UAs – The South Florida Gold Rush

Early in 2013, the Florida Association of Recovery Residences (FARR) raised the alarm regarding certain unethical and potentially illegal practices resulting from an absence of oversight of licensed behavioral healthcare providers. One impact of these practices was to pollute the recovery housing pool, attracting unethical operators to a space that had previously been occupied exclusively by persons, themselves in long term recovery, who
were legitimately motivated to help those entering recovery. This predecessor group had earned a solid national reputation, developed over decades of quality service, as providers of safe, clean, alcohol and drug free, recovery-oriented housing. Up until 2010, drug urinalysis screening, while conducted by recovery- oriented housing providers as a condition of residency, had never been treated as a “revenue center”. Drug testing had always been absorbed as cost of business. Typically, sober home operators tested randomly and “for cause” by utilizing multi-panel point of care tests (POCT) that provided reliable results for multiple drug classifications. When a POCT produced a positive result for a particular drug classification and the resident adamantly denied having used drugs, then the provider would forward the sample to an independent laboratory for qualitative confirmation. Qualitative testing by sober homes was a rare event, even for 200 bed operators prior to 2010.

In 2010; an enterprising businessman in the real estate investment sector discovered a little known pathway provided under the Clinical Laboratory Improvement Amendment (CLIA) protocol that permitted unlicensed sober home operators to apply for a CLIA Waiver. This waiver allowed operators of sober homes to submit claims to healthcare insurers for reimbursement as the “collection site”. The CLIA waiver established a legitimate opportunity for sober homes to generate revenue above and beyond rent. Early on, this practice held great promise. Ethical operators viewed this additional revenue as a means to fund enhancements to properties, hire trained staff and improve upon services offered. Regrettably, the attraction of insurance reimbursement for drug urinalysis opened the flood gate of opportunists who rushed into the space. These opportunistic, poorly trained individuals, with little or no experience, and motivated chiefly by the promise of instant wealth, flocked to the SUT and Recovery Support Services sectors in great numbers. The CLIA waiver approach has since morphed through numerous iterations as payers were forced to decline all claims originating from housing providers, requiring drug screening tests to be ordered by a physician as being medically necessary. This payer response led to an explosion in Intensive Outpatient (IOP) license applications that continue to overwhelm the Department of Children and Families (DCF) Substance Abuse (SA) licensure staff. So called “sober homes” then popped up in communities throughout South Florida to provide housing for consumers enrolled in these licensed outpatient programs. Subsequently, the “Gold Rush” has resulted in a dramatic rise in patient brokering and insurance fraud; now considered by many to be systemic throughout the space from Dade to Indian River Counties.

The State Law Enforcement Agency (SLEA) commenced an investigation in South Florida in 2013. FARR has channeled documented evidence of patient brokering and insurance fraud to this law enforcement agency steadily since their arrival. This relationship has contributed to high-profile FBI raids on DCF Licensed Behavior Healthcare providers who also operated complimentary housing (sober homes) for clients enrolled in their clinical platforms. It is our understanding that federal indictments will soon be announced alleging criminal activities perpetrated by a gallery of co-conspirators including healthcare providers, sober homes, confirmatory laboratories, billing companies and marketers. We further understand that the investigation has opened hundreds of files over the last several years and that these initial indictments will likely be followed by yet others.

FARR’s chief mission is to protect the consumer of recovery support services in Florida. While we are grateful for the diligent work of this investigation and certainly applaud the commitment of resources the State of Florida and Federal Agencies have invested to date, we are concerned that soon after the initial fervor surrounding upcoming indictments has subsided, it will be back to business as usual. This frightens us for many reasons, not the
least of which is the fact that providers are shooting themselves in the foot. South Florida’s national reputation couldn’t be any lower. Surely these indictments will be an opportunity for those addicted to the promise of quick riches to seek change. Wouldn’t it be exciting if we refocused on services that promote wellness rather than instant wealth? The opportunity is now and the need is great for all stakeholders, including those who have most contributed to the problem.