The Orange County Register (California) TonySaavedra and Scott Schwebe investigated the Califonia system of recovery and sober homes. The allegations, if true are disturbing.
Philip Ganong, his wife and their 34-year-old son built a fast-growing, multimillion-dollar empire on urine.
They collected it from drug addicts at their chain of Southern California sober living homes. They created labs to test it. And they charged insurance companies to analyze it.
But the success story was a scam, according to prosecutors, who have accused the Ganongs of fraud. They say the family used a network of doctors and others to bilk insurers out of as much as $22 million for tests that were unnecessary or never performed.
The Ganongs have pleaded not guilty and are awaiting trial.
But the allegations raised in the Ganong case highlight what a growing number of critics say are chronic shortcomings in the oversight of California’s multi-billion-dollar drug rehabilitation industry.
Among the complaints:
- Drug counselors and others can run sober living homes and some types of treatment centers without passing any kind of criminal background check. Even people convicted of drug crimes are allowed, under current state law, to get a license to own and/or operate drug and alcohol rehab centers.
- Addicts and families considering rehab have no easy way to check the records of treatment centers, recovery homes or their owners or staff.
- The state lags behind others in adopting reforms to crack down on treatment center operators who exploit vulnerable addicts and focus more on profits than on effective care.
California is “the wild, wild west right now,” said Kansas Cafferty, a commissioner with the National Certification Commission for Addiction Professionals.
In a state with about 1,800 licensed recovery centers and an unknown number of unlicensed sober living homes and testing labs, Cafferty is among many who believe California needs to get better at rehab regulation.
“There (are) a lot of places committing crimes that authorities are trying to enforce, but they can’t keep up with it.”
Just following the rules
Marlies Perez, chief of the California Department of Health Care Services’ Substance Use Disorder Compliance Division, which licenses rehab treatment centers, said her agency can only do what the state Legislature allows.
The state agency has only a broad guidance system, with few enforceable actions.
It’s not a new problem, and California legislators have fought about it for years. Still, they’ve made only halting progress in beefing up licensing standards and rehab monitoring. That’s partly because of industry lobbying, and because of fears that tighter rules will raise treatment costs or limit the number of rehab beds just when the nation’s opioid crisis is cranking up demand.
This year, State Sen. Pat Bates, R-Laguna Niguel, introduced a bill to reform the system, but it stalled in committee. Today, she describes the state’s oversight of rehab operators, sober living homes and counselors as “troubling.”
operator’s) background,” Bates said. “There’s a culture about giving these people a second chance.”
Still, she insists that background checks and tougher licensing requirements for counselors, employees and rehab operators are vital. “It’s something we need to pursue.”
Putting a face on it. Alex Schmick dies of an overdose while living in a recovery facility. The family sued the facility and the physician who wrote the order for the medication.
California lags other states
Smick is not the first to raise the issue of transparency. A state Senate report in 2012 found a host of oversight problems in the recovery industry, including poor monitoring of rehab centers and inadequate information sharing related to treatment center operators.
Other state officials have pointed to financial abuses in the industry that authorities say bleed millions from public and private pockets. Part of the concern is tied to so-called “junkie hunters,” people who recruit addicts from around the country and bring them to rehab centers in California in return for kickbacks.
One area of the rehab industry – sober living homes – has virtually no oversight.
The homes, where addicts often live for a few months after leaving formal rehab, aren’t required to submit any records of their operations. This is true, in part, because operators aren’t claiming to provide medical treatment and the people living in them, recovering addicts, are protected under the Americans with Disabilities Act.
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