Colorado Politics

DeGette seeks to stop deceit, kickbacks in substance-abuse treatment

WASHINGTON – Colorado’s U.S. Rep. Diana DeGette questioned mental health officials at a congressional hearing this week on how to avoid deceptive advertising that could mislead patients desperate for substance abuse treatment.

Tuesday’s hearing before the House Energy and Commerce subcommittee on oversight and investigations caps a year-long probe into what some members of Congress called “patient brokering.”

Congress is considering the possibility of legislation for national standards on substance abuse treatment advertising and referrals.

“When you’re finding your facility online, most patients would have no idea if the facilities that they’re identifying would have the types of treatments that would actually work in dealing with this opioid crisis,” said DeGette, D-Denver.

Research shows treatments that emphasize medication often are the most successful, she said.

“Not all facilities provide that treatment,” DeGette said; instead, they make vague promises about their treatment methods, some of which provide substandard care.

“We’ve got nefarious or unqualified actors out there who are taking advantage of those who are suffering in order to capitalize on this condition,” DeGette said, adding that often they lack training and send patients to “dubious treatment centers.”

“This committee has seen reports of call centers that sell customer referrals to treatment providers,” DeGette said. “Some also hide that they make referrals for a fee.”

DeGette is the ranking Democratic member of the subcommittee on oversight and investigations. Last November, she and four other members of her subcommittee sent a letter to Robert Werthwein, director of the Colorado Department of Human Services’ Office of Behavioral Health, asking for information about possible patient brokering and deceptive advertising by substance abuse treatment centers in Colorado.

“In exchange for steering patients toward said facilities or sober living homes, patient brokers receive generous financial kickbacks from the facilities or homes,” the letter stated. “Patient brokers are predominantly paid in one of two ways: a per-head fee that can range from $500 to $5,000 for each patient who successfully enters a treatment center; or a monthly fee from a facility based on the broker meeting a quota of patients. These kickback schemes can result in earnings as high as tens of thousands of dollars.”

Werthwein acknowledged in his response that the office of behavioral health had “received a few complaints about the practice of potential patient brokering.” He added that his office lacked the regulatory authority to stop it.

There are 87 licensed residential sites for substance abuse treatment in Colorado. There are about 625 licensed outpatient treatment sites.

Werthwein repeated his statement to Congress in a response to an inquiry this week from Colorado Politics.

He said the office of behavioral health’s “purview is currently limited to activities that take place within the treatment setting and whether or not those activities conform to the requirements laid out in our treatment rules. Colorado does not regulate the price setting, fee collection or business models of the treatment providers who receive substance use disorder licenses. There is currently no rule or statute in Colorado that would make this practice illegal or against regulation.”

Witnesses at Tuesday’s congressional hearing included Marvin Ventrell, executive director of the National Association of Addiction Treatment Providers. He said part of the blame for patient brokering and deceptive advertising fell on legal loopholes.

“The law has been confusing and sometimes nonexistent, state by state,” Ventrell told lawmakers. “I would support a federal law.”

America’s Health Insurance Plans, a trade group, said in written testimony that insurers and health care providers “are challenged by fraudulent activity in the substance use treatment industry.”

“These fraudulent, abusive practices not only put patients’ lives in grave danger, but they also make it more difficult for people to afford their coverage and care,” the testimony said. “These practices raise overall health system costs and increase premiums for everyone, not just those who are sent to ‘sober homes.'”

So far, law enforcement against deceptive practices by the treatment centers has been spotty.

In one example last month, the Justice Department had addiction treatment center operators arrested after accusing them of filing more than $106 million in fraudulent insurance claims.

U.S. Rep. Diana DeGette, a Denver Democrat, in a January 2017 photo. (AP Photo/Zach Gibson, File)
Zach Gibson

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