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Paul Zimmerman
pzimmerman@mrllp.com
310.299.5500

Showing 12 posts in Substance Abuse & Sober Living Facilities.

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Department of Justice Targets Fraud and Corruption within Substance Abuse Disorder Treatment Industry

Late last week, the U.S. Department of Justice announced criminal charges against 10 defendants for alleged kickback schemes at substance abuse disorder treatment facilities in Orange County. These charges are part of “The Sober Home Initiative”—a coordinated effort among federal and state law enforcement to investigate and prosecute fraud and corruption within licensed rehab and sober living facilities. In connection with the DOJ’s announcement, a lead prosecutor ominously told the Orange County Register, “This is the beginning, not the end.” (Read More)

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Federal Authorities Have Their Eyes on Treatment Facilities, Sober Living Home Operators and Marketers, Especially in Orange County

Federal prosecutors are aggressively targeting the substance use disorder treatment space—an industry that some believe has been permeated with fraud and abuse. This is particularly the case in Orange County, California, referred to by some as part of the “Rehab Riviera” on account of the dense concentration of treatment facilities and sober living homes in Costa Mesa, Laguna Beach and San Juan Capistrano.

Just last week, on November 15, a marketer pleaded guilty in Orange County federal court to accepting nearly $2 million in kickback payments in return for referring patients to treatment facilities. And, by all indications, further indictments and charges are coming. (Read More 

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EKRA Put to the Test Yet Again

Michelman & Robinson recently posted a blog about two Californians (a medical doctor among them) and three others (one from New Jersey and two Marylanders), all of whom admitted to their part in a conspiracy—in violation of the Eliminating Kickbacks in Recovery Act of 2018 (EKRA)—that involved multiple layers of kickbacks. EKRA enforcement continues with the indictment last month of the Chief Executive Officer of a Costa Mesa-based substance abuse treatment and counseling center. (Read More)

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Chain of Kickbacks Leads to Long-Awaited EKRA Enforcement Against Marketers, Recruiters, and Treatment Facilities

Congress enacted the Eliminating Kickbacks in Recovery Act (EKRA) back in October 2018—legislation that prohibits the payment of kickbacks in exchange for patient referrals to substance use treatment providers. Nearly two years later, a handful of men who ran a triple kickback scheme are amongst the first to plead guilty for violating the law. (Read More)

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Under the Microscope: Substance Abuse Patient ReferralsĀ 

Governor Brown just signed Senate Bill 1228 into law, implementing Health & Safety Code §§11831.6 and 11831.7. The move directly impacts marketing practices within the world of substance abuse treatment. (Read More)

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Rossella Apostoli  © 123RF.com

Federal Legislation Expected on Sober Living Homes

Sober living homes offer drug- and alcohol-free, cooperative living arrangements for people in the process of recovery from addiction. Rapid growth within the sector as well as increased media attention due to some recurring concerns expressed by frustrated communities, have led many states and municipalities to rethink their approach to substance abuse treatment and explore new modes of regulation. Now, federal legislators have said that they will intervene. (Read More)

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Drug Treatment Centers Must Walk a Fine Line With Respect to Marketing

A recent New York Times article entitled “How Staten Island’s Drug Problem Made It a Target for Poaching Patients,” details how recruiters for treatment centers as near as Long Island and upstate New York, and as far away as Arizona, California and Florida are soliciting recovering addicts from addiction treatment centers on Staten Island to leave and go to other centers. Recruiters allegedly find addicts, or in some cases even call patients while they are receiving treatment from other centers, and offer them money to seek treatment at a different facility. They also routinely pay for these individuals to travel to a new treatment center, where presumably they are enrolled and the marketer is paid a fee. This story brings to national attention an issue that has been building within the behavioral health community for years. (Read More)

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Alexander Raths © 123RF.com

SoCal Sober Living Homes Face an Array of Regulatory and Zoning Obstacles

The subject of residential sober living homes and other treatment centers located in residential neighborhoods continues to attract substantial media attention in Southern California. The topic has become a lightning rod within many Southern California coastal communities. Arguments over residential treatment centers have recently evolved into litigation as the issue continues to spur local regulatory challenges and incite great passion. The effect that these cases may ultimately have on state law and city zoning codes remains in flux, all while the state considers various proposed bills on the topic, including AB 2255 and AB 2403. For owners and providers in the sober living and residential treatment space, the time is now to ensure strict compliance with applicable licensing requirements and zoning laws. To play fast and loose with local and state regulations is to invite dire consequences. (Read More)

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Alexander Raths © 123RF.com

Health Net Payments Trickle in to Addiction Treatment Centers as CA Regulators Investigate Insurer

As we have previously detailed, Health Net began directing a great deal of attention toward addiction treatment providers in early 2016. The payor (which has subsequently been acquired by Centene Corp.) started aggressively monitoring and investigating claims from substance abuse treatment facilities, and then dramatically expanded its attestation requests to smaller providers. Among other things, Health Net scrutinized referral practices, the medical necessity of services, and whether providers were waiving out-of-pocket payments from patients. Providers throughout California, as well as states like Arizona, Nevada and Texas, received attestation requests regardless of whether Health Net had any specific evidence of fraud and abuse. At the same time, providers found that Health Net payments stopped completely, including payments for previously-submitted claims that pre-dated the attestation letters.  Now, while some providers are beginning to receive reimbursements from Health Net, the California Department of Insurance (CDI) has reportedly opened an inquiry into the improper withholding of payments. (Read More)

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Rossella Apostoli  © 123RF.com

CA State Legislature Clamps Down on Residential Treatment Centers

The existence of residential sober living homes and other treatment centers located in residential neighborhoods has recently attracted the attention of many media outlets and has become a hot button topic on both sides of the argument. The California State Assembly’s Health Committee has now approved two separate bills which would impose stricter regulations on these facilities. (Read More)