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Be aware of the latest fraud schemes

April 27, 2018
by Julie Miller, Editor in Chief
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As prosecutors continue to shut down exploitive sober homes and treatment center operations, new schemes are emerging that you should be aware of. I recently spoke to Florida State Attorney Dave Aronberg, who’s been driving the cleanup in Palm Beach County.

His office has seen 47 arrests and 16 convictions, but “there’s more to come,” he told me. Aronberg spends about half his time focused on addiction treatment issues and says Florida remains a popular recovery destination. Even with new regulations, 75% of Florida’s patients are still originating from out of state.

Testing as a revenue source

Although payers seem to be catching on to the patterns of overutilization of drug testing in addiction treatment, there are other tactics used by unscrupulous operators to bilk insurance. For example, Aronberg says the operators are now finding creative ways to partner with rural hospitals, which then submit the testing claims under their own identifiers to avoid causing any red flags. In some fraud cases, the hospital name leveraged to slide the claims through is actually a shuttered facility that has ceased operations.

It’s an issue of payers not being able to keep their reimbursement algorithms up to date, thus allowing the bad guys to take advantage of the administrative lag.

Additionally, some intensive outpatient providers are now seeking to maximize revenue by submitting claims for allergy and genetic testing, which Aronberg calls “soft science.” The medical necessity of such testing in the treatment of addiction is questionable. Remember that providers were profiting from $1,200 urine drug screenings until just recently. Shifting to a different testing category is their way of making up the lost profits, even if only for the time being.

More sophisticated enticements

Industry standards in the past year have become more explicit about what qualifies as an enticement to lure a patient into a particular treatment center. For example, a free plane ticket qualifies as an enticement and is unethical or, in some states, illegal.

But Aronberg tells me that bad operators are now resorting to promises of employment as the latest lure. For example, a broker might suggest that a potential patient would make a great future manager after his recovery experience. Employment wages are quite the creative kickback.

Clearly, the vast majority of the treatment centers are good guys doing good work. Kickbacks, patient brokering and fraud are generally the hallmark of networks that have committed similar crimes in other industries, Aronberg says. Thirteen agencies and the FBI are working together in Florida to prosecute the guilty, but swindlers don’t give up so easily.

“We have anecdotal evidence that the bad guys have moved,” he says.

California, Arizona and Texas are some of the key target areas. Aronberg and his team have been assisting communities in other states develop task forces and create best practices. He wants to see the Palm Beach County Sober Home Task Force model replicated nationwide.


Addiction professionals annually convene at the National Conference on Addiction Disorders to share what’s working: Clinicians hear from thought leaders on delivering treatment, while executives of behavioral healthcare organizations learn how to run more effective, more efficient, and ethically minded businesses.

August 19 - 22, 2018 | Disneyland, CA


Julie Miller

Editor in Chief

Julie Miller


Julie Miller has more than 14 years of experience observing, analyzing and reporting on various...

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