Surprise, surprise: Out-of-state visitors to the O.C. cities with the highest concentration of addiction treatment centers were 159% more likely to overdose, according to a recent study published in the journal Substance Use & Misuse.
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“You’d expect that, in a place where there’s a lot of treatment centers, there would be a buffer against relapses and overdoses,” said Ilan Shrira, social psychologist at Pennsylvania State University and lead study author, in prepared remarks.
Indeed, that’s exactly what earlier studies in other places have found: The presence of treatment centers predicted lower rates of overdose and death in the surrounding area.
But no, not here.
“(O)ur study shows that this area of Orange County, where there is an abundance of treatment centers, is a hotspot for overdoses, especially for out-of-state visitors,” Shrira said.
The number of treatment centers attracts many non-locals and leads to the overrepresentation of drug users in the local population, the study found. “This, in addition to a recent rise in predatory practices in connection to fraudulent overbilling at local treatment centers, may further contribute to overdose risk.”
Why might this be? One possible explanation “may be the lack of oversight in the industry, allowing for fraudulent and predatory practices by some bad actors that can harm those seeking treatment and contribute to overdose risk.”
We posit another reason: About 40 years ago, California ditched the “Certificate of Need” system, which required would-be health care providers to prove there was a local demand for their services before they were allowed to snip any opening-day ribbons.
Repeat: Local demand. The lack of such a system is a key reason why Southern California became the Rehab Riviera, with far more centers than the region’s population could possibly support, and the push to import patients to put “heads in beds.”
The study’s authors did a similar examination of overdose deaths in Florida, back when that state was Ground Zero of rehab fraud. There, too, they found that visitors were more likely to have died from a drug overdose, “pointing to the need for stronger regulatory oversight of the industry,” the authors said.
The difference between Florida and California? Florida enacted new laws cracking down on miscreants in the treatment industry. Overdoses and fraud decreased.
California, meanwhile, refuses to make meaningful change. Gov. Gavin Newsom vetoed a bipartisan bill to require licensing for outpatient addiction treatment (is this not health care?!) The Legislature has repeatedly rejected stiffer criminal penalties for wayward operators and stymied efforts to let cities or counties pick up enforcement slack when state inspectors are overburdened. The state’s Attorney General and Housing Department repeatedly threaten cities trying to regulate sober homes, even after federal courts ruled that these regulations aim to protect the vulnerable people living in them, not discriminate against them.
Is the Rehab Riviera stocked with a bunch of NIMBY whiners? No, no, no!
“This isn’t just a local Orange County issue,” Shrira said. “Most of the victims come from the rest of the United States. You have a lot of vulnerable people who are trying to get help, trying to get well, and some of them are being hurt instead.”
For nearly a decade now, we’ve been telling you about the deaths, the fraud, the “curbing” of folks once their (oft ill-gotten) insurance policies are exhausted. Yes, some laws have changed. But they’re wee bites at the edges of a giant cookie; baby steps when we need to run a marathon.
Shrira presented the study’s findings last month to the Southern California Sober Living Task Force, furnishing more evidence for its (uphill) battle to convince the Powers-That-Be to embrace quality standards in the troubled, private-pay slice of the addiction recovery industry.
While there have been many lawsuits and much news reporting, there has been little empirical research testing whether a concentration in treatment centers are tied to a significant increase in overdoses in the area, the report said. “(N)o study has examined whether overdose risk differs for local residents and visitors, a distinction that could inform whether the local treatment industry has contributed to these overdoses.”
Until now, of course. Will a study from East Coat academics with no skin in the game pry open closed minds? Hope springs eternal.
‘Our most intriguing finding’
Shrira and study co-author Joshua Foster, a psychology professor at the University of South Alabama, analyzed more than 33 million records from 323 emergency room locations in California between 2019 and 2021 (the most recent data available when they began the project). The information came from California emergency department databases and it included demographics, diagnosis codes, residence ZIP codes, and hospital identifiers to pinpoint each emergency room’s location.
The authors then calculated the odds of drug overdose for residents of Orange County, residents of other California counties, and residents of other states.
-Local residents within the treatment hub experienced a slight (10%) elevation in overdoses.
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-Visitors from other California counties were 68% more likely to overdose.
-And the risk for aforementioned out-of-state visitors was “exceptionally high” That means they were 159% more likely to overdose within the treatment hub compared to other parts of the state.
“Our most intriguing finding was that the overdose ratios in the exposure region were much greater for out-of-state visitors than for visitors from other counties inside California,” the study said. “This large disparity dovetailed with reports that many out-of-state residents have been recruited to the area in the context of overbilling schemes that have flourished in this region in recent years. The sub-standard care they receive at such clinics, combined with the patients’ distance from home, can put them at greater risk for subsequent return to drug use.
“To be clear, we are not implying that all or even a majority of treatment providers in the exposure region have engaged in unethical activities. But, certainly, this is a context where even a relatively small number of bad actors could inflict an inordinate amount of harm.”
The findings in Florida and California suggest that unethical behaviors in the treatment industry cannot be dismissed as provincial problems confined to these locations, they said.
“As the overdose crisis continues, those in need of addiction treatment — and therefore potential victims of these kinds of predatory schemes — will only grow. In California…there has been little success in restraining these abuses over the past decade. The Department of Health Care Services, the California division that oversees most of the state’s SUD treatment programs, has been very slow to investigate complaints of wrongdoing at treatment centers, often taking more than a year to complete each investigation.
“Punitive measures against violators also tend to be mild, violators are rarely arrested or prosecuted. In some cases, a facility’s license may be suspended or revoked, but this does not prevent their owners from opening up a new (substance abuse) treatment facility nearby and continuing the predatory schemes there. Some have suggested that a separate division is needed with the authority to both investigate claims swiftly and enforce wrongdoing to the fullest extent of the laws.”
They note that the U.S. Department of Justice has named Orange County the nation’s epicenter of addiction treatment fraud. And that the large recovery industry, combined with weak regulatory oversight, “has allowed unscrupulous treatment operators and patient brokers to profit from unethical practices such as excessive and fraudulent billing of the insurance policies of (substance use disorder) patients,” the study said. “Practitioners of these schemes often target non-local residents (usually from outside California state) as patients, drawing on the vast reservoir of people who use substances throughout the U.S. who are desperate for help.”
Why does this matter to you? Beyond the suffering of victims and their families, these predatory practices undermine trust toward legitimate providers and defraud the healthcare system of hundreds of millions of dollars annually, ultimately increasing insurance costs for everyone, the report said.
“Greater attention is needed from lawmakers, law enforcement, non-government organizations, and researchers to find solutions to what is clearly a nation-wide problem,” it said.
Refresher: The mechanics of fraud
The Affordable Care Act requires health insurers to cover addiction treatment, eliminates caps on coverage and lets kids stay on their parents’ insurance until they’re 26.
Money has surged into the addiction recovery sector. And that, in turn, has attracted some unethical providers who use predatory practices to keep patients, particularly out-of-state residents, in a treatment loop. To entice patients to California, providers often pay for plane tickets, sign patients up for primo private insurance (private insurance typically has the most generous reimbursement rates) and even pay the patients’ premiums (they bill much more than they ever pay). If the patient relapses, the insurance coverage typically resets, allowing the provider to start a fresh billing cycle.
“(U)nscrupulous providers may view a patient’s resumed drug use not as a treatment failure but as a highly profitable and continuous revenue stream,” the report said.
In 2021, the last year of data collection in this study, the U.S. Department of Justice filed criminal charges against at least 10 substance abuse facility owners and patient recruiters allegedly involved in kickback schemes in the county. We know the feds are investigating others. We know insurance fraud investigators say the problem may be worse than ever.
In the interest of full disclosure, Shrira came across our reporting during his research, and our work is referenced along with many academic sources in the study. Why, we asked, has Florida done more to combat abuse on this front than California?
“Florida, in general, is like the Wild West — a lack of regulations and oversight for many things,” he said by email. “Ergo, all sorts of scams galore. But I think this lack of structure worked to Florida’s advantage for cracking down on the treatment fraud, because it allowed Dave Aronberg (the state attorney of Palm Beach County) to swoop in and do the things he wanted to do, with little red tape or existing ‘rules’ to constrict him. Once he managed to get bipartisan support at the state level (e.g., to create laws with real teeth), as well as federal support to arrest and prosecute people, most of the worst scammers toppled (or at least were run out of Palm Beach County).
“California is (to me) on the other end of the spectrum in terms of structured rules and regs. And this obviously makes it difficult to make changes to the existing status quo. (Though I suppose if Gavin Newsom or Trump woke up tomorrow morning and decided that the treatment fraud in CA had to end, then they could bring about change like Aronberg did in Florida.)”
Given the tremendously high stakes — people’s lives! — it’s hard not to suspect that there are dark forces at work to preserve the money train. The double standard is hard to justify: Why are publicly-funded addiction treatment programs in California required to abide by stricter rules and oversight, while private-pay programs are not?
Hello? Governor? Attorney General? California legislators? A little help here please?
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