The Unethical Side of Addiction Treatment

By Paul Fuhr 12/18/17

"The whole system is designed to keep people in it, I think."

A woman's face with a hand covering her mouth, dollar sign written on the hand.
Greedy rehabs look at patients as commodities.

“Statistically, you’re wasting your money sending your kid to rehab,” Scott Steindorff tells me without a second of hesitation. “I have three grown kids and I’ve come to the conclusion that if one of them had a [substance abuse] problem, I wouldn’t know where to send them.”

Steindorff, the Hollywood producer whose eclectic credits include the movie Chef and the TV series Las Vegas, has turned his sights on overhauling the $35 billion-a-year rehab industry that’s now coming under fire. “There’s not one facility in the world that’s getting the job done,” he argues. “If you find a rehab center that really gets it, call me—and I’m being serious.”

At the moment, many agree with Steindorff: there’s virtually no shortage of cautionary NPR pieces, disturbing news features, and almost-weekly stories of arrests and busts. In fact, one NPR exposé reported that a convicted rehab owner had “billed insurance companies for more than $58 million in bogus treatment and tests, and recruited addicts with gift cards, drugs and visits to strip clubs.” It’s clear that the rehab industry may be at a critical crossroads, as it needs as much saving as the millions of Americans seeking help themselves.

My good friend Mike Verlie, who just celebrated four years of sobriety after a decade-long heroin addiction, credits sober housing for helping him find his footing and, well, saving his life. But he’s also keenly aware that good sober homes are few and far between.

“The problem lies in that [sober homes] are mainly privately-owned and non-regulated at all,” he notes. “Some may claim to follow non-profit guidelines, but in reality, it’s mostly just a single guy or a couple of people who own houses and call them sober houses.”

Many of these “houses,” Verlie says, cram more people than are legally allowed by fire standards into places that are poorly funded (at best). In fact, many of them are simply way stations between rehab centers, sometimes getting kickbacks for each referral. “A good sober house is a rarity,” Verlie says.

Sadly, shady ethics aren’t limited to homeowners operating businesses that are little more than treadmills leading right back to treatment centers. Sometimes, it’s a lot bigger than just one specific person or center.

“The whole system is designed to keep people in it, I think,” therapist Rikki Grace observed. “And the people who would actually want to make things better are busy trying to help people on the individual level and trying not to get burned out that we forget that the larger-scale problems actively work against us.”

In fact, Grace noted that slippery facts and competing agendas are par for the course when it comes to rehabilitation. She knows of rehab centers that were terrified “of losing the revenue from the ‘frequent fliers,’” she said, noting that she’s seen patient documentation altered to make it seem like people were in worse shape than they actually were. “Most of the time [patients] benefit from continued treatment, but insurance doesn’t want to pay for people who are on their way to doing better. That’s a stupid and ugly fight.” She added that some facilities she’s familiar with have worked overtime to get clients with Medicare in the door, while performing “outreach calls” to those same Medicare patients, inviting them back if they weren’t staying clean and sober.

Allyson, a mental health professional working in opioid-routed Norwalk, Ohio, noted that she and her co-workers have patients angling to visit treatment centers in California and Florida.

“Upon closer look,” she said, “these [programs] make very questionable claims and don’t seem rooted in therapeutic practices.” However, it’s one of many such thorny issues, thanks to the Affordable Care Act, Allyson claimed. “Pretty much anyone can provide sober support services with very little oversight, which results in [centers] popping up all over like Old West snake-oil salesmen.” Although ethical and legitimate programs remain, Allyson believes it’s almost impossible to tell the questionable ones from the legitimate services. She warns that even faith-based programs are increasingly trying to pass themselves off as therapy. Earlier this year, an Orange County Register series explored the recent boom in Los Angeles treatment centers which operate under this seeming lack of governance, depicting the insider-dubbed "Rehab Riviera" as a highly broken, unregulated system where "almost anyone can run a rehab-related business in California [with] no degree, medical or otherwise."

A recent Daily Beast story on the rehab industry notes that the Affordable Care Act and the Mental Health Parity and Addiction Equity Act “completely upended the business model” of many traditional rehab centers, where patients paid out of pocket before their treatment even started. With fewer dollars streaming in, thanks to tighter insurance-company spending, many clinics and centers find themselves struggling to stay financially afloat. 

“They haven’t touched the surface of what’s going on,” one insurance investigator commented on the scope of rehab industry fraud.

All is not lost, though. Florida, which has been struggling with its own rehab-related problems, has become a battleground between fraudsters and officials who have gotten wise to it. In Palm Beach, a “Sober Home Task Force” has already charged more than 30 operators of such “sober homes” with a wide range of crimes—an action that may set a precedent for other states to emulate.

Steindorff sees a more systemic problem with addiction treatment that goes beyond corrupt rehabs. But something as complicated as addiction requires a solution that’s just as dynamic, he thinks.

“We’re just not treating [addiction] the right way. You can’t take emotional issues and solve them with a spiritual program,” he insists. “I’m not knocking AA here. That’s not my mission. My mission is to do something better. Look, the Big Book was written in 1936 for what was happening in 1936, so the language is dated, the meaning is dated, [and] the core of it is based in Christianity. It’s simply not going to change the consciousness of a young person today.”

Steindorff and others are working hard to counter the corruption and exploitation that they see rotting the industry. Ethics groups and advocates are lobbying for stricter regulations, more transparency, and greater accountability, which will, hopefully, diminish the number of bad actors in this space. Steindorff is optimistic: “There’s good people out there,” he acknowledges. “They’re not just all the fraudsters in Florida or Southern California. There’s good people who want to do better [but] they don’t know what the solution is. I’m not saying we have all the answers,” Steindorff says, “but I know we can do a hell of a lot better.”

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Paul Fuhr lives in Columbus, Ohio with his family and two cats, Vesper and Dr. No. He's written for AfterParty MagazineThe Literary Review and The Live Oak Review, among others. He's also the host of "Drop the Needle," a podcast about music and addiction recovery. More at You can also find Paul on Linkedin and Twitter.