How Patient Brokers Prey On Those In Need Of Treatment

By Britni de la Cretaz 07/12/17

People with addiction who are desperate for treatment are unknowingly being taken advantage of for a quick profit.

Man pointing to document that woman is signing.

Patient brokering, a practice that involves receiving kickbacks for helping to enroll people in substance use disorder treatment through insurance fraud, is a widespread problem in the national treatment landscape. And the people who need help are often used as pawns while other people profit from their struggle, a new investigation from The Boston Globe and STAT News finds.

Brokers, who are sometimes in recovery themselves, promise free insurance to people with addiction alongside a stay at a luxury treatment center in another state. Unbeknownst to the prospective patients, the brokers then use fake out-of-state addresses to sign them up for premium insurance plans. By signing them up at a new out-of-state address, they can circumvent the requirement to wait for an end-of-year enrollment period.

The insurance premium is usually paid for by either the patients’ families, marketers for the treatment centers, or the brokers themselves. At a later date, the treatment center bills for tens of thousands of dollars worth of service, which the treatment center then pockets. In some cases, the brokers even pay for the patient's flight to the treatment center.

The treatment centers involved give the brokers a fee for every insured patient that is placed at their facility. Marketers are interested in patients with preferred provider organizations (PPO) insurance rather than stricter HMOs or Medicaid. PPO insurance has fewer restrictions on the location of treatment and they pay out a nice sum of money for drug treatment programs.

Blue Cross Blue Shield is a popular insurer among patient brokers because they offer out-of-network plans with less restrictions and boast a decent pay-out for treatment programs. 

“We can confirm we are definitely seeing the issues you are identifying,” Rachel Jones, the director of Blue Cross company Highmark’s Financial Investigations and Provider Review unit, told the Globe.

The care these patients receive in these expensive treatment centers is often inadequate, and the accommodations can be unsafe or unsanitary. Most patients have no idea that they are part of a scam, only desperate to seek treatment. The brokers tell them that their insurance is taking care of the costs or that the insurance is free. They only become aware of the issue when there is a problem with their billing and, at that point, it’s too late—they’re stuck in another state and now they have no insurance.

Massachusetts resident Michael “Hiss” Hislop told the Globe that when he got involved with brokering, he didn’t know it was illegal. He claims that he stopped when he found out it was against the law, and that he received $500 to $1,000 for each patient he sent to a Florida treatment center. He said that of the approximately 55 people he brokered to the Sunshine State, only about 10 achieved any kind of sobriety.

In West Palm Beach, Florida, several treatment center owners have been arrested for patient brokering in the last year. The centers were allegedly aggressively marketing their centers to people from other states, with the hopes of drawing them to their facilities in Florida.

The Palm Beach County Sober Home Task Force launched last July to crack down on this kind of insurance fraud. As of May, the task force had made 26 arrests related to brokering, and has begun targeting lab owners as well as people who own and operate treatment centers and sober homes.

According to The Palm Beach Post, Palm Beach County State Attorney Dave Aronberg said more arrests will be made. “We believe we are still closer to the beginning than the end… We’re coming for you.”

At the beginning of July, a new law went into effect in Florida which tightens regulations on the state's sober home industry in the hopes of cracking down on patient brokering.

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Britni de la Cretaz is a freelance writer, baseball enthusiast, and recovered alcoholic living in Boston. Follow her on Twitter at @britnidlc.