Deaths, financial chaos bring scrutiny to Rehab Riviera recovery industry By Teri Sforza | Scott Schwebke | Tony Saavedra | April 6, 2018
The son of a high-profile Chicago politician died in February at a sober living home affiliated with addiction treatment provider New Existence Recovery.
In March, a co-owner of New Existence, possibly distraught over that death, died after an apparent overdose.
In addition, last month, a man committed suicide by hanging himself at a mental health facility run by embattled Sovereign Health. Also last month, Luminance Recovery in south Orange County filed for bankruptcy in the wake of shrinking insurance reimbursements, according to public records.
Such human and financial misery is a cranked-up version of what passes for normal in the region’s drug and alcohol recovery industry. Patients die often in rehab; and many rehabs are financially challenged.
But after years of being largely ignored by regulators and state lawmakers, the chaotic industry is starting to attract closer scrutiny.
The Orange County District Attorney launched a specialized task force in March to probe insurance fraud and human trafficking, seen as common abuses in the world of addiction recovery. The O.C. task force comes as other agencies, including the Los Angeles District Attorney and the U.S. Department of Justice, continue open investigations of some of the region’s bigger rehab providers. It also comes as state and federal legislators are proposing new rules aimed at cleaning up the industry.
“People in need of recovery are being exploited,†said D.A. Tony Rackauckas at a public hearing on rehabilitation exploitation and health care trafficking that attracted dozens of people demanding change.
Rackauckas’ bid to look harder at the recovery business comes in the wake of a Southern California News Group investigation into what is known in the industry as “Rehab Riviera,†the cluster of more than 1,000 licensed recovery centers and thousands of unlicensed sober living homes operating in Los Angeles, Orange, Riverside and San Bernardino counties.
The SCNG investigation found that rehab industry includes many unscrupulous operators who thrive on a business model that can turn a single drug addict or alcoholic into huge profit, often without providing much in the way of recovery services.
Some operators use offers of free travel and treatment “scholarships†to lure addicts from other states into Southern California. Those addicts then are signed up for health insurance via Covered California, often under false pretenses, with treatment centers paying the premiums and then billing insurance companies — a slight-of-hand move that can put hundreds of thousands of dollars into the operator’s pocket. Often, when the insurance runs dry, those addicts wind up on Southern California streets, destitute and still addicted. Sometimes addicts die while in the care of non-medical centers that would not be allowed to open in other states.
Many rehab operators are themselves former addicts or convicts, with little or no training in the science of addiction treatment — a fact that frustrates others who say their industry is suffering from a combination of poor oversight and greed.
“I’m thrilled to have this getting the attention of the DA’s office,†said Nancy Clark, who opened her substance abuse treatment facility in Costa Mesa in 1990.
“What I’m seeing is a lot of (providers) who used to be addicted to dope are now addicted to money. They have come upon a business plan that’s incredibly profitable to them.â€
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https://www.ocregister.com/2018/04/06/deaths-financial-chaos-bring-scrutiny-to-rehab-riviera-recovery-industry/
