance. While the current wording of the statute is 

clear to us, Federal Courts continue to disagree as to the meaning of this phrase. 

Another safe harbor, Personal Services and Management Agreements (PSM), applies to 

contractual relationships with third party persons or entities. Requirements found in this safe 

harbor should be made applicable to the BFE exception as well. They include the following: 

1- The agency agreement is set out in writing and signed by the parties. 

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28931.037

2- The agency agreement covers all of the services the agent provides to the principal for 

the term of the agreement and specifies the services to be provided by the agent. 

3- The aggregate compensation paid to the agent over the term of the agreement is set in 

advance, is consistent with fair market value in arms-length transactions and is not 

determined in a manner that takes into account the volume or value of any referrals or 

business otherwise generated between the parties. 

4- The services performed under the agreement do not involve the counseling or 

promotion of a business arrangement or other activity that violates any State or Federal 

law. 

5- The aggregate services contracted for do not exceed those which are reasonably 

necessary to accomplish the commercially reasonable business purpose of the service. 

42 CFR 1001.952 (emphasis added) 

The above requirements for the PSM safe harbor are designed to promote transparency and 

discourage patient broke ring abuses. This reasoning applies equally to employees and may be 

applied to the BFE safe harbor by simply switching the words "agency" and "agent" to 

"employment" and "employee." It should be noted that any treatment provider will be able to 

hire and maintain employees without adhering to these requirements; however, if that 

employee violates the AKS or state equivalent patient brokering statute, they may not use the 

safe harbor as an affirmative defense. 

ENHANCE FEDERAL ENFORCEMENT OF CIVIL AND CRIMINAL INTERSTATE MARKETING FRAUD 

One of the many contributors to fraud and abuse in the private treatment side of the opioid 

crisis is false and misleading advertising. Millions of dollars are spent to gain placement, 

particularly for on-line internet access, to create a funnel from one part of the country to 

treatment destinations such as Florida, Arizona, Texas and California. In many cases, phone 

numbers and maps of legitimate providers are hijacked by unscrupulous marketers. On-line 

positioning in one geographic area can mislead the caller into thinking a facility is local, when 

the local number is in reality a Trojan horse, answered by a lead generator and sold 

downstream to the highest bidder. These phone calls are extremely valuable. In some cases, a 

downstream lead generated call may cost a facility or marketer over $1,000 or more, once 

insurance is validated. 

Florida recently passed landmark legislation to reign in some of the abusive practices in the 

marketing of addiction services. HB 807 included new deceptive and fraudulent marketing 

3IPage 
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28931.038

practices statutes, recognizing vulnerable consumers and their families are at risk of being 

victimized by practices that adversely impact the delivery of health care. False or misleading 

statements or information about a provider or operator's products, goods, services or 

geographical location marketed on advertising materials, in media or on its website are now 

violations of state civil and criminal law. 

While Florida has prohibited false and misleading advertising, the reality is that many of these 

fraudulent marketers are operating on a regional or national level. Jurisdiction and 

investigatory limitations severely hinder effective state action. Lack of resources is also a 

problem. Local law enforcement is not equipped to investigate large marketing firms operating 

over state lines. Holding abusive interstate marketers and marketing systems to task, both 

civilly and criminally, should be made a priority of the appropriate federal agencies. 

CLARIFY THE AMERICANS WITH DISABILITIES ACT (ADA) AND THE FAIR HOUSING 

AMENDMENTS ACT OF 1988 (FHAA) TO PROTECT RESIDENTS OF SOBER HOMES 

In 2016, there were 4,661 opioid overdose responses by Fire Rescue in Palm Beach County 

alone; 552 of them resulting in death. Many, if not most of the calls, were to sober homes. 

The Americans with Disabilities Act (ADA) and the Fair Housing Amendments Act (FHAA) limit 

government oversight of sober homes that house persons recovering from Substance Use 

Disorder (SUD). When President Reagan signed the FHAA, he added people with disabilities to 

the classes protected by the nation's Fair Housing Act (FHA). The amendments recognized that 

many people with disabilities need a community residence in order to live in the community 

like a family as an alternative to institutionalization. SUD is a recognized disability under the 

ADA and FHAA. However, unlike other disabilities, a person suffering from SUD is not protected 

under Federal Law if he or she is actively using controlled substances. In no other instance is a 

disability conditioned on the actions of the disabled. This is an important distinction when 

applying protections for persons with SUDs. The nature of the disease creates a circumstance 

whereby the disabled are vulnerable and easily exploited or manipulated. The need for 

standards in community housing for this vulnerable class must be considered when applying 

Federal Law. 

Because of a lack of oversight, the majority of sober homes in Palm Beach County are little 

more than flop houses. Many are owned or operated by convicted felons, are in crime ridden 

neighborhoods with drug dealers literally next door. Other than voluntary certification with the 

non-profit organization, Florida Association of Recovery Residences (FARR), there is little or no 

protection for this vulnerable class. Enforcing criminal laws and municipal code enforcement is 

reactive and ineffective in protecting sober home residents. 

41Page 
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28931.039

local and State governments do not have the right to ban or refuse reasonable accommodation 

in the enforcement of local codes and ordinances. However, there needs to be an 

acknowledgement that some oversight is necessary for the health and safety of the sober home 

residents. 

There is a type of sober home that is recognized by Congress, called Oxford House. Oxford 

houses are residences that are chartered by a non-profit, national organization that applies 

strict rules and conditions attendant upon residence. These rules include, in part, sobriety, 

collective self governance and good neighbor policies. Oxford House is listed by SAMSHA on 

the National Registry of Evidenced-based Programs and Practices (NREPP). 

In addition, there is a national organization, the National Alliance of Recovery Residences 

(NARR), that has developed model rules and standards for sober homes that have been 

adopted by various state non-profit certifying entities. In Florida, the Florida Association of 

Recovery Residences (FARR) has been authorized by statute and through designation by the 

appropriate executive department, to certify recovery residences. Certification requires quality 

standards, including core principals of a recovery based drug free environment, management 

by a certified recovery residence administrator, a good neighbor policy, ethics and safety 

standards, resident rights and obligations as well as a displacement policy when a resident 

materially violates these standards. The Florida legislature has made FARR certification 

voluntary, in large measure to avoid liability under the ADA and FHAA. Most sober homes 

remain uncertified. 

As previously stated, SUD is a unique disability. Persons with SUD are extremely vulnerable to 

manipulation and abuse. This is especially true when they have actively used in the recent past. 

Most sober home residents are currently participating in active intensive out-patient treatment 

programs. Some have recently completed treatment and are vulnerable to relapse. The lack of 

standards in housing has strongly contributed to the recycling of SUD patients in and out of 

treatment. Safe and sober housing is the key to long term sobriety. It should be noted that 

sober homes are residences only, that is, no treatment is performed in the house. 

The proliferation of sub-standard sober homes must be addressed at the federal level. We 

recommend that states be given the ability to require certification under NARR or similar 

standards, or other recognized programs such as Oxford House to protect the vulnerable 

residents living in sober homes. Clarification of the ADA and FHAA can also be achieved 

through administrative changes to the CFR applicable to group homes housing persons 

considered disabled due to SUD. 

SIPage 
56 

Mr. HARPER. Thank you for your testimony, Mr. Johnson. I look 

forward to hearing more in response to the questions. 

The chair will now recognize Mr. Gold for 5 minutes for the purposes of an opening statement. 

TESTIMONY OF ERIC M. GOLD 

Mr. GOLD. Chairman Harper, Ranking Member DeGette, and 

members of the subcommittee, thank you for inviting me to testify 

this morning on this very important issue. 

I’m an assistant attorney general, Chief of the Healthcare Division in the Office of the Massachusetts Attorney General, and I’m 

privileged to be here today on behalf of Attorney General Healey. 

In 2014, Massachusetts became the first state in the country to 

declare the opioid epidemic to be a public health emergency. Last 

year, there were 2,190 overdose deaths in our state, and thousands 

more are in need of treatment for opioid use disorder. 

Attorney General Healey has made combating the opioid epidemic her top priority, and dedicated the full resources of our office 

to address the problem from all sides using criminal and civil law 

enforcement, and promoting treatment, prevention, and education. 

Earlier this year, the office began hearing devastating stories 

from young men and women from Massachusetts who were lured 

out of state by paid recruiters who promised them free travel to addiction treatment centers in a warm-weather state. 

When the patients arrived, they often discovered that the treatment they were to receive was low quality or even nonexistent. In 

those cases, they were left thousands of miles from home with no 

health insurance, no access to the medical care they needed, and 

no resources to return home. In the most tragic cases, these young 

people suffered fatal overdoses following their continued use of 

opioids without treatment. 

Following these concerns, our office has opened a criminal investigation into addiction treatment fraud, and issued a consumer advisory alerting patients and their families that they should be wary 

of unsolicited offers for free out-of-state addiction treatment. 

Based on our experience in Massachusetts, I have three recommendations for the subcommittee. First, we need additional resources for Federal, state, and local law enforcement to combat patient brokering and addiction treatment fraud. Every time a recruiter lures a young person from Massachusetts to travel far from 

home for treatment, that person’s life is on the line. While state 

and local law enforcement are working aggressively on these cases, 

this is a national problem, and it requires a coordinated national 

law enforcement solution. 

Second, patients need transparency into the quality of addiction 

treatment providers nationwide. If patients are going to travel out 

of state for treatment, they need a reliable way to identify the 

high-quality providers. Right now, families rely on a patchwork of 

incomplete state directories, providers’ own websites, and personal 

reviews online. Because so many patients are receiving treatment 

outside of their home state, there is an opportunity for the Federal 

Government to play a role in getting patients and their families the 

information they need about treatment providers. 

57 

Finally, we need to be sure that any attempts to address patient 

brokering advance the ultimate goal of ensuring that patients with 

substance use disorder have access to the treatment that they 

need. Thanks to changes in Federal and state law, most insured 

patients now have access to treatment for substance use disorder. 

And while you could imagine regulatory changes that reduce the 

risk of patient brokering, in our state, we do not want to change 

the rules in a way that would reduce access to treatment for many 

patients living with substance use disorder. 

Thank you, again, for the opportunity to share my perspective 

and that of the residents of Massachusetts with the subcommittee. 

Thank you to the subcommittee for careful consideration of this important issue, and I look forward to answering any questions that 

you have. 

[The prepared statement of Mr. Gold follows:] 

58 


28931.040

Written Statement of Eric Gold 

Assistant Attorney General 

Chief, Health Care Division 

Office of Massachusetts Attorney General Maura Healey 

"Examining Concerns of Patient Brokering and Addiction Treatment Fraud" 

Tuesday, December 12,2017 

Before the United States House of Representatives 

Committee on Energy and Commerce 

Subcommittee on Oversight and Investigations 

Chainnan Harper, Ranking Member Degette, and members of the Subcommittee, thank 

you for inviting me to testify today on this important issue. I am an Assistant Attorney General 

and Chief of the Health Care Division in the Office of Massachusetts Attorney General Maura 

Healey. 

I. Summary of Written Testimony 

In 2014, Massachusetts became the first state to declare the opioid epidemic to be a 

public health emergency. Last year, there were 2190 overdose deaths in our state and thousands 

more are in need of treatment for opioid use disorder. Attorney General Healey has made 

combatting the opioid epidemic her top priority and dedicated the full resources of the Office to 

addressing the problem from all sides using criminal and civil law enforcement, and promoting 

treatment, prevention, and education. 

Earlier this year, the Office began hearing devastating stories in which young men and 

women from Massachusetts were lured out of state by paid recruiters who promised them free 

travel to an addiction treatment center in a warm-weather state. When the patients discovered 

that the treatment they were to receive was low quality or nonexistent, they were often left 

thousands of miles from home with no health insurance, no access to the medical care they 

needed, and no resources to return home. In the most tragic cases, these young people suffered 
59 


28931.041

fatal overdoses following their continued opioid use without treatment. Following these 

concerns, the Office has opened a criminal investigation into addiction treatment fraud and 

issued a Consumer Advisory, alerting patients and their families that they should be wary of 

unsolicited offers for free out-of-state addiction treatment. 

Based on our experience in Massachusetts, I have three recommendations for the 

Subcommittee. First, we need additional resources for federal, state, and local law enforcement 

to combat patient brokering and addiction treatment fraud. This is a national problem and it 

requires a coordinated, national, law enforcement solution. Second, patients need transparency 

into the quality of addiction treatment providers nationwide. If patients are going to travel out of 

state for treatment, they need a reliable way to identify the high quality providers. Finally, we 

need to be sure that any attempts to address patient brokering advance the ultimate goal of 

ensuring that patients with substance use disorder (SUD) have access to the treatment that they 

need and do not unintentionally limit that access. 

II. Introduction and Background 

Massachusetts was the first state in the country to declare the opioid epidemic a public 

health emergency when it did so in 2014. Our state has been in the throes of the epidemic since 

then. In a state of 6.8 million residents, opioid overdose deaths more than doubled from 638 

state-wide in 2009 to 1364 deaths in 2014, and more than 2100 opioid overdose deaths last year. 1 

The toll on our state can be measured not only in the number of deaths, but in the vast number of 

residents who are in need oftreatment.2 

1 Massachusetts Dep't of Public Health, Data Brief: Opioid-Re1ated Overdose Deaths Among 

Massachusetts Residents at 1 (Nov. 2017), at https://www.mass.gov/files/documents/2017/11/13/seclod%20deaths%20mass%20residents%20Nov-17 .pdf 2 See Massachusetts Dep't of Public Health, Data Brief: An Assessment ofOpioid-Related Overdoses in 

Massachusetts 2011-2015 at 2 (Aug. 20 17), at https://www.mass.gov/files/documents/2017/08/31/databrief-chapter-55-aug-2017 .pdf. 

2 
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Since taking office in January 2015, Attorney General Healey has made combatting the 

opioid epidemic her top priority. The office has taken a multi-disciplinary approach to 

addressing the problem, including criminal and civil law enforcement, and promoting treatment, 

prevention, and education. This work involves our prosecutors and investigators working side 

by side with health care experts, other law enforcement personnel, advocates, and public policy 

experts. 

For example, last month more than 30 individuals were arrested in a takedown of a heroin 

and fentanyl distribution ring in central Massachusetts, which resulted from a joint investigation 

by our office and local police. In October, the Office announced a civil settlement with an 

opioid manufacturer, Insys Therapeutics, related to its unlawful marketing and payment of 

kickbacks to promote the use of the fentanyl spray Subsys. And, in our campaign to prevent 

opioid addiction, the Office has led a $2 million public-private collaboration called Project Here 

that is making substance use prevention education available to every public middle school in 

Massachusetts. 3 

III. The Massachusetts Experience 

A. Patient Brokering in Massachusetts 

Earlier this year, the Office began receiving information about Massachusetts residents 

with SUD who had been lured to out-of-state addiction treatment providers by paid recruiters. 

Though the particular circumstances in these cases varied, the trends were similar. 

Massachusetts-based recruiters have used web-based marketing, social media, text 

messaging, and in-person meetings, to aggressively solicit Massachusetts residents with SUD. 

The recruiters often have close connections to the recovery community (some may be in 

3 More detail about the Office's work combating the opioid epidemic is available at 

www.mass.gov/ago/opioids. Information about Project Here is available at www.here.world. 

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recovery themselves) and may be friends or acquaintances of the patients they solicit. These 

recruiters have even sought to solicit patients at recovery support group meetings. Other 

recruiters solicit a wider audience on-line or through social media, including on Facebook. 

Information reported to the Office (and since publicly reported) indicates that Massachusetts 

recruiters were paid commissions of up to $2000 for each referral of a commercially insured 

patient to an out-of-state treatment provider. 

In one situation, it was alleged that a recruiter manipulated the phone number associated 

with the Google search results for a Massachusetts SUD treatment provider. As a result, when 

patients dialed the phone number displayed next to the name of the treatment provider on 

Google, patients were connected to a recruiter, not the local treatment provider they had sought. 

When recruiters solicit Massachusetts patients, they often communicate that the recruiters 

will arrange and pay for the patient's travel to and treatment at out-of-state addiction treatment 

centers in warm-weather states (including Florida, California, or Arizona). In some 

circumstances where patients do not have commercial insurance that would pay for out-of-state 

treatment, recruiters will offer to obtain insurance for the patients. 

Patients who accept the solicitation and travel out of state have had varied experiences, 

but some have found the treatment centers to be very low quality with, in some instances, little or 

no treatment at all. Yet, the patient may find that he cannot move to a different treatment center 

because his insurance will no longer pay for those services. The patient's insurance coverage 

may have been terminated for a variety of reasons, including that the premiums were not paid 

because the insurance carrier learned that the treatment was not legitimate and denied the claims, 

or that the insurance carrier canceled the coverage all together, believing the policy was procured 

fraudulently. 

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Regardless of the reason, once the patient leaves treatment and loses his insurance, he 

may be stranded far from horne, battling a terrible illness, and without access to housing or the 

treatment he needs. Unfortunately, without access to treatment, some patients have lost their 

battle with SUD, continuing to use opioids and overdosing thousands of miles from home. 

These deaths have been all the more devastating to their family and friends who had thought 

their loved ones were seeking the treatment they needed in a safe and new environment. 

B. Response of the Massachusetts Attorney General's Office 

Based on the information summarized above, the Office has substantial concerns with 

patient brokering and addiction treatment fraud in Massachusetts. Most significantly, the Office 

is concerned that the use of paid recruiters to refer patients to SUD treatment risks patient safety. 

Recruiters who receive a commission for each patient they refer may act in their own financial 

interest, rather than the patient's best interest. As a result, patients may be referred to low quality 

treatment centers that pay the recruiter a commission, rather than a high quality treatment center 

that does not pay a commission. Even if the treatment center receiving the referral is high 

quality, where the recruiter has a financial motive, the patient may be referred to a treatment 

provider that is not the right fit for that particular patient. 

These concerns are heightened when patients are referred out of state, for two reasons. 

First, it is more difficult for patients and their families to assess the quality of the treatment 

provider when those providers are far from the patient's horne. Second, if the patient does not 

receive adequate treatment at the out-of-state treatment center, the patient may be left far from 

home in an especially vulnerable situation without family, support, or the means to return horne. 

Beyond the risk to patient safety, the Office is concerned that patient brokering and 

addiction treatment fraud cause financial harm to patients, their families, insurance carriers, and 

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the health care system as a whole, by charging for unnecessary or inappropriate treatment 

services. 

The Office has responded to this problem using both law enforcement and consumer 

education tools. In Massachusetts, it is illegal to make or accept a payment to induce the referral 

of a commercially-insured patient for any health care services. See Mass. Gen. Laws ch. 175H, § 

3. Massachusetts law also prohibits health insurance fraud. See Mass. Gen. Laws ch. 266, § 

IliA. Based on the information we received, the Office has opened a criminal investigation into 

addiction treatment fraud. The investigation is ongoing.4 

Separately, the Office issued a Consumer Advisory in April to alert Massachusetts 

consumers about patient brokering and offer guidance to patients and their families seeking 

treatment.5 The notice provided information about safely accessing SUD treatment services in 

Massachusetts and also advised patients to: 

• Be wary of unsolicited referrals to out-of-state treatment 

facilities. 

o Anyone seeking to arrange for addiction treatment out of 

state may be getting paid by the treatment center. 

o In Massachusetts, it is illegal for recruiters to accept 

kickbacks for referring you to treatment. 

o Anyone paid a referral fee for recommending a particular 

treatment center does not have your best interests in mind. 

• Be wary of anyone offering to pay for your insurance coverage. 

They can stop paying your premiums at any time, which will 

result in the cancellation of your insurance. 

• If you accept an offer by someone to pay for travel to an outof-state clinic, make sure you have a plan and the means to pay 

for a trip back home. 

• Be careful about giving your personal information including 

your social security number or insurance number- to a 

recruiter, unless you can confirm that the person is employed 

by a medical provider or insurance company. 

4 I cannot disclose further details of the ongoing criminal investigation. 5 The Consumer Advisory is available at http://www.mass.gov/agolbureauslhcfc/the-health-caredivision/consumer-advisory-scams-addiction-treatment-.html. 

6 
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• If someone is offering to arrange travel or cover insurance 

costs for treatment, call the treatment facility or your insurance 

company to confirm that the person is an employee. 

IV. Recommendations 

The practice of paying for referrals for SUD patients has had devastating consequences 

for some Massachusetts residents. The scope of the epidemic in Massachusetts has caused 

delays in accessing treatment for some patients, leaving them particularly vulnerable to 

solicitations to travel out of state for care. Yet, patient brokering is a very complicated problem 

and there is no simple way to immediately end the practice. Addressing the issue will require 

continued work from federal, state, and local law enforcement and policy makers to ensure that 

patients get the treatment they need and unscrupulous brokers cannot take advantage of these 

vulnerable patients for their financial benefit. Based on our experience in Massachusetts, I have 

three recommendations to share with the Subcommittee. 

First, we need to expand the resources available for federal, state, and local law 

enforcement to combat patient brokering and addiction treatment fraud. Each time a recruiter 

successfully lures a young person from Massachusetts to Florida, California, or Arizona for 

treatment, that person's life is on the line. While state and local law enforcement, including our 

Office, are working aggressively to investigate and prosecute these cases, this is a national 

problem and requires coordination among the states and federal law enforcement, as well. The 

U.S. Department of Justice has successfully prosecuted patient brokering under the Federal AntiKickback Act, 42 U.S.C. § 1320a-7b(b), which prohibits payments to induce the referral of 

patients whose services will be paid for by a federal health care program. 6 Dedicating additional 

6 See, e.g., Press Release, Two Defendants Plead Guilty in Multi-Million Dollar Health Care Fraud and 

Money Laundering Scheme Involving Sober Homes and Alcohol and Drug Addiction Treatment Centers 

(S.D. Fla., Mar. 15, 20 17), at https://www.justice.gov/usao-sdfl/pr/two-defendants-plead-guiltv-multimillion-dollar-health-care-fraud-and-money-laundering. 

7 
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federal resources to investigate and prosecute these cases-especially those that occur across 

state lines-will ensure that every vulnerable patient is protected from recruiters looking to take 

advantage of them. 

Second, patients need transparency into the quality of addiction treatment providers 

nationwide. Currently, patients who are referred by family, friends, or a paid recruiter to an 

addiction treatment provider that is far from home have no reliable way to learn about the 

treatment provider, including whether it is high or low quality. While some states, including 

Massachusetts, have on-line directories with information about addiction treatment providers, 

including whether the providers are licensed and supported by the State, those directories are 

inconsistent across t~e states and do not provide detailed information about the providers' 

quality. As a result, patients are left to rely on treatment providers' websites, calling providers 

on the phone, and reading personal reviews on various websites. Because many patients are 

receiving SUD treatment across state lines, there is an opportunity for the federal government to 

play a role in increasing the transparency that patients have into information about SUD 

treatment providers. 

Finally, we need to be sure that any regulatory or legislative reforms meant to address 

patient brokering advance the ultimate goal of ensuring that SUD patients have access to the 

treatment that they need. Following extensive reform over the past decade, including the Paul 

Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of2008, the 

Patient Protection and Affordable Care Act, and similar laws in Massachusetts 7 and other states, 

most insured patients now have coverage for SUD treatment and can access care when and 

7 Massachusetts Jaw requires that insurance plans cover medically necessary inpatient acute treatment 

services and clinical stabilization services for fourteen days without prior authorization and with medical 

necessity determined solely by the treating clinician in consultation with the patient. See, e.g., Mass. Gen. 

Laws ch. 176G, § 4AA. 

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where they need it. As policy makers, we want to encourage SUD patients to seek out the 

treatment they need and health insurance carriers to pay for that needed treatment. 

While one could imagine broad regulatory changes that may reduce the risk of patient 

brokering in Massachusetts (e.g., limiting insurance coverage for out-of-state SUD treatment), 

those policy changes would substantially reduce access to treatment for the hundreds of 

thousands of Massachusetts residents living with substance use disorder. 

V. Conclusion 

Thank you again for the opportunity to share my perspective-and that of the residents of 

Massachusetts--with the Subcommittee. And thank you to the Subcommittee for your careful 

consideration of this important issue. Please do not hesitate to contact me for any additional 

detail, clarity, or with any questions you may have. 

9 
67 

Mr. HARPER. Thank you, Mr. Gold. 

Before we proceed to member questions, I’d ask for unanimous 

consent that Mr. Tieman’s chart of patient rights and Mr. 

Aronberg’s two charts, The Florida Model in Theory and The Florida Shuffle, be made a part of the record. 

Without objection. 

[The information appears at the conclusion of the hearing.] 

Mr. HARPER. The chair will now recognize himself for 5 minutes 

to ask questions. 

And I want to thank all of you for your testimony. It is troubling 

to each of you, and certainly to us, that patient brokers, as well as 

unscrupulous facilities and sober living homes, are treating individuals seeking treatment as a commodity rather than trying to assist 

them in seeking legitimate treatment and achieve sobriety. Sadly, 

there have been instances where people have died, and I think it’s 

very important that we flush out and expose these schemes. 

My first question will be to Mr. Aronberg and Mr. Johnson. And 

then, Mr. Tieman, I may have you follow up in response to that 

after their answers. 

From your experience in the Sober Homes Task Force, what consumer information would you provide to families seeking drug 

abuse treatment for their loved ones to help them distinguish between good actors in the drug treatment industry from the rogue 

providers or corrupt facilities? 

Mr. JOHNSON. Mr. Chair, that hits the heart of the matter. There 

are no effective means of communicating the Caron organizations 

from the flophouses and the strip mall providers that may or may 

not be run by convicted felons. Because everybody gets a license, 

they get somebody to prepare a license for them, answer all the 

questions correctly, have a medical director or a clinical director, 

and they get their license. And, just like everybody else, people can 

come through the door. 

And that would be incredibly helpful to be able to have a registry. How do you do it? That’s hard, because how do you pick and 

choose? But, clearly, accreditation is not the answer. Because there 

are—a Joint Commission and CARF, they can accredit. And I can 

tell you that there are some really bad places that we have arrested that were accredited facilities. 

So that is an issue that should be explored. There is none. We 

have no capacity. People call us—we have a hotline—from all over 

the country worried about their kids that are in Florida, in Palm 

Beach County. And what do we tell them? We can’t recommend a 

particular place. 

There is one thing we can recommend in Florida, and that is the 

FARR, Florida Association of Recovery Residences’ sober homes. 

Because those residences, the rules that govern those residences, 

there’s a certified recovery administrator that oversees. They’re not 

flophouses. They’re actual places that promote sobriety. 

And one of the things that we ask is that this committee explore 

a way to make the states more comfortable with being able to require certification of sober homes for that very reason, to protect 

the residents within. I can tell you right now the State of Florida 

will not mandatorily require certification of sober homes in the 

68 

Florida Association of Recovery Residences because they are afraid 

of violating the ADA and the FHA. Thank you. 

Mr. HARPER. Thank you for that. 

Mr. Aronberg, add to that? 

Mr. ARONBERG. Yes. Thank you, Mr. Chairman. It’s an excellent 

question. As Al said, we have a Sober Home Task Force hotline, 

and we get a lot of tips on rogue operators. But we’ll also get calls 

from families from around the country wanting to know if their 

child’s sober home or drug treatment center is legitimate. And in 

one case, we had to tell a mother to come down and get your 

daughter out of this facility right now. And when she tried, the 

daughter said, no, why would I want to leave? I have everything 

I need right here. She had free rent, transportation, friends. Why 

would she want to leave? And so there needs to be a way to separate the good from the bad. 

I would recommend—and to build on what Al said—some sort of 

certification. We have that in Florida, but it’s only voluntary. Because the state won’t require mandatory certification or registration, even because they’re scared of the ADA and the FHA preventing this. So we have FARR, which is a voluntary organization. 

And the good sober homes are registered with FARR and they’re 

certified. They get inspected. And those are the ones we say, hey, 

they’ve got at least a level of accountability and quality. But it 

would be better if it was mandatory as opposed to just voluntary, 

because there’s only a few homes relative to the population that are 

certified. 

Another way you can improve things, I think, is to adopt an outcome-based reimbursement model. So, right now, the bad guys get 

more money than the good guys. So Mr. Tieman’s facility, they lose 

patients to the bad guys who are encouraging relapse because 

that’s where the money is. But, under the ACA’s Medicare reimbursement model, there’s money that’s held back, and the good providers for hospitals, they get more money in the end. Good providers get more money. The bad providers get less. I’d love to devise a formula where we can reward the good providers, even if it 

takes peer reviews to be part of that calculus, and punish the bad 

providers. If you dry up the money source, you’ll see a lot of these 

guys go away. 

Mr. HARPER. Great. And my time has expired. So, Mr. Tieman, 

hopefully, we will get an opportunity in a little while to respond 

to any followup that you may have. 

At this point, the chair will now recognize the ranking member, 

Ms. DeGette, for 5 minutes for questions. 

Ms. DEGETTE. Thank you, so much, Mr. Chairman. 

As I said in my opening remarks, I’m trying to figure out the 

breadth of this problem. We sent a letter to the Florida Department of Children and Families and asked how many drug treatment facilities and sober living homes have been shut down due to 

patient brokering. Florida said they’ve pulled the license of five facilities since December 2016, so in the last year or so. 

Mr. Aronberg, I know you’ve made more arrests and that this 

problem’s probably larger than just a few facilities. Can you tell me 

how many patient broker arrangements you’re aware of that are 

not legitimate? 

69 

Mr. ARONBERG. Thank you for your question, Congresswoman 

DeGette. 

Ms. DEGETTE. And recognizing I’ve got 5 minutes. 

Mr. ARONBERG. Right. OK. Yes, ma’am. 

Ms. DEGETTE. Thank you. Sorry. 

Mr. ARONBERG. We don’t even know how many sober homes 

there are in Palm Beach County. 

Ms. DEGETTE. I see. So you don’t have a sense of the extent of 

it really? 

Mr. ARONBERG. Well, what happens is someone opens up a sober 

home, they do it today. 

Ms. DEGETTE. Right. 

Mr. ARONBERG. They don’t have to get any licensing. 

Ms. DEGETTE. Right. There’s no regulations. Yes. 

Mr. ARONBERG. Right. The only way that—I’m sorry. 

Ms. DEGETTE. Well, let me ask you, do you know how many licensed physicians might be taking part in this? 

Mr. ARONBERG. Well, licensed physicians aren’t affiliated with 

the sober homes. 

Ms. DEGETTE. Right. 

Mr. ARONBERG. They’re affiliated with the outpatient facilities 

and the inpatient facilities. 

Ms. DEGETTE. Right. 

Mr. ARONBERG. As far as how many, I wouldn’t know offhand. I 

would have to defer to Al. 

Ms. DEGETTE. Mr. Johnson, do you have any idea? 

Mr. JOHNSON. We can’t put a number on the abuse because, 

when we find abuse, we prosecute it. 

Ms. DEGETTE. Sure. How many have you prosecuted? 

Mr. JOHNSON. We have one physician that we filed felony 

charges on. And, of course, I can’t discuss with you the—— 

Ms. DEGETTE. Sure. 

Mr. JOHNSON [continuing]. The other investigations. 

Ms. DEGETTE. I understand. So—— 

Mr. ARONBERG. We’ve had 41 arrests so far in the last year. 

Ms. DEGETTE. Forty-one arrests. OK. And who are the arrests of? 

Mr. ARONBERG. The arrests are individuals who operate sober 

homes and outpatient drug treatment centers. 

Ms. DEGETTE. OK. 

Mr. ARONBERG. We even—— 

Ms. DEGETTE. And how many of these centers are associated 

with these 41 arrests? Are they 41 different centers or do they all 

work for one or two centers? 

Mr. JOHNSON. If you look at it as a hub and the spokes of a 

wheel—— 

Ms. DEGETTE. Yes, yes. 

Mr. JOHNSON [continuing]. The hub is the facility that provides 

treatment—— 

Ms. DEGETTE. Yes. I understand. 

Mr. JOHNSON [continuing]. The spokes are going to be the sober 

homes. 

Ms. DEGETTE. Right. So how many hubs are there? 

Mr. JOHNSON. The majority are sober homes. 

Ms. DEGETTE. How many? 

70 

Mr. JOHNSON. Oh, I would say probably 70 percent, maybe 80 

percent, are sober homes. 

Ms. DEGETTE. How many facilities are you investigating? I’m 

trying to figure out how widespread this problem is. 

Mr. ARONBERG. Twelve. 

Ms. DEGETTE. Twelve. 

Mr. ARONBERG. Twelve. In addition to that—— 

Ms. DEGETTE. OK. 

Mr. ARONBERG [continuing]. There have been many others who 

have packed up and left—— 

Ms. DEGETTE. OK. Yes. 

Mr. ARONBERG [continuing]. Because of our—— 

Ms. DEGETTE. Yes. Thank you. 

Now, in California, Mr. Nielsen, do you have any sense of how 

many of these rogue actors there are? 

Mr. NIELSEN. We do not. 

Ms. DEGETTE. OK. Is anybody trying to do any factfinding to figure that out? 

Mr. NIELSEN. Yes. But it’s hard to be able to boil down what’s 

actually happening. Because it’s like Windex—— 

Ms. DEGETTE. Right. 

Mr. NIELSEN [continuing]. A lot of them look like they’re good actors, but really they’re rotten to the core. So it’s peeling away the 

layers—— 

Ms. DEGETTE. Yes. 

Mr. NIELSEN [continuing]. To get to them. 

Ms. DEGETTE. And, as Mr. Aronberg said, since there’s no requirement that they meet certain standards, anybody can just open 

one of these things. 

I want to ask you, Mr. Aronberg, one thing I talked about in my 

opening was this ridiculous billing of laboratories for unnecessary 

urine tests. And I’m just wondering—maybe some of the rest of you 

can talk about this too—why would insurance companies pay for 

these tests? Any of us who’ve tried to get a prescription for anything know they’ll give you like five pills and say you’re good. Why 

would insurance companies pay thousands of dollars for daily urine 

tests which aren’t medically necessary? 

Mr. ARONBERG. In my experience in speaking—and I’ll defer to 

others—but in speaking to the insurance company folks, they’ve 

said they worry about being sued under Federal law if they don’t 

reimburse. But they have self-corrected in that they used to pay 

$3,000 for a urinalysis. Now that’s drastically reduced to a few 

hundred dollars. But it’s still very lucrative. But I would defer to 

the others. 

Ms. DEGETTE. Mr. Johnson? 

Mr. JOHNSON. The problem is insurance companies are like a 

battleship and they’re slow in maneuvering. And they are finally 

catching up. Unfortunately, sometimes the pendulum overcorrects. 

Ms. DEGETTE. Yes. I know. 

Mr. JOHNSON. But you mentioned medical necessity. That’s the 

key. 

Ms. DEGETTE. Yes. 

Mr. JOHNSON. The insurance companies are battling with providers over what is and is not—— 

71 

Ms. DEGETTE. Medically necessary. 

Mr. JOHNSON [continuing]. Medically necessary, and that includes urine testing. 

Ms. DEGETTE. OK. I have one last question for you. And I apologize for romping through these questions. We really do only have 

5 minutes. 

Florida passed a law, the Practices of Substance Abuse Service 

Providers Law, in June and which will take full effect in February. 

This law makes patient brokering a criminal racketeering offense 

under Florida law, prohibits dishonest treatment provider advertising, and increases penalties for both of these things. 

Mr. Johnson, do you think this is going to help in enforcement 

efforts against these rogue actors in Florida? 

Mr. JOHNSON. We can’t prosecute our way out of this problem, 

but, yes. 

Ms. DEGETTE. OK. 

Mr. JOHNSON. The enhanced laws that were passed—actually, 

they went into effect July 1—are going to be significant. Resources 

on the state and local level, however—we noticed that other circuits in the state do not have a task force like we do—very difficult. 

But the laws do help. 

Ms. DEGETTE. Thank you. Thank you, Mr. Chairman. 

Mr. HARPER. The chair will now recognize the vice chairman of 

the committee, Mr. Griffith, who has done an exceptional job these 

last couple of months for our subcommittee. And we now recognize 

him for 5 minutes. 

Mr. GRIFFITH. Thank you very much, Mr. Chairman. It was an 

honor to fill in. It will also be a great honor, and I look forward 

to serving with you and the great work that we’re going to do together as a team, along with Ms. DeGette and others, because this 

subcommittee really does like to try to find answers and solve problems. 

So here’s a problem I’ve got. Between Mr. Johnson and Mr. Gold, 

both of you have touched on the issue. You’ve identified two sides 

of the argument. And it’s one that has concerned me as we’ve 

looked at this issue, and that is you’ve got some legitimate folks 

out there that are trying to do drug treatment. In my very rural 

district, with 29 geopolitical subdivisions, there aren’t. And one of 

the big complaints is we don’t have enough drug treatment centers. 

I know for sure that one of my drug treatment centers pays either 

based on volume or commission, a couple of people that they send 

out to interface with the court services units, when they have people who may need their services, they say, OK, here’s what we can 

provide, does that help your person? They also interface with some 

of the physicians’ offices that are dealing with this where they 

don’t have drug treatment themselves, but they identify that a patient has a substance abuse problem. 

So between the two of you, how do we resolve the problem that 

Mr. Gold raised and the problem Mr. Johnson has raised? We’ve 

got bad actors, we want to shut them down. But if we eliminate 

commissions and volume—I get value—but volume referrals for 

these folks that are out in the field, I fear that, particularly in 

rural areas like mine, we may be, as Mr. Gold pointed out, limiting 

access to the substance abuse treatment itself. 

72 

So, Mr. Gold, I don’t know if you want to go or, Mr. Johnson, if 

you have some solution to that dilemma that I’m trying to figure 

out up here. Because we want to stop the bad actors, but we want 

to make sure people get drug treatment services. Now, the sober 

homes is completely alien to my knowledge and—before starting to 

study this issue. And very concerned about those. But for drug 

treatment. 

Mr. GOLD. Sure. Thank you, Congressman. I obviously don’t 

know the specifics in your district. From where we are in Massachusetts, we have a tremendous demand for treatment services, a 

large number and a limited supply. So from our perspective, if we 

can cut off the money that’s flowing to these commissions, to the 

brokers that are trying to lure folks out of state, we think that 

would help in Massachusetts. People would still get access to the 

treatment that they need, and if they need to go out of state, can 

do so. 

Mr. GRIFFITH. So let me translate, if I might, and make sure I’m 

hearing it correctly, because I’m going to translate it into my verbiage. So what you’re saying is you’re worried about the people who 

are out recruiting people from out of state, but if they were in 

state, you see where there might be some validity in having somebody out there working with the in-state folks, like the court services units, as opposed to getting on the phone—I never even heard 

of telemarketers selling these services—but getting on the phone 

and trying to recruit people. Is that what you’re saying? 

Mr. GOLD. Yes. I’m concerned about the people being paid commissions in-state too. I think my point was, in Massachusetts, 

there’s not actually a lot of recruiting going on to keep people in 

the state. 

Mr. GRIFFITH. Right. 

Mr. GOLD. Because people who are already in this—all the treatment centers in Massachusetts are pretty much full. And so my understanding is they’re not out there on the ground doing that. But 

what I am concerned about is because some people do legitimately 

need to travel out of state to get treatment, and I want to make 

sure insurance is still going to be able to cover that and people can 

go out of state if needed. But they’re going to the treatment that 

they want, not just that the recruiter/broker is getting paid a commission to send them to that treatment. 

Mr. GRIFFITH. Right. 

Mr. Johnson. 

Mr. JOHNSON. I have not yet heard a compelling argument why 

an employee needs to have commissions or bonuses. If you have a 

good salesperson—if you’re selling automobiles, they’re on commission, that’s fine. When you’re talking about health issues, when you 

give somebody a commission, you incentivize overutilization. You 

incentivize the standard of care that’s not the appropriate standard 

of care, because all they’re interested in is getting that commission 

for that person. 

You can pay somebody to do the job of going out and talking to 

doctors and going to court services without giving them a 

bonus—— 

Mr. GRIFFITH. So they just have to a rearrange their business 

model. 

73 

Mr. JOHNSON. Fair market value. 

Mr. GRIFFITH. OK. 

Mr. JOHNSON. Fair market value for the product, yes. 

Mr. GRIFFITH. Let me go to Mr. Tieman. I only have about a half 

minute left, but talk about what you all do with drug screening and 

drug testing. And you all are one of the good players. How do we 

create rules that make sense? 

Mr. TIEMAN. That’s a good question. Thank you so much, ViceChairman. The whole idea of urine drug screening, particularly in 

a residential setting, should rarely happen, because you’re in a safe 

environment. We utilize it if someone needs to go home on a home 

pass. They go home for the weekend. There is a funeral in the family and they need to be gone, we would do a urine drug screen 

when they come back. 

When this whole scam came up about 5 years ago, like all treatment centers, we were inundated with calls. You should do this— 

and, frankly, it sounded quite attractive. People say, invest a million dollars, you’ll have it paid back in 10 months. We said, this 

doesn’t pass the smell test. And, unfortunately, now, the light is on 

that we have talked to insurance companies. And as I think Mr. 

Johnson pointed out, insurers are now saying—they were slow to 

react to it, but they see it, and now that has been slowed down dramatically and will continue to do so, which has now put other pressures on the charlatans because they’ve got to find other ways to 

make that money. But it should be used when medically necessary, 

clinically appropriate. 

Mr. GRIFFITH. I thank you, and yield back. 

Mr. HARPER. The gentleman yields back. 

The chair will now recognize the gentlelady from Florida, Ms. 

Castor, for 5 minutes for questions. 

Ms. CASTOR. Thank you, Mr. Chairman. 

Mr. Aronberg and Mr. Johnson, thank you very much for your 

very direct and concise recommendations to the committee. It’s 

very helpful. I think your first one relating to changing the ACA 

health insurance plans to the Medicare reimbursement approach 

is—that’s very helpful. The one that’s a little more difficult involves 

the ADA and the Fair Housing Act. 

You write in your testimony, Federal law prevents the regulation 

or inspection of these residences, and many are little more than 

flophouses or drug abuse, human trafficking, and other crimes are 

prevalent. And you recommend to the committee that we address 

these abuses by clarifying the ADA and Fair Housing Amendments 

Act to allow states and local governments to enact reasonable regulations for the health, safety, and welfare. 

How do you recommend that be done, while we maintain the important protections of the ADA and Fair Housing? 

Mr. ARONBERG. Thank you, Congresswoman Castor. I realize also 

the challenge of opening up the ADA for amendment, so that’s why 

we’re suggesting clarification. This was requested for some time to 

HUD and DOJ because the Fair Housing Act and the ADA, they’re 

the ones who had issued the clarification, and they did last year, 

but the clarification they issued was not helpful. It was a joint 

statement, and it seemed to ignore the realities on the ground. 

74 

They were talking about senior housing and all these other issues, 

but they did not give any good guidance. 

The only thing they did help us with was that the clarification 

did say that a local government can prevent the clustering of sober 

homes in one small area. That that’s not conducive to recovery. But 

we wanted to know, well, can we require mandatory certification 

or inspection of these facilities? They didn’t answer that. 

And so we’re left now where local governments are starting to require these things, but they’re doing so out on their own, waiting 

to get sued. The City of Boca Raton tried to zone sober homes into 

an industrial area a few years ago. They got sued and they paid 

out and lost, and they had to pay out $3 million. 

So local governments are scared to challenge the ADA and FHA 

without some guidance. So I don’t think you need to amend it; you 

just need to maybe give a better clarification that acknowledges the 

realities on the ground. The ADA and the FHA were designed to 

protect these individuals. And in reality, it’s being used a shield to 

protect people who are harming these folks. 

Ms. CASTOR. Good. And, hopefully, that’s something the committee can work on. 

I’m being advised by a father back home in the Tampa area who 

has struggled with his son’s addiction for many years, probably not 

unlike many of the members on this committee dealing with folks 

back home. He says—and he wrote in advance of the hearing just 

what you had said and showed that—that our current system 

incentivizes the cycle of addiction and relapse. And he wrote: The 

current system is designed to maintain a perpetual healthcare crisis. There is no incentive to help addicts as their illness creates 

wealth, profits shielded by the illusion of healthcare. They are left 

to those that will pretend to help and provide some initial safety 

net, so long as they profit from the disease. 

He says: The mechanism for getting healthy does not exist right 

now, given the paradox between the insurance companies and the 

providers of healthcare. Insurance carriers put downward pressure 

on cost and addiction care, providers put upward pressure on creating recurrence. 

And he is advocating for an entire paradigm shift, a separate 

system, because of the waste in the system, because of the huge 

amount of dollars lost in productivity all across the country. He 

says our entire system must be revamped. He suggests maybe a 

VA-style system or something new. 

Mr. Tieman, clearly, we have to change the paradigm here. This 

is not working, and it’s costing the Federal Government and the 

folks we represent a whole lot of money. What do you think about 

a revamped system that really directly provides care? 

Mr. TIEMAN. Thank you so much for that question, Congresswoman Castor. As I enter the last chapter or last lap of my career, 

one I began 35 years ago, and at the time, it was a bunch of dogooders that cared desperately about families that were suffering 

from substance use disorder. And seeing the abuses of today and 

the kind of comments I hear really reflect what you have stated. 

I had one guy say to me, we want to treat people so well that 

when they relapse, and we surely expect they will, that they want 

to come back, which is that whole idea of almost having an annuity 

75 

when someone comes to treatment. So we’ve adopted the practice 

and, in fact, are slow in his recovery for life. But we want you to 

get well. We’d love you to come back for an alumni reunion. We’d 

love you to come back as a sponsor. We’d love for you to come back 

and share your story, but we really don’t want you to come back 

as a patient. And you’re absolutely right. 

And I think Mr. Aronberg mentioned the whole idea of incenting 

quality, incenting outcome. We’re currently working with Independence Blue Cross trying to develop that exact model, where people 

who get substance use treatment costs Independence Blue Cross 

less money for other kinds of healthcare. They save money in the 

jail system, the court system, emergency room system. That’s 

where we need to get to, which is an outcome-based system, as opposed to just continuing to look at this as an acute episode. 

Substance use disorder is a chronic illness. You have it for the 

rest of your life. We need to put it in remission. Unfortunately, not 

everyone gets there. Just like other chronic illnesses, not everybody 

goes into remission from cancer or diabetes, but this is very successfully treated when we do it for the long haul. And the savings 

to society are enormous and the savings of pain is beyond comprehension. 

Ms. CASTOR. Thank you very much. 

Mr. HARPER. The chair now recognizes Dr. Burgess for 5 minutes. 

Mr. BURGESS. Thank you, Mr. Chairman. 

Again, thanks to our witnesses. This has been a fascinating discussion and clearly a problem that needs our attention. 

I’ve got a number of questions that I will submit for the record 

as written questions, but our discussion has actually—I’d like to 

ask for some clarification on some of the points that have already 

been raised. 

And, Mr. Aronberg, in your written testimony, you talked a little 

bit about this, in response to the last questions—address private 

insurance abuses by adopting the Affordable Care Act’s outcomebased reimbursement model used in the Medicare program. I just 

need to add here that that is a process in evolution. Payment reform in Medicare actually predated the ACA by some time, and 

again, it is still a work in progress. It is far from settled. 

But so many of the nongovernment insurances, the private insurances, so many of them, as the ranking member suggested, it’s 

hard to get reimbursement. I was in private practice in medicine 

for 25 years. It’s hard to get money out of insurance companies. 

They don’t part with it willingly. How is it that they’re giving it 

so freely in this instance? 

Mr. ARONBERG. Thank you, Dr. Burgess. It’s the big question 

we’ve been trying to answer, is why do the insurance companies 

continue to pay out these large amounts. And as Al Johnson said, 

it’s like a battleship where, at first, they were caught by surprise 

by this, and they’re worried about being sued, so we’re paying out 

$3,000 per urinalysis, which is egregious. And now, they have cut 

back dramatically. Mr. Tieman could probably tell you what they 

get reimbursed now on it. 

But in talking to the executives, they have said they were concerned about being sued. And then there was another issue, which 

76 

I’m not an expert on, but, apparently, the 80/20 rule within the Affordable Care Act exists. And so, I guess, for some insurance companies, if you pay out more on the 80 percent, you can keep more, 

the 20 percent, the pie is expanded. So the 80/20 rule may have 

created incentives to pay out as much as possible. You just get reimbursed by the taxpayers, and now you get to keep that 20 percent which you get to keep for profits is now expanded. So it’s 

something to pursue, but we are seeing a correction. 

Mr. BURGESS. You’re referring to the medical loss ratio. You expand the pie and your 20 percent is a larger piece of pie. 

Mr. ARONBERG. Correct. 

Mr. BURGESS. Actually, I had not considered that, and I thank 

you for bringing that point up. 

The other aspect is we’re all familiar with hearing from our constituents, the difficulties with the out-of-pocket expenses within the 

Affordable Care Act and the high deductibles. And I can’t tell you 

this is happening, but what it looks to me, one of the things that 

may be happening is, let’s get through that deductible as fast as 

we can, and then everything else is a covered benefit, and the 

checks will continue to come in. Again, I have no proof that that 

is actually happening, but from what I’ve heard discussed here this 

morning, it’s something certainly worthy of our investigation. 

On the whole issue of the urine tests, a urine test has to be ordered by a physician. You can’t just go down to a lab and say, I 

want you to test my urine for drugs today, and get your reimbursement check. That doesn’t happen in the real world. So how is that 

happening? 

Mr. ARONBERG. Congressman, we’ve seen physicians just leave 

pads for prescriptions for urinalyses and just walk away. The corrupted physicians who are part of this—— 

Mr. BURGESS. So that has to be a violation of your state law. 

There’s probably a False Claims Act violation in there somewhere. 

Does any of this ever get prosecuted? 

Mr. ARONBERG. Yes. It is harder to prosecute a physician, just 

like it’s harder to prosecute a lab, but we’re going after labs, and 

we have gone after physicians. But it’s tougher. To determine a violation of standard of care—and maybe Al can speak to that a little 

more, but we have gone after physicians and labs. 

Mr. BURGESS. Well, Mr. Gold, before I run out of time, let me 

just ask you, because the compelling testimony that you provided, 

and you’ve lost constituents who have gone places for treatment 

and ended up not surviving. Is that correct? 

Mr. GOLD. That’s right. 

Mr. BURGESS. So has any family ever brought an action against 

one of these locations? I’m not one to think that medical liability 

cases are ones that should be brought, but it begs the question, if 

an avoidable death has happened, generally, there’s some questions 

asked and some liability assigned. 

Mr. GOLD. That’s a good question. I’m not aware of any medical 

malpractice cases that have been brought on this issue that I’m 

aware. 

Mr. BURGESS. You’re not aware of any medical malpractice cases? 

Mr. GOLD. No. 

77 

Mr. BURGESS. And how many deaths in your state, in Massachusetts? 

Mr. GOLD. I don’t have any statistics. I’m aware of public reports 

of at a least a handful of them. But, again, many of these cases, 

the healthcare treatment was provided out of state. It’s not even 

clear that the families are aware of the particular healthcare providers that were providing that treatment. So I don’t know that 

there have been any of those cases brought. 

Mr. BURGESS. Well, OK. Again, I thank all of you for your testimony. I do have some questions that I’ll submit for the record. 

Thank you, Mr. Chairman. I yield back. 

Mr. HARPER. The gentleman yields back. 

The chair will now recognize the gentleman from New York, Mr. 

Tonko, for 5 minutes. 

Mr. TONKO. Thank you, Mr. Chair. And congratulations on your 

appointment. 

Mr. HARPER. Thank you, sir. 

Mr. TONKO. These schemes we have heard about today are very 

upsetting, and that’s all the more reason why we need to encourage 

and support access to evidence-based addiction treatment as we address the opioid crisis. 

I would like to ask our panelists today what good treatment 

looks like, and what people in need and their families should look 

for when seeking treatment. 

Mr. Nielsen, your organization offers credentialing in California 

for agencies and professionals in substance use disorder treatment. 

What are the hallmarks of effective evidence-based treatment? 

Mr. NIELSEN. So it’s important not only for the facility to be competent, but the professionals that they employ to be competent as 

well. Everybody has to be brought in the process that this is about 

the person and not about the profits. And for a facility to really be 

outstanding, and they have to go above and beyond to make sure 

that the clients’ rights are protected and that they give quality 

care, meaning that the individual is the driver of the care, not the 

facility. And that there is a way for them to have a say in the process. They need to be a part of the process and they need to be 

stakeholders. And it’s very important that they not only are given 

input, but their family is also given input as well, and that this is 

a whole team approach and not just the facility driving the bus for 

profits. 

I also think that it’s very important that there’s credentials for 

the executives, which do not exist, for the telemarketers, and admission specialists, and sober living specialists, that there should 

be credentialing. That there’s a legal aspect and there’s also an ethical aspect as well. And I really think at the heart of this, it’s an 

ethical aspect of them putting the profits and treating the individuals as a commodity versus as an individual that needs care. 

Mr. TONKO. Thank you. 

And, Mr. Tieman, a similar question. How can a patient know if 

a particular treatment facility offers evidence-based treatment? 

Mr. TIEMAN. Thank you so much for that question, Congressman. 

We were so concerned about that 2 years ago that, along with a 

Hazelden Betty Ford center, we actually authored a paper on how 

to select a treatment center. It’s something that we would really 

78 

love to see a part of the SAMHSA website so that people can look 

at it. 

One of the things that we encourage folks to do is to look at 

whether or not it is being promoted as healthcare. If you look at 

the Caron website, you would see the credentials of all of our 

healthcare providers, the doctors, the psychiatrists, the psychologists. You would see outcomes, something that we’ve been doing for 

the last 15 years with the University of Pennsylvania, and it talks 

about what you can expect at Caron, as far as the likelihood of 

being sober at the end of the year. We would talk about our academic affiliations, where we provide training and where our staff 

have teaching credentials of places like Penn state Hershey and 

University of Pennsylvania and Drexel and Temple. 

When a patient looks at that, this looks like healthcare. When 

they look at another website that talks about yoga, that talks about 

thread count, that talks about meals, that talks about free things 

that you get, that’s not healthcare. So these are the types of things 

that we encourage people to look at. Because if it looks and feels 

like healthcare, you’re certainly a long ways toward that. 

One other thing I’d like to just mention, National Association of 

Addiction Treatment Providers is trying to put together the kind 

of list that you heard Mr. Aronberg talk about. That’s what we 

need. Who are the good guys? And it’s something that we’re looking 

at. Because licensure and accreditation is a bar, it’s a low bar, but 

we also need, who does provide evidence-based practices. And while 

CARF and Joint Commission looks at things, they don’t look at the 

ethics behind it. So it’s something that between the National Association of Addiction Treatment Providers and the American Society 

of Addiction Medicine, we’re trying to put that together so that the 

state, the Federal Government, and insurers can have the list of 

who should we be paying for to go to what kind of treatment. 

Mr. TONKO. Beyond examining those websites, are there any particular questions that patients or their families should be asking 

before enrolling in a treatment facility? 

Mr. TIEMAN. Yes. I think good ones to ask are: Are your medical, 

psychiatry, and psychology, are they on your staff or are they outside consultants? That’s a great start. If they’re on your staff, that 

is a terrific start. What is the staff to patient ratio? Are you gender 

separate? Are you age separate? An 18-year-old with a 48-year-old 

is not good treatment. Do you have a family program that’s more 

than just an educational program? Do you do follow-up studies? Do 

you have outcomes? 

And any program that does followup and has outcomes is committed to some level of quality. Can you tell me what those are? 

And, like I say, on a website like Caron’s, we put them out there 

and we talk about the process that we go through, so it’s completely transparent. 

Mr. TONKO. Thank you very much for the insight. 

I yield back. 

Ms. DEGETTE. Mr. Chairman, could we ask Mr. Tieman for a 

copy of those standards that he wants to give to SAMHSA so that 

we can put them in the record of this hearing? And I’d ask unanimous consent they be included. 

Mr. HARPER. Yes. Yes. Without objection. 

79 

[The information appears at the conclusion of the hearing.] 

Mr. TIEMAN. Absolutely. Thank you. 

Mr. HARPER. The chair will now recognize Mr. Barton for 5 minutes for questions. 

Mr. BARTON. Well, thank you, Mr. Chairman. And, again, as I’m 

sure everybody has, congratulations on your chairmanship. You follow me, Fred Upton, Gregg Walden, and when we were in the minority, John Dingell, Bart Stupak. So this is kind of a mini committee of the full committee. The Oversight Subcommittee looks at 

everything the full committee does. So I’m sure you’ll do an excellent job, and I think on both sides of the aisle we’ll do our best to 

make you a successful chairman. 

Mr. HARPER. Thank you. 

Mr. BARTON. So congratulations. 

I want to ask Mr. Aronberg and Mr. Gold some basic questions. 

Is so-called patient brokering illegal under any state law currently? 

Mr. ARONBERG. Yes, Congressman. In Florida, it’s a third-degree 

felony, punishable by up to 5 years in prison, but because of sentencing guidelines, it’s rare that anyone would get that. So our recent legislation we passed got tough on it, and now it’s easier to 

get a tougher sentence, but still it’s rare to get the full 5 years. 

Mr. BARTON. Mr. Gold. 

Mr. GOLD. So Massachusetts does not have a specific law related 

to patient brokering for substance use treatment, but we do have 

a general anti-kickback statute that applies to commercial insurance as well. So paying for referrals for any commercial health insurance is illegal in Massachusetts. 

Mr. BARTON. Are there any other states that would have a state 

law that patient brokering is illegal? No? 

Mr. GOLD. I’m not aware of others. 

Mr. BARTON. OK. Does any—— 

Mr. ARONBERG. Congressman, we believe there are. I’m sorry, off 

the top of our heads, we don’t know how many. 

Mr. BARTON. That’s OK. 

Mr. ARONBERG. But we can get that information. 

Mr. BARTON. Just if you can get it, if there are. 

Does anybody on the panel think that we should pass a Federal 

law criminalizing patient brokering? Anybody? 

Mr. BARTON. I see some nods. You have to say something. 

Mr. JOHNSON. There is a Federal anti-kickback statute, which is 

a patient brokering—you can’t pay for the volume or value of referrals into treatment. And there are states that have fashioned patient brokering. I know there are, if not a majority, a minority of 

states have some sort of patient brokering. 

Mr. BARTON. I think Mr. Nielsen had a comment. 

Mr. NIELSEN. Chairman, my understanding of the Federal law, 

I believe it’s the Stark Law. And my understanding of that is that 

it’s for medical services, and within Medicaid, but not non-Medicaid. So some of the facilities fall under nonmedical facilities, and 

it wouldn’t apply to them. That’s our issue in California. 

Mr. BARTON. OK. 

Mr. TIEMAN. I’d like to just comment, we looked at the Stark 

Laws and the anti-kickback laws, and not being a lawyer, it seems 

like most of the things that we’re seeing, at least to us, feels illegal, 

80 

and kind of like if it looks like a duck and walks like a duck, it 

is probably a duck. But not being a lawyer, it’s really a concern. 

I actually just talked to Governor Wolf this last week about some 

of those issues, and there really gets to be a question about what’s 

state and what’s Federal. So the kind of point about this is it’s providing a lot of loopholes right now for folks to call it like speeding 

in North Dakota, I mean, there’s no speed traps, so you can go as 

fast as you want to go, and if you do happen to get caught once 

in awhile, it’s kind of the price of driving fast. And that’s what 

we’re seeing from a lot of these charlatans is we’re not going to get 

caught, and if we do, there’s probably an escape hatch there. 

Mr. BARTON. What percent of the claims that are paid under the 

current system are private pay or family out-of-pocket versus Medicaid/Medicare? Anybody know that? 

Mr. TIEMAN. Yes. Of the $36 billion that will—the rough estimate on what will be paid for substance use disorder treatment 

this year, about 70 percent of that will be public fund. 

Mr. BARTON. Public? 

Mr. TIEMAN. Public fund. About 30 percent of that will be a combination of insurance, along with private pay—— 

Mr. BARTON. So Medicaid—— 

Mr. TIEMAN. Medicaid and Medicare is a large part of that 70 

percent. I can’t remember the exact number. 

Mr. BARTON. I would have thought it would be reversed. 

Mr. TIEMAN. No, it’s not. The government is far and away the 

largest payor of substance use treatment disorder in the United 

states today. 

Mr. BARTON. Since the Federal Government, based on what you 

just said, is paying the majority of these claims, should we require 

at the Federal level a certain cure rate for treatment per facility 

or per company? 

Mr. TIEMAN. Again, with any chronic illness that is progressive, 

there is no cure. Diseases can be put into remission. I think there 

are certain standards that—— 

Mr. BARTON. I guess an outcome—a positive outcome. 

Mr. TIEMAN. Right. I think definitely demanding some level of 

outcome based—I think Mr. Aronberg talked about that as well— 

there should be some level of outcome for any kind of healthcare 

that’s provided today. 

Mr. BARTON. We’ll let Mr. Aronberg, and then my time’s expired. 

Mr. ARONBERG. Thank you, Congressman. Most of the fraud we 

see, the Florida shuffle is being fueled by private insurance payments, not government insurance payments. The Florida shuffle 

really is being fueled by the overpayments and the payments from 

private insurance companies, not a Medicare—— 

Mr. HARPER. Thank you for clearing that up. 

The gentleman yields back. 

The chair will now recognize the gentleman from California, Mr. 

Ruiz, for 5 minutes. 

Mr. RUIZ. Thank you very much. 

This is such an important conversation. I’m going to start big 

idea, then go into the granular. I think it’s very important that we 

do get a grasp on the severity and the intensity and the frequency 

of these type of illnesses, because we need to prioritize how we’re 

81 

going to address the mental health/addiction opioid crises that we 

have in the United States of America. And the bigger picture here 

is that we are woefully short in providing the resources, in providing more providers, and in being able to improve healthcare access to mental health services. And instead of taking away health 

insurance or coverage for mental health services, that we will take 

care of our patients. 

So having said that, this is an important issue. I think that this 

is an issue that we can all focus on bringing justice towards. But 

let’s not forget the big picture here and how we are going to address the overall mental health crisis and get patients the adequate 

care. 

I have heard of stories where these recruiters will go into my 

local parks, from constituents of mine, and offer them free room 

and board. And they would sign them up in a homeless—it can be 

either hot in the desert or it can be really cold in the winter at 

night. They’ll take room and board, they’ll get reimbursed, they’ll 

get sent out, and they’ll do it again over and over and over again. 

And the homeless just want a place to stay. And some of them may 

be addicted, some may not, but they’ll go through whatever is necessary to get the care that—or a shelter and a warm plate of food 

to eat. 

So I know that Congresswoman Chu has been working on legislation that would direct SAMHSA to publish best practices for operating recovering housing. And I know that you’ve said that you 

want a certification. Perhaps SAMHSA could develop these kind of 

best practices, and those that can meet them can get this kind of 

certification for consumer marketing purposes. 

Mr. Tieman, what do you think about this idea? 

Mr. TIEMAN. I love it. Great question and great observation. And 

it’s really the thing that we’re trying to work through with some 

of our associations to establish standards, and then work with 

SAMHSA so that there is a bona fide list. We think that, you know, 

it should be easy for people to find at the Federal level, we think 

people should be able to find it at the state level, we think the insurer should know it as well, as to where are those facilities that 

are providing ethical evidence-based treatment with legitimate results. 

Mr. RUIZ. Yes, I think that’s a very simple solution whose time 

has come. And I think that by working with all the different agencies that are out there, with your best standards, I think that 

SAMHSA could provide something like this. And I know it can gain 

bipartisan support here in this committee as well. 

Now, getting a little more to the granular. In terms of the excessive urine drug tests, my understanding is that the insurance companies have the ability to apply very good data analytics to claim 

submissions—for claim submissions to detect potential abusive or 

fraudulent practices. So a single patient responsible for multiple 

billings for urine tests, each of which may be many thousands of 

dollars, I would think that this would be something that could be 

looked at more closely through insured data analytic tools. 

So, Mr. Johnson and Mr. Aronberg, have any insurers reached 

out to you to discuss this issue? 

82 

Mr. ARONBERG. I have spoken to Blue Cross Blue Shield and 

been working with them. But our Sober Homes Task Force—we 

have two different groups that meet once a month—we’ve had trouble bringing the insurance companies to the table. We would love 

a way to discuss these issues with them. 

Mr. RUIZ. OK. And why do you think it’s so hard for the insurance companies to get their arms around what appears to be one 

of the primary drivers of this problem? And why is it difficult for 

them to discuss this with you? 

Mr. JOHNSON. That’s an excellent question. And if you look at 

this behavioral health, and it’s a parity now with physical health, 

if you have a heart condition or if you have diabetes, there are protocols that are involved. There are preauthorizations that—and everybody has had that issue with getting an MRI or something of 

that nature. The preauthorization situation for behavioral health, 

because you have these doctors saying, I need urine confirmation 

with 50 panels, which is going to cost $1,500, there’s no 

preauthorization for that. The insurance companies haven’t caught 

up yet in terms of standards for the behavioral health, especially 

substance use disorder. 

So we’ve spoken to investigators for insurance companies, and 

they say, look, there’s no preauthorization. They do it, and then it’s 

a matter of grappling with, after the fact, whether we will pay or 

we won’t pay. 

Mr. RUIZ. Yes. I mean, most of these drug urine tests, they’re 

very complicated and they take awhile to get the results to begin 

with. So having daily checks is medically even unnecessary. 

Thank you very much. 

Mr. HARPER. The gentleman yields back. 

The chair will recognize the gentlelady from California, Mrs. 

Walters, for 5 minutes. 

Mrs. WALTERS. Thank you, Mr. Chairman. 

Sadly, like so many other communities, Orange County, which is 

where I live, has been ravaged by the opioid epidemic. In August, 

the Orange County Healthcare Agency issued its 2017 Opioid Overdose and Death in Orange County Report. I have it right here. 

And, Mr. Chairman, I would like to submit this article for the 

record. 

Mr. HARPER. Without objection. 

[The information appears at the conclusion of the hearing.] 

Mrs. WALTERS. This report found that the rate of opioid-related 

emergency room visits increased by over 140 percent since 2005. 

Drug overdose deaths in 2015 have increased by 88 percent, and 

nearly half of those deaths were due to accidental prescription drug 

overdose. 

Orange County officials and health providers are working hard 

to combat this epidemic, but sadly, some bad actors are doing far 

more harm than good. And I want to be clear that not all rehab 

centers are taking advantage of patients. It’s the bad actors in this 

space that require us to hold this hearing. 

A four-part series published in May 2017 by the Orange County 

Register exposed the practice of patient brokering and insurance 

fraud. 

83 

And, Mr. Chairman, I’d also like to submit this article for the 

record, please. 

Mr. HARPER. Without objection. 

[The information can be found at: https://docs.house.gov/meetings/IF/IF02/20171212/106716/HHRG-115-IF02-20171212- 

SD007.pdf] 

Mrs. WALTERS. It found that a lack of oversight of rehab centers 

contributed to these practices. One issue is that there are nearly 

2,000 rehab centers throughout the state, yet only 16 inspectors are 

employed to monitor the centers. According to state regulators, between 2013 and 2016, consumer complaints about licensed rehab 

centers nearly doubled to 509 complaints per year. 

Bad actors in the rehab center business are exploiting this epidemic through deceptive advertising and third-party recruiters to 

persuade addicts from around the country to travel to southern 

California for treatment. In fact, some rehab centers will pay for 

an individual to travel to California and then sign them up for insurance. Some recruiters will seek out those suffering from the addiction at AA or NA meetings or drug courts to find people to send 

to rehab centers who will then pay the recruiters a kickback. These 

bad actors run up medical bills for patients, yet do little to provide 

effective treatment and recovery services. 

Court documents and state records found that some centers, including sober living homes, provide street drugs to patients to restart the fraudulent process. I’m incredibly troubled by these practices, particularly given how rampant it is throughout my district 

and state. 

Mr. Nielsen, my questions are for you. It is our understanding 

that, in California, the Department of Healthcare Services licenses 

residential or inpatient treatment facilities, but does not license 

outpatient treatment facilities. Do you know why that is? 

Mr. NIELSEN. That’s a great question, Congresswoman Walters, 

and I ask myself the same question as well. It should be. They 

should license or certify outpatient facilities; they do not. And I 

think it’s just something that’s been passed through time, that 

originally it was voluntary to have an outpatient facility. And we 

don’t even have a licensure for drug and alcohol counselors to do 

private practice. So, actually, anybody can hang up a shingle and 

do private practice in California. 

So I think that there needs to be licensure for drug and alcohol 

counselors and private practice, as well as the outpatient facilities 

need to be either licensed or certified and make it mandatory. 

Mrs. WALTERS. Do you know if there are outpatient facilities licensed or overseen by any other body to ensure that these facilities 

meet standards to ensure safe and effective treatments? 

Mr. NIELSEN. So part of our network, we have a provider network, and there are many of them that do adhere to our standards 

and are a part of it, but they usually are not the ones that are part 

of the problem. Also, one of the issues is that the out-of-network 

providers versus in-network providers. We’re finding in California 

that it’s the out-of-network insurance providers that are the largest 

issue and not so much the in-network providers. 

Mrs. WALTERS. OK. Interesting. 

84 

OK. You state that sober living homes serve as a bridge to independent living. This stage of the recovery process is obviously distinct from inpatient treatment, yet clearly, the patient is not prepared to resume complete independence. Should these sober living 

homes be subject to state licensing? 

Mr. NIELSEN. I think they should be certified. And I think that 

Riverside County is a really good model to what it should look like 

statewide. They actually protect the ADA, and also make sure that 

there’s actually proper oversight of those facilities. And there also 

has to be a mandatory complaint line for neighbors and individuals 

to complain, and somebody needs to be able to investigate those. 

And I think they don’t necessarily need to be a part of the state, 

but it could be independent oversight by a nonprofit that would 

take on that responsibility. 

Mrs. WALTERS. OK. Thank you. And I’m out of time. 

Mr. NIELSEN. Thank you. 

Mrs. WALTERS. Thank you very much. 

Mr. HARPER. The gentlelady yields back. 

The chair will now recognize the gentlemen from Pennsylvania, 

Mr. Costello, for 5 minutes. 

Mr. COSTELLO. Mr. Tieman, my first question maybe can be the 

one that you end on, and that is, if you just think about any testimony that’s been provided that you may want to add to, as well 

as when we look through your written testimony, in terms of defining the problem and the various problems and the largely unregulated sector, I think you mentioned, if there’s anything that you 

would like to add that you think that we need to be looking at or 

where you think Federal legislation may be required. You conclude 

to suggest that it might be a combination of state and/or Federal 

laws that we may need to bring about in order to address some of 

these problems. 

What I’d like to focus on for a minute is the role of call centers 

and call aggregators. We have discussed them a little bit this 

morning. You also speak about how Caron was—the name of Caron 

was manipulated there. 

Do the call centers provide any value? Number one. Do call 

aggregators provide any value to a legitimate treatment provider? 

Mr. TIEMAN. Thank you so much, Congressman. Call aggregators 

and call centers, by and large in our industry, have really become 

marketing opportunities to put heads on beds. There’s a lot of common schemes that are used. One of the real common one is, go to 

to a city some time and just type in ‘‘top ten treatment centers.’’ 

If you’re in Kansas City, St. Louis, wherever. And you will probably 

always see Hazelden Betty Ford, very legitimate, high quality. 

You’ll probably see Caron Treatment Centers. You might see one 

other good one locally. And then there will probably be seven that 

are owned by whoever the call center is. 

Now, here’s the catch. All of the phone numbers are going to go 

to the place, even if what you think is calling Hazelden Betty Ford, 

calling Caron, calling another reputable place, you’re going to end 

up at the place that owns the call center. So call centers have become synonymous with a way for a marketing firm to be able to 

either sell that person to the highest bidder, wherever their insurance will pay them the most money, or if it’s owned by a treatment 

85 

center, it puts them in one of their facilities, the telemarketer is 

instructing you. Yes, you may be wanting to go to Minnesota, but 

let me tell you why our place in Florida is far better this time of 

the year. So that tends to be the ploy. 

For example, we have a call center at Caron, but when you 

call—— 

Mr. COSTELLO. But it’s identified as your call center. 

Mr. TIEMAN. You are calling Caron. You are calling Caron Treatment Center. Hazelden has a call center. You are calling Hazelden. 

You know that you’re calling them. But when you’re calling one of 

these obscure ones, you just think you’re calling something like the 

American Cancer Society. I’m trying to get information about cancer. So most of these are set up. I’m trying to get information about 

addiction treatment, but you’re actually calling a place that’s going 

to funnel you to a specific treatment center. And we think that is 

morally wrong. 

Mr. COSTELLO. Well, that strikes me that way too. I guess the 

question is, at what point in time does it become a deceptive business practice? And is there just too much room for interpretation 

or ambiguity to allow what would otherwise be a deceptive business practice to continue to persist? 

Mr. TIEMAN. And that’s where we think the whole idea of laws 

regarding accuracy and transparency. If somebody calls a call center, they should know who is the treatment center that they’ve 

called. 

Mr. COSTELLO. I think the answer is no. But working at a call 

center, does it require any sort of training or certification that 

makes them qualified to advise people on drug treatment options? 

Mr. TIEMAN. No, you could do it today. 

Mr. COSTELLO. Do you think that I should be allowed to do it 

today? 

Mr. TIEMAN. No. 

Mr. COSTELLO. Good. I don’t either. 

Do you believe there should be some level of accreditation in that 

respect? 

Mr. TIEMAN. We definitely think there should be credentialing 

around anybody that is dealing and directing people to patient 

care. 

Mr. COSTELLO. Speak a little bit more, I saw you nodding your 

head when, I believe, Mr. Aronberg was speaking on the role of accreditation. You said that that was the lowest common denominator there. 

Mr. TIEMAN. Yes. 

Mr. COSTELLO. What if we wanted to up that? What if we wanted 

to add to it? Let’s enhance the accreditation process. What would 

that look like? Do you think that that would be of value? Would 

that help to Mr. Barton’s question on the issue of public? Twothirds of the money being spent here is government dollars. What 

do you think that we should be doing? 

Mr. TIEMAN. Well, I definitely think the accreditors, right now, 

we are working with CARF and JCAHO to try to deal with them 

from an ethical perspective. They basically look at the standards, 

but we just think there needs to be more. And so having this highVerDate Nov 24 2008 14:58 Jan 15, 2019 Jkt 037690 PO 00000 Frm 00089 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-87 CHRIS
86 

er level, this gold or platinum level is something that we think 

would be very important. 

The thing that’s kind of interesting, as it relates to the public 

and private piece, is more money, is insurance per case, which to 

Mr. Aronberg’s reason, why the Florida shuffle has primarily gone 

after private insurance, as opposed to public. But with the public 

paying between Medicare, Medicaid, and state grants, which is a 

big portion of this, there’s a lot of money there, and I’m sure we 

will find abuses in that as well. 

Mr. COSTELLO. I have more questions, but I’m out of time. I will 

yield back. 

Mr. HARPER. The gentleman yields back. 

The chair will now recognize the gentlelady from Indiana, Mrs. 

Brooks, for 5 minutes. 

Mrs. BROOKS. Thank you, Mr. Chairman. And congratulations. 

We look forward to your leadership on this committee. 

I am a former U.S. attorney, and so I’m very curious—I was very 

involved in a lot of different fraud task forces as a U.S. attorney 

between 2001 and 2007, but I have to admit, a sober living task 

fraud force is not something that came across my plate during that 

time period. And I’m curious, are there other sober living task 

forces, that you’re aware of, in the country, Mr. Aronberg and Mr. 

Johnson? 

Mr. ARONBERG. Thank you, Congresswoman. Not that I’m aware 

of. And, also, I think we’re the first jurisdiction that empaneled a 

grand jury to look into fraud and abuse in this area. 

Mrs. BROOKS. And I saw that—and because of the grand jury recommendations, then went to your state legislature to try to increase penalties and really raise the level of awareness of this 

problem? 

Mr. ARONBERG. Yes. Congresswoman, we successfully were able 

to pass House Bill 807, which did tighten oversight and penalties 

in this area. And we’re going back to the legislature this coming 

session to ask for additional reforms. 

Mrs. BROOKS. And I saw that you had 41 arrests. And I realize 

it might be early in the process, just out of curiosity, any convictions yet? 

Mr. ARONBERG. Yes. I think 10 convictions already. We started 

the task force about a year ago, so it’s happening pretty quickly, 

but—— 

Mrs. BROOKS. That’s in one county? 

Mr. ARONBERG. Oh, yes. Yes. 

Mrs. BROOKS. OK. So this is one county in Florida where you’ve 

got 41 people arrested. And just out of curiosity, on the 41 arrests, 

how many of those are actually county residents? Do you know? Or 

is this a national network, just out of curiosity, if you know? 

Mr. ARONBERG. They’re all residents. The 41 are all residents. I 

think there were a few who may not be citizens, but they are all 

county residents. 

Mrs. BROOKS. OK. And can you share with me maybe, Mr. Johnson, what has been the involvement of the U.S. Attorney’s Office? 

And what have been some of the impediments that maybe you’ve 

seen in working with the U.S. Attorney’s offices as to challenges 

they might have in these types of cases? 

87 

Mr. JOHNSON. Thank you, Congresswoman, for asking. We’ve had 

a great relationship with the Federal prosecutors and the FBI. As 

a matter of fact, we frequently meet to make sure we don’t conflict 

with each other. We don’t want to be tripping over each other in 

our investigations. We’ve been involved and shared intelligence 

with them. They’ve made a very significant arrest and conviction 

on a fellow by the name of Kenneth Chatman. He got 27 years prison, and his abuses were about the worst of the worst. And we—— 

Mrs. BROOKS. And was this violation of which statute, if you recall? 

Mr. JOHNSON. The problem is it had to be conspiracy to commit 

insurance fraud, because they don’t have the ability under either 

the Stark Act or the Anti-Kickback Statute, to do patient 

brokering. So they had to go obliquely, and it was mainly fraud, 

human trafficking as well, because one of the abuses is the patients 

are made to be prostitutes or labor pool workers, et cetera. 

Mrs. BROOKS. Did that individual plead guilty or go to trial? 

Mr. JOHNSON. He pled guilty. 

Mrs. BROOKS. And I assume the 27 years was because of the 

amount of money that had been defrauded? 

Mr. JOHNSON. Amount of money and the egregious factual basis. 

Mrs. BROOKS. And I’m curious, in your cases, are patients or the 

participant—the residents of the sober living homes, rather than 

patients, but residents. Are you using residents as witnesses in 

your cases, Mr. Aronberg or Mr. Johnson? 

Mr. JOHNSON. Yes, we are. 

Mrs. BROOKS. OK. 

Mr. JOHNSON. Yes, we are. And we cannot prosecute the patients, nor would we want to, but that’s one of the unique things 

about this fraud, is that one of the members of the conspiracy is 

a willing participant but also a victim at the same time. 

Mrs. BROOKS. And so it’s very, very difficult to figure out who the 

bad actors are, who’s in charge. 

Mr. JOHNSON. And they’re transient, so it’s very difficult—in one 

case we had 1,500 potential witnesses, and I think we’re at a 2 percent rate of being able to find them and have them cooperate. 

Mrs. BROOKS. Because I was not aware of these websites that 

have been discussed, on one particular website run out of a group 

out of California, it indicates that Indiana has 310 sober living facilities, which I find fascinating that—now, some I recognize, some 

of these service providers, but I have to admit, they don’t direct you 

directly to phone numbers, from what I can tell. And then they also 

are putting up a time where a person has the last 10 phone numbers requested. 

Mr. Tieman, why would they be putting up these by the minute? 

Mr. TIEMAN. I’m not sure I understand the question. 

Mrs. BROOKS. So the question is, oddly, on this website it says, 

last 10 phone numbers requested: 12/12, 10:55, and they direct to 

a provider. Then 12/12, 10:55, to a southern California provider. 

This is on the Indiana website. 

Mr. TIEMAN. Wow, I don’t know how to answer that question. 

There’s so much that happens through the internet. That is fascinating. I don’t know the answer. 

Mrs. BROOKS. OK. Thank you. 

88 

Mr. TIEMAN. Sorry. 

Mrs. BROOKS. My time is up. I yield back. 

Mr. HARPER. The gentlelady yields back. 

The chair will now recognize the gentleman from Georgia, Mr. 

Carter, for 5 minutes. 

Mr. CARTER. Thank you, Mr. Chairman. And thank all of you for 

being here today. This is certainly an important subject. 

Mr. Chairman, I would certainly be remiss if I didn’t join in congratulating you on your new position, and let you know how much 

I look forward to working with you. 

Gentlemen, as a practicing pharmacist and currently the only 

pharmacist serving in Congress, this is a big problem that I have 

worked with closely over the years. And I can assure you that no 

two people are the same, you all know that, that people react differently. And some people can rehab through little therapy, some 

people it’s going to take a lifetime of therapy, and we all understand that. 

The opioid problem, in particular, if we’re going to get more specific about a problem, the opioid problem, to me, is a twofold problem. One problem is prevention. How do we prevent it? And we’ve 

certainly talked about that on this committee, and certainly it’s one 

of our concerns. But the second part of the twofold problem is just 

what we’re talking about, and that’s those people who are addicted 

now. We can talk about prevention, how we prevent it. But what 

about those people who are already there? What do we do with 

them? And that’s what we’re talking about here. 

Just like every profession, there are bad actors in this area. We 

all understand that. And that’s why we’re here today. We want to 

know how we can help in the Federal Government to do away with 

these bad actors. We know that there’s patient brokering. We understand that and we know that that’s a big problem. And I guess 

the question I have for you, and it’s a very general question, is just, 

what can we do from a Federal perspective to give you, Mr. 

Aronberg, at the state level, the resources you need and the ability 

that you need to get rid of these bad actors? 

Mr. ARONBERG. Thank you, Congressman. I think more than providing money, it’s to help us by closing loopholes in Federal law 

that—— 

Mr. CARTER. And that’s what I’m talking about. Please understand, I’m not interested in throwing money at this problem. I 

want to know specifically what we can do to help you legislatively. 

Mr. ARONBERG. Thank you, Congressman. Yes. And that’s why 

we’re not coming here to ask for money. We’re just asking for help 

in the form of reforming the Federal laws that have enabled and 

exacerbated this problem. You can’t attack the opioid epidemic 

without going after the increased number of deaths from fraud and 

abuse in the drug treatment industry that—and those deaths are 

preventable. These are people who are looking for help and, instead, get caught up in the Florida shuffle until they leave Florida 

in an ambulance or a body bag. And there’s stuff that can be done. 

As we mentioned earlier, clarifying the ADA to allow reasonable 

regulations at the local level for the sober homes. To change the 

fee for service model of the ACA to an outcome-based reimburseVerDate Nov 24 2008 14:58 Jan 15, 2019 Jkt 037690 PO 00000 Frm 00092 Fmt 6633 Sfmt 6633 I:\MY DOCS\HEARINGS 115\HEARINGS\115-87 CHRIS
89 

ment model. And then Mr. Johnson also had some areas we’re dealing with a kickback statute. 

Mr. JOHNSON. Reforming the Anti-Kickback Statute and the 

Stark Laws. So that these safe harbors, you can drive a truck 

through them right now—— 

Mr. CARTER. Right. Right. 

Mr. JOHNSON [continuing]. With boots on the ground. 

Mr. CARTER. And that’s exactly what I’m looking for. What do we 

need to put in code that’s going to help you, that’s going to give 

you the ability to get rid of these bad actors? 

All of you, I suspect, are familiar with drug courts. We certainly 

use them in the State of Georgia. They’ve been very successful. 

We’ve been very pleased with the results that we’ve gotten there. 

Just wondering, how do you and your states employ who you’re 

going to use in those drug treatments? If it’s a pretrial motion to 

get someone to go through drug therapy, how do you go about in 

selecting the company that you’ll be using there? Are there any 

kind of qualifications? 

Mr. JOHNSON. Most of the court-referred cases are Medicare, 

Medicaid, or other federally assisted programs. Very few are private, but when there is a private one, the Court doesn’t get involved in picking and choosing where somebody will go for treatment. 

Mr. CARTER. They just say you’ve got to go to one. 

Mr. JOHNSON. Now, we had a judge, he’s just been reassigned, 

who administered drug court, and would only recommend or send 

people to certified sober homes. Again, no treatment at the sober 

homes, but the sober homes themselves had to be certified. 

Mr. CARTER. So sober living facilities have to be certified? 

Mr. JOHNSON. No, not under state law. It’s voluntary only, which 

is a problem. 

Mr. CARTER. Is that something we can handle through Federal 

law? Should we require it? 

Mr. JOHNSON. Yes. By clarifying the ADA and FHA, to give some 

comfort to the states, that they indeed can have some requirement 

of certification of the sober homes, where right now they’re afraid 

to do that. They’re afraid that that is in violation of the FHA. 

Mr. CARTER. And I too am hesitant to get more Federal involvement in these things. However, I want to give you the tools you 

need. And it’s just a dilemma, and I understand it firsthand, I’ve 

seen it firsthand. 

Mr. JOHNSON. Nobody’s asking you to open up the FHA or ADA, 

that’s not the ask. The ask is to get DOJ and HUD to do a real 

clarification applying the fact that if a resident needs protection 

that—— 

Mr. CARTER. I understand. Well, please hear the message: We 

want to help. This is a serious, serious problem. 

And, thank you, Mr. Chairman, and I yield back. 

Mr. HARPER. The gentleman yields back. 

The chair will now recognize the gentleman from Florida, Mr. 

Bilirakis, for 5 minutes. 

Mr. BILIRAKIS. Thank you, Mr. Chairman. Congratulations again. 

I know you’re going to do a great job running this committee. 

90 

And I also want to welcome Mr. Aronberg. We served in the legislature together. And thanks for coming up and advocating on behalf of our great State of Florida. 

I have a couple questions. Mr. Nielsen and Mr. Tieman, is there 

currently an industrywide uniform code of ethics that bans patient 

brokering? 

Mr. NIELSEN. There’s not an industrywide. There is some. There 

should be an industrywide that’s agreed upon. I know that there 

are—— 

Mr. BILIRAKIS. Why don’t we have an industrywide code? I mean, 

my goodness, you would think we’d have something like that. 

Mr. NIELSEN. Because it affects both for-profit and nonprofit, and 

it seems that they run in separate circles, and that there needs to 

be a unified ethical code because fraud happens both in for-profit 

and nonprofit organizations. And so there should be. Just as there’s 

a patient bill of rights, there should be ethical standards for treatment facilities, just as there are for social workers, for drug and 

alcohol professionals. 

Mr. TIEMAN. Congressman, that’s a great question. And there 

should be, and it’s one of the real high priorities of the National 

Association of Addiction Treatment Providers, as we’ve just initiated something called Quality Control Initiative, which actually 

outlined, for the first time, what is ethical and what is nonethical. 

There needs to be standards. 

One of the things that amazed me was, for the last 3 years, some 

of the most unethical practitioners would hold conferences on what 

is ethical. And what I found out was that ethics was defined by 

every individual. I actually had treatment providers tell me about 

the urine drug screening. It’s OK to do that because the end justifies the means. The insurance company doesn’t pay for this, so you 

know what, they will pay for urine drug screens, so we’ll have them 

pay for that. And the net result is the person gets treatment. That 

was ethical in their minds. 

So one of the things we’ve taken upon our national association 

is, you know what, someone’s got to put the line in the sand and 

determine what is ethical. So we’ve now done that. And in 2018, 

we’re going to be, with all of our association members, saying, ignorance is no longer a defense, your own interpretation isn’t a defense. We’re going to tell you what’s ethical and nonethical, and 

we’ll determine whether or not it is. But you’re absolutely right, 

that needs to be done. 

Mr. BILIRAKIS. Very good. We need to make progress in that 

area. 

Mr. NIELSEN. I have a followup. 

Mr. BILIRAKIS. Yes. Go ahead, please. 

Mr. NIELSEN. If you don’t mind. It’s not just the treatment centers, but the executives should be held accountable as well. Part of 

the problem is it’s at the top. And so I think that they should have 

a code of ethics that they should follow, and they should be 

credentialed. That these executives that run these treatment facilities should—and then you would have a list of the individuals that 

are unethical because they would lose their credential around that. 

The International Certification and Reciprocity Consortium is an 

organization that credentials counselors. We need something like 

91 

that for executives, and even for marketers and admissions specialists. 

Mr. TIEMAN. And really to that, that’s what we’re looking at with 

this ethical certification. It’s just like a CEO, I have to sign off on 

our audit. I have to sign off on our 990. I would have to sign off 

and saying that Caron Treatment Centers has—we have provided 

the training, and I verify that we are adhering to ethical standards. 

Mr. Nielsen’s absolutely correct that you start at the top. 

Mr. BILIRAKIS. Absolutely. Let’s get it done. 

A question for Mr. Aronberg. As you’re well aware, patient 

brokering continues to be an issue in the State of Florida. Upon 

learning that various mental health and substance abuse facilities 

were making payments to individuals for the referral of patients 

identified in Alcoholics Anonymous meetings, homeless shelters, 

and other similar environments, Florida’s legislature recently 

passed a Patient Brokering Act to prevent it by making the perverse practice a third-degree felony, punishable by 5 years in prison. However, monitoring and enforcing continue to challenge our 

state. 

What are other states doing? And then whoever wants to speak 

on the—please give us if you have anything to contribute. What are 

other states doing to monitor and enforce patient brokering laws? 

Mr. ARONBERG. Congressman, thank you. And thank you for your 

service to Florida and Pinellas County in particular. We’re seeing 

that a lot of our sober homes are moving to your coast because of 

our crackdown, and so we’re all in this together. 

I can’t speak to what other states are doing, but we do know that 

other states do have patient brokering laws on the books. And we 

were discussing earlier whether the Federal Government should 

have a more effective anti-patient brokering law. They do have an 

anti-kickback law. 

But this is something that you’re going to see a lot of the scam— 

the Florida shuffle move to other communities that are not as 

aware of this problem and don’t have effective laws on the books. 

And that’s why we’re offering ourselves as a resource for any community that would like to see what we’re doing. We’ve trained prosecutors and law enforcement from throughout the state, and we’d 

be happy to help folks from across the country so they will be 

aware and ready to stop the Florida shuffle when it comes to them. 

Mr. BILIRAKIS. Very good. Thank you. Great work. 

Mr. ARONBERG. Thank you. 

Mr. BILIRAKIS. I yield back, Mr. Chairman. 

Mr. HARPER. The gentleman yields back. 

In conclusion, I want to thank our witnesses and members for 

participating in today’s hearing. I remind members that they have 

10 business days to submit questions for the record. And if so submitted, I would ask that the witnesses agree to respond promptly 

to those questions. 

With that, the subcommittee is adjourned. 

[Whereupon, at 12:15 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

92 

PREPARED STATEMENT OF HON. GREG WALDEN

Thank you, Mr. Chairman, for holding this hearing. Congratulations again for 

taking over this esteemed Subcommittee. 

Today’s hearing subject is classic oversight and investigations territory: fraudsters 

and knaves who exploit the vulnerable for profit. This particular outrage involves 

unscrupulous people trying to make a buck off of the nation’s opioid epidemic with 

unethical practices such as patient brokering, identity theft, kickbacks, and insurance fraud. 

How do these abuses happen? One such story was reported in STAT News. A 30- 

year old man in Massachusetts suffering from heroin addiction was approached by 

a prominent figure in the Boston-area drug recovery community with an offer too 

good to be true. The patient could get treatment in South Florida, with all expenses 

paid, including airfare. This young man took the deal and two months later he was 

dead. He was treated as a paycheck by a middle man, a ‘‘patient broker’’ who recruits and arranges transportation and insurance coverage for vulnerable patients 

seeking treatment for their addiction. 

These patient brokers can earn up to tens of thousands of dollars a year from 

finder’s fees of $500 to $1,000 per person by steering patients to out-of-state treatment centers that often provide few services and sometimes are run by shady operators with no training or expertise in drug treatment. Worse, people are getting paid 

to relapse so that treatment facilities can collect more insurance money. 

A Palm Beach Post investigation of the county’s $1 billion drug treatment industry found that testing the urine in the substance use disorder treatment industry 

is so lucrative that treatment centers are paying sober living homes for patients. 

A basic urine drug screening test in cup can detect ten types of drugs or more, costs 

less than $10, and can display the results within minutes. Yet we’ve heard of instances where individuals are tested daily and the treatment facility or sober living 

home sends the samples for more expensive confirmatory tests that can costs thousands of dollars. 

Another nefarious problem is ‘‘black hat marketing’’ where some providers overstate their treatment capabilities and use established treatment program names to 

market and attract patients, a form of identity theft. The fraudsters also use misleading websites or call centers to recruit out-of-state patients who were looking for 

a legitimate treatment provider in their local area. 

These abuses have consequences. It threatens patients, communities, taxpayers, 

and insurance policyholders. It undermines the ethical and legitimate treatment facilities that provide life-saving treatment to patients. 

The Committee’s investigation has revealed that while many of these schemes involve steering patients to warm-climate destinations such as California, Florida, and 

Arizona, it is increasingly emerging as a nationwide problem. 

Today’s hearing will help bring needed attention to this issue, highlight some effective actions taken, and start a thoughtful discussion on the best solutions to combatting these corrupt practices while protecting good and legitimate treatment programs and those that are seeking treatment. 

I welcome our witnesses and look forward to their testimony. 

93 


28931.049

; ., CCAPP 

California Consortium of 

Addiction Programs and 

Professionals 

Inspiring Excellence, Promoting Change 

STANDARDS 

FOR SOBER LIVING ENVIRONMENTS 

JAl\'UARY 19, 1993 

OCfOBER 12, 1993 

MAY26,1996 

JANUARY 18, 1999 

OCTOBER JO, 200:3 

FEBRUARY 16,2012 
94 


28931.050

STANDARDS 

FOR 

SOBER LIVING ENVIRONMENTS 

Sober Living Environments (SLE) is a term generally used to describe a specific type of 

housing. SLE's offer a housing alternative to individuals who are recovering from alcohol 

and or drug addiction. These environments are not subject to licensing by any State 

agency and are not subject to certification or accreditation. Other terms used to describe 

such housing are "recovery residences" "cooperative housing for recovering people", 

"resident-run housing", "sober cooperative living", "alcohol, drug free living centers", etc. 

All of these arrangements have something in common in that they are intended for 

cooperative living of individuals who are recovering from alcoholism or drug addiction. 

Resident responsibility for the environment sets it apart from formal recovery programs. 

There is a great need for sober housing in our communities. Experience has shown that 

persons who have completed a residential program of recovery or have stabilized in 

Alcoholics Anonymous need to live in a sober environment in order to maintain sobriety 

and recovery. Many persons who leave organized programs do not have a home to go 

to, nor can they afford individual housing, which is recovery conducive. Cooperative 

housing offers a bridge to independent living. 

Sober Living Environments come in all sizes and configurations - from freestanding 

homes to apartment buildings. If more than six people who are not related to each other 

(not a "family") live together they may need to have some sort of a use permit from the 

governing district in which they live. Some local jurisdictions require health clearance and 

there may be a need for review by the local fire marshall. 

SLE's must not require residents to attend programs or counseling sessions, however 

certain rules may be set as provisions of residency. House rules may include curfew, 

smoking, chores, payment of rent, and attendance at house meetings, and A.A. /N.A. 

meetings, and must include prohibition of any use of alcohol and or drugs. 

A sober living home may or may not have paid staff. The role of the staff must be clearly 

for management of the housing and not for management of individuals. 

The environment must be recovery conducive and space should be adequate to 

accommodate each individual comfortably and with dignity and respect. 

Attention should be given to the health and safety of all residents and therefore the home 

should meet minimum fire and health standards. 

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Article 1: 

Article 2: 

Article 3: 

Article4: 

Article 5: 

STANDARDS 

Physical Environment 

Management 

Record Keeping 

House Rules 

Residency Requirements 

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2200 

2300 

2400 

2500 
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2100 Article 1. Physical Environment 

2101 ARCHITECTURAL ASPECTS OF RECOVERY-CONDUCIVE HOUSING 

Architectural aspects of design should be similar to those for regular residences with a 

few important differences. 

(a) Sociopetality: Design should encourage residents to contact each other 

incidentally, informally, and without status barriers. Mundane contacts with each 

other during the course of the day are the medium for recovery in a well-designed 

setting. 

(b) Communality: Space should be available for all residents to meet for community 

meetings, and to attend community events (parties, meals, holidays, celebrations). 

(c) Security: Entrance and exit must be controlled. This means that informal 

perimeter security and monitoring of the front door are necessary. Human security 

(people circulating through the facility) is far preferable to electronic security. 

(d) Durability and quality of furnishings: Only the highest quality fixtures, materials, 

appliances and furniture should be used. The extra investment in the beginning 

repays itself many times over. 

(e) (f) (g) Upkeep and appearance: Repair, maintenance, cleanliness, and 

attractiveness are critical elements in the life of the house. The upkeep and 

appearance of the house are a metaphor for the lives of the residents. This 

includes grounds and driveways surrounding the home. 

(h) (i) Personalization and comfort: Residents should feel the place is their own. This 

means allowing room for personal possessions, decorating one's own area, etc. 

{Reprinted with permission, "The architecture of recovery: Prospects for the Nineties for housing low-income people 

with alcohol and drug problems'', Frledner D. Wittman, Clew Associates, presented April1 0, 1992, at a Conference on 

Recovery-Conducive Affordable Housing Strategies, University of California, San Diego.) 

Q) Respect for neighbors: Good neighbor policies assure that the home and its 

residents are accepted as part of the community. This means that residents will be 

mindful of noise levels of conversations, designated smoking areas that will not 

affect the neighbors, and walking on sidewalks and paths to destinations. 

2102 SPACE 

(a) Space should be adequate to accommodate each individual comfortably and with 

dignity and respect. 

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(b) Each home shall have a living room area with adequate space for participants to 

assemble for social or other group activities. 

(c) Each home shall have a dining area suitably furnished for group or individual meal 

service. 

(d) Sleeping rooms shall be adequate to provide a bed and private space for each 

resident. These areas shall not be used for any other purposes. 

(e) Bathrooms shall be conveniently located and sufficient to provide adequate 

facilities for health, hygiene and privacy for each resident. 

(f) Kitchen facilities shall provide cooking and storage space to meet the needs of the 

home and its residents. 

(g) Personal storage should be provided for each resident. 

2103 FIRE SAFETY 

The following minimum fire prevention requirements shall be followed: 

(a) There shall be no smoking in bedrooms; 

(b) Smoking is allowed outside only and smoking materials shall be disposed of safely; 

(c) There shall be no accumulation of clothing, newspapers, or cartons in the 

living/sleeping areas; 

(d) Stoves and cooking areas shall be kept clean of grease accumulation; 

(e) Furniture and drapes are treated with fire retardant materials 

(f) Smoke detectors fire extinguishers, and C02 detectors shall be installed; 

(g) Exit doors shall be clearly marked and readily available; 

(h) Fire drills from sleeping areas should be encouraged; 

(i) Buildings with 2nd floor shall have emergency fire ladders clearly marked. 

2104 HEALTH STANDARDS 

The following minimum health maintenance measures shall be followed: 

(a) There shall be adequate space for food storage; 

(b) All food shall be stored in covered containers, or properly wrapped; 

(c) Perishable items shall be refrigerated and adequate refrigeration in good repair 

shall be available; 

(d) All dishes and cooking implements shall be washed upon use; 

(e) There shall be adequate hot water for dish washing; 

(f) Bathroom space shall be adequate for number of residents; 

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(g) Bathrooms shall be kept clean on a daily basis; 

(h) Bathrooms shall provide personal privacy; 

(i) There is a policy for drug testing. 

2200 Article 2. Management 

2202 MANAGERS RESPONSIBILITY 

The person in charge of the facility shall be clearly identified to all residents and on the 

premises (a). This should be an individual or designated individual within the group. This 

person shall be responsible for the maintenance and safety of the building. (b) If the 

person is designated, the lines of authority must be clearly defined. (c) The manager 

should be the keeper of the "good neighbor'' policy and liability insurance and copies 

should be available and visible in the home. 

2203 STAFFING 

(a) - (f) Staffing may or may not be necessary depending on the nature of the housing. 

At a minimum, someone must be responsible for the safety of the building, someone must 

be available to maintain records, to collect rent, and to register and check-out residents, 

and to maintain rules of the house. The resident group may choose to have other staff 

available such as cooks, grounds keepers, etc. Staff shall not provide any direction to 

the residents but shall be available for appropriate management of the physical plant. 

2300 Article 3. Record Keeping 

2301 RESIDENT RECORDS 

(a) The manager in charge of the residency shall maintain formal records. Records 

fill several important roles: they allow management to track the person served and 

provide a sense of order. The following record keeping standards are applicable 

to SLE: 

(b) Personal Data Form: Biographical personal data that provides an identification 

profile and emergency contact. Personal data requirements should be consistent 

with the organization's record and profile data requirements. Length of sobriety, 

prior recovery experience, and source of referral are appropriate. 

(c) Resident Log: This is a continuing record of residents as they enter and exit 

residency. The log includes referral into the home and circumstances of exit. 

Management thus has available a quick review of residents registered in a given 

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year, along with the number of people moving out and why. 

(d) Resident Fee Payment Record: This record indicates the amount of resident fee 

due, and the date and amount of actual payment. 

(e) Sign-in, Sign-out Sheets: For the safety of the residents and in case of emergency, 

the designated person must know the location of each resident. Sign-in and Signout sheets are available and in a prominent place in the home. 

2400 Article 4. House Rules 

(a) The rules of the house must be clearly defined. Optional rules will depend on the 

needs of the population to be served, should not be over burdensome, and must 

be consistent with residency needs. 

(b) No drinking of alcohol or items containing alcohol or using illegal drugs at any time. 

(c) No alcohol, items containing alcohol or illegal drugs shall be brought onto the 

premises at any time. 

(d) Rent must be paid on time. 

(e) Mandatory attendance at a weekly house meeting. 

(f) A policy on drug testing is available and equally applies to all residents and staff if 

utilized. 

2500 Article 5. Residency Requirements 

(a) The residency requirements must be clearly defined and at a minimum should 

include: 

(b) A desire to live a clean and sober life style. 

(c) Completion of a formal alcohol or drug recovery program, or documented stability 

in a self-help group. 

(d) A willingness to abide by all the house rules; 

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(e) A signed residential agreement on file for each resident. 

For questions concerning these standards, or the registration process: 

Craig Koury 

916-338-9460 ext 123 

craig@ccapp.us 

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Patients have the right to: 

1. Be treated for the life-threatening, chronic disease 

of addiction with honesty, respect and dignity. 

2. Know what to expect from treatment, and the 

likelihood of success. 

3. Be treated by licensed and certified professionals. 

4. Evidence-based treatment. 

5. Be treated for co-occurring behavioral health 

conditions simultaneously. 

6. An individualized, outcomes-driven treatment plan. 

7. Remain in treatment as long as necessary. 

8. Treatment for their families and loved ones. 

9. A treatment setting that is safe and ethical. 
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CD caron® @ Hazelden Betty Ford Fdlndation 

Caron Treatment Centers and Hazelden Betty Ford Foundation I February 2016 

Defining a Center of Excellence: An Addiction Treatment Model 

Introduction 

From a medical model perspective, a 

Center of Excellence ( COE) is defined 

as an organization that demonstrates 

leadership and the highest clinical 

quality in a field of specialized 

treatment This definition by nature 

includes not only leadership hut 

also demonstrated best practices, 

progressive treatment modalities, 

a solid infrastructure, utilization of 

a personalized team approach that 

includes both the patient and family, 

staff development, and academic 

research that generates outcomes 

guiding not only best treatment 

practices but also measures quality. 

Increasing the quality of addiction 

treatment is now more critical 

than ever. At present, the addiction 

treatment industry is fragmented \'lith 

no consistent operating principles or 

regulatory requirements. Some states 

require no regulation, which leaves 

treatment centers unaccountable 

for the services they provide. In 

addition, the industry is seeing 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 or 

demonstrated outcomes. 

Two leading non·profit organizations, 

Caron Treatment Centers and the 

Hazelden Betty Ford Foundation, coauthored this article to outline criteria 

necessary for an addiction treatment 

provider to qualify as a Center of 

Excellence. We hope this begins a 

national dialogue around this important 

issue and leads to further action in 

establishing a clearinghouse to identify 

the industry's centers of excellence. 

Key Attnbutes of a COE m 

Add1ctmn Treatment 

Determining the characteristics of 

a COB requires identification of the 

minimum standards necessary to 

deliver outstnnding quality of care. In 

other words, an obvious starting point 

is to define the characteristics and 

practices that are minimally required 

in order for a provider to demonstrate 

it is delivering adequate services. 

This section of tht paper will list and 

describe ea.;:h of these criteria. 

AccreditatiOn 

The first essential characteristic is 

receiving and maintaining accreditation 

from external regulatory organizations. 

such as the Joint Comm~ion (JCAHO) 

or the Commission on Accreditation 

of Rehabilitation Facilities (CARP). It 

is also important to maintain a state 

license and meet the expectations at 

the highest standard of care. Hazdden 

Betty Ford and Caron are accredited 

and licensed faciUties. Surprisingly. 

many addiction treatment providers 

throughout the United States have 

not received accreditation, and there 

is no mandate in the field requiring 

providers to have accreditation in 

order to operate. Because accrediting 

agencies are vital in establishing 

rigorous standards for quality of care, 

organizational performance, and 

evalunUng whether providers meet 

these standards, accreditation should 

be a "'minimum requirement" of 

any organization offering addiction 

treatment 

Qualified Chnic1ans 

Well~trained and credentialed clinicians 

are critical to providing quality care. 

COEs hire and retain clinicians 

with the appropriate degrees and 

licenses. such as addiction medicine 

physician~ doctoral~level psychologists, 

and licensed or certified addiction 

counselors. As the field of addktions 

counseling has increased in complexity 

and sophistication over the past 

decades, so too have the licensing and 

certification requirements across the 

United States. At present, few states will 

license counselors at the associate's level. 

COEs hire addictions counselors that 

have, at a minimum, a baccalaureate 

degree from an accredited institution 

with a preference for those prepared at 

the master's level. COEs also implement 

clinical training programs that keep 

clinicians up to date in their fields and 

continuously advlmce their dini(;al skills. 
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COEs use state-ofthe-art tools tOr 

conducting aU aspects of business, 

including clinical operations, These 

include a well-designed, integrated 

electronic health record that allows 

information to be shared acros-s 

all stakeholders, including direct 

providers of care, Organizations 

should have solid Information 

Technology (IT) platforms, case 

management systems and other data 

systems that facilitate care and allow 

quick and seamless communication 

among staff and stakeholders< It is 

also important for these platforms 

to provide accurate and reliable data 

that can be used for benchmarking 

and quality performance assessment. 

Advances in technology have led to its 

use during treatment Both Caron and 

Hazelden Betty Ford utilize technology 

as part of their treatmenL At Caron, 

the IT team worked with the clinical 

team to develop a program called 

Passport This program is electronic 

and allows the patients 1o interface 

with their patient-centered treatment 

plan, track progress, keep their 

treatment homework, work on their 

treatment work digitally, interface with 

their addictions counselor when not 

in group or individual sessions, and be 

part of a peer community. At Hazel den 

Betty Ford, the My Ongoing Recovery 

Experience (MORE) web-based 

program helps discharged patients 

track their recovery process, interact 

with recovery coaches, and participate 

in a peer community of support. 

Clinical services offered to patients 

should be "evidence-based;' serve 

as "practice-based evidence" and/ 

or be rooted in research and aimed 

at establishing new innovations in 

practice. In addition, the treatment 

provider should have a hard-wired 

process for routinely re\'iewing the 

ongoing research literature and 

exploring ways to incorporate new 

practices and methods as the evidence 

base for these develops. Hazelden 

Betty Ford and Caron both have robust 

training programs and affiliations with 

leading universities to ensure employees 

are knowledgeable and trained in 

current trends in the industry, age 

and gender specific treatment issues, 

along with recognized evidenced~ 

based practices such as Motivational 

Interviewing and Dialectical Behavioral 

Therapy. 

It is well known that the majority 

of individuals with a substance use 

disorder also have a co-occurring 

mental health condition or other 

co-existing addiction. An addiction 

treatment provider should therefore 

offer formal treatment for these cooccurring disorders (in addition to 

treatment for the substance addiction) 

and do so using evidence-based 

practices. To ensure proper treatment 

of co-occurring disorders, addiction 

treatment providers should have 

medical or psychiatric staff available 

to treat the presenting co-occurring 

disorder and clinical slaff trained in 

the treatment of these disorders, An 

integrated approach to treatment is the 

best practice. At Caron and Hazelden 

Betty Ford, there is a comprehensive 

behavioral health tt~am bolstered by 

fuil-time medical, psychiatry and 

psychology staJI 

is performance measurement 

Increasingly, substance use treatment 

centers are being called to task 

to provide measurable outcomes. 

demonstrating the success of their 

programs. At the industry level, 

addiction treatment centers are facing 

a rapidly expanding competitive 

environment and increasing pressure 

from government and health 

care insurance industries to show 

demonstrated success. Individuals 

seeking treatment are also becoming 

progressively savvy in their search for a 

treatment center that will give them the 

best possible outcome. A COE should 

have formalized, proven methods 

for measuring several aspects of 

organizational perfonnance, including 

patient outcomes, 

While there appears to be fieldwide acknowledgement that such 

measun:ment is important, addiction 

practitioners and scholars have yet 

to agree on the precise metrks that 

should be collected and reported 

within the addiction treatment field. 

If outcomes are collected at all, most 

treatment centers rely solely on patient 

self~ reporting without methods and 

structures in place to reduce bias 

and demand characteristics. Centers 

of Excellence have robust measures, 

which include reports from f3milies, 

information from other professionals 

and science-based, physical measures, 

such as urine drug screens in addition 

to self~reporls. This is an area where 

both organizations have been pioneers. 

For decades, Hazelden Betty Ford 

and Caron have collected patient self 

report, hut recognized the limitations 

of distal-outcomes measurement and 

designed programs to manage and 

monitor patients during treatment 

and after discharge for a year or 

more. It is not uncommon to find 

providers with little to no evidence 

of measuring patient outcomes or 
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There should also be transparency care. 

haye services oftCred to the patient 

and family prior to admission to 

treatment Examples include education, 

intervention, and supports for families 

in the community and in the schools. 

COEs have extensive programming 

for families, which includes education, 
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addiction tre~tmcnt organization to 

consider itself a Center of Excd!em::e. 

Wilh the ever-changing landscape 

of the American healthcarc system, 

providers are challenged to meet 

accomplished wilh acc:reditation, 

performance management, and 

evidence-based care with the capacity 

It is time for accountability in 

the addktion fidd. It is time to 

set standards that all treatment 

overall quality of care. 
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Director 

Mary Hale, MS 

Deputy Agency Director 

Jeffery Nagel, PhD 

Director of Behavioral Health Operations 

Annette Mugrditchian, lCSW 

Director1 Adult & Older Adult Services: 

Brett O'Brien1 MFT 

Director, Children1 Youth, & Prevention Services 

Mark Lawrenz, LCSW 

Division Manager 

Donna L Grubaugh 

Chief 

Curtis Condon1 PhD 

Research & Planning Manager l! 

Alaka Nafday, MS, MSc 

Research & Planning Manager I 

Richard Chhuon, MPH 

Research Analyst IV 

Allyson Furry, MA 

Research Analyst IV 

Donna Meyers 

Research Analyst IV 

Robert Osborne 

Captain 

Overdose and Death In Orange County. 

OC Health Care Agency and Orange County Sheriff-Coroner 

Department Santa Ana, California, August, 2017." 

This report, a story map, and a variety of additional resources 

about outreach and prevention efforts are available online at 

www.ochealthinfo.com/opioids. 
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D rug overdose 

(poisoning) is now the 

leading cause of unintentional injury death 

in the United States, causing more 

deaths than motor vehicle crashes. 

Opioids- both prescription painkillers and heroin- are responsible 

for most of those deaths. The number 

of Californians affected by prescription and non-prescription opioid 

misuse and overdose is substantial, 

with rates varying significantly across 

counties, and even within counties. 

In Orange County, there were 7,457 

opioid overdose/abuse cases treated 

in emergency departments (ED) 

between 2011 and 2015. Importantly, 

seven of every 10 overdose deaths 

investigated by the Orange County 

Sheriff-Coroner during this five-year 

period involved opioids. 

While Orange County has lower 

opioid mortality rates compared to 

some other states and the nation, 

notable disparities and risk factors 

were identified for some of our 

residents. For example, males were 

nearly two times more likely than 

females to overdose and/or die from 

an opioid-related incident. Geographically, cities along the coastal and 

southern regions of Orange County 

tended to have higher rates of ED 

visits and death than other cities. 

The Orange County Health Care 

Agency offers several different public 

education, prevention, outreach and 

treatment services aimed at reducing the misuse and abuse of drugs 

and alcohol among Orange County 

residents. Current efforts to address 

these findings include increasing 

available treatment, the hosting of 

town halls and community meetings to raise awareness for parents, 

support National Take Back Day to 

encourage the proper disposal of 

prescription medication, and target 

educational outreach and services in 

communities with higher prevalence 

among high school age youth. The 

County continues to look for opportunities to expand these services. 

On July 11, 2017, the Orange County Board of Supervisors accepted a 

grant for 6,218 doses of Naloxone. 

Naloxone, also known as Narcan, 

is an opiate antagonist and is used 

to reverse the effects of an opiate 

overdose. The purpose of the grant is 

to distribute the naloxone locally and 

save lives from opioid overdose. 

Efforts will be made to link those 

who are using opioids, including 

those who overdose, to the services 

available throughout the county. 

Additionally, the Orange County Alcohol and Drug Advisory Board is working on an Opioid Strategic Plan that 

will identify individual and community 

needs in Orange County and effective 

strategies to address these needs. 

The plan will focus on integration of 

evidence-based practices related to 

education and prevention, early intervention, treatment and recovery. 

For more information on these and 

additional resources, please refer to 

page 16 of the report. 
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INTRODUCTION of all deaths were due to accidental pre~ 

scription drug overdoses. Moreover, a total 

of 1,711,809 prescriptions for opioids (e.g., 

According to the National Survey on Drug Use and 

Health (NSDUH, 201S), 27.1 million people in the 

United States used illicit drugs or misused prescription drugs in the last month (Center for Behavioral 

Health Statistics and Quality, 2016). Additionally, the rate of 

drug-induced overdose deaths in the U.S. has significantly 

increased in the past decade with an estimated 47,055 drug 

overdose deaths occurring in 2014 and over 60% of such 

deaths are due to opioids, including heroin and prescription 

drugs (Rudd et al., 2016). The Centers for Disease Control 

and Prevention (CDC) also found the lethal combination 

of benzodiazepines and opioids 

was a leading cause of overdose 

in the nation (CDC, 2014; Chen 

et al., 2014). Researchers have 

speculated that concurrent use 

of multiple substances may be related to the surge in hospitalizations and overdose deaths (CDC, 

2013a; Paulozzi et al., 2011). 

Substance use disorders also 

have serious economic conseThe average 

prescription in 

OC was filled for 

72 pills, which 

corresponds to 

over 122 million 

pills in one year. 

quences resutting in lost productivity~ criminal justice 

involvement, and health care expenses acc:un1ul;atlr•a'~t 

upwards of $400 billion annually in the U.S. (sacks 

al., 2015; National Drug Intelligence Center, 2011). 

In Orange County alone, substance-related hospitalization 

charges between 2011 and 2012 were estimated to be 

more than $269 million (OSHPD-ED & OSHPD-PD, 2011-12) 

and increased to over $425 million between 2013 to 2015 

(OSHPD-ED & OSHPD-PD, 2013-15). The development of 

prevention programs not only have the potential to reduce 

substance-related hospitalizations and/or deaths, but also 

provide cost-effective Interventions. The benefit-per-dollar 

cost ratios can range from small returns to more than $64 for 

every dollar invested in prevention programs (U.S. Department of Health and Human Services, 2016). 

Similar to nationwide trends, Orange County has seen an 

increase in drug-related overdose deaths within the last 15 

years. In a recent report, drug overdose deaths increased by 

88% between 2000 and 2015 (HPRC, 2017), and nearly half 

hydrocodone, oxycodone) were dispensed to OC residents 

in 2015 according to the Controlled Substance Utilization 

Review and Evaluation System (CURES; data provided by 

california Department of Justice). Additionally, oploids have 

become the most prescribed class of medications in the U.S. 

with more than 289 million prescriptions written each year 

(Levy et al., 2015; Volkow et al., 2011). This highlights the Importance of focusing prevention efforts to address the rising 

oplold consumption among residents. 

This report serves as a follow-up to Orange County Health 

Care Agency's (HCA) Drug & Alcohol Overdose Hospitalization & Death report published in 2017, wherein we further 

examine in more detail, opioid-related emergency depart~ 

ment (ED) visits, hospitalizations, and deaths that occurred between 2011 and 2015. It presents demographic 

differences (e.g., gender, age, race/ 

ethnicity, and geography) of Orange 

County residents who overdosed 

and/or died as a result of using 

opioids, as well as examines factors 

that contributed to an overdose 

(e.g., intent and type of substance 

used). These findings and profiles 

are Intended to help guide local 

Top 5 Prescribed 

Opioids in OC: 

1. Hydrocodone (61!%) 

II. Oxycodone (16%) 

s. Morphine (7%) 

4. Methadone (2%) 

5. Hydromorphone (II%) 

substance use education, prevention, and 

treatment efforts. 

ED visit and hospitalization cases (2011-

2015) were collected 

from the State of 

California Office of 

Statewide Health 

Planning and Development- Emergency Department (OSHPD-ED) and Patient Discharge (OSHPD-PD) and were categorized according to the International Classification of Disease 

9th (ICD-9) and lOth (ICD-10) Revisions. Information regarding overdose deaths (2011-2015) were analyzed from death 

certificates, which was found In the state master death file 

for the county and matched to data from the Orange County 

Sheriff's Department, Coroner Division. 
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As part of an indepth investigation into the substance 

use habits of Orange County 

residents, this report examines 

cases where opioids were the 

primary drug resulting in a visit 

to the Emergency Department 

(ED) or subsequent hospitalization. Over the last ten 

years (2005-2015), the rate 

of opioid-related ED visits has 

steadily increased, while the 

rate of hospitalizations has 

remained relatively level. The 

overall rate of ED visits has 

increased by 141%, from 23.3 

per 100,000 in 2005 to 56.0 

in 2015 (Figure 1). The rate of 

hospitalizations as a result of 

an opioid-related overdose also 

increased by 9% over this ten 

year period (21.1 vs. 23.1 per 

100,000). Overall, this increase 

can largely be attributed to the 

rise of opioid abuse or opioid 

dependence cases, as well as 

poisoning by heroin. 

The type of opioid substance 

used prior to overdose also 

influenced whether or not 

s 

patients were admitted to the hospital after being treated in the ED. Opioid-related cases were classified based on the 

principal diagnosis (ICD-9 or ICD-10) in to one of five categories (Figure 2). Overall, 54% of opioid cases (n = 4,012 of 

7,457) were admitted to the hospital for additional treatment. Patients who were classified as opioid abuse or dependent, as well as those poisoned by prescription opioids (i.e., opium, semi-synthetic, or methadone) were more likely to 

be admitted to the hospital. Conversely, only 20% of cases involving heroin poisoning were admitted to the hospital for 

additional treatment. 
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Frequency of Opioid-Induced Emergency Department Visits (2011-2015) 

During this time period, 

7,457 residents visited an 

ED for opioid-related issue 

(Table 1)-the majority 

of which were for opioid 

abuse or dependence 

(39%), followed by heroin 

poisoning (24%), and natural/semi-synthetic opioid 

poisoning (21%). 

DEMOGRAPHIC PROFILES 

On average, 1,500 residents are treated in the ED each year for 

an opioid-related overdose or dependence. Roughly six out of ten 

(61%) cases were among males (n = 4,532), while 39% (n = 2,924) 

were female (Table 2). Additionally, males were treated in the ED at 

an average rate of 59.1 per 100,000, whereas females had a rate of 

37.4 per 100,000. Between 2011-2015, the number of opioidrelated ED visits increased for both males (54%) and females (48%). 

The majority of opioid-related ED visits was among Non-Hispanic White residents (78%), followed by Hispanics (15%), Other I 

Unknown (4%), Asian I Pacific Islanders (2%), and African-Americans 

(1%). Non-Hispanic Whites also had the highest number and rate 

of ED visits for opioid-related issues at 87.2 (per 100,000). African-Americans had the second highest rate at 41.8 albiet a very small 

number of cases,' followed by Hispanics at 21.5. With the exception of African-Americans, the number of opioid-induced ED visits 

increased for all racial/ethnic groups between 2011-2015 (Table 2). 

Adults between the ages of 18 to 34 accounted for more than half 

of those who were treated for opioid abuse (53%). The highest 

number and rate of visits were for people between 18 to 24 years 

old at 133.8 (per 100,000), followed by 25 to 34 year olds at 82.7. 

Adults ages 45 to 54 and 55 to 64 had the next highest rates (45.2 

and 45.9 per 100,000; respectively). Teenagers (<18 years) and 

seniors (>65 years) had much lower rates. Importantly, the number 

of opioid-related ED visits increased for all age groups between 

2011-2015, except for adolecents ages 10 to 17 (Table 2). 

tThe rate of African-American EO visits should be interpreted with caution due to the small JlOJlulation size. 

1,157 

Non-Hispanic 

Whites on 

average per year 

Hispanics on 

average per year 

27 

Asian/Pacific 

Islanders on 

average per year 

1 

AfricanAmericans on 

average per year 

Source: OSHPD-EO, 2011·2015 
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Demographic Characteristics of Opioid Overdose Emergency Department Visits 

(2011-2015) 

GEOGRAPHY 

The geographic distribution for opioid-related ED visits 

between 2011 and 2015 is presented in Table 3 and Map 

1 on page 7 and 8. Importantly, those ZIP codes and 

cities with the highest rates were primarily located in the 

southern and coastal cities of Orange County. Examining 

the regional prevalence of ED visits for opioid overdose 

or poisoning revealed a 59% increase in the number of 

cases in the southern region of Orange County (50.6 per 

100,000). Between 2011-2015, there was also a 58% 

increase in the number of oploid cases reported in the 

central portion of the county (50.7 per 100,000). 
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28931.072

Op.~;t~i;il !fl.JsrtOEI'ii,'EittE!! [}:.;'t'&ftl!ifoll!nit Ylaiit Nu;;n!Ei::ifc> i!LE;;il iibt1to, §;r,\' ·~:i,;;:;1t!i:i~iijl'l;i~~= !!t.!il'iii;'!;;,r~ ;!!;~;!! (~i ~~' i:;[~];:l:ii.-:i:!i:i~] . .. . .. .. .. . 

=:!;~it.., ;;.;:;lt~ .~~Eo :r.r .f!:!!!im•· ,;:;;;;;;;;;; ;;;:o;;;: !l::;;;ii t .. ; "*'=i;;r .. -:~~~!' ,:;;:!iff. :;~;!:i!' .~!:=!;:~ f-!~:;l~ifJ!" ;~-f. ;l;*~~ .. ';'t.~t.ff ~~=!~ ;:::m::!;l:r-;;:. 

~Geographic regions are based on the Behavioral Health Services' Service 'Planning Area breakouts. 
117 


28931.073

Rate of OpioidRelated ED Visits 

by Zip Code 

§ < 30.8 

[ 

~ 30.9 45.7 

45.8 72.8 

72.9 126 

HOSPITALIZATION CHARGES & 

LENGTH OF STAY 

For all opioid-related cases, the total number of hospitalizations between 2011 and 2015 (N ~ 4,012) resulted in over 

20,000 hospital days, with the average length of stay being 

5.1 days (Table 4). During this five-year period, the total 

amount of charges accumulated to more than $133 million. On average, each hospitalization stay resulted in over 

$33,000 In charges. Nearly four in ten patients were insured 

through a private insurance company (41%). followed by 

those who self-·pald {Le., uninsured) or were covered through 

Medi-Cal insurance (37%). 

Opioid-Related Hospitalization Charges and 

Length of Stay (2011-2015) 

OPIOID-RELATED 

EMERGENCY 

DEPARTMENT 

VISITS BY 

ZIP CODE 

Hospitalization 

charges averaged 

$33,000 

per admission 

PATIENT DISPOSITION 

The majority of patients admitted to the hospital 

for opioid-related problems had a routine discharge 

(75%). Nearly one in ten left the hospital against 

medical advice (9%), while a smaller percentage of 

patients transferred to a skilled nursing facility/rehab or home health care/hospice (6%). Fewer were 

discharged to another acute or psychiatric hospital 

(4%). and even less died or went to jail after being 

admitted to the hospital (2%). 
118 


28931.074

Data from the Orange County 

Sheriff's Department's (OCSD) Coroner Division was used to identify 

opioid-related drug overdose deaths. 

The data contained demographic 

information of the decedent, as well 

as information regarding the specific drugs used, categorized specific 

opioid types, and contributing causes 

of death. To better understand the 

latest trends in opioid-related overdose deaths, data was analyzed from 

the Coroner's database for deaths 

that occurred between 2011 and 

2015. Residents who died out of the 

county were not investigated by the 

Coroner and, therefore, not included 

in the following analysis. Also excluded from this analysis were deaths of 

non-Orange County residents. 

DEMOGRAPHIC 

PROFILES 

Fully 70% of all overdose deaths 

investigated by the coroner during 

this five-year period involved opioids, 

either illicit and/or prescription 

(n=1,207). Approximately 62% of 

opioid-related deaths were among 

males (n = 744), who also had a 

higher 5-year average rate compared 

to females (9.7 vs 5.9 per 100,000, 

respectively; Table 5). Between 2011 

and 2015, the 5-year average rate 

of opioid-related deaths was 7.8 per 

100,000, and remained relatively 

stable throughout this time period. 

Demographic Characteristics of Opioid-related 

Overdose Deaths (2011-2015) 

One exception was found in 2012, which demonstrated a very slight drop in 

the number and rate compared to adjacent years (7.3 per 100,000). 

The majority of deaths were among Non-Hispanic White residents (81%), 

followed by Hispanic (14%), Asian/Pacific Islander (3%), and African-American 

(1%). Non-Hispanic Whites also had the highest rate with 14.8 per 100,000, 

which was much higher than other racial/ethnic groups.' Nearly half of all 

opioid-involved deaths were between the ages of 45 and 64 (45%). Adults 

aged 45-54 had the highest rate with 13.8 per 100,000. 

'The rate of African-American deaths should be interpreted with caution due to the small population size. 
119 


28931.075

OPIOID SUB-TYPES 

Information regarding the specific 

opioid(s) used were also provided 

by the Coroner. When examining 

oploid--related overdose deaths 

by sub-types, at least one form of 

natural and/or semi-synthetic opioid 

was found in 66% of deaths, or 801 

cases, followed by heroin (n 239; 

20%), methadone (n ~ 177; 15%) and 

synthetic opioids other than methadone (n 139; 12%; Table 6). From 

Opioid Sub-types in Overdose Deaths (2011-2015)' 

2011 to 2015, deaths Involving natural/ TYPE & INTENT OF DRUG USE semi~synthetic opiolds and methadone decreased; however, there was 

an increase 1n heroin and synthetic 

opioids other than methadone (e.g., 

Fentanyl). See the Appendix for a classification of oplold types. The growing 

Examining oplold type (e.g., prescription versus illicit opioids) and the intent 

of use (e.g., intentional or accidental overdoses) can provide evidence for how 

opiold substances were obtained and how the user planned to use these types 

of drugs. !n genera!, 81% of a!! overdoses were accidental, while 16% identified 

as intentional or suicide. Over half of oploid-invo!ved deaths were categorized 

as due to prescription opioid medication overdoses (55%), followed by polytrend among heroin and synthetic drug use or the mixing of opioids with alcohol (26%; Table 7), Deaths co used by 

opiolds are consistent with other iillclt oploids such as heroin accounted for 19% of cases. Additionally, accirecent reports highlighting this nation- dental overdoses accounted for the majority of HHcit1 mixture, and prescription 

wide pattern (Rudd et aL, 2016). opiold overdose death (93%, 88% and 74%, respectively). 

10 
120 


28931.076

Rate per lOOK persons 

2.5-3.6 7.1-9.6 

3.7-7 • 9.7-13.7 

(2011-2015) 

Map 

11 

BY 
121 


28931.077

Opioid Overdose Death Numbers and Rates by Geographic Region and City (2011-2015) 

sGeographlc regions are based on the Behavioral Health Services' Senlice Planning Areas. Cities wlth 20 or fewer cases can lead to unstable rate eslmates <~nd thus should be interpreted with caution. 

12 
122 


28931.078

SUMMARY 

Between 2011 and 2015, there were 7,457 opioid overdose/abuse cases treated In the ED, which averaged to approximately 1,491 ED visits each year. Importantly, 7 of every 10 overdose deaths investigated by the Coroner during 

this five-year period involved opioids (n=1,207 opioid-related overdose deaths), for an average of 241 opioid-related 

overdose deaths each year. 

OPIOID-RELATED 

ED VISITS AND 

HOSPITALIZATIONS 

The rate of opioid-related ED visits 

has more than doubled since 2005, 

increasing to 1,769 cases in 2015. 

Orange County residents were 

more likely to be admitted to 

the hospital for opioid abuse/ 

dependence (77%) or methadone 

poisonings (62%). Conversely, 

cases involving heroin poisoning 

were less likely to be admitted to 

the hospital (20%). 

While males had a higher rate of 

opioid overdoses compared to females (59.1 vs 37.4 per 100,000), 

the rate increased for both males 

(54%) and females (48%) over the 

last five years. 

Majority of hospitalizations were 

Non-Hispanic Whites (78%) 

with a rate of 87.2 per 100,000, 

followed by Hispanics (15%; 21.5 

per 100,000). 

Residents between the ages 

of 18 to 24 and 25 to 34 were 

most likely to visit the ED for an 

opioid-related issue {53%) and 

demonstrated the highest rates 

{133.8 and 82.7 per 100,000, 

respectively). 

Higher ED visit rates were found 

in coastal and southern cities 

{e.g., Dana Point, Costa Mesa, 

San Clemente, Laguna Beach, and 

Laguna Woods). 

*:~ There were nearly 21,000 hospital bed-days with an average 

stay length of 5.1 days- resulting 

in approximately $133 million in 

total charges. 

13 

OPIOID-RELATED 

DEATHS 

·:· Between 2011 and 2015, the 

5-year average rate of opioidrelated overdose deaths was 7.8 

per 100,000 persons and has 

remained relatively level over this 

time period. 

•!" Males had a higher rate of overdose deaths when compared to 

females {9.7 vs 5.9 per 100,000). 

•:* The majority of overdose deaths 

were to Non-Hispanic Whites 

(81%) with a rate of 14.8 per 

100,000, followed by Hispanics 

(14%; 3.2 per 100,000). 

•!• Residents between the ages of 45 

to 54 had the highest overdose 

death rates of 13.8 per 100,000 

with 45% of all deaths in the age 

range of 45 to 64. 

-~'!• Natural or semi-synthetic opioids 

were present in 66% of overdose 

deaths (n = 801). 

•!• Coastal and southern cities 

demonstrated the highest rates 

of opioid-related mortality 

relative to the rest of the 

county (e.g., Laguna Beach, 

laguna Woods, Dana Point, 
123 


28931.079

Costa Mesa, Laguna Niguel, 

Huntington Beach, and 

Laguna Hills), 

There was an increase in the 

number of deaths that occurred 

in southern and central regions 

of the county between 2011 to 

2015 (21% and 20%, respectively), while northern cities had an 

18% decrease. 

The Orange County Health Care 

Agency (HCA) offers several public 

education, treatment, and counseling services aimed at reducing the 

misuse of drugs and alcohoL To support these educational initiatives1 the 

Agency and our partners often host 

events to provide a safe and responsible way for residents to dispose 

of unused prescription medication 

(f1ttp:/(ochealthinfo.comfeh/wa21!U 

med:t~Jl~~Lmedwaste.). 

Emergency medical personnel and 

paramedics have administered over 

1,500 doses of naloxone in each 

of the last two years. Additionally, 

Orange County Emergency Medical 

Services (OCEMS) developed a public 

safety, first responder standing order 

to support the Orange County Sheriff's Department (OCSD) and other 

jurisdiction's implementation of an 

Overdose Prevention Program. For 

example, OCEMS staff partnered with 

OCSD to train more than 150 OCSD 

Deputies to administer prepackaged 

naloxone to unconscious, unrespono/o 

due to 

prescription 

opioids 

sive victims of a suspected opiold 

overdose (after ensuring that 9-1-1 

EMS responders are en route) to help 

reverse effects of these narcotics. 

Our efforts focus on providing 

consumers and professionals in the 

behavioral health field with accurate 

information regarding the potentia! 

risk factors associated with drug 

and alcohol abuse. For more informabon on HCA's Behavioral Health 

Services, please call the informabon 

and referral line at 855-0C-links 

(625-4657) or visit j)J!p__:iL\Yl\'\Y, 

pche aJ!IJ!D1P~~QrnLQclir1_ih'\L14 
124 


28931.080

REFERENCES 

California Department of Justice. (2015}. 

Controlled Substance Utilization Review and 

Evaluation System (CURES) database. Data 

provided by the California Department of 

Justice. For more information see~ 

oag ca.goy/cures, 

Center for Disease Control and Prevention. 

(CDC, 2013a). Opioids drive continued 

increase in drug overdose deaths. Available 

from URL: http:/fwww.cdc goy.medla/re-

!eaaes/2013/o0220 drug oyerdose deaths 

ht!!!J. 

Center for Disease Control and Prevention. 

(CDC, 2013b). Deaths: Final Data for 2010. 

Available from URL: http://www cdc.ggy/ 

nchs/data/nysr/nysr6llnvsr§1 04 tables. 

~. 

Center for Disease Control and Prevention. 

(CDC, 2014). Prescription drug overdose in 

the United States: Fact sheet {online]. Avail~ 

able from URl: http://www.cdc gov/home~ 

andrecreationa!safetv/overdose/facts.html. 

Center for Behavioral Health Statistics and 

Quality. (2016). Results from the 2015 

National Survey on Drug Use and Health: 

Detailed tables. Rockville, MD: Substance 

Abuse and Mental Health Services Admin is~ 

tration. 

Chen, L H., Hedegaard, H., & Warner, M. 

(2014}. Drug-poisoning deaths involving oploid 

analgesics: United States, 1999-2011. National 

Center for Health Statistics. Data Brief, No. 166. 

Available from URl: http·l/www cdc gov/nchs/ 

d ata/databriefs/db16§.pdf. 

Health Policy, Research & Communications. 

(2014). Drug & Alcohol Overdose Hospitalization & Death in Orange County. County of 

Orange Health Care Agency. Available from 

URl: http·/!ochea!th!nfo.com/aboutladmin/ 

~· 

Health Policy, Research, and Communi~ 

cation. (2017). Drug & Alcohol Overdose 

Hospitalization & Death in Orange County. 

County of Orange Health Care Agency. Available from URl: http·//ochealthinfo.com/ 

about/admjn/pubs/od. 

levy, B., Pau!oui, L, Mack, K. A., &Jones, C. 

M. {201S). Trends in Opioid Analgesic-Prescribing Rates by Specialty, US, 2007-2012. 

American Joumal of Preventive Medicine, 

49(3), 409-413. 

National Drug Intelligence Center. (2011). National drug threat assessment. Washington, 

DC: U.S. Department of Justice. 

Office of the Surgeon General. (2016}. Facing 

Addiction In America: The Surgeon General's 

Report on Alcohol, Drugs, and Health. Washington, DC: U.S. Department of Health and 

Human Services {HHS} 

Pauloni, L J., Jones, C. M., Mack, K. A., 

Rudd, R. A. (2011). Vital signs.: Overdoses. 

of prescription opio!d pain relievers~ United 

States, 1999-2008. Morbidity and Mortality 

Weekly Report, 60(43), 1487·1492. 

Rudd, R. A., Seth, P., David, F., & Scholl, L 

(2016). Increases in drug and opioid~involved 

overdose deaths- United States, 2010~2015, 

Morbidity and Mortality Weekly Report, 

65(50-51), 1445-1452. 

Rudd, R. A., Aleshire, N., Zibbel, J. E., & 

Gladden, R. M. (2016), Increases in drug and 

opioid overdose deaths - United States, 

20Q0-2014. Morbidity and Mortality Weekly 

Report, 64(50), 1378-1382. 

Sacks, J. J., Gonzales, K. R., Bouchery, E. E., 

Tomedi, l. E., & Brewer, R. D. (201S}, 2010 

national and state costs of e)(c::essive alcohol 

consumption. American Journal of Preventive Medicine, 49(5), e73~e79. 

US Department of Health and Human 

Services. (2016}; Substance Abuse and 

Mental Health Services Administration (US); 

Office of the Surgeon General (US). Facing 

Addiction in America: The Surgeon Gener~ 

at's Report on Alcohol, Drugs, and Health 

[Internet]. Washington (DC): Available from: 

https:/!www ncbi.n!m nih gov/books/ 

~ 

Vo!kow, N. D., Mclellan, T. A., Cotto, J. H., 

Karithanom, M., & Weiss, S. R. B. (2011). 

Characteristics of opioid prescriptions in 

2009. The Journal of the American Medica! 

Association, 305(13), 1299-1301. 

15 

APPENDIX: 

CLASSIFICATION OF 

OPIOID 

SUB-TYPES 

Semi-synthetic opioids are derived 

from the naturally occurring 

opiates and opium alkaloids (e.g., 

morphine). Fully-synthetic opioids 

such as methadone and fentanyl are 

synthesized from other chemicals 

and molecules that do not come from 

alkaloids found in opium. 
125 


28931.081

NAMI WarmLine 

877-910-WARM (877-910-9276} 

The NAMI Warmline provides telephone-based, non-crisis support for anyone struggling with mental health 

and/or substance abuse issues. Services are available in 

English, Spanish, Vietnamese, Farsi and interpretation for 

other languages is made available upon request. 

24 Hour Suicide Prevention Line 

877-7-CRISIS (877-727-4747} 

The Suicide Prevention Line provides 24-hour, immediate, confidential over-the-phone suicide prevention services to anyone who is in crisis or experiencing suicidal 

thoughts. The service is provided in English, Spanish, and 

Vietnamese, while interpretation for other languages is 

made available upon request. 

Medication Disposal 

http://www.ochealthinfo.com/phs/about/promo/adept 

There are many drop box location sites throughout 

Orange County. Drop boxes offer a safe location where 

people can dispose of unused medications, which can 

help prevent people from using medications that were 

not prescribed to them. In addition, medications can be 

safely destroyed at home. 

Opioid Strategic Plan 

The Orange County Alcohol and Drug Advisory Board 

is working on an Opioid Strategic Plan that will identify 

individual and community needs in Orange County and 

effective strategies to address these needs. In addition, 

the Orange County Board of Supervisors accepted a grant 

for 6,218 doses of Naloxone in July 2011. Naloxone, also 

known as Narcan, is an opiate antagonist used to reverse 

the effects of an opiate overdose. The purpose of the 

grant is to distribute the naloxone locally and potentially 

save lives from opioid overdose. For more information 

on these resources, please visit: 

http:ljwww.ochealthinfo.com/bhs/about/adab. 

16 

SAFE~OC 

http:l/www.saferxoc.org/ 

Working together to save lives. Misuse and abuse of 

prescription drugs is Orange County's fastest growing drug 

problem, with overdose deaths increasing at alarming 

rates- most of them accidental. The harm of substance 

abuse is rippling through our families, schools and workplaces. To stem this epidemic, we have launched SafeRx 

OC, an initiative led by a team of community members 

and experts. 

OC Links 

855 OC-LINKS (855-625-4657} 

www.ochealthinfo.com/ocijnks 

OC Links is an information and referral phone and online chat service to help navigate the Behavioral Health 

Services {BHS) system within the Health Care Agency for 

the County of Orange. Callers are connected to clinical 

Navigators who are knowledgeable in every program 

within the BHS system. This includes children and adult 

mental health, alcohol and drug Inpatient and outpatient 

programs, crisis services, and prevention/early intervention programs. Once a program is identified, the Navigator will make every effort to link the caller directly to that 

program while still on the call or engaged in a chat. 

a iss:olc:·c·iiiis 

• (625-4657) www.ochealthinfo.com/OCLinks 

This information is also available on our website at 

www.ochealthinfo.com/opiojds. 
126 


28931.082

GREG WALDEN, OREGON 

CHAIRMAN 

ONE HUNDRED FIFTEENTH CONGRESS 

FRANK PALLONE, JR., NEW JERSEY 

RANKING MEMBER 

<!Congress of tbt ~nitdJ ~tatcs 

~ouse of ~tpttstntati\les 

COMMITTEE ON ENERGY AND COMMERCE 

2125 RAYBURN HousE OFFICE BuiLDING 

WASHINGTON, DC 20515-6115 

Mr. Douglas Tieman 

President and CEO 

Caron Treatment Centers 

P.O. Box 150 

Wernersville, PA 19565 

Dear Mr. Tieman: 

Majority (202)225-2927 

Minorlty(202)225-3B41 

January 23, 2018 

Thank you for appearing before the Subcommittee on Oversight and Investigations on 

December 12, 2017, to testify at the hearing entitled "Examining Concerns of Patient Brokering 

and Addiction Treatment Fraud," 

Pursuant to the Rules of the Committee on Energy and Commerce, the hearing record 

remains open for ten business days to permit Members to submit additional questions for the 

record, which are attached. The format of your responses to these questions should be as 

follows: (1) the name of the Member whose question you are addressing, (2) the complete text of 

the question you are addressing in bold, and (3) your answer to that question in plain text. 

Also attached are Member requests made during the hearing. The format of your 

responses to these requests should follow the same format as your responses to the additional 

questions for the record, 

To facilitate the printing of the hearing record, please respond to these questions and 

requests with a transmittal letter by the close of business on Tuesday, February 6, 2018. Your 

responses should be mailed to Ali Fulling, Legislative Clerk, Committee on Energy and 

Commerce, 2125 Rayburn House Office Building, Washington, DC 20515 and e-mailed in Word 

format to AlLFul!ing@maiLhouse.gov. 
127 


28931.083

US House Energy Committee on Energy and Commerce 

Subcommittee on Oversight and Investigations 

December 12, 2017 Hearing Entitled: 

Examining Concerns of Patient Brokering and Addiction Treatment Fraud 

Questions for the Record Responses and Member Requests for the Record 

Submitted on Behalf of Doug Tieman, President and CEO of Caron Treatment Centers 

Attachment !-Additional Questions for the Record 

The Honorable Michael C. Burgess 

1. The issue of abusive billing, particularly relating to urine drug tests in the context of this 

hearing, is especially concerning given the costly nature of the issue. In one case in Florida, an 

insurance company was billed $600,000, primarily for drug tests, over the course of just seven 

months. How can we work to limit abusive billing and incentivize insurance companies to get 

involved? 

Caron is greatly concerned about abusive billing practices. These practices undermine the trust 

between providers and payers, and make it more difficult to help patients access the treatment 

modalities and clinically-based practices often required to establish ongoing recovery from addiction. 

Additionally, urine drug screen (UDS) billing may serve as an indication of'a shift in focus from 

providing quality addiction treatment to increasing profits at patient and insurance payer expense. 

Caron's primary concern is for the patients and the quality of care provided to those who are 

subjected to unnecessary urine drug screens (UDS) to such a dramatic extent. While there is a place 

for UDS in substance use disorder (SUD) treatment, excessive testing that is not clinically necessary 

must end. Not only is this an unethical practice, it adds to the barriers to treatment by casting an 

exploitative shadow over the addiction treatment sector of health care as a whole. 

Here are a few federal and industry guidelines related to UDS testing and billing that may help 

mitigate abusive billing practices: 

The Department of Health and Human Services (HHS) Centers for Medicare & Medicaid 

Services (CMS)- Provider Compliance Tips for Laboratory Testing' and Controlled Substance 

Monitoring and Drugs of Abuse Testing2 

The American Society for Addiction Medicine (ASAM)- the Appropriate use of Drug Testing in 

Clinical Addiction Medicine3 

1 

~ 

https://www.cms.gov/Outreach-and-Education/Medicare-learning-Network-MLN/MLNProducts/Downloads/ ProviderCompllanceTipsforlabTests-Other2 https://www.cms.gov/medicare-coverage-database/shared/handters/highwire.ashx?ur!=https://www.cms.gov/ medicare-coverage-database/detal!s/!cddetai!s.aspx@@@LCDfdSSS36029***ContrldSSS238***verSS$11 **"' ContrVerSSS2***CntrctrSelectedSS$238*2***CntrctrSSS238***name$SSCGS+Administrators +llC+f15202 +MAC+-

+Part+B)"'"'"'DocType$$$Active"'"'*sSSS42"'*"'bcSSSAggAAAQAAAAAAAS$$SSS"'"'"'&session= vekzg4vulg312f4Saej30wub&kq=1201395334 3 https:lfiournalsJww.com/lournaladdictionmedlcine/Ful!text/2017/06000/Appropriate Use of Drug Testing in Clinical.l.aspx 

1 I Examining Concerns of Patient Broke ring and Addiction Treatment Fraud Questions for the Recard Response, 

Douglas Tieman~ President & CEO, Caron Treatment Centers 
128 


28931.084

Substance Abuse and Mental Health Services Administration's (SAMHSA's) Center for 

Substance Abuse Treatment (CSAT)- Treatment Improvement Protocol (TIP) Substance Abuse: 

Clinical Issues in Intensive Outpatient Treatment, Appendix B. Urine Collection and Testing 

Procedures and Alternative Methods for Monitoring Drug Use.4 

It is Caron's belief that key points from the above-referenced guidelines could serve as components of 

a quality care standards certification for both substance use disorder treatment and recovery 

residence providers. In addition, Caron supports provider education based on the recommendations 

in the resources listed above for UDS testing as a standard of quality treatment and care to limit 

abusive billing. Key points to highlight include:5•

6 

1. For people in addiction treatment, frequency of testing should be dictated by patient acuity and 

level of care. 

2. Urine drug screening must be ordered by the physician or other eligible professionals who are 

treating the patient. 

3. Drug testing should be scheduled more frequently at the beginning of treatment; test 

frequency should be decreased as recovery progresses. 

4. When a patient is stable in treatment, drug testing should be done at least monthly. Individual 

consideration may be given for less frequent testing if a patient is in stable recovery. When 

possible, testing should occur on a random schedule. 

5. Weekly random drug testing is appropriate in a recovery residence. (Any patient expelled from 

a recovery residence should be able to continue an ongoing therapeutic relationship with his 

or her outpatient addiction treatment provider.) 

6. Drug testing during and after tapering from methadone or buprenorphine continues to be an 

important way to support a patient's recovery; providers may want to consider increasing drug 

testing frequency during tapering and in the period after tapering. 

7. The physician or other eligible professionals who ordered the test must maintain 

documentation of medical necessity in the beneficiary's medical record. 

8. Providers should seek to work with a laboratory that has expertise in drug testing in addiction 

treatment settings and should be aware of the costs of different test methods. 

9. When selecting a laboratory, providers should investigate whether state law requires a specific 

certification. 

10. It is important to work with a laboratory qualified to perform accurate tests and assist in the 

interpretation of results. 

11. Because drug testing should be individualized, laboratories should allow providers to order 

specific tests for each patient. 

12. Entities submitting a claim must maintain documentation received from the ordering physician 

or non-physician practitioner. 

4 1'1ttps://www.ncbi.nlm.nih.gov/books/NBK64092/ 

s Jarvis, Margaret MD, DFASAM; Williams, Jessica MPH; Hurford, Matthew MD; lindsay, Dawn PhD; lincoln, Piper MS; Giles, leila BS; Luongo, Peter PhD; 

Safarlan, Taleen BA. (May/June2017). Appropriate Use of Drug Testing in Clinical Addiction Medicine. Retrieved from 

https://iournals.lww.com/journaladdictionmedicine/Ful!text/2017/06000/Appropriate Use of Drug Testing in Clinical.l.aspx 5 Department of Health and Human Services, Centers for Medicare & Medicaid Services. (n.d.). Provider Compliance Tips for laboratory Tests- OtherUrine Drug screening. Retrieved from https:Uwww.cms.gov/Outreach-and-Education/Medicare-learning-Network-MLN/MLNProducts/Downloads/ 

ProviderComplianceTipsforlabTests-Qther-ICN909412.pdf 

2 1 Examining Concerns of Patient Broke ring and Addiction Treatment Fraud Questions for the Record Response, 

Douglas Tieman, President & CEO, Caron Treatment Centers 
129 


28931.085

Caron believes that most insurance companies are engaged on this issue and are looking for ways to 

reduce abusive billing practices. As noted above, guidelines are available in relation to appropriate 

clinical use of UDS in addiction treatment. As substance use disorders and treatment become more 

widely acknowledged and accepted as a sector of health care, further defining the medical necessity 

guidelines of UDS may facilitate further insurer engagement. 

The Honorable Michael C. Burgess 

2. Insurance companies are at the forefront of abusive billing practices. Would a practice such as 

requiring consent from a patient or a referral for out-of-network services be effective in 

preventing beneficiaries from enrolling in ineffective treatment programs or schemes? 

Ideally, a patient would obtain a referral for substance use disorder (SUD) treatment from a primary 

care provider to a board-certified addiction medicine physician, like any other illness requiring 

specialized care. However, most health care providers lack the information and training to adequately 

identify, assess, or refer a patient in need of SUD treatment. The fact that individuals and families turn 

to the internet as the primary source of information and access to treatment indicates a lack of 

adequate training for health care professionals, as well as the overwhelming stigma associated with 

this disease. Another obstacle for those seeking treatment is a lack of knowledge and understanding 

about insurance coverage for SUD treatment. From our conversations with Independence Blue Cross 

(IBC} and Cigna, we have learned that driving policyholders to their websites for addiction treatment 

information is a challenge. As part ofthe solution to this dilemma, an insurer may consider utilizing 

predictive modeling to send information about policy SUD coverage and in-network providers to some 

policyholders. 

Since the window of opportunity when an individual or family is ready to access treatment is quite 

brief, the additional step of obtaining a referral can create delays and barriers to obtaining care. 

Unfortunately, due to the nature of SUD, a delay in accessing treatment can be deadly. 

Due to the interstate nature of insurance fraud and patient broke ring, determining the appropriate 

federal response, coordination, and responsibility is imperative. Caron recommends: 

Immediate action by examining internet search provider marketing practices to prevent 

beneficiaries from enrolling in ineffective treatment programs or schemes. 

Prioritizing anti-kickback legislation, similar to what is in place for publicly funded health care, 

to protect commercial insurance companies. 

The issue of patient brokering/human trafficking must also be addressed and supported by 

heavy financial penalties for violators. 

Long-term engagement with the Department of Education to fund and mandate evidencebased addiction prevention education for all children K-12 as part of the health curriculum. 

Additionally, SUD identification and referral to treatment should be an educational requirement 

for all health care professionals to obtain licensure and certification. 

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The Honorable Michael C. Burgess 

a. What role do you think Insurers can play in preventing or avoiding fraudulent billing 

practices while protecting their beneficiaries? 

IBC and other insurers often have robust data-driven warning flags in place to track claims submissions 

trends. Insurers are also refocusing fraud investigations to address suspicious billing from SUD : 

treatment providers. Caron is aware of at least one other insurer that is reaching out to large 

employers to provide education on this issue as a method to prevent policyholders from falling victim 

to unethical schemes. 

Caron recommends insurers partner with in- and out-of-network treatment providers to strategize and 

bridge solutions. Providers and payers must have a level of agreement regarding ethical, evidencebased treatment. 

The Honorable Michael C. Burgess 

3. You outlined in your testimony that "we must certify evidence-based treatment standard 

practices and outcomes, and treatment providers to safeguard that individuals and families 

seeking substance use disorder care are receiving the medical attention needed to manage 

recovery of this chronic disease." When there are so many bad actors present online and in 

person, how can we ensure that patients are obtaining reliable information and that insurance 

companies are effectively collecting billing data to detect fraud and abuse occurring? 

Sy Syms used to say, "An educated consumer is our best customer." Individuals and families looking for 

reliable addiction treatment information often fall prey to unethical marketers and treatment 

providers because they lack a good understanding about the chronic disease of addiction and are 

uninformed about what to look for when seeking treatment. In short, they don't know what to look for 

and they don't know how to find it. 

Although some progress has been made with internet search providers, the measures to address 

predatory advertising are limited in scope and offer little protection from unethical marketers. The 

most significant change has been ensuring the National Helpline7 from the Substance Abuse and 

Mental Health Services Administration (SAMHSA) appears at or near the top of the results page when 

performing a search for "rehabs near me." The National Institutes of Health (NIH) also offers concise 

information for finding and evaluating online resources. including questions to ask when evaluating a 

health-related web site. 8 However, to date, a vetted, reliable, and current list of ethical treatment 

providers does not exist. 

The addiction treatment sector of health care is in the midst of significant growing pains. As a sector, 

the National Association of Addiction Treatment Providers (NAATP) is a strong example of an 

organization that defines quality treatment and ethical standards in addition to requiring members to 

attest that they have read, understand, and agree to adhere to the NAATP Code of Ethics. 9 Licensing 

7 httos://www.samhsa.gov/flnd-help/national-belp!ine 

8 https://nccih.nih.gov/health/webresources#key 

9 https://www.naatp.org/resources/ethics/code-eth!cs 

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and certification regulations vary from state to state. Caron supports the development and 

implementation of something akin to the Centers for Medicare & Medicaid Services' (CMS's) Five -Star 

Quality Rating System10 for addiction treatment providers. Additionally, Caron recommends the 

passage of necessary state and/or federal regulations making it illegal to provide false or misleading 

information about substance use treatment providers intended to lure or misdirect individuals or 

family members seeking care. 

Caron supports the long-term solution of early intervention via routine screening for those at risk of 

developing SUDs. Incorporating screening and early intervention into routine health care practice and 

into health services offered through schools is an effective approach to reduce risky substance use and 

the development of addiction." Screening, Brief Intervention, and Referral to Treatment (SBIRT) is an 

evidence-based practice used to identify, reduce, and prevent problematic use, abuse, and 

dependence on alcohol and illicit drugs. 

Caron believes that education is key to resolving the addiction crisis. Currently, most health care 

professionals typically receive fewer than 10 hours in addiction-specific training. At Caron, we believe 

that this paradigm needs to shift to ensure that health care professionals are armed with the 

information they need to proactively prevent the onset of addiction wherever possible and to facilitate 

access to treatment when appropriate. 

Caron recommends: 

1. National implementation of universal school-based SBIRT for all gth graders. 

2. Educate health care professionals and the American public: 

a. To recognize the risk factors and warning signs of SUDs 

b. To understand that addiction is a chronic disease, not a moral failing 

c. Where to find accurate information if you or someone you know has a problem and may 

need help 

d. To know patients' rights in SUD care 

e. To know what good treatment is and what to look for in a treatment center. 

The Honorable Michael C. Burgess 

4. You have argued that non-profits and for-profits should work together in order to ensure 

transparency and outcomes for patients and their families. I think that this is a noble cause. How 

many other providers have you worked with to create these standards and how do you expect 

they will affect the industry as a whole? 

Caron is very active with the National Association of Addiction Treatment Providers (NAATP), serving 

on its Board of Directors and engaging in the development of NAATP's Quality Assurance lnitiative.12 

10 https://www.cms.gov/Medicare/Provider-Enro!lment-and-Certification/CertificationandComplianc/FSORS.html 

11 Guide for Policymaker.s: Prevention, Early Intervention and Treatment of Risky Substance Use and Addiction. (December 2015). Retrieved from 

https://www.centeronaddiction.org/addiction-research/reports/guide-po!icymakers-prevention-early-lntef"'lentlon-and-treatment-riskv 

u https://www.naatp.org/resources/news/naatp-launches-new-year-ethics-code-20/ian-8-2018 

5 I fxamining Concerns of Patient Brakering and Addiction Treatment Fraud Questions far the Record Response, 

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NAATP is supported by hundreds of addiction treatment provider members." Caron also serves on the 

Boards ofthe Drug & Alcohol Service Providers Organization of Pennsylvania (DASPOP) and the Florida 

Alliance for Recovery. Plus, Caron and Hazelden Betty Ford Foundation collaborate quite often. 

In addition to the provider organizations above, Caron collaborates and supports the efforts of a 

number of other advocacy groups and federal agencies including: Addiction Policy Forum (APF), 

American Society of Addiction Medicine (ASAM), Collaborative for Effective Prescription Opioid Policies 

(CEPOP), Faces & Voices of Recovery (FAVOR), Facing Addiction with NCADD; Institute for Behavior & 

Health (IBH), National Council for Behavioral Health (The Council), and Shatterproof to name some of 

them; plus, National Institute on Drug Abuse (NIDA) and National Institute on Alcohol Abuse & 

Alcoholism (NIAAA). 

Through Caron's work with other providers, advocacy groups, and Federal agencies, it is our hope to 

improve transparency for both patients and insurance companies to ensure that what is promised on 

websites is, in fact, what is delivered and with no surprises related to billing. Ultimately, we are 

working in partnership to create a transparent sector of health care. 

The Honorable Frank Pallone, Jr. 

1. What kind of treatment are patients pulled into patient brokering schemes receiving at these 

facilities, and how do these schemes cause roadblocks in their recovery process? 

Treatment for patients pulled into patient brokering schemes vary by provider. From Caron's 

perspective as a treatment provider, there are three levels of providers who participate in unethical 

practices: 

1. Ignorance- providers who truly are simply unaware of what business and treatment 

practices are considered unethical or use outside firms for marketing and are unaware that 

patient brokers are working on their behalf 

2. Ends justify the means- providers who deliver quality care, but need to fill beds to be 

financially solvent, or who may "color outside the lines" when it comes to insurance billing 

to help a patient remain in treatment longer to stabilize their recovery. 

3. Disregard- providers who know and understand ethical business and treatment standards, 

but overlook what is in the best interest of the patients or best practices, or refuse to adopt 

industry proposed quality measures for financial reasons. 

In some cases, potential patients are considered "leads". Since patient brokers and lead generators are 

paid by the lead, patients are referred to the highest bidder. When individuals in crisis are essentially 

sold as products, they may be sent to a treatment center that does not meet their clinical needs. 

Imagine if this were the case with any other chronic disease, for example individuals seeking treatment 

for heart disease, asthma, diabetes, or even cancer. 

13 ~ttps://www .naatp.org/resources/addiction-industry-directorv 

6 I Examining Concerns of Patient Brokering and Addiction Treatment Fraud Questions jar the Record Response, 

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The most widely abused treatment scheme that Caron is aware of consists of a recovery residence 

engaged in an undisclosed financial arrangement with a substance use disorder treatment provider. 

These types of arrangements have been highlighted in the press as the most frequent source of antikickback and insurance billing fraud violations. 

Patients who do not receive adequate treatment: 

• Are more likely to suffer a relapse 

Become disenchanted by treatment, and less likely to seek further treatment 

• Are drained of financial resources and insurance coverage for treatment 

Are more likely to die from complications of SUD or overdose because addiction is a chronic 

and progressive disease. 

The Honorable Frank Pallone, Jr. 

2. I understand that Caron Treatment Centers' online profile was hijacked by a third party in an 

apparent attempt to redirect patients. How prevalent do you believe these tactics are in patient 

broker schemes? 

Based on Caron's experience and through anecdotal evidence, Caron believes these tactics are 

widespread. Unfortunately, concrete numbers are difficult to determine since there is currently no way 

to track how many individuals and families have been diverted or misdirected. Unless addiction 

treatment providers search their own names daily, or several times a day, the only other way to know 

if a phone number or facility name has been hijacked or pirated is if we are informed by individuals, 

families, or referring providers. Caron conducts these searches on a regular basis. 

An advisory memo from the Pennsylvania Department of Drug & Alcohol Programs about this issue is 

attached at the end ofthis document for your reference. Although this is dated from 2016, it indicates 

the scope of the problem. Caron is currently not aware of any further steps taken by the 

Commonwealth of Pennsylvania to address the marketing element ofthese schemes. The interstate 

nature of internet marketing, patient brokering, and insurance fraud is likely contributing to the delay 

in a comprehensive response. 

Caron does recognize that the issue is prevalent enough that the internet search engine Google has 

had to revisit its practices around paid searches utilizing certain key words twice within less than one 

year. 

The Honorable Frank Pallone, Jr. 

3. What do you believe can be done to address the issue of frequent and excessive urine drug 

testing, which appears to be a key component of patient broker schemes? 

7 I Examining Concerns of Patient Brokering and Addiction Treatment Froud Questions for the Record Response, 

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Please see Caron's response to The Honorable Michael C. Burgess' question #1. 

The Honorable Kathy Castor 

1. What treatments have you seen that have had the most success for individuals in recovery and 

how can we ensure that patients have access to the treatment that will work for them? 

There is no single SUD treatment that works best for all individuals. Treatment of SUD must address 

the chronic nature ofthe disease and be individualized for each patient's needs. Treatment needs to 

incorporate the psychological, social, behavioral and physical aspects of the disease to be managed 

successfully. Because SUD is a chronic disease, it is a disease of remission and relapse. Therefore, 

relapse, which has traditionally been viewed as a failure oftreatment, is now understood to be a part 

of the disease that can be successfully managed. 

According to the National Center on Addiction and Substance Abuse (CASA), in Addiction Medicine: 

Closing the Gap Between Science and Practice, of those who do receive treatment, few receive 

anything that approximates evidence-based care. This compares with 70% to 80% of people with such 

diseases as high blood pressure and diabetes who do receive treatment. This report exposes the fact 

that most medical professionals are not sufficiently trained to diagnose or treat the disease, and most 

ofthose providing addiction care are not medical professionals and are not equipped with the 

knowledge, skills or credentials necessary to provide the full range of effective treatments. 

Misunderstandings about the nature of addiction and the best ways to address it, as well as the 

disconnection of addiction medicine from mainstream medical practice, have undermined effective 

addiction treatment. 14 

It is Caron's belief that until substance use disorders and addiction treatment are truly incorporated 

into the medical profession and health care industry, ensuring that patients have access to the 

treatment that will work for them will continue to be a challenge. With full incorporation as a sector of 

health care, patients will have access to necessary the assessments and evaluations to determine the 

most appropriate level of care. 

The Honorable Kathy Castor 

2. It seems some providers seek to profit on failure of a treatment rather than on long term 

recovery. What can we do to break the cycle? In other words, how can we incorporate incentives 

that provides for positive results? 

The simplest answer is a model that adequately reimburses treatment providers for patients to achieve 

and maintain a level of successful chronic disease management. This type of model would provide 

coverage and reimbursements to incentivize all levels of care, from identification and assessment 

through recovery supports. 

14 https://www.centeronaddiction.org/addiction-research/repo:rts(_~~djc:~!Cl""medi~!~e-clgsin&t·gap-between-science-and-p_r~ctice 

8 1 Examining Concerns of Patient Broke ring and Addiction Treatment Fraud Questions for the Record Response, 

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Attachment 2-Member Requests for the Record 

The Honorable Gregg Harper 

1. Throughout the hearing, there were several questions regarding which states have patient broker 

laws and the specifics of those laws. Please provide the committee with a list and short 

description of all current state laws or proposed legislation in Pennsylvania that address patient 

brokering. 

To the best of Caron's knowledge, through outreach and dialog with others, Pennsylvania has not 

passed a law, nor proposed legislation, specifically to address patient brokering. However, PA Act 

59 of 2017 includes regulations that may deter patient brokering, stating; 

(4) A policy that no drug and alcohol recovery house owner, employee, house officer or 

individual related to a drug and alcohol recovery house owner, employee or house officer shall 

directly or indirectly solicit or accept a commission, fee or anything of monetary or material 

value from residents, other related individuals, third party entities or referral sources, beyond 

specified rent established in writing at the time of residency.15 

For more information, Caron recommends contacting DASPOP for more information at (717) 652-9128 

or dasdbeck@hotmail.com. 

The Honorable Gregg Harper 

Z. During the hearing, gaps in the federal anti-kickback statute as it applies to non-Medicaid 

facilities were discussed. Please provide a list of all current state laws or proposed legislation in 

Pennsylvania addressing anti-kickback statutes applying to commercial insurers and nonmedical 

facilities. 

Pennsylvania's current anti-kickback statues under 18 Pa. Cons. Stat. Ann.§ 4117(b)(2) state: 

(2) With respect to an insurance benefit or claim covered by this section, a health care 

provider may not compensate or give anything of value to a person to recommend or secure 

the provider's service to or employment by a patient or as a reward for having made a 

recommendation resulting in the provider's service to or employment by a patient; except that 

the provider may pay the reasonable cost of advertising or written communication as 

permitted by rules of professional conduct. Upon a conviction of an offense provided for by 

this paragraph, the prosecutor shall certify such conviction to the appropriate licensing board 

in the Department of State which shalt suspend or revoke the health care provider's license. 

(3) A lawyer or health care provider may not compensate or give anything of value to a person 

for providing names, addresses, telephone numbers or other identifying information of 

individuals seeking or receiving medical or rehabilitative care for accident, sickness or disease, 

except to the extent a referral and receipt of compensation is permitted under applicable 

professional rules of conduct. A person may not knowingly transmit such referral information 

~ http:://www legis.s~ate.pa,us/cf~ocs/legi_slli/uconsCheck dm?vr=2017&sesslnd=Q&act=59 

9 I Examining Concerns of PaUent Brokering and Addiction Treatment Fraud Questions for the Record Response~ 

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to a lawyer or health care professional for the purpose of receiving compensation or anything 

of value. Attempts to circumvent this paragraph through use of any other person, including, 

but not limited to, employees, agents or servants, shall also be prohibited. 

(4) A person may not knowingly and with intent to defraud any insurance company, selfinsured or other person file an application for insurance containing any false information or 

conceal for the purpose of misleading information concerning any fact material thereto. 16 

To the best of Caron's knowledge, there is no proposed legislation in Pennsylvania relating to antikickback statutes for the current legislative session to date. For more information, Caron recommends 

contacting DASPOP for more information at (717) 652-9128 or dasdbeck@hotmail.com. 

16 http://www.!egls.state.pa.us/cfdocs/legis/UkonsCheck.ctm?txtTVpe=HTM&W=lS~div=O&_chpt=41&sctn=17&subsctn=O# 

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MPORTANT: Incorrect Routing of Calls for Treatment Placement 

Smith, Jennifer S (DDAP) 

Wed 11/9/2016 1:14 P.M. 

Reply! 

··············•***********************************"*"***** 

Good afternoon, 

DDAP would like to make SCAs and treatment providers aware of an issue that has been occurring 

more frequently over the past few days. Individuals from the general public have been using Google to 

locate treatment providers and/or SCAs and the phone number Google shows for the facility 

is NOT that of the SCA/provider. In fact, in all of the instances brought to DDAP's attention, the 

phone number is answered by an entity referring to themselves as "Treatment & Addiction Helpline" 

where a recorded voice asks the caller to select I or 2 based on whether the caller has "government 

insurance" or private insurance. If the caller selects the option for "government insurance" the call is 

rerouted to an agency referring to themselves as the "recovery helpline" and the caller is again asked to 

select whether they have private insurance or government insurance. 

When selecting government insurance, the recording says "I'm sorry. We can't help you with 

inpatient treatment" or "I'm sorry. We only accept private insurance." At that point the recording 

directs the caller to contact 800-662-HELP, which is SAMHSA's number that is currently answered by 

DDAP for PA callers but will be answered by our hotline, PAGet Help Now, as of tomorrow 

I 1110/16. When the caller gets to DDAP, they believe they've reached the SCA!provider they initially 

googled. DDAP gives the caller the correct number for the SCA/provider. 

When an individual selects "private insurance" the call is picked up by someone from an agency that 

calls itself "National Treatment Program" or "National Treatment Referral Network". Callers' 

experience has been the individual that is taking the call is often abrupt and tells the caller if he/she 

wants inpatient treatment he/she will need to go to Florida. Callers who have questioned the individual 

from "National Treatment Program" or "National Treatment Referral Network'' have had their calls 

terminated and/or met with a rude response. 

As DDAP became aware of this issue, staff were attempting to alert the SCA!provider; however, the 

number of callers who have been misdirected has increased significantly today, so it has become 

impossible for DDAP to reach out to each impacted SCA/provider individually. It appears there is an 

option on Google where the SCA/provider can suggest an edit to the incorrect information and by 

doing so, you can select scam/scammer as the reason for the change. Again, as DDAP receives calls, 

we are giving the caller the correct contact information for the SCA/provider and when the calls 

transfer to PAGet Help Now tomorrow, staff will also have access to the correct phone numbers for 

the SCAs and providers, but your agency may want to attempt to take correct the information on the 

web search engines whenever possible. 

Thank you for your attention to this matter. 

Jennifer S. Smith I Deputy Secretary 

Department of Drug and Alcohol Programs 

02 Kline Village I Harrisburg, P A 1 7104 

Phone: 717.736.75131 Fax: 717.787.6285 

!!~' .<ld~p.oa.~!!l 

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GREG WALDEN, OREGON 

CHAIRMAN 

ONE HUNDRED FIFTEENTH CONGRESS 

FRANK PALLONE, JR., NEW JERSEY 

RANKING MEMBER 

(ltongress of tf)e ltniteb .i>tates 

~ouS'e of ~epreS'entatibeS' 

COMMITTEE ON ENERGY AND COMMERCE 

2125 RAYBURN HousE OFFICE BuiLDING 

WASHINGTON, DC 20515--6115 

Mr. Pete Nielsen 

Executive Director 

Majority ~202) 225-2927 

Minority (202) 225-3641 

January 23, 2018 

California Consortium of Addiction Programs and Professionals 

2400 Marconi Avenue, Suite C 

Sacramento, CA 95821 

Dear Mr. Nielsen: 

Thank you for appearing before the Subcommittee on Oversight and 

Investigations on December 12, 2017, to testify at the hearing entitled "Examining Concerns of 

Patient Brokering and Addiction Treatment Fraud." 

Pursuant to the Rules of the Committee on Energy and Commerce, the hearing record 

remains open for ten business days to permit Members to submit additional questions for the 

record, which are attached. The format of your responses to these questions should be as 

follows: (I) the name of the Member whose question you are addressing, (2) the complete text of 

the question you are addressing in bold, and (3) your answer to that question in plain text. 

Also attached are Member requests made during the hearing. The format of your 

responses to these requests should follow the same format as your responses to the additional 

questions for the record. 

To facilitate the printing of the hearing record, please respond to these questions and 

requests with a transmittal letter by the close of business on Tuesday, February 6, 2018. Your 

responses should be mailed to Ali Fulling, Legislative Clerk, Committee on Energy and 

Commerce, 2125 Rayburn House Office Building, Washington, DC 20515 and e-mailed in Word 

format to Ali.Fulling@mail.house.gov. 
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Attachment !-Additional Questions for the Record 

The Honorable Michael C. Burgess 

1. The issue of abusive billing, particularly relating to urine drug tests in the context 

of this hearing, is especially concerning given the costly nature of the issue. In one 

case in Florida, an insurance company was billed $600,000, primarily for drug tests, 

over the course of just seven months. How can we work to limit abusive billing and 

incentivize insurance companies to get involved? 

Urine testing should abide by best practice parameters, with justification, should there be 

an increased need for frequency of testing. Urine testing is a necessary tool to assist in 

the individual's recovery, but should be done correctly. This can be accomplished by 

having insurance companies adopt recommended testing frequency guidelines published 

by the American Society of Addiction Medicine (ASAM) and cap all reimbursements for 

testing to Medicare rates. 

2. Insurance companies are at the forefront of abusive billing practices. Would a 

practice such as requiring consent from a patient or a referral for out-of-network 

services be effective in preventing beneficiaries from enrolling in ineffective 

treatment programs or schemes? 

This is a double edged sword because, on one hand we have treatment facilities taking 

advantage of insurance companies with abusive billing practices, and on the other, we 

have insurance companies denying reimbursement to treatment facilities for medically 

necessary and physician recommended courses of treatment for this life threating disease. 

Many times insurance companies will dispute medical necessity after three days of 

treatment, forcing the beneficiary, who may have benefits at a lower (and less expensive) 

level of care. Unfortunately, insurance companies often do not have qualified care 

managers making medical necessity and appeal decisions. A tremendous improvement to 

the insurance payment system would be to require that individuals making coverage 

decisions for care have competency in addiction. One way to accomplish this would be 

to require physicians with ASAM certification be required to oversee treatment 

decisions, particularly where there are disputes between clients and insurance companies. 

Optum Care Medical Group now requires consent from the patient in order to verifY 

benefits and to seek authorization for out of network admissions. This practice is 

beneficial to the patient for privacy reasons, and to keep the patient informed of who will 

be billing for treatment services. Its application to preventing beneficiaries from 

emolling in ineffective treatment programs or schemes would not be a likely deterrent 

because being an out of network provider has little to do with whether a program is 

effective or ineffective. 

Our organization is considering an initiative that would create an "exchange" for 

addiction providers where placement criteria aligned to ASAM, would be required for 

providers to participate. In order for insurers to participate they would need to accept 

treatment protocol approved by ASAM certified physicians. Additionally, providers 

would be required to complete ethical treatment standards coursework and could be 
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removed from the exchange when unethical behavior, including inappropriate treatment 

referrals, is found to have occurred. 

3. What role do you think insurers can play in preventing or avoiding fraudulent 

billing practices while protecting their beneficiaries? 

Insurance companies need to do a better job understanding the types of addiction 

treatment in the continuum of care. This will entail a better working relationship between 

insurers and treatment professionals. One example of how the lack of knowledge leads to 

abusive billing is billing for services via two concurrent modalities of care. When 

patients have been admitted to "all-inclusive" levels of care, providers should not be 

concurrently billing for claims for professional services that should be included as "all 

inclusive." For example, claims for patients in Residential Treatment Center (RTC) and 

Partial Hospitalization Program (PHP) levels of care should never bill for individual 

professional services (by providers associated with that RTC or PHP program) that 

should be included in the RTC and PHP per diem rates. This should not prevent patients 

from continuing to see their outpatient provider while in treatment, but rather prevent a 

facility from double billing for RTC/PHP and having a therapist/psychologist associated 

with the program also bill. Again, having qualified professionals with a competency in 

addiction treatment overseeing the care (e.g. ASAM physician, licensed addiction 

counselor, addiction psychologist/psychiatrist) would reduce these billing abuses. 

4. Mr. Nielsen, in your testimony, you explained that sober homes do play a role in 

substance abuse treatment, but that they need to have rules. You later stated that it 

is important that the industry be able to support itself with minimal oversight. 

What kind of legislative approach might allow us to drive out bad actors while 

allowing for the development of safe and effective sober homes in a minimally 

burdensome environment? 

Legislation that encourages recovery residence certification by a certifying organization 

that uses National Alliance for Recovery Residence (NARR) standards is certainly a step 

in the right direction. Recovery residences that are not associated with any type of 

treatment program should be treated exactly as any other congregate living (roommate) 

situation. Imposing complex rules or health care licensing parameters on recovery 

residences that are not associated with, or receive funding from, any healthcare provider 

will drive up operating costs and reduce access to supportive recovery housing that is 

essential to long term recovery. Stand-alone sober living homes provide a much needed 

service and are absolutely not part of the problem. 

Federal law regarding employment protection for persons with addiction is very clear. 

When a person claiming protection is no longer maintaining sobriety, employers are no 

longer required to provide protection required by statute. Recovery residences should be 

held to the same standard. A home that maintains certification has a positive defense that 

should be protected by statute. Problem homes, who cannot abide by certification 

standards, should lose their protection. Homes that are not shown to be "bad actors" 

should be left alone. Essentially, if an individual claims protection, there are rules to 

maintain this protection. There is no parallel for residences. Any group of people can 

claim the protection and there is no way to remove it. 
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The Honorable Frank Pallone, Jr. 

1. Because some bad actors are taking advantage of the sober home model, how can 

good actor sober homes differentiate themselves from the bad ones? 

Most "good" sober living homes go unnoticed in neighborhoods. As the need for recovery 

residences increases consumers have very little in the way of resources to identify safe 

homes for loved ones. Private or public certification that is voluntary allows homes that 

wish to be distinguished by a "seal of approval" to come forward and identify themselves 

for consumers. Certification requires quality and safety measures, including a good 

neighbor policy, maintenance of a recovery environment, and a safe and healthy physical 

environment. These homes are an asset to the community. "Bad actors" are often times be 

associated with a treatment center. The recovery residences that are influenced by greed 

will always be associated with, or receive money from, a treatment center. Stand-alone 

recovery residences are not structured to make substantial short term gains. Recovery 

residences have existed as long as people with addiction have been excluded from their 

homes due to the consequences of addictive behavior. They will always exist because they 

provide a much needed service; one that will be in demand again after the bad actor 

treatment centers go away. 

2. How can voluntary certification help patients seeking treatment for substance use 

disorders distinguish legitimate facilities from bad actors? 

In California recovery residences do not provide treatment. They are strictly residences. 

Recovery residences that choose to list availability of housing can choose to agree to being 

displayed on a public website. The certifying organization's website typically displays 

only certified recovery residences in good standing. Certification also allows consumers 

to lodge complaints so that "bad" sober living homes can be identified and either trained 

to correct deficiencies or revoked, which would be displayed on the public website to 

discourage potential residents from selecting it. The certifying organization typically 

requires that all homes certified post a complaint phone number that goes directly to the 

certifying organization. This number is also published and posted at locations in the 

community so that members of the community could report to certifying organization any 

complaints or concerns. The certifying organization also performs scheduled, unscheduled, 

and complaint driven inspections. If a home is found to be in violation of the certifying 

organization's standards it could be suspended or revoked. This information is then 

displayed on the certifying organization's web site to inform the public of the horne's 

status. 

3. What can be done to improve the voluntary certification process? Are better 

standards needed? 

The most effective way to encourage participation in a voluntary certification program is 

to provide preferential referrals to certified residences, for example, requiring that all 

licensed programs refer only to certified residences. 

As for evolving standards, NARR continuously assesses its standards, on a periodic basis, 

to ensure that they are implementable, provide safe environments, and encourage 

participation. The third version ofNAAR standards will be introduced by year's end. 
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4. What else can be done to bring more accountability to sober homes? 

A stigma reduction campaign to assist communities in becoming more "recovery friendly" 

would greatly aid in improving accountability in sober living. If the public could help to 

distinguish bad homes from good, resources could be focused on problem homes rather 

than all homes. When community members associate all homes with bad homes, code 

enforcement resources are wasted on harassing and stigmatizing residences that should 

come to be a natural part of any neighborhood. If communities and local government could 

learn what "good" sober living looks like, they could lodge legitimate complaints about 

homes that harm people and impact communities. 

5. What resources would help your Consortium's members to distinguish themselves as 

legitimate treatment providers and recovery residences? 

Funding that would incentivize volunteer certification would help strengthen recovery 

residences. Funding for technical assistance for our members to improve quality of care 

and stay current with changes in the industry would also be a benefit. 

The Honorable Kathy Castor 

1. What treatments have you seen that have had the most success for individuals in 

recovery and how can we ensure that patients have access to the treatment that will 

work for them? 

People achieve sobriety and remain in long term recovery through a wide variety of 

means. Some have accomplished this in religious based programs; via 12 step recovery 

meetings and step work with sponsors; through social model residential and outpatient 

treatment programs; or through medical model treatment programs including clinics that 

conduct medically assisted treatment (MAT). Since recovery is a highly individualized 

process, there is not one single path to achieve sobriety and maintain recovery. All 

healthy approaches to recovery should be embraced. Since the words "treatment" and 

"recovery" were both used in the question, it is important to distinguish the two. 

Recovery is the overall healing process by which people move from a state of being 

unwell toward wellness. Formal treatment may or may not be a part of the recovery 

process. When we are talking about formalized treatment (medical model or medical 

model mixed with aspects of social model that receive public funds), a full continuum of 

care founded on evidence based practices for addiction, case management, recovery 

services, the availability of recovery residences, and connection to other ancillary 

services equips clients with the greatest chance for recovery success (see section B of 

question 2 for further explanation). For reference please refer to John Herdman's book, 

12 Core Functions for descriptions of counseling and treatment, and refer to the 

American Society of Addiction Medicine (ASAM) Patient Placement Criteria for 

appropriate level of care protocol for individuals needing treatment. 

2. It seems some providers seek to profit on failure of a treatment rather than on long 

term recovery. What can we do to break the cycle? In other words, how can we 

incorporate incentives that provide for positive results? 
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The key is to have a treatment program that puts people before profits. These programs 

have staff who genuinely care about client success; client success allows them to attract 

dedicated and talented professionals to their programs and maintain a solid community 

reputation, which creates long term viability for a program. 

The reason that SUD treatment often appears to be a revolving door with low success rates 

is two-fold: 

a) Misunderstanding of the Disease of Addiction- Public ignorance about the 

chronic, relapsing nature of the disease of addiction, or outright refusal to recognize 

addiction as a chronic disease of the brain that often involves relapse like other 

common chronic diseases such as diabetes, high blood pressure, and asthma, plays a 

large role in the perception that treatment is either ineffective or is designed to fail in 

order to financially benefit those who profit from its treatment. Rarely would a 

physician treating diabetes be accused of profiting due to failure of his or her 

patients. 

When the chronic and relapsing nature of the disease of addiction is not understood 

or acknowledged a false paradigm, namely, that SUD treatment programs can 

inoculate individuals against relapse, essentially "curing" the disease is propagated. 

No other treatment of a chronic, relapsing medical problem is tethered to such an 

expectation. This expectation is stigma, plain and simple. Even more unrealistic is 

the notion that if the treatment programs use evidence based treatments and provide 

clients with all the support and tools they need, the client will be 100% successful 

after the first attempt at treatment. Treatment cannot be completely formulized into a 

"cookie cutter" model that works for all clients because clients have diverse 

psychological, social, and medical needs which require individualized treatment 

plans for both short term and long term recovery. 

While treatment does work and can be improved to be made more effective through 

research and improved scientific treatment models and evidenced based practices, the 

nature of the disease of addiction, unfortunately, often (not always) requires multiple 

treatment episodes and a lifetime of recovery maintenance once stabilization is 

achieved. Healing, as with other diseases often involves multiple attempts and 

requires client cooperation. Relapsing after a period of sobriety following treatment 

is not a treatment failure in that the client has not lost the tools he or she obtained 

during the course of treatment. The common nature of relapse and return to treatment 

may give the false impression that programs want clients to return to pad their 

pocketbook, rather than relapse being a part of the disease and a component of the 

learning process in recovery for many. While treatment providers bear the 

responsibility of ensuring quality care and improving care as treatment 

methodologies are discovered to be effective, realistic expectations need to be 

embraced in light of the chronic relapsing nature of the disease. 

b) Lack of a Nationally Standardized and Comprehensive System for SUD 

Treatment and Service Delivery- Since people come from different backgrounds, 

enter treatment at different stages of life, use different substances or combinations of 

substances, suffer from a wide variety of functional impairments caused by their 
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substance abuse, and come into treatment with various degrees of recovery capital, 

treatment must be tailored to each individual seeking treatment. This requires that a 

full continuum of SUD care exists from the lowest level, outpatient care, to the 

highest level, residential treatment and medically assisted treatment (MAT). 

Entry into treatment at any level and transition to higher or lower levels of care 

through periodic re-assessment of client progress must be according to medical 

necessity as determined by a medical doctor or a licensed practitioner of the healing 

arts utilizing the Diagnostic and Statistical Manual of Mental Disorders 5th Edition 

(DSM 5). It also requires that a wide range of withdrawal management exists from 

the lowest level of outpatient withdrawal management to medically managed 

withdrawal management so that clients can be accommodated during withdrawal at 

all stages of treatment. In addition to a full continuum of SUD treatment and 

withdrawal management levels, case management services must be utilized 

throughout the continuum at every level of care to ensure that transition from one 

level of care to another is seamless and client barriers are addressed by connecting 

clients to community resources/ancillary services (e.g., medical services, mental 

health services, recovery residences) in order to resolve issues that may pose as 

barriers to sustained recovery. 

Once a client discharges from any level of treatment, recovery support in the form of 

recovery services must be available for as long as it is deemed medically necessary 

so that clients can remain engaged in activities and with people that promote 

sustained recovery. The comprehensive framework for this continuum and as 

described above exists in the American Society of Addiction Medicine (ASAM) 

Continuum of Care and is the current framework for the Organized Delivery System 

(ODS-Drug Medical Waiver) in California and in many other states, yet it has not 

been adopted as a national standard. 

The DSM 5 and the ASAM Continuum should also be the standard for private sector 

treatment programs and the insurance companies that fund SUD treatment. This 

ensures that private sector programs are admitting clients utilizing a medically and 

clinically accepted admission standard based on medical necessity. Requiring the use 

of the DSM 5 and ASAM Continuum through legislation would force insurers, who 

attempt to deny legitimate claims to justify a service denial, to use a common industry 

standard. This would protect consumers and promote public health by ensuring 

treatment in both the public and private sector are standardized. 

In addition to the creation of a full continuum of SUD care and a national standard for 

admission to treatment within the continuum, there also needs to be a national standard 

for SUD counselor practice and a standard code of conduct. This standard can be found 

in the International Certification and Reciprocity Consortium's 12 Core Functions 

(www.internationalcredentialing.org). 

The 12 Core Functions for addiction counseling and a nationally adopted SUD 

counselor code of conduct should be required for all programs that receive public 

funding so that SUD counselors understand what their role and work is while 

conducting services in the greater framework of a standardized SUD continuum of 
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care, which includes both Medicaid and Medicare funding (for addiction treatment for 

older adults). 

Finally, SUD treatment that is conducted in the public and private sector must be based 

on sound, evidence based practice for substance use disorders (e.g., motivational 

interviewing, cognitive behavioral therapy, trauma informed care, relapse prevention, 

psycho-education). While 12 step recovery models have served as the primary mode 

of treatment in social model programs for decades and continues to be indispensable 

for many during treatment process and in sustained recovery, newer evidence based 

models have shown to be effective in helping individuals obtain and maintain long 

term recovery. Evidence based models should constitute the bulk of clinical practice 

while still utilizing 12 step models throughout the recovery process for those it is 

effective for. 

Embracing national standards for SUD treatment and clinical practice would require 

public and/or private oversight in the form of program accreditation and licensure, 

counselor certification/licensure, and both annual and random, on sight compliance 

audits. Unifying SUD treatment under a standardized continuum and clinical practice 

standards, coupled with regular fiscal and clinical oversight, would improve access to 

treatment, improve treatment outcomes, and help eliminate abusive and incompetent 

counselors and owners/operators. 

3. Mr. Nielsen, you stated in your testimony that cooperative housing offers a bridge to 

independent living, which is a critical piece of the sobriety puzzle. Those struggling 

with addiction are often in need of a stable environment, which in theory, sober living 

facilities seek to provide. Do you know on average what the percentage of success is 

for patients who have lived in cooperative housing and for how long? 

Although there are not a lot of studies concerning long term recovery rates and sober 

living, What Did We Learn from Our Study on Sober Living Houses and Where Do We 

Go from Here? (Policn) and others do provide some data on the issue. Research 

continues to document the important role of social factors in recovery outcome (Polcin, 

Korcha, Bond, Galloway & Lapp, in press). For example, in a study of problem and 

dependent drinkers Beattie and Longabaugh (1999) found that social support was 

associated with drinking outcome. Not surprising, the best outcomes were predicted 

by alcohol-specific social support that discouraged drinking. Similarly, Zywiak, 

Longabaugh and Wirtz (2002) found that clients who had social networks with a higher 

number of abstainers and recovering alcoholics had better outcome 3 years after 

treatment completion. Moos and Moos (2006) studied a large sample of 461 treated and 

untreated individuals with alcohol use disorders over a 16 year period to examine factors 

associated with relapse. They found that social support for recovery was important in 

establishing sustained abstinence. Finally, Bond, Kaskutas and Weisner (2003)reached a 

similar conclusion in a 3-year follow up study on 655 alcohol dependent individuals who 

were seeking treatment. Abstinence from alcohol was associated with social support for 

sobriety and involvement in Alcoholics Anonymous. 

A critically important aspect of one's social network is their living environment. 

Recognition of the importance of one's living environment led to a proliferation of 

inpatient and residential treatment programs during the 1960' and 70's (White, 1998). 

The idea was to remove clients from destructive living environments that encouraged 
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substance use and create new social support systems in treatment. Some programs 

created halfway houses where clients could reside after they completed residential 

treatment or while they attended outpatient treatment. A variety of studies showed that 

halfway houses improved treatment outcome (Braucht, Reichardt, Geissler, & Bormann, 

1995; Hitchcock, Stainback, & Rogue, 1995; Milby, Schumacher, Wallace, Freedman & 

Vuchinich, 2005; Schinka, Francis, Hughes, LaLone, & Flynn, 1998). 

4. In your testimony you say that "as in any cooperative environment, a sober living 

house needs rules. Rules may include curfew, smoking, chores, payment of rent, and 

attendance at house meetings, and must include prohibition of any use of alcohol and 

or drugs. The space should be adequate to accommodate each individual comfortably 

and with dignity and respect." How can we incentivize sober living homes that are 

safe spaces for patients to recover from addiction? Also, what recommendations do 

you have to ensure qualified, well-trained individuals are working at sober homes? 

Voluntary certification of recovery residences is a fair and economically feasible way to 

encourage higher levels of quality. The certification process is a means of teaching 

operators and residents about how to maintain effective and safe homes. It allows outside 

entities that have extensive experience in recovery residence programming to assist 

residents in developing high quality, supportive environments. It also allows for the 

dissemination of information about new trends in recovery residence management to 

occur. Most importantly it sets a baseline for safety within a residence, which should be 

guaranteed to all who reside in them. 

Recovery residences are residences. There should be no "staffing" at a recovery residence 

because clinical services are not provided in them. There are typically "house managers" 

or "chairs" who perform duties beyond those of the rest of the residents. These individuals 

generally have seniority in the home and typically have longer sobriety times than other 

members of the house. They may be paid directly or "in-kind" via rent reduction or 

payment of utilities. Although not 24-hour employees, their leadership in the home should 

be fostered via continuing education and mentoring. This could be achieved through 

certification requirements that include continuing education specific to recovery residence 

programming. 

Attachment 2-Member Requests for the Record 

During the hearing, Members asked you to provide additional information for the record, 

and you indicated that you would provide that information. For your convenience, 

descriptions of the requested information are provided below. 

The Honorable Gregg Harper 

1. . Throughout the hearing, there were several questions regarding which states have 

patient broker laws and the specifics of those laws. Please provide the committee with 

a list and short description of all current state laws or proposed legislation in 

California that address patient brokering. 

2. During the hearing, gaps in the federal anti-kickback statute as it applies to nonMedicaid facilities were discussed. Please provide a list of all current state laws or 
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proposed legislation in California addressing anti-kickback statutes applying to 

commercial insurers and nonmedical facilities. 

CA Penal code 549 was used by the Riverside District Attorney in June 2017 to arrest and 

prosecute an individual that served as a "patient broker" or "referent" to a treatment 

center. This individual was paid $2,000 per each admission. 

The code reads: 

Any firm, corporation, partnership, or association, or any person acting in his or her 

individual capacity, or in his or her capacity as a public or private employee, who solicits, 

accepts, or refers any business to or from any individual or entity with the knowledge that, 

or with reckless disregard for whether, the individual or entity for or from whom the 

solicitation or referral is made, or the individual or entity who is solicited or referred, 

intends to violate Section 550 of this code or Section 1871.4 of the Insurance Code is guilty 

of a crime, punishable upon a first conviction by imprisonment in the county jail for not 

more than one year or by imprisonment pursuant to subdivision (h) of Section 1170 for 16 

months, two years, or three years, or by a fine not exceeding fifty thousand dollars 

($50,000) or double the amount of the fraud, whichever is greater, or by both that 

imprisonment and fine. A second or subsequent conviction is punishable by imprisonment 

pursuant to subdivision (h) of Section 1170 or by that imprisonment and a fine of fifty 

thousand dollars ($50,000). Restitution shall be ordered, including restitution for any 

medical evaluation or treatment services obtained or provided The court shall determine 

the amount of restitution and the person or persons to whom the restitution shall be paid. 

CA Penal code 550 was used by the Riverside District Attorney in June 2017, and again 

in June 2018 to arrest and prosecute a treatment provider who was procuring insurance 

policies for patients, and engaging in fraudulent billing practices. These fraudulent billing 

practices yield revenue that fund patient brokering practices and perpetuate fraud overall. 

The code reads: 

(a) It is unlawful to do any of the following, or to aid, abet, solicit, or conspire with any 

person to do any of the following: 

(1) Knowingly present or cause to be presented any false or fraudulent claim for the 

payment of a loss or injury, including payment of a loss or injury under a contract of 

insurance. 

(2) Knowingly present multiple claims for the same loss or injury, including presentation 

of multiple claims to more than one insurer, with an intent to defraud. 

(5) Knowingly prepare, make, or subscribe any writing, with the intent to present or use 

it, or to allow it to be presented, in support of any false or fraudulent claim. 

(6) Knowingly make or cause to be made any false or fraudulent claim for payment of a 

health care benefit. 

(7) Knowingly submit a claim for a health care benefit that was not used by, or on behalf 

of, the claimant. 
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(8) Knowingly present multiple claims for payment oft he same health care benefit with an 

intent to defraud. 

(9) Knowingly present for payment any undercharges for health care benefits on behalf of 

a specific claimant unless any known overcharges for health care benefits for that claimant 

are presented for reconciliation at that same time. 

(10) For purposes of paragraphs (6) to (9), inclusive, a claim or a claim for payment of a 

health care benefit also means a claim or claim for payment submitted by or on the behalf 

of a provider of any workers' compensation health benefits under the Labor Code. 

(b) It is unlawful to do, or to knowingly assist or conspire with any person to do, any of 

the following: 

(1) Present or cause to be presented any written or oral statement as part of, or in support 

of or opposition to, a claim for payment or other benefit pursuant to an insurance policy, 

knowing that the statement contains any false or misleading information concerning any 

material fact. 

(2) Prepare or make any written or oral statement that is intended to be presented to any 

insurer or any insurance claimant in connection with, or in support of or opposition to, 

any claim or payment or other benefit pursuant to an insurance policy, knowing that the 

statement contains any false or misleading information concerning any material fact. 

(3) Conceal, or knowingly fail to disclose the occurrence of, an event that affects any 

person's initial or continued right or entitlement to any insurance benefit or payment, or 

the amount of any benefit or payment to which the person is entitled. 

(c) (1) Every person who violates paragraph (I), (2), (3), (4), or (5) of subdivision (a) is 

guilty of a felony punishable by imprisonment pursuant to subdivision (h) of Section I 170 

for two, three, or jive years, and by a fine not exceeding fifty thousand dollars ($50,000), 

or double the amount of the fraud, whichever is greater. 

(2) Every person who violates paragraph (6), (7), (8), or (9) of subdivision (a) is guilty of 

a public offense. 

(A) When the claim or amount at issue exceeds nine hundred fifty dollars ($950), the 

offense is punishable by imprisonment pursuant to subdivision (h) of Section 1170 for two, 

three, or five years, or by a fine not exceeding fifty thousand dollars ($50,000) or double 

the amount of the fraud, whichever is greater, or by both that imprisonment and fine, or 

by imprisonment in a county jail not to exceed one year, by a fine of not more than ten 

thousand dollars ($IO,OOO), or by both that imprisonment and fine. 

(B) When the claim or amount at issue is nine hundred fifty dollars ($950) or less, the 

offense is punishable by imprisonment in a county jail not to exceed six months, or by a 

fine of not more than one thousand dollars ($1,000), or by both that imprisonment and 

fine, unless the aggregate amount of the claims or amount at issue exceeds nine hundred 

fifty dollars ($950) in any 12-consecutive-month period, in which case the claims or 

amounts may be charged as in subparagraph (A). 

(3) Every person who violates paragraph (1), (2), (3), or (4) of subdivision (b) shall be 

punished by imprisonment pursuant to subdivision (h) of Section 1170 for two, three, or 

five years, or by a fine not exceeding fifty thousand dollars ($50, 000) or double the amount 

of the fraud, whichever is greater, or by both that imprisonment and fine, or by 
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imprisonment in a county jail not to exceed one year, or by a fine of not more than ten 

thousand dollars ($10,000), or by both that imprisonment and fine. 

(4) Restitution shall be orderedfor a person convicted of violating this section, including 

restitution for any medical evaluation or treatment services obtained or provided. The 

court shall determine the amount of restitution and the person or persons to whom the 

restitution shall be paid. 

(d) Notwithstanding any other provision of law, probation shall not be granted to, nor 

shall the execution or imposition of a sentence be suspended for, any adult person 

convicted of felony violations of this section who previously has been convicted offolony 

violations of this section or Section 548, or of Section 1871.4 ofthe insurance Code, or 

former Section 556 of the Insurance Code, or former Section 1871.1 of the insurance Code 

as an adult under charges separately brought and tried two or more times. The existence 

of any fact that would make a person ineligible for probation under this subdivision shall 

be alleged in the information or indictment, and either admitted by the defendant in an 

open court, or found to be true by the jury trying the issue of guilt or by the court where 

guilt is established by plea of guilty or nolo contendere or by trial by the court sitting 

without a jury. 

Except when the existence of the fact was not admitted or found to be true or the court 

finds that a prior felony conviction was invalid, the court shall not strike or dismiss any 

prior folony convictions alleged in the information or indictment. 

This subdivision does not prohibit the acijournment of criminal proceedings pursuant to 

Division 3 (commencing with Section 3000) or Division 6 (commencing with Section 6000) 

of the Welfare and Institutions Code. 

(e) Except as otherwise provided in subdivision (f), any person who violates subdivision 

(a) or (b) and who has a prior folony conviction of an offense set forth in either subdivision 

(a) or (b), in Section 548, in Section 1871.4 of the Insurance Code, informer Section 556 

of the Insurance Code, or informer Section 1871.1 of the Insurance Code shall receive a 

two-year enhancement for each prior felony conviction in addition to the sentence 

provided in subdivision (c). The existence of any fact that would subject a person to a 

penalty enhancement shall be alleged in the information or indictment and either admitted 

by the defendant in open court, or found to be true by the jury trying the issue of guilt or 

by the court where guilt is established by plea of guilty or nolo contendere or by trial by 

the court sitting without a jury. Any person who violates this section shall be subject to 

appropriate orders of restitution pursuant to Section 13967 of the Government Code. 

(f) Any person who violates paragraph (3) of subdivision (a) and who has two prior felony 

convictions for a violation of paragraph (3) of subdivision (a) shall receive a five-year 

enhancement in addition to the sentence provided in subdivision (c). The existence of any 

fact that would subject a person to a penalty enhancement shall be alleged in the 

information or indictment and either admitted by the defondant in open court, or found to 

be true by the jury trying the issue of guilt or by the court where guilt is established by 

plea of guilty or nolo contendere or by trial by the court sitting without a jury. 

(h) This section shall not be construed to preclude the applicability of any other provision 

of criminal law or equitable remedy that applies or may apply to any act committed or 

alleged to have been committed by a person. 
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28931.106

In the for-profit sector, close to 100% have had to modify their payer matrix to include 

commercial payers ... either directly or through courtesy billing. These providers DO NOT 

accept federal healthcare funding (Medicare, etc.), and are often not owned or operated by 

licensed physicians or any other licensed individual that is subject to the same restrictions 

imposed by CMS, and OIG. CA Penal Codes 549 and 550 have the ability to hold anvone, 

licensed or not, accountable for patient brokering and/or fraudulent biiiing practices. 

SB 1228 was recently signed by the Governor, and while the fine imposed as punishment is 

less than that of California Penal Codes listed above, it does allow for the revocation of the 

facility license and/or professional credentials. This will play a major role in hindering patient 

brokering. The text of the new law is as follows: 

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: 

SECTION 1. 

The Legislature finds and declares all of the following: 

(a) The opioid epidemic is a nationwide scourge that claimed approximately 1,925 lives in California 

in 20 16, and drug and opioid overdoses are currently in the top 20 causes of death statewide. 

(b) The need for quality recovery services has grown, driven by the opioid crisis and changes in federal 

law that requires insurance coverage of substance use disorders. Yet, only one in five people who need 

treatment for opioid use disorders currently receives treatment, according to the United States Surgeon 

General. 

(c) Desperation is fueling a surge in patient brokering or patient trafficking, where unscrupulous 

services refer people with substance use disorders to programs that are inappropriate for their needs in 

order to gain access to insurance payments. 

(d) All people in recovery from substance use disorders are entitled to safety and security throughout 

their recovery. 

(e) California has an interest in ending patient brokering and trafficking and increasing the availability 

of quality recovery services to encourage recovery and stability for all patients. 

SEC. 2. 

Section 11831.6 is added to the Health and Safety Code, to read: 

11831.6. 

(a) The following persons, programs, or entities shall not give or receive remuneration or anything of 

value for the referral of a person who is seeking alcoholism or drug abuse recovery and treatment 

services: 

(I) An alcoholism or drug abuse recovery and treatment facility licensed under this part. 

(2) An owner, partner, officer, or director, or shareholder who holds an interest of at least I 0 percent 

in an alcoholism or drug abuse recovery and treatment facility licensed under this part. 
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28931.107

(3) A person employed by, or working for, an alcoholism or drug abuse recovery and treatment facility 

licensed under this part, including, but not limited to, registered and certified counselors and licensed 

professionals providing counseling services. 

( 4) An alcohol or other drug program certified by the department in accordance with the alcohol or 

other drug certification standards established pursuant to Section 1183 0.1. 

(5) An owner, partner, officer, or director, or shareholder who holds an interest of at least I 0 percent 

in an alcohol or other drug program certified by the department in accordance with the alcohol or other 

drug certification standards established pursuant to Section 11830.1. 

(6) A person employed by, or working for, an alcohol or other drug program certified by the department 

in accordance with the alcohol or other drug certification standards established pursuant to Section 

11830.1, including, but not limited to, registered and certified counselors and licensed professionals 

providing counseling services. 

(b) Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 

(commencing with Section 11340) of Part I of Division 3 of Title 2 of the Government Code), the 

department may, if it deems appropriate, implement, interpret, or make specific this section by means 

of provider bulletins, written guidelines, or similar instructions from the department, until regulations 

are adopted. 

SEC. 3. 

Section 11831.7 is added to the Health and Safety Code, to read: 

11831.7. 

(a) The department may investigate allegations of violations of Section 11831.6. The department may, 

upon finding a violation of Section 11831.6 or any regulation adopted pursuant to that section, do any 

of the following: 

(!)Assess a penalty upon an alcoholism or drug abuse recovery and treatment facility licensed under 

this part. 

(2) Suspend or revoke the license of an alcoholism or drug abuse recovery and treatment facility 

licensed under Chapter 7.5 (commencing with Section 11834.01), or deny an application for licensure, 

extension of the licensing period, or modification to a license. Article 4 (commencing with Section 

11834.35) of Chapter 7.5 shall apply to any action taken pursuant to this paragraph. 

(3) Assess a penalty upon an alcohol or other drug program certified by the department in accordance 

with the alcohol or other drug certification standards established pursuant to Section 11830.1. 

(4) Suspend or revoke the certification of an alcohol or other drug program certified by the department 

in accordance with the alcohol or other drug certification standards established pursuant to Section 

11830.1. 

(5) Suspend or revoke the registration or certification of a counselor for a violation of Section 1183!.6. 

(b) The department may investigate allegations against a licensed professional providing counseling 

services at an alcoholism or drug abuse recovery and treatment program licensed, certified, or funded 

under this part, and recommend disciplinary actions, including, but not limited to, termination of 

employment at a program and suspension and revocation of!icensure by the respective licensing board. 
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28931.108

(c) Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 

(commencing with Section 11340) of Part I of Division 3 of Title 2 of the Government Codo::), the 

department may, if it deems appropriate, implement, interpret, or make specific this section by means 

of provider bulletins, written guidelines, or similar instructions from the department, until regulations 

are adopted. 
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28931.109

GREG WALDEN, OREGON 

CHAIRMAN 

Mr. Dave Aronberg 

State Attorney 

ONE HUNDRED FIFTEENTH CONGRESS 

FRANK PALLONE, JR., NEW JERSEY 

RANKING MEMBER 

€ongrt55 of tbt Wnittb ~tatts 

J}ouse of 1\epresentatibes 

COMMITTEE ON ENERGY AND COMMERCE 

2125 RAYBURN House OFFICE BuiLDING 

WASHINGTON, DC 20515-6115 Majority {202)225-2927 

Mlnorlty {202)225-3641 

January 23, 2018 

15th Judicial Circuit 

401 North Dixie Highway 

West Palm Beach, FL 33401 

Dear Mr. Aronberg: 

Thank you for appearing before the Subcommittee on Oversight and Investigations on 

December 12, 2017, to testifY at the hearing entitled "Examining Concerns of Patient Brokering 

and Addiction Treatment Fraud." 

Pursuant to the Rules ofthe.Committee on Energy and Commerce, the hearing record 

remains open for ten business days to permit Members to submit additional questions for the 

record, which are attached. The format of your responses to these questions should be as 

follows: (I) the name of the Member whose question you are addressing, (2) the complete text of 

the question you are addressing in bold, and (3) your answer to that question in plain text. 

Also attached are Member requests made during the hearing. The format of your 

responses to these requests should follow the same format as your responses to the additional 

questions for the record. 

To facilitate the printing of the hearing record, please respond to these questions and 

requests with a transmittal letter by the close of business on Tuesday, February 6, 2018. Your 

responses should be mailed to Ali Fulling, Legislative Clerk, Committee on Energy and 

Commerce, 2125 Rayburn House Office Building, Washington, DC 20515 and e-mailed in Word 

format to Ali.Fulling@mail.house.gov. 
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The Honorable Michael C. Burgess 

1. The issue of abusive billing, particularly relating to urine drug tests in the context of this 

hearing, is especially concerning given the costly nature of the issue. In one case in Florida, an 

insurance company was billed $600,000, primarily for drug tests, over the course of just seven 

months. How can we work to limit abusive billing and incentivize insurance companies to get 

involved? 

Insurance companies generally are not investing significant resources in identifying and 

investigating provider fraud. In addition, carriers are not required to report suspected fraud, 

have been slow to respond to requests from law enforcement for information, and when 

fraudulent schemes are suspected, refuse to pay claims or "claw back" payments that have 

already been made to treatment providers. 

Our law enforcement task force recently contacted an insurance carrier investigator to obtain 

information regarding a physician who was under criminal investigation. As it turned out, this 

physician had billed the carrier $7 million dollars in the previous nine months. This activity was 

neither flagged nor audited by the carrier and when the insurance investigator reviewed a 

sample of 240 claims, he discovered that 30% contained the exact same diagnosis (allergies), 

symptoms, environmental circumstances (black mold) and contained the same date of service 

and recorded vital signs for all the patients. In short, the doctor had "cut and pasted" his notes 

on over 70 claims. The insurance investigator had no idea that this ongoing fraud was occurring. 

The market appears to be self-correcting with regard to excessive confirmatory urinalysis (U/A) 

lab tests, however, this correction is localized by state network and in many cases is only applied 

to insurance networks where the fraud has been identified as a significant issue. For example, in 

Florida, carriers have drastically cut the allowable number and percentage of reimbursable 

confirmatory U/A tests, while the same carrier in another state network still reimburses 

unlimited testing at inflated rates. Another example; while carriers have put limits on treatment 

providers, rural hospitals have been reimbursed without question, and at inflated rates. Bad 

actors will follow the money. 

Government must intervene and encourage insurance carriers to work with law enforcement. 

When they uncover fraud, they should be required to report the fraud. Federal privacy laws 

should not stand in the way of sharing information, especially when the victims of exploitation 

are the patients. 

2. Insurance companies are at the forefront of abusive billing practices. Would a practice such as 

requiring consent from a patient or a referral for out-of-network services be effective in 

preventing beneficiaries from enrolling in ineffective treatment programs or schemes? 

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Patients are being marketed to out-of-network providers by the thousands; however, while in 

many instances the marketing is deceptive or outright fraudulent, the patient is oftentimes a 

willing participant. Consent is not an issue. Unscrupulous marketers prey on desperate addicts 

or their family members. Education and outreach are important. If the consumer had a list of 

questions and red flags available in layman's terms, the risk of falling prey to marketing abuse 

would be reduced. The Palm Beach County Sober Homes Task Force is working to create such a 

list. The American Society of Addiction Medicine (ASAM) and the National Association of 

Addiction Treatment Providers (NAATP) have lists of recommended questions, albeit somewhat 

technical in nature. The general population must have easy access to this information. 

Requiring a local in-network referral for out-of-network drug and alcohol treatment would go a 

long way in ending the fraud and abuse created by deceptive marketing. A medical doctor, 

either a Psychiatrist or Physician with training and certification in addiction medicine would be 

able to properly assess a patient and appropriately make a referral to an in or out-of-network 

provider that fits with the patient's diagnosis. In the current system, patients who are marketed 

out of state, in most instances, are not properly assessed (if at all) until they arrive at a facility. 

Certainly not by the bad actors in the industry. In a perfect world, if a clinical assessment made 

upon the patient's arrival determines that the receiving facility does not offer the appropriate 

level of care, the provider would not accept the patient but would refer to an appropriate 

facility. While this would be ethically and medically appropriate, referring a patient would not 

be in the economic interest of the provider. Unfortunately, we do not live in a perfect world. 

Lastly, if insurance providers were required to make drug and alcohol treatment programs start 

as in-network programs, rather than out-of-network, ethical treatment providers, insurance 

companies and consumers would all benefit. In-network systems will provide more access for 

patients; allow for direct contracting between provider and insurance company (rather than 

assignments of benefits); allow treatment providers to be able to determine with a level of 

certainty that they will be paid and how much; will eliminate the high deductibles and co-pays 

inherent in out-of-network arrangements; and create sufficient numbers of patients at programs 

so that data can be gathered on what is and is not working. Unfortunately, in behavioral health, 

the current system does not produce sufficient in-network provider contracts as such contracts 

are very difficult to obtain. Maintaining our current system that favors out-of-network services 

only churns the unethical marketing practices that have become prevalent in the industry and 

incentivizes unethical behavior as out-of-network payouts are not limited by contract and are 

therefore much larger. 

a. What role do you think insurers can play in preventing or avoiding fraudulent billing 

practices while protecting their beneficiaries? 

Insurance carriers have a duty to ensure that their beneficiaries obtain the best medical care 

within their plans. The current model for addiction treatment is fee for service. While this may 

be appropriate in other areas of healthcare, it is a failed system for a chronic disease like opioid 

use disorder (OUD). Treatment is covered in the short term, with a continuum of care that in 

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most cases lasts for days (detox/in-patient) followed by weeks (intensive out-patient) and then 

discharge. Medical science has long since identified opioid addiction as a disease ofthe brain. 

Chronic use of opioids will physically alter the brain and requires at least a year of abstinence for 

the brain to repair the damage. The best practice is a longer, lower level continuum of care. The 

care continuum as it now stands is one of failure. Worse, the economic model favors relapse. 

Once a round of treatment is finished and insurance is exhausted, the patient is discharged. 

Relapse is a pre-existing condition. Relapse is covered as an acute episode, therefore insurance 

kicks in anew and coverage resumes. Too often provider decisions are being made based on 

self-interest rather than cost, quality of care or necessity of service. This recycle model is 

economically beneficial to the bad actors and is being grossly exploited; however, as the 

insurance companies move to correct the market, they wind up hurting those patients who are 

being treated by legitimate providers, by cutting services, days in treatment and denying 

medically necessary treatment. 

Insurance carriers need to be part of the solution. Changing their reimbursement model from 

fee for service to an outcome based model that rewards effective treatment programs would 

significantly increase positive outcomes, and decrease fraud and overutilization of the health 

care system. Positive outcome models already exist. For example, Medicare reimbursement 

under the Affordable Care Act (ACA) uses an outcome based model that rewards good 

treatment. A hospital that does a poor job is not rewarded with additional payments for 

readmission. 

3. In your fall 2016 Presentment of the Palm Beach County Grand Jury, you mention that 

substance use treatment licenses should be treated as other health care licenses- as a 

privilege, not a right. While fraud and abuse of the system is something that needs to be 

addressed, do you have any concern that with increased regulation we would see a decline in 

substance abuse treatment facilities such that supply would not meet demand? 

No. We are in the middle of an opioid addiction health crisis. Supply will meet demand. 

Effective long term treatment, incorporating best practices and rewarding positive outcomes 

will result in a decrease in demand over time, as the crisis abates. The current system of fee for 

service, and the attendant overutilization of care, combined with low regulation and minimal 

oversight, has contributed to the explosion in demand over the past decade. In short, 

ineffective or fraudulent treatment may be more damaging than no commercial treatment at 

all. 

The Honorable Frank Pallone, Jr. 

1. In your estimation, how many patients seeking treatment for substance use disorders have 

been pulled into these schemes? 

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There is no way to numerically measure the extent of the systemic failure due to fraud or 

ineffective treatment coupled with overutilization of services. According to the Substance 

Abuse and Mental Health Services Administration (SAMHSA), 11.8 million U.S,. citizens over 12 

had misused opioids in 2016. From 2002 through 2016 there had been a 135% increase in the 

number of heroin users and a 533% increase in the number of deaths attributable to heroin. 

During 2016, slightly less than 7% of those aged 12 or older with a substance use disorder (SUD) 

received treatment at a specialty treatment facility. In 2616, Palm Beach County, Florida {PBC), 

Fire Rescue responded to 4,661 opioid overdose calls, including transport to area hospitals. This 

does not include scores of overdose victims otherwise brought to area hos_pitals. 589 overdose 

victims died in Palm Beach County alone 2016. In 2017, the PBC Medicai,Examiner has reported 

642 opioid related deaths. This scenario is repeated nationwide, with ov~r-42,000 opioid 

overdose deaths reported by the CDC for 2016. In August, 2018, the CDC released provisional 

numbers for overdose deaths in 2017. Through December 17, 2017, over 49,000 opioid 

overdose deaths were reported. 

A review of insurance statements show a pattern of recycle in and out of treatment for persons 

with SUD, and in Palm Beach County, with over 200 treatment facilities, the number of patients 

has been estimated in the tens of thousands. Anecdotally, one facility in P.BC purchased over 

3000 airline tickets for patients in 2016. 

Based on the confidentiality and unavailability of patient records, there is no way to accurately 

estimate the number of patients that have been drawn into these marketing schemes. The 

"Florida shuffle" actually refers to the recycling of addiction treatment. Therefore, it is entirely 

possible that many patients originally attend a good facility and are subsequently either 

"poached" (enticed) away during a course of treatment, or are approached by "body brokers" 

after discharge and encouraged to relapse and begin a new cycle of treatment with facilities 

paying kickbacks to the broker. As indicated earlier, the fee for service model favoring short 

treatment programs, feeds this cycle of relapse. 

• 

2. Are there any typical patterns regarding patients seeking treatment for substance use 

disorder, such as their socioeconomic status or where they reside before they come to Florida 

for treatment? 

In PBC, the typical demographic for an SUD private-pay patient is; young adult, 18-27 years old, 

male. Many come here under their parent's insurance po1icies and their socioeconomic status is 

middle to upper middle class. There are a number of similar destinations marketed by out-ofnetwork programs in places including; Orange County, CA, Prescott, AZ, Austin, TX. 

3. How is Florida's Patient Brokering Act designed to address the patient brokering issue? 

Modelled after the Federal Anti-Kickback statute (AKA), the Florida Patient Broke ring Act {PBA) 

seeks to eliminate bribes, kickbacks, commissions, split fee arrangements and other benefits 

used to induce patients or patronage to utilize a particular health care provider or compensate a 

third party for the referral of patients or patronage for health care services. Marketing 

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addiction treatment is not the same as selling cars or appliances. lncentivizing a referral for 

medical treatment leads to decisions that are based on self-interest rather than cost, quality of 

care or necessity of services. The patient's best interest becomes secondary to the monetary 

interest of the broker. 

The PBA does not seek to eliminate advertising or marketing, so long as it is done in a manner 

that does not incentivize the placement of a patient for economic, and not appropriate medical 

reasons. 

4. How has Florida's Patient Broke ring Act been working so far? What successes has Florida had 

in using the law to disrupt patient brokering schemes and bring prosecutions? 

Patient Broke ring is a "white collar" crime. It is also a form of human trafficking. It requires 

significant forensic investigation, akin to insurance, health care and other types of fraud. In 

addition, unlike most fraud cases, the victim who is being trafficked is generally unreliable, 

uncooperative, and in many cases, a willing participant in the fraud. In most brokering cases, 

the patient is induced with free rent, gym memberships, gift cards, cigarettes and other "stuff' 

so long as they attend a particular treatment facility. As such, the patient is aiding and abetting 

the broke ring, and in some instances, self-brokers to a facility in return for cash and other 

benefits. 

In Palm Beach County, we have established a Law Enforcement Task Force (TF), with 

investigators from a number of local and state agencies, along with assigned prosecutors. To 

date, the TF has arrested and prosecuted 46 individuals, mostly under the state Patient 

Broke ring Act (PBA). Twenty two defendants have pled guilty. Our TF is also closely cooperating 

with a similar Federal Task Force and have participated in numerous joint investigations 

resulting in additional federal arrests and convictions. Palm Beach County remains a premier 

location for SUD treatment, however, it has seen a significant reduction in sober homes and 

facilities. Ethical treatment providers have been supportive of our efforts. 

In many ways, state law enforcement and prosecutors face resource issues within the context of 

the opioid crisis. Numerous jurisdictions have become destinations for unscrupulous actors who 

prey on this vulnerable population. Areas of Florida, Arizona, California and Texas have become 

destinations for addiction treatment. As we have cracked down on patient brokering, these 

schemes have become more sophisticated, or bad actors have fled into other jurisdictions 

where law enforcement is not as aggressive and state regulation is lax. Many have relocated in 

states that do not have patient broke ring laws that apply to behavioral health. We have seen a 

trend with providers relocating to the Northeast and Mid-Atlantic states. There has also been 

an increase in activity in other local jurisdictions within Florida that do not have a multi-agency 

approach to the problem. With resources stretched, most prosecutor offices and law 

enforcement agencies focus on violent crimes and crimes against persons. For example, I am 

unaware of any patient broke ring cases having been brought in the other 19 Florida Circuits 

(other than Federal AKA cases) in the past 2 years. We have been encouraging other Florida 

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State Attorneys to form multi-agency task forces to go after patient brokers, especially sober 

home owners who funnel residents into sub-standard programs in exchange for kickbacks from 

the facilities. This effort needs encouragement and resources. As our model has shown, with a 

coordinated effort, we can achieve significant results. 

5. How does Florida's Patient Broke ring Act seek to crack down on deceptive advertising 

practices used as part of these schemes, and how successf!JI has it been thus far? 

The Florida PBA does not address deceptive advertising or marketing practices. In 2017, Florida 

enacted into law two deceptive marketing statutes, one civil and one criminal. In essence, F.S. 

397.55 and F.S. 0345 prohibit a marketer from providing false or misleading information about 

the location, services or identity of a facility being marketed. Willful, material violations are 

punishable as a 3'• degree felony. The Florida Attorney General has dedicated an attorney to 

investigate and prosecute civil violations. However, it is difficult for a local prosecutor to 

investigate and criminally prosecute a marketing company located in another state, or operating 

on a national level. We have been in touch with attorneys for the Federal Trade Commission 

and have sent them information on actors who we believe are using deceptive marketing 

practices. 

6. Do you feel that law enforcement has sufficient resources to investigate and go after bad 

actors in your state? If not, what additional resources would help you do so? 

As discussed above. local law enforcement agencies and prosecutors do not have the resources 

to effectively combat these fraudulent practices. This is true in Florida as well as elsewhere. As 

indicated, these are complex, sophisticated activities. Privacy laws including HIPAA and Title 42 

protections prevent law enforcement from obtaining patient information without prior court 

approval. An investigation cannot even begin without this prior approval. 

Specific grants, earmarked to hot spots (sober home and treatment facility saturation) to assist 

local jurisdictions in undertaking these investigations through multi-agency task forces, would 

dramatically change the paradigm, encouraging an active and productive response to this 

fraudulent activity. 

7. Have insurers reached out to you to discuss issues with frequent and excessive urine drug 

tests as part of these patient broker schemes? If so, what challenges do you believe insurers 

face in addressing this issue? 

Unfortunately, Insurance companies have remained uninvolved with both the civilian and law 

enforcement sections of our Task Force. In most cases, insurance companies were unaware of 

the problem, slow to react, and reluctant to cooperate with law enforcement in the 

investigation of this fraud. They are not legally required to pass potential criminal information 

on to law enforcement and when insurance Investigators uncover unnecessary or excessive 

charges, they either withhold payment, or "claw back" these payments from providers after the 

fact. According to the Florida Department of Financial Regulation investigators attached to the 

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Task Force, they receive very few referrals or complaints from insurance providers. Our multi· 

agency task force has not received a provider referral in the two years since its inception. 

Of greater concern, most insurance providers have been unhelpful with ongoing criminal 

investigations; slow to respond, unwilling to provide employee witnesses to verify fraudulent 

payments or release investigative files pursuant to subpoena or court order. Notwithstanding 

the fact that the insurance company is the victim of these fraudulent schemes, in too many 

instances, their actions delay and diminish the ability of local prosecutors to timely and 

efficiently prosecute these fraud cases. 

The Honorable Kathy Castor 

1. What treatments have you seen that have had the most success for individuals in recovery 

and how can we ensure that patients have access to the treatment that will work for them? 

As previously stated, Opioid Use Disorder (OUD) is a disease of the brain. There is a common 

consensus in the medical and scientific community that the physical effects of this disease take 

time to reverse. Despite the scientific evidence that best practices include a long term plan for 

recovery, our system of care favors short term, limited care continuums; days in detox or 

inpatient care followed by weeks of intensive out-patient treatment and then discharge. 

Insufficient long-term recovery then feeds the syndrome of relapse rather than recovery, known 

as the "Florida Shuffle." Numerous studies have shown that the longer a patient remains in 

treatment, the better the outcome. Common success rates through short term treatment are 

very low, around 10% in some studies. However, a patient who remains in a continuum of care 

for more than a year is far more likely to succeed, even if they have experienced relapses along 

the way. No one would argue that a diabetic, asthmatic or heart patient receive short term care 

and then be discharged without continual follow-up care. 

Medication Assisted Treatment (MAT) is one best practice that focuses on harm reduction. If an 

addict can be stabilized through low dose opioid maintenance (Buprenorphine/Methodone) or 

opioid free medication (Vivitrol/naltrexone), along with clinical treatment, outcomes can be 

significantly improved. In addition, this form of treatment can be very effective at the point of 

contact with an active user as it is less painful than abstinence detoxification. Acute withdrawal 

can be reduced and the patient will not only be less likely to use, but is more likely to initially 

engage. The use of medication is generally seen as a short or moderate term transition to 

abstinence, to reduce the likelihood of relapse while the patient is receiving clinical care and the 

brain has a chance to repair. Common sense would dictate that the MAT of choice would be 

Vivitrol, as an anti-agonist, that is, a non-addictive replacement for opioids. While at least one 

study by the National Institute on Drug Abuse (NIDA) found that the use of Vivitrol is just as 

effective as Buprenorphine, the findings applied only to those patients who already went 

through detoxification (no longer craving opioids). In reality, harm reduction must apply to 

those persons most at risk, who are active users. Both agonists (Buprenorphine), and anti· 

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agonists (Vivitrol) are effective evidence based treatments. One of the dangers inherent in the 

use of low-dose opioid agonists is the chance that this medication will become the next pill-mill, 

exploited by corrupt physicians who prescribe for profit and do not adhere to the best practice 

that requires a robust clinical component be a part of the treatment. Buprenorphine has a black 

market value and our Task Force has already prosecuted a physician who was inappropriately 

prescribing the drug. 

2. Though some states have prosecuted corrupt facilities and rogue provides, how can we crack 

down on facilities not providing the level of care needed to aid patients? 

First, we cannot arrest our way out of the corruption, including the criminal malfeasance and 

systemic misfeasance, inherent in substance use disorder treatment. However, there are some 

industries that so affect the health and safety of our society that significant government 

oversight is necessary and appropriate. Public utilities is one. Substance abuse treatment 

should be looked at in a similar fashion. Most states require very little oversight of this industry. 

While strides have been made on the federal level to bring parity to both physical and 

behavioral health, many states have not enforced parity, or have treated behavioral health as a 

quasi-medical entity. For example, Florida has significant oversight of the medical profession 

through its Department of Health (DOH) and Agency for Health Care Administration (AHCA). 

Mental health and substance abuse oversight is regulated by the Department of Children and 

Families (DCF). DCF operates with a fraction of the budget provided to DOH and AHCA and its 

administrative powers are also significantly reduced. There is no way to police the industry, 

when there is no effective police force available. A recent effort to transfer oversight authority 

of behavioral health to AHCA gained no traction in the Florida legislature. Parity in the provision 

of medical services must include parity of oversight. 

Second, the policing of the medical profession is largely left to the profession itself. Unless the 

subject of a criminal probe, complaints to medical regulating agencies are generally reviewed by 

physicians, or boards of physicians. Historically these review boards are very reluctant to act 

against a doctor's license. 

To truly crack down on those facilities that provide sub-standard care to those suffering from 

SUD, government must do a better job of requiring and enforcing best practices. 

The Honorable Gregg Harper 

1. Throughout the hearing, there were several questions regarding which states have patient 

broker laws and the specifics of those laws. Please provide the committee with a list and 

short description of all current state laws or proposed legislation in Florida that address 

patient brokering. 

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There is no proposed legislation currently pending before the Florida Legislature. Most states 

have some form of patient broke ring {PBA) or anti-kickback statutes (AKS). However, the 

enforcement and application of these laws vary significantly. For example, California has an 

anti-kickback statute that does not apply to drug treatment facilities, although there is a current 

bill before the legislature that mirrors the Florida PBA. The new California legislation contains 

no penalties, civil or criminal, for its violation. 

States With Anti-Kickback/Fee-Splitting Statutes 

At the outset it's important to note that there are two main groups of laws that deal with 

healthcare referrals: (1) Stark laws, and (2) Anti-Kickback/Fee-Splitting laws. Stark Laws focus on 

physicians that refer patients to a business that the physician has an interest in. AntiKickback/Fee-Splitting laws apply more generally to the wide world of payment for patient 

referrals. These two groups can sometimes overlap in certain areas, especially when dealing 

with complex business arrangements so it's important not to get caught up in semantics. While 

I've made note of the Stark laws in each state, this memo, in response to the Committee's 

questions, addresses Anti-Kickback/Fee-Splitting laws. 

46 states have at least some kind of Anti-Kickback/Fee-Splitting law. Of those states, only 12 

have a general criminal statute that applies to both public and private healthcare (like Florida's 

Patient Brokering Act). And!!. of those 12 states adopt at least one or more of the federal AKS 

safe harbors or have their own exceptions that closely resemble the federal AKS safe harbors. 

Below is a more in-depth outline of what I've found. 

_, __ . =only applies to publicly-funded treatment 

applies to public AND private treatment 

1. Alabama 

a. Ala;Cod~.l97~ ~ 22~~-11 

b. 

2. Alaska 

i. adopts AKS and all safe harbors 

i. {financial arrangement between hospital authority and non-hospital-based 

physician for the furnishing of office space may take into account the probability 

or possibility that such person will refer patients or others to [a health care 

facility] owned or operate by the authority) 

a. --· i. (crime of commercial bribe, receiving; applies to physicians; class C felony) 

ii. Very obscure. 

3. Arizona 

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28931.119

i. Very obscure, only applies to fluoride varnish! 

ii. No safe harbors 

JJ. 1\,R.,s,;§j.a:a?:ts 

i. Similar to AKS 

ii. Appears to adopt all safe harbors 

c: Att~-."e~~~~~t~Arifl!.§ ~z~14p1 

i. (noncriminal) 

d~ .A:lt~r§~a~,.!>$l(2mf11o~tM 

4. Arkansas 

i. 3. Give, pay or receive, or offer to give, pay or receive, directly or indirectly, any 

gift, premium, discount, rebate or remuneration to or from any physician or 

optometrist in return for the referral of patients or customers. 

il·. M~.;!:.§~tl·9Q2 

i. Adopts some of the AKS safe harbors 

5. California 

a. We$t's;An~t.e<~LWetf, ~ trist.c.qae §\i4<)9t:z 

i. Similar to AKS 

6. Colorado 

ii. Adopts most safe harbors 

i. Very broad 

ii. Adopts some safe harbors and ADDS some unique exceptions of its own 

LAB SPECIFIC! 

ii. Has some unique exceptions but does not adopt any safe harbors 

i. California's version of Stark Law 

i. General prohibition against fee splitting or payment for patient referrals 

ii. Adopts no safe harbors but is RENDERED COMPLETELY USELESS BY EXCEPTION! 

1. (b) Notwithstanding the provisions of paragraph (a) of subsection (1) of 

this section, a licensee may pay an independent advertising or 

marketing agent compensation for the advertising or marketing services 

rendered on the licensee's behalf by such agent, including 

compensation which is paid for the results or performance of such 

services on a per patient basis. 

7. Connecticut 

i. LAB SPECIFIC but noncriminal 

ii. (e) A license issued under this section may be revoked or suspended in 

accordance with chapter 54 or subject to any other disciplinary action specified 

in section 19a-17 if such laboratory has engaged in fraudulent practices, feesplitting inducements or bribes ... 

10 I Page 
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28931.120

iii. (f) No representative or agent of a clinical laboratory shall solicit referral of 

specimens to his or any other clinical laboratory in a manner which offers or 

implies an offer of fee-splitting inducements to persons submitting or referring 

specimens, including inducements through rebates, fee schedules, billing 

methods, personal solicitation or payment to the practitioner for consultation or 

assistance or for scientific, clerical or janitorial services. 

i. lAB SPECIFIC STARK lAW 

VERY BROAD, APPLIES TO ANY SERVICES NOT JUST TREATMENT! 

ii. Adopts all safe harbors 

iii. (2) knowingly solicits, accepts or agrees to accept any benefit, in cash or in kind, 

from another person upon an agreement or understanding that such benefit will 

influence such person's conduct in relation to referring an individual or 

arranging for the referral of an individual for the furnishing of any goods, 

facilities or services to such other person under contract to provide goods, 

facilities or services to a local, state or federal agency 

8. Delaware 

a, aloet.c; §.10i;ls 

i. Identical to AKS 

ii. Only adopts a few of the safe harbors! 

9. District of Columbia 

a,· QC;$!§'1$-'802 

lO.Fiorida 

i. Similar to AKS 

ii. No safe harbors 

i. Similar to AKS 

ii. Adopts all safe harbors 

Ill II 

i. Extremely broad 

ii. Excludes substance abuse treatment 

iii. Adopts all safe harbors via 817.505 

i. VERY BROAD 

ii. Only applies to hospitals 

iii. No safe harbors 

iv. Noncriminal 

i. Florida's Stark Law 

1,!; • ~54 4~.~..,0 

i. Medicaid only 

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28931.121

i. Nursing homes only 

Lab kickbacks 

ii. Non-criminal 

iii. No safe harbors 

i. Pharmacy kickbacks 

ii. Non-criminal 

iii. No safe harbors 

i. ALF kickbacks 

ii. Adopts all safe harbors via 817.505 

i. Non-criminal for medical practice in general 

ii. No safe harbors 

i. Osteopathic only 

ii. Has Stark provision 

iii. Has broad AKS provision 

iv. Some exceptions but no safe harbors 

i. Dental charting 

ii. Adopts all federal and state AKSiaws and safe harbors 

--

11.Georgia 

12.Hawaii 

Naturopathy 

ii. Non-criminal 

iii. No safe harbors 

i. Abortions 

ii. Very broad 

iii. No safe harbors 

i. Georgia's Stark Law 

i. Only Applies to Opticians 

ii. No safe harbors 

--

i. Broad, but civil only, unfair trade regulation on referral kickbacks 

ii. No safe harbors 

Broad but non-criminal 

ii. no safe harbors 

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28931.122

13.1daho 

..... 

14.111inois 

i. Noncriminal 

ii. General prohibition against fee splitting for referrals 

i. Only applies to Optometrists 

ii. No safe harbors 

a,• \3list~~\:s~~~ 

i. General public assistance fraud 

ii. Some exceptions but no adopted safe harbors 

lS.Indiana 

a. i!i1~~1~~1l*~~ifi~!C.il.2~1~~~~~ 

16.1owa 

i. Medicaid only 

ii. VERY BROAD 

iii. NO SAFE HARBORS 

iv. Only a Class A misdemeanor though 

i. Stark law notice to patient requirement 

ii. Dentists only 

.... 

17.Kansas 

1. Uniquely worded anti-kickback provisions for dentists 

ii. Non-criminal 

iii. No safe harbors 

i. Uniquely worded anti-kickback provisions for acupuncturists 

II. Non-criminal 

iii. No safe harbors 

i. Same as above but for Hearing AIDS 

ii. Non-criminal 

iii. No safe harbors 

iv. I. Directly or indirectly giving or offering to give, or permitting or causing to be 

given, money or anything of value to a person who advises another in a 

professional capacity, as an inducement to influence the person or cause the 

person to influence others to purchase or contract to purchase products sold or 

offered for sale by a hearing aid specialist, or to influence others to refrain from 

dealing in the products of competitors. 

--

i. Non-criminal 

ii. No safe harbors 

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28931.123

iii. (29) Referring a patient to a health care entity for services if the licensee has a 

significant investment interest in the health care entity, unless the licensee 

informs the patient in writing of such significant investment interest and that 

the patient may obtain such services elsewhere 

b. KS:Al1~$'9~S 

i. Medicaid only 

ii. Identical to AKS 

iii. No safe harbors 

lB. Kentucky 

i. Abortion 

ii. Very broad 

iii. No safe harbors 

b. ~RS ~'2~~'.2$1~ 

i. Medicaid and medicare kickbacks 

ii. Very broad 

iii. Adopts all safe harbors 

c' KRS.~S.$461 

i. Social Security Act funded kickbacks 

ii. Very broad 

iii. Adopts all safe harbors 

19.Louisiana 

a, ,~·~,s.4~':43s;2 al)tl LS:A~/l.S.l4;:7{);s 

i. Similar to AKS 

ii. Adopts all safe harbors 

i. Non-criminal prohibition 

20.Maine 

a. 10-144 CMR Ch. 101, Ch. I,§ 1 

i. Adopts AKS but only as non-criminal regulation 

21.Maryland 

a. MD ~~;;¢r1(1\lnaii;Sw, §S~il;,.:~;~~=p:rri\erly ti~atl.as·MO.CQD£.!\ft. ~1, §;l~Ot) 

i. Extremely broad language 

ii. No safe harbors 

b. MD(:odt,;~~lmtniillaw, §8-su .• :;,,-,:F(n·metly cited' as Mo¢o'E:A~.,i7';~.i2~QO 

i. Extremely broad language 

ii. No safe harbors 

i. Mostly Stark Law and includes some exceptions 

i. Relating to hospitals and split-fee arrangements with referral services 

ii. No safe harbors 

14 I Page 
168 


28931.124

L Very broad (for pharmacies) 

ii. No safe harbors 

22.Massachusetts 

a •.. ~;G~~:A:t'i~(~4l 

i. Broad language 

ii. Only includes a few exceptions similar to main safe harbors 

i. Lab specific 

ii. Civil only 

iii. Very broad 

iv. No safe harbors 

v. See also M.G. L.A. 1110 § 13 (interesting language) 

1. (c) A person or company that solicits, offers or enters into a referral 

arrangement or scheme with a clinical laboratory which the person or 

company knows or should know has a principal purpose of assuring 

referrals by the person or company to a particular clinical laboratory 

which, if the person or company directly made referrals to such clinical 

laboratory, would be in violation of clause (17) of section 8 or section 

!!A, shall be liable to the commonwealth for a civil penalty of not more 

than $100,000 for each referral arrangement or scheme plus 3 times the 

amount of damages sustained, including consequential damages. No 

action shall be brought under this section more than 6 years after it 

accrues. The commissioner shall transmit to the attorney general such 

evidence of an offense as the department may have in its possession 

--· i. Criminal AND Civil penalties 

ii. Broad yet contains some exceptions similar to popular safe harbors 

d. Mass also has some Stark Laws for specified physicians 

23.Michigan 

a. M.c:b~i.4Q6~Q4 

i. Very broad 

ii. No safe harbors! 

i. Very broad 

ii. No safe harbors 

iii. Aiding and abetting receipt of rebate or referral fee in violation of Medicaid 

False Claims Act (MFCA) and Health Care False Claims Act (HCFCA) are general 

intent not corrupt intent, crimes and, thus, to convict defendants as alders and 

abettors, prosecution must prove that they intended that another receive 

rebate or referral fee. People v. Motor Citv Hosp. and Surgical Sypp!y. Inc. 

11997) 575 N.W.2d 95. 227 Mich.App. 209. appeal denied 590 N.W.2d 66.459 

~ 

15 I Page 
169 


28931.125

1. Blanket prohibition against physicians receiving kickbacks from labs! 

2. No safe harbors! 

3. Only a misdemeanor though 

i. See alsoMich. Comp. Laws Ann.§ 14.15(1622l)(licensed health professional 

subject to discipline for engaging in fee-splitting or illegal remuneration activity 

in connections with patient referrals or medical or surgical services, appliances, 

or medications); Mich. Comp. Laws Ann.§ 333.1622l(d)(ii)(licensed health 

professionals subject to discipline for, among other things, unethical business 

practices, which includes [d]ividing fees for referral of patients or accepting 

kickbacks on medical or surgical services, appliances, or medications purchased 

by or on behalf of patients); !d.§ 333.2052S(clinicallaboratory (or owner or 

director) subject to discipline for solicit[ing] specimens ... by offering or 

implying, directly or Indirectly, discounts, rebates, or other benefits or 

considerations to persons referring patients or work); id.§ 333.21792{nursing 

home cannot accept or pay illegal remuneration for referrals or for purchase of 

items or services for a patient); ld.§ 339.1910(specifies penalties for nursing 

home administrator who receives or pays (or offers or solicit or Implies a 

willingness to pay or receive) illegal remuneration); id.§ 400.604 (person who 

solicits, offers, receives, or pays a kickback or bribe in connection with services 

or items to be paid by Medicaid program is guilty of felony); ld.§ 550.12lla 

(corporation providing services in connection with non-insured benefit plan 

cannot induce a person to contract or to continue to contract for services 

through payment of something of value or through discount or rebate not 

reflected in contract or service certificate); id.§ S50.1402(2)(c) (same) 

24.Minnesota 

a. Only regulatory and civil 

b. And adopts all safe harbors 

i. (West 2006) (explaining that the rules in this section 

must be "compatible with, and no less restrictive than, the federal [antlllfllllllkl~t~kb~a~c~k statute] and regulations adopted under it.") 

i. Nursing homes specific 

II. Civil only 

ZS.Mississippi 

a. <MISs.c"cn~~~~li;. § 4~~1$~2(')7 

i. Medicaid only 

26.Mlssouri 

ii. Extremely broad 

iii. No safe harbors 

--

i. Similar to AKS 

ii. Adopts all safe harbors 

16 I Page 
170 


28931.126

b.' v:~:fv1;s. '~~;tt\:$~!:1~ v,!\,¥:$;3.98.\'lla 

Medicaid only 

ii. Broad 

iii. No safe harbors 

iv. But exception for pharm rebates for chronic illnesses {V.A.M.S. 376.823) 

v. Not sure of criminal penalty??? 

i. Stark law 

ii. With some exceptions 

27.Montana 

a; · M!JA 45~~13 

i. Medicaid only 

ii. Similar to AKS 

iii. Adopts all safe harbors 

b. Mont. Code Ann§ 39-71-llOB.Physician self-referral prohibition 

i. Stark law 

ii. See alsoMont. Code Ann.§ 37-2-102(medical practitioner may not have legal or 

beneficial interest in drug company and may not accept illegal remuneration 

from same); id.§ 37-2-103 {same With respect to medical practitioner and 

pharmacy); id.§ 37-3-322{unprofessional conduct by physician includes feesplitting) 

28.Nebraska 

a. Regulations and ad min. Sanctions only!!! 

29.Nevada 

Neb. Admin. R. & Regs. Tit. 172, Ch. 128 

ii. Neb. Admin. R. & Regs. Tit. 471, Ch. 12-000, § 12-011 

iii. Neb. Admin. R. & Regs. Tit. 471, Ch. 2-000, § 2-002 

a. I\I.R.S.422,S60 

i. Medicaid only 

ii. Very strange language 

iii. No safe harbors but some weird exceptions 

b. Other disciplinary actions for specified physicians 

i. Civil and admin sanctions only 

30.New Hampshire 

a. N.!i; Re\f} stat: §167:61~a 

i. Medicaid only 

ii. No safe harbors 

iii. {i) Knowingly solicit or receive any remuneration, including any bribe or rebate, 

directly or indirectly, overtly or covertly, in cash or in kind, in return for 

purchasing, leasing, ordering, or arranging for or recommending the purchase, 

lease, or ordering of any good, service, accommodation or facility for which 

payment may be made in whole or in part under RSA 161 or RSA 167, or 

knowingly offer or pay any remuneration, including any bribe or rebate, directly 

17 I P age 
171 


28931.127

or indirectly, overtly or covertly, in cash or in kind, to induce a person to 

purchase, lease, order, or arrange for or recommend the purchase, lease, or 

ordering of any good, service, accommodation or facility for which payment 

may be made in whole or in part under R5A 161 or R5A 167; or 

iv. {j) Knowingly charge, solicit, accept or receive, in addition to any amount 

otherwise required to be paid under R5A 161 or R5A 167, any gift, money, 

donation, or other consideration either as a precondition of admitting or 

expediting the admission of a patient to a hospital, skilled nursing facility, or 

intermediate care facility, when the cost of the services provided in such facility 

to the patient is paid for in whole or in part under R5A 161 or R5A 167. 

v. 11. (a) Any natural person who violates any provision of this section shall be 

guilty of a class B felony. 

vi. (b) Any other person who violates any provision of this section shall be guilty of 

a felony. 

b. R5A 125:25-a, 125:25-b 

State 5elf-Referrallaw (Stark) 

31.New Jersey 

b. 

Only applies to physicians fee-splitting 

ii. One exception but no other safe harbors 

Only applies to Lab kickbacks and fee-splitting 

ii. No safe harbors 

iii. NON-CRIMINAL!!!! 

c.· NJ.S;~. 3:0i4J;h~7.~ 

i. Medicaid only 

ii. BFE and a couple other exceptions 

1. c) Any provider, or any person, firm, partnership, corporation, or entity 

who solicits, offers, or receives any kickback, rebate, or bribe in 

connection with: (1) The furnishing of items or services for which 

payment is or may be made in whole or in part under P.l.1968, c. 413; 

or (2) The furnishing of items or services whose cost is or may be 

reported in whole or in part in order to obtain benefits or payments 

under P.L.1968, c. 413; or (3) The receipt of any benefit or payment 

under this act, is guilty of a crime of the third degree, provided, 

however, that the presumption of nonimprisonment set forth in 

subsection e. of NJ.S.2C:44-1 for persons who have not previously been 

convicted of an offense shall not apply to a person who is convicted 

under the provisions of this subsection. 

2. This subsection shall not apply to (A) a discount or other reduction in 

price under P.l.1968, c. 413 If the reduction in price is properly 

disclosed and appropriately reflected in the costs claimed or charges 

made under P.L.1968, c. 413; and (B) any amount paid by an employer 

18 I Page 
172 


28931.128

32.New Mexico 

33.NewYork 

to an employee who has a bona fide employment relationship with such 

employer for employment in the provision of covered items or services. 

Broader than AKS and has NO SAFE HARBORS 

i. Labs 

ii. No safe harbors 

iii. Only a misdemeanor though 

iv. Interesting minimum fine scheme 

i. ABSOLUTE PROHIBITION ON FEE-SPLITTING WITH MEDICAL REFERRAL SERVICES 

ii. NO SAFE HARBORS 

iii. No idea what the penalty is????? 

i. Stark Law 

ii. Lots of exceptions 

d. Mit<llli"iev~s®~t~riJle~$~~:§'3~6~" 

i. Extremely broad! 

ii. No safe harbors! 

1. 1. Definitions. As used in this section, "medical assistance provider" 

means any person, firm, partnership, group, association, fiduciary, 

employer or representative thereof or other entity who is furnishing 

care, services or supplies under title eleven of article five of this chapter. 

2. 2. No medical assistance provider shall: (a) solicit, receive, accept or 

agree to receive or accept any payment or other consideration in any 

form from another person to the extent such payment or other 

consideration is given: (I) for the referral of services for which payment 

is made under title eleven of article five of this chapter; or (ii) to 

purchase, lease or order any good, facility, service or item for which 

payment is made under title eleven of article five of this chapter; or 

(b) offer, agree to give or give any payment or other consideration in 

any form to another person to the extent such payment or other 

consideration is given: (i) for the referral of services for which payment 

is made under title eleven of article five of this chapter; or (ii) to 

purchase, lease or order any good, facility, service or item for which 

payment is made under title eleven of article five of this chapter; 

19 I Page 
173 


28931.129

34.North Carolina 

a. NJ:;.Gs,~;~':l,oa~-6~ 

i. Identical to AKS, 

ii. Adopts all safe harbors 

3S.North Dakota 

a. NOTHING!!!!! 

36.0hio 

a. R,t,§l!i1~3,~ 

Medicaid only 

ii. Has a few strange exceptions but does not adopt any AKS safe harbors 

37.0klahoma 

i. Adopts all AKS safe harbors 

38.0regon 

...... 

i. SeeOre. Rev. Stat.§ 677.190(physician subject to discipline for [e]mploying any 

person to solicit patients for the licensee 

39.Pennsylvania 

a. · 64Jl.~~§::t4Q7 

i. (expressing that any person who solicits, receives, offers or pays any illegal 

remuneration shall be guilty of a felony) 

ii. No safe harbors! 

b. ...stat 1457 

40.Rhode Island 

a. Gen.~a~sX~6)§~0;~473 

i. Medicaid only 

ii. Adopts a few safe harbors 

41.South Carolina 

a. 40-45-10(A)(1) 

i. Only regulatory and admin . 

... 

i. Very broad 

ii. No safe harbors 

iii. Only a misdemeanor 

42.South Dakota 

a. SDCL § 36-2-19 

i. Stark law only regulatory 

43.Tennessee 

a. T. C. A.§ 63-31-109 

i. Regulatory sanctions only 

ii. No safe harbors 

20IPage 
174 


28931.130

iii. (19) Paying or agreeing to pay any sum or providing any form of remuneration 

or material benefit to any person for bringing or referring a patient, or accepting 

or agreeing to accept any form of remuneration or material benefit from a 

person for bringing or referring a patient 

b. T. C. A. § 63·6·602 

i. Stark law with exceptions 

44.Texas 

----

45. Utah 

i. {a) A person commits an offense if the person knowingly offers to pay or agrees 

to accept, directly or indirectly, overtly or covertly any remuneration in cash or 

in kind to or from another for securing or soliciting a patient or patronage for or 

from a person licensed, certified, or registered by a state health care regulatory 

agency. 

ii. (b) Except as provided by Subsection (c), an offense under this section is a Class 

A misdemeanor. 

iii. (c) An offense under this section is a felony of the third degree if it is shown on 

the trial of the offense that the person: (1) has previously been convicted of an 

offense under this section; or (2) was employed by a federal, state, or local 

government at the time of the offense 

iv. No safe harbors, but interesting exception! 

1. V.T.C.A., Occupations Code§ 102.004 

a. Section 102.001 does not prohibit advertising, unless the 

advertising is: (1) false, misleading, or deceptive; or (2) not 

readily subject to verification, if the advertising claims 

professional superiority or the performance of a professional 

service in a superior manner 

a. ·u,c~~953§~672ih4 

i. Broad 

ii. No safe harbors 

46.Vermont 

a. NOTHING! 

47.Virginia 

a .. VAtodf1~1i.<§$2;\1~~1,~ 

i. Adopts all AKS safe harbors 

i. Only regulatory and admin. 

ii. Adopts all AKS safe harbors 

i. Separate statute for physician fee splitting in exchange for patient referrals 

ii. Adopts some safe harbors 

i. SPECIFIC TO BEHAVIORAL HEALTH 

211Page 
175 


28931.131

ii. Narrowly worded-though 

iii. Adopts all AKS safe harbors 

iv. Only a misdemeanor 

48. Washington 

i. Strangely-worded 

ii. Similar to AKS and Stark 

iii. No safe harbors 

iv. Only a misdemeanor 

b. W•S:~'s;'Rtw~ ~4,~,,z~o 

i. Same as AKS and Stark 

ii. Adopts some of the main safe harbors 

49.West Virginia 

a, :<~,\fJ.;<:g~e;~§}~·:N 

i. Similar to AKS 

ii. No safe harbors 

SO. Wisconsin 

i. Narrowly prohibits fee-splitting for referrals 

ii. No safe harbors 

51. Wyoming 

a. NOTHING! 

2. During the hearing, gaps in the federal anti-kickback statute as it applies to non-Medicaid 

facilities were discussed. Please provide a list of all current state laws or proposed legislation 

in Florida addressing anti-kickback statutes applying to commercial insurers and nonmedical 

facilities. 

Federal anti-kickback statutes apply to both medical and behavioral facilities, however, the 

current law only gives jurisdiction to the Department of Justice to prosecute kickback schemes 

involving federal programs such as Medicaid and Medicare. This limitation ties the hands of 

federal prosecutors from going after corrupt facilities involved in foreign or interstate commerce 

who defraud private insurance providers. This multi-billion dollar scam, at least insofar as it 

involves private pay patient brokerlng, is not being prosecuted by the federal government. 

There has been legislation proposed In the U.S. Senate (Eliminating Kickbacks in Recovery Act of 

2018, S. 3254} by Senators Rubio and Kobachar that will extend the jurisdiction of federal 

prosecutors to those bad actors scamming commercial insurers through interstate marketing 

and broke ring of patients. 

221Page 
176 


28931.132

GREG WALDEN, OREGON 

CHAIRMAN 

Mr. Alan S. Johnson 

ONE HUNDRED FIFTEENTH CONGRESS 

FRANK PALLONE, JR., NEW JERSEY 

RANKING MEMBER 

Ql:ongre~~ of tbe 'Qilniteb ~tate~ 

~ou~e of l\epre~entatibe~ 

COMMITIEE ON ENERGY AND COMMERCE 

2125 RAYBURN HousE OFFICE BuiLDING 

WASHINGTON, DC 20515-6115 Majority {20:t)225-2927 

Minority {202)225-3841 

January 23, 2018 

Chief Assistant State Attorney 

15th Judicial Circuit 

401 North Dixie Highway 

West Palm Beach, FL 33401 

Dear Mr. Johnson: 

Thank you for appearing before the Subcommittee on Oversight and Investigations on 

December 12, 2017, to testify at the hearing entitled "Examining Concerns of Patient Brokering and 

Addiction Treatment Fraud." 

Pursuant to the Rules of the Committee on Energy and Commerce, the hearing record remains 

open for ten business days to permit Members to submit additional questions for the record, which are 

attached. The format of your responses to these questions should be as follows: (I) the name ofthe 

Member whose question you are addressing, (2) the complete text of the question you are addressing in 

bold, and (3) your answer to that question in plain text. 

To facilitate the printing of the hearing record, please respond to these questions with a 

transmittal letter by the close of business on Tuesday, February 6, 2018. Your responses should be 

mailed to Ali Fulling, Legislative Clerk, Committee on Energy and Commerce, 2125 Rayburn House 

Office Building, Washington, DC 20515 and e-mailed in Word format to Ali.Fulling@mail.house.gov. 

Thank you again for your time and effort preparing and delivering testimony before the 

Subcommittee. 

Sincerely, 

~ Chairman 

Subcommittee on Oversight and Investigations 

cc: The Honorable Diana DeGette, Ranking Member, Subcommittee on Oversight and Investigations 

Attachment 
177 


28931.133

Attachment-Additional Questions for the Record 

The Honorable Michael C. Burgess 

l. The issue of abusive billing, particularly relating to urine drug tests in the context of this 

hearing, is especially concerning given the costly nature of the issue. In one case in Florida, an 

insurance company was billed $600,000, primarily for drug tests, over the course of just seven 

months. How can we work to limit abusive billing and incentivize insurance companies to get 

involved? 

2. Insurance companies are at the forefront of abusive billing practices. Would a practice such as 

requiring consent from a patient or a referral for out-of-network services be effective in 

preventing beneficiaries from enrolling in ineffective treatment programs or schemes? 

a. What role do you think insurers can play in preventing or avoiding fraudulent billing 

practices while protecting their beneficiaries? 

3. In your fall2016 Presentment of the Palm Beach County Grand Jury, you mention that 

substance use treatment licenses should be treated as other health care licenses- as a privilege, 

not a right. While the fraud and abuse of the system is something that needs to be addressed, do 

you have any concern that with increased regulation we would see a decline in substance abuse 

treatment facilities such that the supply would not meet demand? 

The Honorable Gus Bilirakis 

I. Mr. Johnson- The Sober Homes Task Force in Palm Beach County represents a unique, 

forward-thinking local approach to addressing patient brokering. 

a. Who comprises the makeup of this task force? 

b. To date, what work has been undertaken by the task force to address the issue of patient 

brokering? 

c. It's my understanding that many of the task force's findings and recommendations were 

used in crafting Florida's newly implemented law aimed at addressing fraud and abuse 

the sober home industry. Which recommendations from the task force are still 

outstanding? 

The Honorable Frank Pallone, Jr. 

I. In your estimation, how many patients seeking treatment for substance use disorders have been 

pulled into these schemes? 

2. Are there any typical patterns regarding patients seeking treatment for substance use disorder, 

such as their socioeconomic status or where they reside before they come to Florida for 

treatment? 
178 


28931.134

3. How is Florida's Patient Brokering Act designed to address the patient brokering issue? 

4. How has Florida's Patient Brokering Act been working so far? What successes has Florida had 

in using the law to disrupt patient brokering schemes and bring prosecutions? 

5. How does Florida's Patient Brokering Act seek to crack down on deceptive advertising 

practices used as part of these schemes, and how successful has it been thus far? 

6. Do you feel that law enforcement has sufficient resources to investigate and go after bad actors 

in your state? If not, what additional resources would help you do so? 

7. Have insurers reached out to you to discuss issues with frequent and excessive urine drug tests 

as part of these patient broker schemes? If so, what challenges do you believe insurers face in 

addressing this issue? 

The Honorable Kathy Castor 

I. What treatments have you seen that have had the most success for individuals in recovery and 

how can we ensure that patients have access to the treatment that will work for them? 

2. Though some states have prosecuted corrupt facilities and rogue providers, how can we crack 

down on facilities not providing the level of care needed to aid patients? 

2 
179 


28931.135

GREG WALDEN, OREGON 

CHAIRMAN 

Mr. Eric M. Gold 

ONE HUNDRED FIFTEENTH CONGRESS 

FRANK PALLONE, JR., NEW JERSEY 

RANKING MEMBER 

C!Congrt~~ of tbt Wnittb ~tate~ 

1!}ouse of 1\epresentat\bes 

COMMITTEE ON ENERGY AND COMMERCE 

2125 RAYBURN HouSE OFFICE BuiLDING 

WASHINGTON, DC 20515-6115 MaJority 1202)22!>-2927 

Minority 1202)225-3641 

January 23,2018 

Assistant A ttomey General 

Chief, Health Care Division 

Office of the Massachusetts Attorney General 

One Ashburton Place 

Boston, MA 02108 

Dear Mr. Gold; 

Thank you for appearing before the Subcommittee on Oversight and Investigations on 

December 12, 2017, to testify at the hearing entitled "Examining Concerns of Patient Brokering 

and Addiction Treatment Fraud." 

Pursuant to the Rules of the Committee on Energy and Commerce, the hearing record 

remains open for ten business days to permit Members to submit additional questions for the 

record, which are attached. The format of your responses to these questions should be as 

follows: (I) the name of the Member whose question you are addressing, (2) the complete text of 

the question you are addressing in bold, and (3) your answer to that question in plain text. 

Also attached are Member requests made during the hearing. The format of your 

responses to these requests should follow the same format as your responses to the additional 

questions for the record. 

To facilitate the printing of the hearing record, please respond to these questions and 

requests with a transmittal letter by the close of business on Tuesday, February 6, 2018. Your 

responses should be mailed to Ali Fulling, Legislative Clerk, Committee on Energy and 

Commerce, 2125 Rayburn House Office Building, Washington, DC 20515 and e-mailed in Word 

format to Ali.Fulling@mail.house.gov. 
180 


28931.136

THE COMMONWEALTH OF MASSACHUSETTS 

OFFICE OF THE ATTORNEY GENERAL 

ONE AsHBURTON PLACE 

80S TON, MASSACHUSETTS 02] 08 

MAURA HEALEY 

ATTORNEY GcNF.RAL 

(617) 727-2200 

www.mass.gov/ago 

0 

By Electronic Mail (Ali.Fulling@mail.house.gov) 

And U.S. Mail 

Ali Fulling 

Legislative Clerk 

Committee on Energy and Commerce 

Rayburn House Office Building 

Washington, D.C. 20515 

Dear Ms. Fulling: 

February 13,2018 

It was a pleasure to testify before the Committee on Energy and Commerce, 

Subcommittee on Oversight and Investigations at the December 12, 2017 hearing 

entitled, "Examining Concerns of Patient Brokering and Addiction Treatment Fraud." As 

requested, enclosed are my responses to additional questions for the record. 

Please let me know if you have any further questions. 

Very truly yours, 

c 1/)/lti(J 

EricM. Gold 

Assistant Attorney General 

Chief, Health Care Division 

(617) 963-2663 
181 


28931.137

Eric Gold 

Assistant Attorney General 

Chief, Health Care Division 

Office of Massachusetts Attorney General Maura Healey 

"Examining Concerns of Patient Brokering and Addiction Treatment Fraud" 

Tuesday, December 12,2017 

Before the United States House of Representatives 

Committee on Energy and Commerce 

Subcommittee on Oversight and Investigations 

Responses to Additional Questions for the Record 

The Honorable Michael C. Burgess 

1. The issue of abusive billing, particularly relating to urine drug tests in the 

context of this hearing, is especially concerning given the costly nature of the issue. In one 

case in Florida, an insurance company was billed $600,000, primarily for drug tests, over 

the course of just seven months. How can we work to limit abusive billing and incentivize 

insurance companies to get involved? 

As suggested by the example in the question, insurance carriers have substantial financial 

incentive to detect, investigate, and prevent health care fraud, including bills for unnecessary 

urine drug screens and can be helpful partners, working with law enforcement and policy 

makers. In Massachusetts, both public and private payers have engaged in extensive activities to 

root out urine drug screen fraud in billing. For example, in 2012, our Office, working in 

collaboration with the Massachusetts Medicaid Program, obtained a $20 million settlement from 

Calloway labs to resolve allegations of an elaborate kickback scheme that cost Massachusetts 

millions of dollars for wmecessary urine drug screens.' Similarly, the largest commercial health 

1 Press Release, Office of Massachusetts Attorney General, Calloway Laboratories Pays $20 

Million to Resolve Allegations of Kickbacks and Fraud on State Medicaid Program (Mar. 30, 
182 


28931.138

insurers in Massachusetts, Blue Cross Blue Shield of Massachusetts, 2 Harvard Pilgrim Health 

Care, 3 and Tufts Health Plan\ expend substantial resources to detect and prevent this type of 

health care fraud. 

2. Insurance companies are at the forefront of abusive billing practices. Would 

a practice such as requiring consent from a patient or a referral for out-of-network services 

be effective in preventing beneficiaries from enrolling in ineffective treatment programs or 

schemes? 

Many health insurance plans currently require that patients receive referrals for out of 

network services. Some health insurance plans have also imposed prior authorization 

requirements on certain treatments for substance use disorder ("SUD"). Massachusetts law, 

however, now requires that insurance carriers provide coverage for medically necessary acute 

treatment services and clinical stabilization services for treatment of SUD for up to a total of 

fourteen days without requiring preauthorization. See Mass Gen. Laws ch. 176A, § 47GG. As I 

noted in my written testimony, policy makers need to be sure that any attempts to address patient 

brokering advance the ultimate goal of ensuring that patients with SUD have access to the 

treatment that they need and do not unintentionally limit that access. 

3. What role do you think insurers can play in preventing or avoiding 

fraudulent billing practices while protecting their beneficiaries? 

20 12), at http:/ /www.mass.gov/ago/news-and-updates/press-releases/20 12/20 12-03-30-callowaysettlernent.html 

2 http://www.bluecrossma.com/healthy-times/did-you-know/health-care-fraud.html' 

3 https://www.harvardpilgrim.org/pls/portal/docs/P AGE/PROVIDERS/MANUALS/ 

PA YMENT"/o20POLICffiS/H-2%20FRAUD-WASTE-ABUSE%20POLICY 112917.PDF 4 https://tuftshealthplan.corn/mernber/our-plans/tufts-health-together/docum~ts-andresources/fraud-and-abuse 

2 
183 


28931.139

Insurers have an important role to play and must balance detecting and preventing health 

care fraud with giving patients access to the health care treatment that they need. As noted 

above, public and private health care payers in Massachusetts have invested substantial resources 

in rooting out fraudulent billing practices, including fraudulent practices related to SUD 

treatment. 

The Honorable Frank Pallone, Jr. 

1. What tools does the Massachusetts Attorney General's office have to 

investigate and prosecute patient brokers? 

Our office has both civil and criminal law enforcement tools. On the civil side, the 

Office enforces the Massachusetts Conswner Protection Act, Mass. Gen. Laws ch. 93A, and 

Massachusetts False Claims Act, Mass. Gen. Laws ch. 12, §§SA-50, both of which give the 

Attorney General pre-suit investigatory authority and allow for robust remedies, including civil 

penalties, against those who violate the law. Criminally, the Office has authority to enforce 

various criminal statutes that may relate to patient brokering, including but not limited to, Mass. 

Gen. Laws ch. 175H, § 2 (false statements on insurance applications and claims), ch. 175H, § 3 

(anti-kickback), ch. 266, § 30 (larceny), and ch. 266, § IliA (fraudulent insurance claims). 

2. What barriers, if any, are preventing Massachusetts officials from being able 

to do more to assist families whose loved ones have been pulled into patient broker 

schemes? 

In instances where Massachusetts residents have been lured out of state for treatment by 

patient brokers, there are substantial obstacles to our Office directly assisting those patients and 

their families. Most practically, those patients are often far from home and, in many cases, the 

families who have contacted our office in Massachusetts do not know exactly where their loved 

3 
184 


28931.140

ones are located, only that they are being treated in a particular state. Even in situations where 

the families know where their loved ones are, the patients (who may be still suffering from 

addiction) may not be in contact with their families, may not want our Office to intervene, or 

may not want to return home, despite the risks of receiving sub-par treatment far from home. 

Despite these barriers, our Office does offer support and guidance for SUD patients and 

their families who have run into difficulties seeking the treatment they need. 

3. What challenges inherent to these patient broker schemes make it difficult 

for the Massachusetts Attorney General's office to investigate and prosecute cases? 

There are a number of challenges to our Office investigating and prosecuting patient 

brokering schemes. I note three of those challenges here. First, patient brokering schemes are 

often devised and run from out-of-state, especially states far from Massachusetts like Florida, 

Arizona, or California. Although our Office can effectively prosecute certain interstate cases, 

those investigations pose substantial logistical and other challenges. Second, the victims of 

patient brokering schemes are often suffering from severe substance use disorder. The victims 

may, therefore, be unable or unwilling to work with our Office because of ongoing treatment or 

other complications, which poses challenges to the investigation. Finally, the patient brokers 

themselves may be closely integrated into the recovery community or in recovery themselves. 

The victims, victims' families, and others working to assist those in recovery may, therefore, 

have close relationships with those who have engaged in the unlawful patient brokering, making 

investigations and prosecutions more challenging. 

4. What more can be done to educate the public about patient broker schemes? 

Our Office has issued a consumer advisory and, through our Community Engagement 

Division, worked to spread the word among SUD patients and their families about patient 

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brokering schemes. Similarly, other government agencies, including federal, state, and local 

health departments, may educate the public through broad public education campaigns (like our 

Office's consumer advisory) and direct interactions with patients and their families. 

We have also found that the media can be helpful in raising awareness with the public 

about the issue. A number of Massachusetts families have reported becoming aware of the issue 

through reports in the newspaper and on local television news. Other professionals who work 

with SUD patients, including doctors, nurses, and insurance carriers, can remind patients of the 

risks of accepting referrals to unknown treatment centers. 

5. What types of deceptive marketing tactics have been employed by patient 

brokers in Massachusetts, and how prevalent do you believe the use of these tactics is? 

We are aware of various allegations of deceptive marketing tactics that patient brokers 

have employed to lure Massachusetts residents to out-of-state treatment. As noted in my written 

testimony, in one situation, it was alleged that a recruiter manipulated the phone number 

associated with the Google search results for a Massachusetts SUD treatment provider, so that 

when the patient called the number, he was routed to a patient broker. More generally, we are 

aware of allegations that patient brokers have misled prospective patients about various aspects 

of the treatment that the patient was to receive. It is unclear how prevalent these tacties are. 

6. What can be done to prevent call aggregaton from preying on patients 

seeking treatment for substance use disorders? 

The most immediate thing that can be done is to educate patients and their families about 

patient brokering schemes and the role that call aggregators and other referral services play. Our 

Office has issued a consumer advisory reminding consumers to be aware of unsolicited referrals 

for addiction treatment. Over the long term, law enforcement should also continue efforts to 

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investigate and prosecute, either civilly or criminally, those engaged in fraudulent marketing 

through call aggregators or otherwise. 

7. Do you feel that law enforcement has sufficient resources to investigate and 

go after bad actors in your state? If not, what additional resources would help you to do 

so? 

Our Office has and continues to dedicate substantial resources to combatting all aspects 

of the opioid epidemic, including investigating and prosecuting patient brokering schemes. Still, 

many patient brokering schemes involve individuals and entities operating across the country and 

it is challenging for our Office to address all components of a particular scheme through our 

investigations and prosecutions. As I recommended in my written testimony, dedicating 

additional federal resources-whether in the form of additional federal investigative teams or 

grants for state and local investigators-to investigate and prosecute these interstate cases will 

ensure that every vulnerable patient is protected from recruiters looking to take advantage of 

them. 

The Honorable Kathy Castor 

1. What treatments have you seen that have had the most success for 

individuals in recovery and how can we ensure that patients have access to the treatment 

that will work for them? 

Although I am not a health care professional, I understand that for many patients the most 

effective tr.eatment for substance use disorder (especially opioid use disorder) is a combination of 

medication-assisted treatment (i.e., buprenorphine, methadone, or naltrexone) and psychosocial 

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therapy. See American Society for Addiction Medicine, The National Practice Guideline For 

the Use of Medications in the Treatment of Addiction Involving Opioid Use, at 39 (2015).5 

Massachusetts has taken a number of steps to ensure that patients have access to 

treatment they need. First, our state requires that insurers cover up to fourteen days of medically 

necessary acute treatment services (detoxification treatment) and clinical stabilization services 

and that patients receive outpatient SUD treatment without prior authorization. Further, since 

2015, Massachusetts has added more than 1100 treatment beds in the state, and our Medicaid 

program has committed to investing up to $30 million to expand residential recovery services 

and increase access to medication-assisted treatment, among other types of treatment. 

We can also work to expand the number of health care providers that are available to treat 

substance use disorder by incentivizing doctors, nurses, counselors and others to go into the field 

and providing training to current health care providers about how to treat SUD. 

Member Requests for the R~ord 

The Honorable Gregg Harper 

1. Throughout the hearing, there were several questions regarding which states 

have patient broker laws and the specifics of those laws. Please provide the committee with 

a list and short description of all current state laws or proposed legislation in 

Massachusetts that address patient brokering. 

I am not aware of any Massachusetts laws or proposed legislation that specifically 

address patient brokering. The following are examples of Massachusetts statutes that prohibit 

conduct that may be present in patient brokering schemes: 

Mass. Gen. Laws ch. 12, §§SA-50 (false claims act) 

5 https://www.asam.org/docs/default-source/practice-support!guidelines-and-consensusdocs/asam-national-practice-guideline-supplement.pdf?sfvrsn=24 

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Mass. Gen. Laws. ch. 93A, § 2 (consumer protection law) 

Mass. Gen. Laws ch. 175H, § 2 (false statements on insurance applications and claims) 

Mass. Gen. Laws ch. 175H, § 3 (commercial anti-kickback law). 

Mass. Gen. Laws ch. 266, § 30 (larceny) 

Mass. Gen. Laws ch. 266, § lilA (fraudulent insurance claims) 

2. During the hearing, gaps in the federal anti-kickback statute as it applies to 

non-Medicaid facilities were discussed. Please provide a list of all current state laws or 

proposed legislation in Massachusetts addressing anti-kickback statutes applying to 

commercial insurers and nonmedical facilities. 

Mass. Gen. Laws ch. 175H, § 3 (commercial anti-kickback law). 

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