Washington, D.C. — U.S. Representatives Eugene Vindman (D-Va.-07), Michael Rulli (R-OH-06), and Cliff Bentz (R-Ore.-02) introduced a bipartisan bill to confront the rise of fraud, scams, and deceptive practices in the addiction treatment and recovery industry
“Virginians are fed up with scammers, and it’s past time Congress did something about it. No one seeking help for addiction should be exploited or misled for profit,” said Vindman. “This bill will support government watchdogs cracking down on bad actors with the tools and information they need to identify fraud in the rehab industry, protect patients from abuse, and ensure insurance dollars support real, effective care.”
“When bad actors exploit people seeking recovery by tricking them into leaving their homes to faraway states, providing little to no care, and then dumping them on the streets when their insurance expires, it isn’t just fraud; it is cruel and disgusting,” said Rulli. “Every dollar lost to this scam is a dollar that could have gone to legitimate treatments and quality care for the affected individuals.”
The Protecting Patients from Rehab Fraud Act directs the Government Accountability Office (GAO) and the Department of Justice (DOJ) to study insurance fraud and patient exploitation within the drug addiction treatment and recovery industry. This bill aims to stop deceptive, predatory practices that exploit patients, drain insurance resources, and undermine legitimate treatment providers.
Specifically, the bill would direct the DOJ to examine:
- The prevalence of insurance fraud in Affordable Care Act (ACA) plans used to house individuals at treatment facilities
- The practice of brokers encouraging patients to commit insurance fraud to enroll in high-cost, out-of-network plans
- Drug use and trafficking within treatment facilities
- The practice of “patient dumping,” also known as “curbing,” where patients are discharged and abandoned once their insurer no longer pays the facility
- Instances where patients are discharged in locations different from where they originated
- Any research on the prevalence of homelessness and relapse among individuals who are dumped by their rehab facility
- Legislative recommendations for Congress to crack down on illegal practices in the rehabilitation industry and protect prospective patients seeking rehab
Specifically, the GAO’s study would examine:
- The actions currently being undertaken by U.S. Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS), and the federal government to curb this type of insurance fraud
- The extent and effectiveness of Congress’ expenditure of taxpayer dollars on subsidizing rehab facilities to date
- State-level efforts to curb this type of insurance fraud
- Recommendations for Congress to crack down on illegal practices in the rehabilitation industry
BACKGROUND
The addiction treatment field has grown quickly in the past decade. While many providers offer important, quality care, some predatory, for-profit operations have taken advantage of weak oversight and insurance rules.
“Body brokers” recruit people with substance use disorders — often from other states — and steer them to specific facilities in exchange for illegal referral payments. They target people with valuable private or ACA insurance and often push them to lie about where they live or their income to get coverage.
Patients are then transported to distant treatment centers that bill insurers large amounts for unnecessary or fraudulent care. When a patient’s insurance runs out, these places commonly discharge them suddenly — often without money, transportation, medication, or follow-up support — leaving them stranded, homeless, or forced to return home on their own. Some end up in unfamiliar cities, relapse, overdose, or become trapped in homelessness.
The Protecting Patients from Rehab Fraud Act seeks to bring transparency and accountability to an industry where oversight has failed too many people seeking recovery.
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