Our Need for Ethics and Fraud Prevention

Our Need for Ethics and Fraud Prevention in the Behavioral Health Treatment Industry

The alcohol and addiction treatment industry has been receiving a great deal of attention the past few years around fraudulent patient recruitment and billing practices. Nationally, major organizations like the National Association of Addiction Treatment Providers (NAATP) have focused on providing leadership and sparking a dialogue on this topic of ethical treatment practices (NAATP code of ethics). However, generally speaking, the industry is troubled.

Current State

Loopholes have allowed unethical drug treatment centers to bill insurance companies for millions of dollars’ worth of counseling and assessment fees, without necessarily helping addicts recover. When coupled with the recent opioid epidemic, some addiction treatment centers have wrongly acted on this opportunity to profit from the increased number of clients struggling with addiction.

The general population is becoming more and more aware of this unscrupulous conduct, as increased attention from the media has brought troubling treatment practices to light. Responding to the current state of affairs, the NAATP has moved beyond pledging to actually enforcing ethical treatment practices. The theme of the most recent NAATP conference could be summarized as, if our industry doesn’t change practices, and soon, it will implode.

Some of the top unethical practices NAATP and other leading organizations are hoping to eliminate moving forward include:

Patient brokering:

Unethically steering a patient with certain insurance coverage to a particular facility, and compensating from this practice. Art VanDivier, chair of the NAATP’s Ethics Committee, said the going rate to steer a patient with Affordable Care Act coverage to a particular facility is now $7,000. That sounds like a lot of money, but the clinic can bill the insurer $15,000 to $30,000 for a month of treatment, charge for lucrative drug tests along the way, and then bill for eight or so weeks of intensive outpatient treatment” (Grim, Huffington Post, 6/17/16).

Bribing clients to relapse:

“And if the patient relapses and fails a drug test, that process can start all over again, still covered by insurance. Not surprisingly, stories of patient brokers bribing people to relapse were rampant at the [NAATP] convention. The fee for that ran between $500 and $1,000” (Grim, Huffington Post, 6/17/16).

Manipulative online marketing practices:

“Third-party sites that present themselves as independent aggregators of information are often run by a single treatment center, and every phone number routes to it rather than to the various clinics the site purports to link to. “Closers” on the other end of the line are charged with persuading the family in crisis to send their loved one to that single center – even if they may be located far away” (Grim, Huffington Post, 6/17/16).

Sound treatment programs have adjusted to this new wave of enforced proper ethical conduct, responding by changing questionable practices and cleaning up their business models. However, the reputations of many programs have yet to catch up with their behavior. Currently, service providers struggle with finding balance and answering questions such as, what is appropriate compensation for marketing our program? And, how can we best work around barriers to treatment for individuals who are dealing with financial problems and/or homelessness?

Future Implications

It’s important to remember that many clients seek addiction treatment on the worst day of their life, and, when brave enough to seek treatment, they deserve to be met with respect and ethical care. Many behavioral health providers believe this and are optimistic about their industry, with hope that change is possible.


Brown Consulting, Ltd. can help you guarantee compliance

We have over 30 years of experience helping behavioral health organizations with compliance. Our extensive experience in behavioral healthcare consulting lends itself to understanding the necessary regulations and guidelines state by state. Our Regulatory Compliance services can be found here.

-Megan Phillips, M.A.



Riordan Seville, L., Rappleye, H., Schecter, A., (2017, June 26). How to Find a Good Drug Treatment Program and Avoid the Bad Ones. Retrieved from https://www.nbcnews.com/feature/megyn-kelly/how-find-good-drug-treatment-program-avoid-bad-ones-n776101.

Grim, R. (2016, June 17). Addiction Treatment Industry Worried Lax Ethics Could Spell Its Doom. Retrieved from http://www.huffingtonpost.com/entry/addiction-treatment-industry-ethics_us_575f3fa5e4b0e4fe5143865c.