The Justice Department is taking a new hard line on kickbacks, unnecessary treatments, and excessive urine tests at “sober homes” and other substance abuse facilities as the scourge of the opioid crisis makes headlines.

Justice Department officials in recent weeks have stated their intention to pursue prosecutions against unscrupulous substance abuse treatment providers in South Florida. Two major trials against substance abuse treatment providers will be coming next year. So far this year in southern Florida, at least 34 people were charged, 19 people convicted, and over $20 million in restitution ordered for a variety of crimes related to substance abuse treatment fraud and the illegal distribution of opioids.

“It seems to be a growing concern in the world of health-care fraud for one simple reason, and that is because that’s where the money is,” Melissa Jampol, a former federal prosecutor working in Epstein Becker Green’s health-care and life sciences practices in New York and Newark, N.J., told Bloomberg Law.

The Department of Health and Human Services estimates that more than 130 people died every day from opioid-related drug overdoses and 2.1 million people had an opioid use disorder in 2016 and 2017. Addiction treatment centers are responding by directly selling their services to opioid addicts. Some of them are fly-by-night operations looking to exploit vulnerable people desperate for a cure.

“It’s tough for us because we’re getting a bad name as an industry because of a minority of providers,” Marvin Ventrell, the executive director of the National Association of Addiction Treatment Providers (NAATP), an industry trade group, told Bloomberg Law. “If you don’t cheat, you can’t make a fortune, nor should you in the addiction treatment business.”

Kickbacks and Urine Tests

“Not only are we seeing potentially improper toxicology exams, sometimes we see patients’ insurances being billed for unnecessary medications, unnecessary psychological exams and evaluations—they’re potentially being cycled through and kept in facilities longer than necessary,” Jason Mehta, a former Justice Department attorney on both the civil and criminal side, told Bloomberg Law. He is a partner at Bradley Arant Boult Cummings in Tampa, Fla.

For example, in the indictment of substance abuse treatment facility owner Eric Snyder and his co-defendants issued June 7, the U.S. alleges the defendants provided kickbacks in the form of free rent, payment for travel, and other benefits to people with insurance who agreed to attend treatment at their sober home and treatment clinic and to submit to regular drug tests that were often three or more times per week.

The government alleges that two patient brokers referred patients to the substance abuse treatment facility and a sober home where the facilities submitted over $58.2 million in claims to insurance plans.

The government also alleges the facilities double-billed tests that weren’t medically necessary or reimbursable by insurance plans, among other charges. The case against Snyder is scheduled to go to trial in May 2019.

“The issue of urinalysis several times a week at high rates—absolutely unnecessary,” Ventrell said, adding that quality programs may only do two to five urine tests on patients in a 28-day period.

Why Florida?

Substance abuse treatment is not limited to Florida and neither are the fraud issues surrounding it, but Florida has become a particular hotbed.

According to several attorneys, Florida’s disproportionate amount of fraud has a lot to do with the location and the perception given online. Marketing with palm trees, beaches, and pools in a place known for vacations can help lure people to facilities in the Sunshine State.

But Florida is taking efforts to combat the problem at a state level. It has a law barring patient brokering, which includes the payment of kickbacks or bribes to induce the referral of patients to substance abuse treatment facilities.

“The state attorney’s office here has been tremendous in prosecuting this stuff,” Ryon McCabe, a former U.S. attorney who is a co-founder of McCabe Rabin PA in West Palm Beach, Fla., told Bloomberg Law.

“The Florida legislature has been active in trying to close loopholes that allow these abuses to take place,” he said. “It’s just part of this wave of problems associated with opioid abuse.

Compliance officers for substance abuse treatment facilities have to make sure they are keeping a close eye on the facility’s programs.

“I think you really have to watch the recruitment of patients and how patients are being brought in and the use of third-party vendors,” Jampol said. “People get into trouble by hiring brokers or getting recruiters to get people in.”

Patient recruiters or brokers will find potential patients to send to substance abuse treatment centers. In return, the treatment centers will pay the brokers a commission or a consulting fee for referrals.

Mehta said compliance officers should make sure insurance is only billed for needed services, that patient profiles are regularly reviewed that document patient improvement, and the facility uses licensed workers.

An overall lack of regulation is one of the causes of the current substance abuse treatment fraud problem, according to Ventrell.

“When I go to get my haircut, I walk to my barbershop, and each person has to have a license on their desk. But to open a substance abuse treatment facility you don’t need a license; you just need a facility in some states,” Peter Thomas, a former executive director of a substance abuse treatment facility now working as a quality assurance officer at the NAATP, told Bloomberg Law.