David Armstrong and Evan Allen's slides from the Center for Health Journalism webinar, "Profiteers of Tragedy: Making Money Off America’s Opioid Addicts," 10.31.17
More info: https://www.centerforhealthjournalism.org/content/profiteers-tragedy-making-money-americas-opioid-addicts
David Armstrong and Evan Allen: "Profiteers of Tragedy: Making Money Off America’s Opioid Addicts" 10.31.17
1. • Patient brokering and insurance fraud are a national problem, and it’s
killing people across the country. Addicted patients are placed in
shoddy care facilities that bill their insurance at high rates, then throw
them out on the street. A patient who stays in treatment for a month can
bring in upwards of $30,000 in insurance claims.
• Those insurance payments fund kickbacks that power a complex, cross-
country network of brokers and marketers who work with treatment
facilities to recruit addicts, enroll them in fraudulent insurance plans,
and fly them all over for treatment.
• As law enforcement cracks down in one place, the perpetrators move
their operations and shift their tactics.
2. • In one case we uncovered, a
patient from Massachusetts was
given a fake address in
Pennsylvania, allegedly by people
working in Massachusetts,
California, and Florida, and then
shipped to Florida where he died.
• We talked to dozens of people
who were brokered, and many
spoke of being offered trips to
California or other states for
treatment.
• Brokers joke about it: “Blue-
Crossing the country,” and “red
states or blue states.”
3. The kickbacks
• The treatment center pays marketers or brokers to recruit
patients. The agreements are often per-patient, and depend on
the length of time a patient stays in treatment.
• Those marketers or brokers are often paying a second layer of
recruiters, who feed them leads. They go to AA meetings and
are often well-connected in the addiction treatment
community.
• Licensed but unscrupulous insurance brokers often work with
these groups, signing patients up for fraudulent insurance
policies through health insurance connectors for a fee.
• They all get paid out of the money the treatment center collects
from the patient’s insurance.
4. Sober Homes
• Sober homes come into play once a
patient has exhausted their inpatient
benefits. Sober homes take kickbacks
from treatment centers to house
patients who are bused back to the
centers for outpatient treatment.
Treatment centers bill their insurance
all over again.
• Some sober homes are filled with
drugs and run by people who are only
weeks sober.
5. Lots of money, with few strings attached
• $35 billion industry
• Weak state and federal regulation
• No agreed-upon standards for treatment: 12-step, faith-based, medication
assisted, inpatient, outpatient, programs that last a week, programs that last
a month, sober living
• High relapse rate even with good treatment – so success and failure are
hard to measure
• Patients are addicts – when they complain they received bad treatment, no
one believes them
• The fraudulently obtained insurance is usually only used for a month or
two – so by the time the company catches the fraud, it’s too late
6. Red flags to watch for
• Treatment centers that promise “luxury,” “5-star
accommodations,” or services like spray-tanning and
hairstyling
• Social media marketing promising free treatment in other
states
• Deaths of people from out of state at treatment centers or sober
homes
• Patients who say their airfare was paid for
• Patients who don’t know their insurance information
• Patients who say they were urine tested multiple times a week
7. Where to start
• Victims and their families were our
best sources.
• Look for support groups for families
who have lost children to addiction,
and advocates who work in addiction
treatment.
• Ask for cell phone records, Facebook
messages, insurance documents.
Much of this scheme is conducted via
text and Facebook.
• People who were brokered were sent
to facilities full of other brokered
patients. Once you get into the
network, you can move quickly
through it.
8. Documents
• State Department of Public Health (or whoever licenses
treatment facilities in your state) – complaints, investigations,
corrective action plans
• In some states, facilities are required to report deaths to a
licensing body. Ask for all deaths statewide at treatment
facilities.
• Death certificates – place of injury and place of death
9. • Joint Commission and CARF – useful for finding addresses of
treatment facilities, which are often hidden. This allows you to
request:
• Police reports, police call logs for each address. Look for
patterns of overdoses, violence.
• Physician licensing and disciplinary documents. Many
treatment centers running these scams are staffed by
physicians who disgraced themselves elsewhere.
• Your state’s corporate database. Many people who run
unscrupulous treatment centers also own other related
businesses – like marketing companies or testing companies.
Or they have a history of other similar ventures.
• PACER – many of these marketers/brokers/treatment center
owners have past bankruptcies, which help illuminate
motivation
10. A note on social media
• A lot of this brokering is conducted right out in the open on
Facebook and Instagram. One you know the names of patients
and brokers, spend a bunch of time on their pages. Look for
Facebook groups where people off “scholarships” for free
treatment, or free flights. Watch what treatment centers are
posting on their pages.
• Remember that many victims are not going to make formal
complaints to the state. Look for complaints about treatment
facilities on social media and sites like Yelp. We found a lot of
people this way.