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Drug Rehab Scams & Insurance Fraud Lawsuits

Drug rehab scams are more common than many Americans realize. What happens when people suffering from brutal addictions try to get help? Many are recruited simply for potential financial reasons, and may not receive the kind of addiction treatment they require.

Residential treatment centers across America have been investigated for insurance fraud, ethical violations, patient privacy violations and misleading sales practices. In short, many drug rehab treatment centers are businesses looking to profit off of the opioid addiction epidemic in the United States.

Some estimates say the industry is worth over $40 billion and encompasses over 14,500 drug treatment centers across the country. Studies show that getting high-quality drug rehabilitation can mean the difference between life and death. Many drug treatment centers, both inpatient and outpatient, sell very expensive services to treat addicts. But critics claim despite all the promises, drug rehab centers don’t always deliver.

The Lyon Firm is investigating drug rehab scams & reviewing cases involving unscrupulous drug treatment centers on behalf of plaintiffs nationwide. Joe Lyon has spent more than a decade battling consumer fraud offenders and has filed class action lawsuits across America.

Drug Rehab Center Fraud

When addiction treatment centers and “sober homes” claim high success rates, they usually have no evidence or explanation on how they came up with such a figure. The truth is, most people with substance abuse disorders will not benefit from drug rehab in the long term. But the truth doesn’t sell in this case, because rehab centers profit from each patient, and the longer the patient stays, the more money they can charge an insurer or individual.

According to a recent study, published in Health Affairs, many for-profit rehab charge excessive fees and use deceptive sales tactics to attract patients before they even evaluate the treatment they require. Some former patients have said when they contacted certain rehab centers, the “patient brokers” did not even ask a single medical-related question.

Typically, the sales team at drug rehab centers are not nurses or therapists, but simply salespeople using direct marketing tactics. Some addiction treatment centers demand a cash deposit up front, and vulnerable patients may put a charge of up to $20,000 on their credit card.

For-Profit Addiction Treatment

Experts say the addiction treatment industry suffers from a lack of standards. Rather than standardize addiction programs with scientific evidence, many choose to offer “alternative” or “homeopathic” treatments, which sound great, but without proven success.

What has been described as a spa for rich celebrities is now being pitched to everyday Americans. Rehab programs can be obscenely expensive, and offer luxurious amenities that have nothing to do with actual treatment: gourmet food, horseback riding, resort-style swimming pools, massage services, and more. What’s missing in some rehab centers is the actual rehabilitation. Some don’t even offer evidence-based opioid addiction medications like buprenorphine and methadone.

Americans have maxed out credit cards and gone into debt to try to get family members sober only to see them relapse or die. If you have suffered due to corrupt drug rehab program, contact The Lyon Firm to review your case. You may be able to recover treatment costs, or in the event of a death, you may have a viable wrongful death claim.

Opioid Addiction Treatment Centers

Data from the Centers for Disease Control and Prevention in 2019 suggest 81,000 died from drug overdoses in the U.S. Rehab and treatment centers are crucial to combatting these terrible preventable deaths. But in the wake of the Affordable Care Act mandating that private insurance programs cover people suffering from substance addiction, many rehab facilities are taking advantage of a lucrative opportunity, exploiting individuals as well as the law.

In some instances, the fraudulent treatment centers are driving the legitimate ones out of business. Task forces in some states have been investigating corruption and insurance fraud, but there are so many centers that it’s not an easy fix. Most families and individuals cannot distinguish a good rehab center from an unethical one, and they often pay with their life.

In Ohio, residents pleaded guilty to Medicaid fraud, a scheme that amassed $48 million in illegal funds. The group billed Medicaid for addiction recovery services, but did not provide any proper rehabilitation. Similar cases have been seen across the nation.

Unqualified Addiction Treatment Centers

There is little federal or state oversight for treatment credentials or program pricing. The lack of certification needed creates a very low barrier to open a drug rehab center or even to become an addiction treatment “specialist.”

Many physicians are unwilling, or lack the training, to properly treat patients suffering from substance abuse and addiction. When these centers fail to treat patients properly, and simply churn individuals and insurance companies for profits, they may face legal action. Plaintiffs have filed lawsuits and criminal charges, alleging drug treatment facilities have engaged in fraudulent activities.

Drug Rehab Fraud Lawsuits

Rules and requirements for drug rehab centers vary from state to state. In some states there is next to no real industry oversight. Some rehab programs are “certified,” which basically just involves paying a fee to private accreditors.

In the end, the for-profit rehab industry is largely driven by profit rather than proven treatments for patients. Studies show far less expensive non-profit treatment programs—even outpatient addiction care—can be just as effective.

If you or a loved one has experience with an unethical drug treatment center or seen first-hand insurance fraud, patient brokering, kickbacks, deceptive sales and marketing, or patient privacy violations, call The Lyon Firm to investigate. You may have a viable fraud claim, and may be eligible for compensation.


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