By Jim Kreitler, MS, LASAC, CEO of Calvary Healing Center

Price tagFlorida and California have well-earned reputations as states where addiction treatment programs play fast and loose with ethical guidelines, regulatory requirements and the law. Now, national publications have named Arizona as one of the next worst states for these violations. I’m disheartened to learn that some addiction programs in Arizona pay marketers for referred addicted patients, a practice that is not only unethical but likely illegal.

I’ve been lucky in my time in this field to work for three great organizations: Banner Behavioral Health Scottsdale, The Meadows and Calvary. All are licensed at the highest level, are fully accredited, employ full-time compliance officers and hold internal ethical and safety standards that are higher than required by state regulatory agencies.

I didn’t know anyone did it differently. But apparently they do! If something doesn’t change, Arizona’s premier reputation as a great place to recover will suffer. I’m already hearing that programs in other states are becoming reluctant to refer patients here due to the worsening reputation for patient brokering and other questionable practices.

What Is Patient Brokering?

Patient brokering is the practice of accepting or paying remuneration for a referred patient. But brokers don’t call themselves brokers. Instead, they refer to themselves as treatment advisors or referral or placement services. They may advertise on the internet as such — or troll 12-Step meetings — in search of sources of increased commissions (that is, people).

In 2015, The Palm Beach Post reported that suspect practices may include, “Halfway house owners paying a bounty, often $500, to ‘junkie hunters’ for every new addict they can deliver to the halfway house. Separately, if an addict in the halfway house relapses, detox businesses may pay bonuses to managers of the houses if they refer the addict to the detox facility.”1

Robin Bright, CEO and Founder of Vive Media Group, blogged last year that some of the marketers, interventionists and individuals making referrals to treatment centers are actually getting paid up to $4,000 per head to do so.2

“Is this compassion?” Bright asks. “Do these people actually care about the addict?”

The answer to which is, no — or, at the very least, it’s not required. Brokering is ultimately about numbers, not people, about monetary needs over human ones. Compassion is optional.

Is Patient Brokering Legal?

When Medicare or Medicaid is involved, patient brokering is clearly illegal, and penalties are severe, including prison.

Brokering is also in direct violation of ethical codes for licensed professionals. For example, the American Counseling Association Code of Ethics states, “Counselors do not participate in fee splitting, nor do they give or receive commissions, rebates or any other form of remuneration when referring clients for professional services.”

However, when it comes to non-licensed persons referring to a facility that bills private insurance, the legal and ethical guidelines are less clear. Florida cleared up this ambiguity by creating the Florida Patient Brokering Statute, which states:

  1. It is unlawful for any person, including any health care provider or health care facility, to:
    1. Offer or pay any commission, bonus, rebate, kickback, or bribe, directly or indirectly, in cash or in kind, or engage in any split-fee arrangement, in any form whatsoever, to induce the referral of patients or patronage to or from a health care provider or health care facility;
    2. Solicit or receive any commission, bonus, rebate, kickback, or bribe, directly or indirectly, in cash or in kind, or engage in any split-fee arrangement, in any form whatsoever, in return for referring patients or patronage to or from a health care provider or health care facility;

Efforts are underway to urge state legislators in Arizona to pass a similar law. It cannot come soon enough, as the problem in our state is only getting bigger.

David (Mick) Meagher, Esq., writes: “A few years ago I met with the director of an addiction treatment center in Southern California. He offered me a payment of $4,000.00 per client that I referred to his center. He stated that with this payment and the amount of money I collected for the intervention, I could make a very comfortable sum by simply putting two clients in his center each month. When I pointed out that his offer was a violation of B&P Code 650, and the prohibition of paying for referrals, his comment was an astonishing reflection of his lack of ethics. He said no one will ever know. He was wrong, I would know.”3

The End Result

Bounty payments for referring patients hurts the credibility of our industry and our state and are likely illegal. If you are offering or receiving payment for patient referrals, please stop. Remember what this industry is really about: saving lives, whatever the cost. Our addicted patients are vulnerable and need their referral decisions to be made based on what is best for them. When they become pawns in a game of money and manipulation, treated as commodities and sold to the highest bidder, they are exploited by the very people they came to for help.


Sources:

1 Beall, Pat. “County’s $1 billion gold rush: Addiction treatment draws FBI.” The Palm Beach Post, August 14, 2015.

2 Bright, Robin. “Paid to Care? … Addiction Treatment Marketers.” ThatSoberLife.com, April 26, 2016.

3 Meagher, M David (Mick). “Can Our Addiction Industry Withstand a ‘Fearless and Searching Moral Inventory’ of Our Business Practices?” Serene Scene, Accessed December 11, 2017.