Charges of sexual assault, insurance fraud and furnishing drugs filed against Christopher Bathum, the self-proclaimed “Rehab Mogul,” will have a negative impact felt beyond the 19 sober-living facilities he founded in California and Colorado, industry leaders say.
Bathum, founder of the former Community Recovery Los Angeles (CRLA), was arrested Nov. 10. On Monday, he was charged by Los Angeles County prosecutors in two separate cases:
First, Bathum was accused of sexually assaulting nine patients and furnishing them with controlled substances. He is accused of providing female patients at the treatment centers with drugs and then sexually assaulting them over a period from 2013-16. If convicted, Bathum faces life in prison.
Bathum, along with Kirsten Wallace, the program’s chief financial officer, faces 31 counts of money laundering, eight counts of grand theft, six counts of identity theft and five counts of insurance fraud. The pair are accused of orchestrating a scheme to fraudulently bill $175 million, mostly for services never provided. Bathum and Wallace each face 53 years in state prison if convicted.
Although they are the exception and not the rule, the alleged actions in these cases are damaging to the vast majority of treatment and recovery service providers who are operating above board, says Pete Nielsen, CEO of the California Consortium of Addiction Programs and Professionals (CCAPP), a statewide association of community-based for-profit and nonprofit substance use disorder treatment agencies and addiction-focused professionals.
“It really doesn’t help us to break the stigma,” Nielsen says. “It cements the communities that don’t want treatment facilities and recovering people in their backyard. Unfortunately, people see this more as the rule rather than the exception. They think, ‘Wow, they all must be like that.’ But that’s an exception and not the rest of the industry.”
And ultimately, he adds, it’s patients who suffer as a result.
“Imagine if somebody wanted to get help and said, ‘I don’t want to go to a treatment facility because I don’t trust them,’” Nielsen says. “It’s bad for the individual trying to get help.”
David Sheridan, executive director of California's Sober Living Network and president of the National Alliance for Recovery Residences (NARR), noted “a substantial spike” in new providers to support the demand for treatment services, creating a strain on state authorities responsible for licensing and overseeing programs.
“At least in California, it’s my impression they are very constrained in terms of resources,” Sheridan says. “There are other things going on that these agencies have to deal with too. In California, the big one for us is a substantial change in the way Medicaid is going to be delivered next year. California applied for and received a waiver for how it runs its Medicaid program for addiction services. That’s putting a huge load not only on existing providers, but also the regulators.
“When you add to that the number of new licensing applications and things like this, it can be easy for things to get lost in the shuffle unless there is a good, well-resourced mechanism for responding to complaints,” Sheridan says.
Complaint launched probe
A complaint of sexual assault filed in May triggered the investigation into Bathum’s practices by Los Angeles County authorities, according to a Los Angeles Times report. Bathum stepped down from his position with CRLA and the company rebranded itself to Commonwealth Global. On Monday, he pleaded not guilty to the charges he now faces.
Sheridan notes that the insurance fraud scheme allegedly perpetrated by Bathum and Wallace could have another consequence for legitimate caregivers: delays and outright denial of payment by skeptical insurance companies.
“It’s really difficult to deliver care and spend your resources on a client without knowing if you’re going to get paid for legitimate claims,” Sheridan says. “It puts providers in an impossible situation.”
A panel of experts will discuss today’s business ethics at the 2016 Treatment Center Investment & Valuation Retreat in Scottsdale, Ariz., December 5-7. Register now!