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Ethics Survey: Behavioral health leaders examine industry conduct

March 01, 2017

Federal raids on sober homes and addiction treatment centers in Florida in the past six months have resulted in 19 arrests and helped bring to light the prevalence of fraudulent and illegal activities within the state’s profitable treatment industry. In most cases, investigators alleged patient brokering schemes, illegal kickbacks and identity theft.

And what’s happening in Florida is happening in other markets around the country.

It’s exceedingly difficult to quantify the scope of such unethical practices, but experts generally agree that it’s more about criminal enterprise than treatment centers gone bad. For example, one operator arrested in Florida for patient brokering in February had previously served a three-year jail sentence for defrauding the state’s unemployment agency.

At the very least, it’s an issue that has flummoxed the vast majority of programs that operate honestly and aim to put patient care first.

“The industry is not corrupt,” says Marvin Ventrell, executive director of the National Association of Addiction Treatment Providers (NAATP). “There are unethical players but to paint the entire addiction treatment industry with that brush is unfair. And we have to be absolutely clear to the public about that.”

To that end, Behavioral Healthcare Executive surveyed our national audience of behavioral health professionals to get a better feel for their level of awareness regarding unethical practices and their opinions on what should be done to improve matters. More than 650 professionals responded to the first-ever BHE Ethics Survey.

Although not an exhaustive list, the unscrupulous and often illegal activities we identified for the survey focused on egregious examples of profiteering, which include:

  • Patient brokering—Generally involves the promise of money, gifts or other valued arrangements in exchange for enticing patients to enter treatment, including enticements given directly to the patients themselves.
  • Lab testing kickbacks—Generally involves the promise of money, gifts or other valued arrangements in exchange for lab testing that leads to reimbursement dollars, such as urine drug screenings that may or may not be clinically appropriate.
  • Black-hat marketing—Generally involves overstated, intentionally deceptive or false information meant to mislead or entice individuals, especially those with insurance, to seek treatment at a particular facility.

More than meets the eye

An even 11% of BHE Ethics Survey respondents say they are aware of patient brokering in their local area within the past year, and 7.3% say their organization has been approached to enter into a patient brokering scheme. When the results are filtered to only include those identifying their role as “executive or board member”—a total of 83 respondents—the awareness is greater. BHE found that 30.1% of executives are aware of patient brokering, and 15.7% say they have been approached for a deal.

However, there is likely more patient brokering going on than respondents even realize, says Jeffrey Lynne, a Palm Beach, Fla.-based attorney who sits on a committee that is working toward industry reform in the state. Although it’s impossible to confirm, part of the reason for the scant awareness of brokering might be that there were more not-for-profit centers (65.8%) among the respondent pool. Such organizations feel less competitive pressure to fill their beds and therefore might be less likely to notice brokering in the area.

“The pressure to deliver patients appears to be on the private sector and not on the nonprofit sector,” Lynne tells BHE. “The for-profit treatment sector is generally populated by people who are well intentioned but bring a business perspective to drug and alcohol treatment that conflicts with healthcare policy. Your MBA [degree] isn’t going to work in the behavioral health setting because the economics are completely different. The rules of the game in healthcare do not lend themselves by design to traditional capitalism—supply and demand or buy one, get one free. You can’t have three days of treatment and get the fourth one free.”

SIDEBAR: Black hat marketing baffles the best providers

Lynne says organizations also must consider a longer list of activities that are unethical or illegal in the context of fair business practices. For example, offering potential patients free airfare to encourage them to commit to an intake is enticement. While many treatment professionals might not consider transportation within the definition of patient brokering, Lynne does. And a provider could face legal trouble in some states for doing so.

“Offering anything to any patient that skews their choice of healthcare provider [qualifies]—giving them anything of value,” he says. “A provider might say, ‘the patient needed services and couldn’t get them if I didn’t fly them in.’ Then in that case, the patient needs to find a different treatment center perhaps.”

Additionally, he says offering patients free rent while they attend a program is a form of patient brokering as well. It happens often in Florida, where the recovery industry is estimated at $1 billion, according to the Palm Beach Post. Florida and most other states have specific laws against patient brokering, according to the American Addiction Treatment Association. The laws usually address the broader scope of healthcare providers even if they don’t call out behavioral health in particular.

New recruits

Money-making schemes can be particularly exploitive of patients.

For example, the more unsavory operators that are solely focused on keeping the reimbursement checks rolling in will typically bargain with their current clients to start baiting their friends and relatives to sign up as new patients. What’s more, it can become an ongoing spiral if the patient-turned-recruiter starts shopping around for a new facility to offer him a better deal.

“Congratulations, there’s your new patient broker,” Lynne says.

He also questions practices that amount to competitive reconnaissance. For example, a broker or hired marketer acting like a bounty hunter of sorts might deceptively check himself into a rival treatment center for the purpose of stealing patients away. With “finders fees” of $1,000 per patient or more, the pretense can be profitable.

“Is it illegal for you or I to go into a treatment center as a paid employee of another center and try to lure the patients in? Maybe not, but it is violative of commercial business practices, which you could sue someone for,” Lynne says.

Most states have statutes modeled after the Federal Trade Commission Act, he says. To rein in the offenders, an organization put at a disadvantage would need to file a civil lawsuit. Another option might be to report the activity to a district attorney or department of health and human services.

What to do

In the BHE Ethics survey, 10.2% of respondents say they have reported incidents of patient brokering to a state authority, association or another entity. In fact, 54.9% suggest that ethics standards enforced among associations would be the most important factor in improving the industry’s conduct.

“I was really pleased to see the responders believe associations, like NAATP presumably, have the most important role in both promulgating standards and doing something about those standards,” Ventrell says.

NAATP offers an online reporting mechanism that anyone can use—from members to non-members to lawmakers to private citizens—to alert the association to questionable business practices.

“NAATP’s ‘jurisdiction,’ if you will, is limited,” says Ventrell. “We want to have the most impact we can, but our only authority is within our membership.”

He says members pledge to follow a code of ethics, and the association follows up on any issue that is identified. Essentially, the process is aimed at improving practices overall, but dismissal from membership is also possible. Like many associations, NAATP serves as a resource and is not striving to police the industry, he says.

The pledge is a somewhat recent program for the association, and so far, no member organizations have been dismissed for their conduct.

It’s important to note that addiction treatment seems the most ripe for fraud, but mental health organizations witness misdeeds as well. Experts say observers must make the effort to report questionable behavior anywhere in the industry. Some reporting opportunities include:

  • NAATP;
  • Accreditors like Joint Commission or CARF;
  • State attorney general offices;
  • For psychiatric care, The Citizens Commission on Human Rights;
  • State departments of health and human services or licensing agencies; and
  • In Florida, a new fraud tip line (844-324-5463).

Keeping up standards

In the BHE Ethics survey, 9.3% of industry watchers believe accreditors could play a role in identifying unethical practices.

More than 2,460 behavioral health organizations were accredited by the Joint Commission in 2016, according to Merlin Wessels, associate director of the Standards Interpretation Group for the Joint Commission. There are some standard measurements that could relate to the common complaints about treatment center operations, but he says ethical business practices are not measured specifically.

For example, a chapter on care and treatment services touches on matching clients to the right care provider.

“The first standard in that chapter is a requirement that each organization identifies who they’re treating and what the eligibility criteria is for treatment with the expectation that anyone coming to a particular organization is being evaluated to determine if that person meets that criteria for services,” he says.

Following the accreditation standard protects patients from inappropriate admissions that potentially could be driven by reimbursement rather than quality care.

While accreditors might be able to measure a certain degree of quality, industry leaders note that those who wish to remain in the shadows are unlikely to make the effort to achieve accreditation. Many insurers do require accreditation for in-network providers, however.

In the BHE Ethics survey, 15.4% of overall respondents say they are aware of providers in their area overstating insurance coverage to attract new patients. The insurance dollars remain the common denominator in what drives unethical operators.

Raising the bar

Most experts agree the vast majority of behavioral health organizations are honest, and it’s the very few—who appear to fall into the category of organized crime more so than healthcare—who taint the industry as a whole. With greater scrutiny, the hope is that more unethical operators will be caught.

Certainly, addiction and mental health providers have been the subject of many mainstream media exposés that have cast an unfavorable light on the good and bad guys alike.

There is no consensus on what to do about the industry’s reputation. BHE Ethics Survey respondents indicate that shutting down bad operators (25.6%) is the most important element in enhancing the industry’s reputation with the public at large, followed by improving patient outcomes (25.4%) and eliminating stigma (24.8%).

Lynne emphasizes that treatment centers can do more to stop unethical practices in their tracks when they realize the real harm ultimately comes to the patient who receives low-quality care or worse.

“They need to know what patient brokering is, and they need to start educating their patients on what it is,” he says. “It’s just like educating the patient on good health, because the patients become the victims of human trafficking basically.”

In terms of raising the bar for the industry, Ventrell says the key is outcomes—the greatest measure of success. If a treatment center truly follows best business and ethical practices, the outcomes are certain to reflect that.

“Somebody will ask what’s wrong with patient brokering,” Ventrell says. “Well, there are lots of things wrong with it, but at the end of the day, that patient is unlikely to get good treatment. We care about the outcome. If someone is being placed in care by an unethical or unscrupulous practitioner, they’re probably not being placed in good care.”

NAATP is currently working on a scientific outcomes study, due out later this year.

Local discussion

Rocky Hill, MA, CADC, NCACII, executive director of Hill Alcohol & Drug Treatment in California, has been frustrated with the bad players he’s seen in his home state on occasion and helped to organize a local ethics committee in September 2016. He says behavioral providers and several district attorneys meet about once a month and discuss their observations. The meetings have grown from just a few in attendance to more than 40 people with “an enormous amount of interest” from law enforcement, he says.

“The programs who showed up to discuss ethics were some of the folks who were participating in the very thing we were talking about, and some of them did not understand it was illegal,” Hill says.

He says the meetings have been an eye-opener for treatment centers and have inspired some heated discussions. For example, the California market allows for nonmedical detox services, which Hill knows to be a risky clinical practice, and which have opened up the industry to poor-quality care and even more bad operators.

“Some have been educated, but I don’t think it will change their policies because that’s how they make their money,” he says. “They’ll continue to do it from what I can tell.”

Urine drug testing can be an especially big moneymaker. For example, as in-network provider, Hill pays $6.02 for a 12-panel drug test about once a week, and the center eats the cost as part of the care plan. He knows of centers that test every 48 hours and bill insurance $1,200 each time.

“That baffles me the most,” Hill says. “The insurance companies seemingly for years have ignored the fact that out-of-network folks have been billing these exorbitant rates.”

While the California ethics committee is only in its early days, the goal is to create credibility that will have leverage with lawmakers to drive them to make regulatory changes. Hill believes 100% of providers in his market are aware of—or themselves are accepting—lab service kickbacks. Meanwhile the honest organizations would like to see the problem solved.

“Some are going under because they cannot survive competing against the out-of-network providers where it was so easy and cheap to rent a house and do intensive outpatient,” he says. “Who’s looking? Nobody is.”

Survey respondents

The BHE Ethics Survey was conducted online in January among the Behavioral Healthcare Executive audience with 846 individuals responding in all. Those who were not part of a treatment center (15.4%) did not access the survey questions specific to treatment center operations. While the largest number of respondents categorized their role as clinical leader or staff (48.6%), more than 12% identified themselves as executives. In terms of their organizations, 34.2% were for-profit and 65.8% were not-for-profit. The geographic area with the largest percentage of treatment centers was the Northeast (38.8%), followed by the Southeast (27.5%).

Additional data will be released in future reports.

Editor's Note: Several survey questions allowed respondents to select multiple answers, so some percentages add up to totals greater than 100%.

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