Rapists, child molesters and pedophiles served in positions of trust inside state-licensed addiction treatment centers because, in California, no criminal background checks were required.
Addiction counselors preached abstinence to clients even as they racked up fresh drug and alcohol charges of their own; no system for reporting new offenses existed.
State regulators overseeing the rehab industry often failed to catch life-threatening problems and, when they did, failed to follow up to ensure that dangerous practices ceased.
These blistering critiques of California’s weak regulation of addiction treatment — delivered in a pair of reports from the Senate Office of Oversight and Outcomes more than four years ago — indicted a system that far too often produced deadly results for people at perhaps the most vulnerable point in their lives.
Shortly after the reports were written, the agency overseeing rehabs ceased to exists, its responsibilities transferred to a different department. Hopes ran high that California would modernize its approach to better protect those who need help.
Since then, some has changed for the better — but much has changed for the worse:
• As opioid addiction has soared, inexperienced and unscrupulous rehab operators have rushed in to take advantage of mandatory mental health treatment coverage required by the Affordable Care Act.
• California’s notoriously hands-off approach to regulating the industry — still predominantly non-medical even as other states push hard for a more medical approach to care — makes it easy for almost anyone to open a treatment center and bill insurance companies hundreds of thousands of dollars per client.
• California’s easy-enroll health insurance marketplace also has helped cement the state as a go-to destination for addicts seeking to get clean — or cash in — on what has become known as the Rehab Riviera.
• Residential treatment facilities bring chaos to neighborhoods and swell the homeless population with rehab rejects who are kicked to the curb when their insurance runs dry.
• Addicts trying to get clean — and their families — often mistake California’s non-medical rehabs for facilities that provide medical treatment, thanks in part to slick advertising. In non-medical facilities, many are dying for want of proper medical care.
Since the Southern California News Group’s investigation of the Rehab Riviera began last winter, criminal probes of industry players have been confirmed by the Federal Bureau of Investigation and several local district attorneys, including those in Orange and Riverside counties. The California Department of Insurance is investigating irregularities as well.
But proposed laws aimed at closing loopholes in the regulatory system — such as forbidding patient-brokering, the buying and selling of well-insured addicts to the centers willing to pay the most for them — have languished or died in the Legislature.
The department charged with regulating the industry has advanced no comprehensive plan to lawmakers to help correct problems that fester in plain sight.
And as lawmakers debate where rehab inspectors should be stationed, the qualifications of drug counselors and how many rehabs should be allowed per block (many are in ordinary tract houses in residential neighborhoods) they don’t address the decidedly non-medical nature of much addiction treatment in California.
“This is a crisis and it’s growing,” said Mike Pearce, whose daughter, Shannon, floated in and out of treatment centers until she was killed Dec. 16 at the Santa Ana apartment she shared with another recovering addict.
“The governor should take the direct lead on this…It’s going to take inspired leadership at the top. And we haven’t had inspired leadership for a long, long time,” Pearce said.
“It just galls me that they don’t care.”
Shannon might still be alive if she had gotten some kind of care from the people she turned to in faith, Pearce said. She seemed to be making progress with one counselor, he said, until that counselor relapsed.
“Something is seriously wrong with how we’re approaching this, and we’re not confronting it,” said Walter Ling, professor of psychiatry and founding director of the Integrated Substance Abuse Programs at UCLA. “There is no leadership. We know it’s not working. We’ve known that for years.”
Buck stops nowhere
While governors in other states — Vermont’s Peter Shumlin, Ohio’s John Kasich, Florida’s Rick Scott — have unveiled aggressive plans to fight drug addiction and reform the treatment industry, Gov. Jerry Brown has largely declined to engage.
When the Southern California News Group summarized its findings for Brown — including the deaths of at least a dozen people in non-medical detox facilities, which are not allowed in several other states because of the extreme health risks posed by withdrawal — the governor’s press secretary, Ali Bay, said, “I don’t expect our office will have additional information for you.”
The department that Brown’s office referred us to for answers, the Department of Health Care Services’ Substance Use Disorder Compliance Division, is headed by Marlies Perez.
This year, Perez’s department is rolling out a system to bring medication-assisted treatment to California’s hard-hit northern reaches. It also has hired more inspectors. But addressing the problems outlined by the Southern California News Group’s probe are not her department’s purview, she said.
“Our authority is around the licensing of the facilities. Patient-brokering is not within our jurisdictional authority. That’s the jurisdiction of the Department of Insurance. And the state department that oversees managed health care, that is not with the Department of Health Care,” she said.
Nor is it her department’s job, as the state’s regulatory experts, to bring reform proposals to lawmakers. “We have the opportunity to weigh in on bills and things brought forward, but the ultimate authority is going to lie with the Legislature and the governor to make those decisions,” Perez said.
Over in the Legislature, several lawmakers are seeking reforms, without much success.
A bill that would forbid patient brokering was introduced by Sen. Steven Bradford, D-Gardena, but stalled in committee over the summer. It has been amended and awaits a new hearing.
Criminal background checks are required for acupuncturists, dental hygienists, optometrists and veterinarians, but substance abuse counselors can work with vulnerable addicts for five years without officials probing their background, noted a bill by Assemblyman Reggie Jones-Sawyer, D-Los Angeles. His bill requiring such screening was overwhelmingly approved by the Assembly, but stalled in the Senate.
A bill by Sen. Tony Mendoza, D-Artesia, seeks to address over-concentration of rehab centers by requiring at least 300 feet between new facilities – a distance critics say should be at least twice that. A hearing is set for that in January.
Sen. Pat Bates, R-Laguna Niguel, sought a study examining whether sober living group homes should be licensed if they provide counseling, manage a resident’s schedule or do urine tests to ensure a drug-free environment. That effort stalled, and her bill has been amended to ask the Department of Health Care Services to figure out how to evaluate neighborhood complaints about over-concentration; determine how many rehab facilities are actually needed in the state; and figure out how to track their outcomes.
Assemblywoman Sharon Quirk-Silva’s bill placing a state complaint investigator directly in Orange County — home to the highest concentration of licensed rehabs in the state — faced stiff opposition. “The system right now isn’t broken,” said Sherry Daley of the California Consortium of Addiction Programs and Professionals at a public hearing. Quirk-Silva’s bill has been amended, but no hearing has been scheduled yet.
“You’re right to feel as if the (issue) isn’t being resolved in a satisfactory way,” said Quirk-Silva, D-Fullerton. “It’s frustrating.”
Part of the problem is that too many people are profiting from the current setup, she added.
“I think there is some pushback from the addiction centers. They don’t want to see these programs closed. They’re still making money.”
Treatment in a non-medical facility can reap $3,410 per day, with monthly bills topping $100,000 for some clients, according to documents filed in court.
A woman from Washington state ran up a $416,050 bill over several months of treatment with San Clemente-based Sovereign Health.
Some critics even suggest the basic model of the rehab industry isn’t focused on wellness.
“There is no money in sobriety,” said Dave Aronberg, state attorney for Palm Beach County, Florida. “There is no incentive to recover in this process. It will cost you your free housing, your free illegal gifts, your friends. And now you have to move back home to live with Mom and Dad and find a job.
“But the insurance benefits will renew, and the cycle will start again if you just test dirty. Because you can’t be denied coverage for a pre-existing condition,” Aronberg added.
“Instead of a recovery model, we have a relapse model.”
Community chaos
Much addiction treatment in California happens in 6-bed homes in residential communities.
Neighbors of such facilities have, for years, complained about the chaos these homes bring, but those complaints often are dismissed as NIMBY — “not my backyard syndrome.” And because rehab homes are legally protected under the Americans With Disabilities Act they don’t need special permits to operate, leaving neighbors with little recourse.
Records obtained by the Southern California News Group show that police and emergency workers in Southern California routinely respond to complaints connected to state-licensed, neighborhood rehabs. Calls come in for rape, assault, suicide, attempted suicide, burglary, public intoxication, child endangerment and indecent exposure, among others.
In Pasadena, since 2012, police responded to 1,666 calls for service at just 17 rehab addresses. Those included 91 mental health-related calls, 33 public intoxications, 16 sex offender registrations, 16 burglaries, a dozen vehicle thefts, 11 batteries, four overdoses, two indecent exposures, and one each of assault with a deadly weapon, lewd conduct, prostitution, and child endangerment, according to call logs.
In the eight south Orange County cities patrolled by the Orange County Sheriff’s Department, there were 2,500 calls for service during that same period. The heaviest-hit were San Clemente, where there were 926 calls, the majority to just six addresses; and San Juan Capistrano, where there were 667 calls, the majority to just 10 addresses.
In the city of Riverside, there were 1,052 calls for service at 26 licensed rehab centers, including 186 mental health-related calls, 18 overdoses, five sexual assaults, three rapes, one alleged child molestation and one felon with tear gas. A single center on Brockton Avenue generated 285 calls for service.
“The addicts in these facilities are not getting helped, they’re getting hurt,” said Warren Hanselman of Advocates for Responsible Treatment, a group pushing for better regulation in San Juan Capistrano.
In a letter to the Costa Mesa city council, Tiffani Rosing recounted how she had just dropped her boys off at school one morning in 2014 when her cell phone rang: A man had collapsed in her driveway; an ambulance, police cars and fire truck had surrounded her house; and her neighbor wanted to know if everything was OK.
She rushed home to find a young man, high on meth, next to a car. His friend, also high on meth, had bolted — taking the car keys. And a third young man — lying in her driveway — had overdosed and vomited. He was taken away by ambulance.
After the firefighters and police left, Rosing stood there in her dirty driveway with the remaining man. He felt bad about everything, Rosing said, and helped her clean the driveway. His name was Brian. He was 22, from Las Vegas, trying to kick heroin. He’d been at a sober house in Eastside Costa Mesa trying to get clean, but then a guy brought in meth, he told her, and they all partook.
“I do feel bad for these people, but the system is obviously broken,” Rosing wrote.
Hanselman, of San Juan Capistrano, has a list of similar tales.
“Why is there no grand jury looking into this?,” he asked. “Where are our justice people?”
Political will
Richard Rawson spent years advising California on how to best regulate addiction treatment as co-director of UCLA’s Integrated Substance Abuse Programs.
“The state drug and alcohol office never has been a particularly powerful entity,” said Rawson, now retired. “I suspect that’s because there’s not a lot of political support for getting out and cleaning up this industry.”
It is different in Rawson’s home state of Vermont. “Here you had Gov. (Peter) Shumlin in 2014 doing his entire State of the State speech on opioid addiction. It became the top priority in the state government. That has never happened in California – there’s too much other stuff going on.”
Perez, head of the Substance Use Disorder Compliance Division, deserves credit for channeling California’s entire $90 million federal grant toward expanding medication-assisted treatment in hard-hit corners of the state, Rawson said. But without leadership from the top, he added, it’s hard to get more done.
“The mess in the rehab industry is a problem that politicians seem to want to avoid.”
Huntington Beach filmmaker Greg Horvath produced a documentary, “The Bu$iness of Recovery,” to expose what he calls the “gross deficiencies” addiction treatment.
“The industry must change,” said Horvath. “There must be oversight and regulations in place that protect the public and the families who are entrusting these centers with their loved ones. Treatment needs to be more scientific and empirically validated. The educational requirements for people treating addiction must be higher.”
UCLA psychiatrist Ling agrees, suggesting much of the industry is built on false claims: “This is a very critical point: There is a misrepresentation of what they do because they make people believe they are rendering medical services.”
Florida, hard-hit by pill mills and deadly fraud in the treatment industry, responded to this disconnect with new laws criminalizing dishonest marketing, kickbacks and patient-brokering.
“We shut these places down because the government had the courage to do so,” said Aronberg, state attorney for Palm Beach County.
On Wednesday, the state of New York launched a new ad campaign to alert those seeking help about bogus rehab referral services. “Vulnerable New Yorkers struggling with addiction are being targeted and falsely promised life-saving treatment services and then are given inadequate and ineffective treatment at outrageous costs,” Gov. Andrew Cuomo said.
Fixing California’s regulatory ills would require a significant overhaul of the system, said Harry Nelson, founding partner of Nelson Hardiman, a firm specializing in health care law. He’s not sure there’s an appetite for it.
“The problem is, drug rehab is complicated, so it doesn’t fit neatly into the healthcare category or the community care framework,” Nelson said. “It has been cut off from the rest of the health care system for so long it has had a silo effect.”
Undoing that isolation — by integrating addiction treatment into the mainstream health care system — will ultimately address irregularities, said Martin Y. Iguchi, a senior behavioral scientist at the RAND Corporation and professor in the departments of Psychology and International Health at Georgetown University.
“When you have fraud like that, that’s because of the Wild West nature of the programs that have popped up,” he said. “There hasn’t been a lot of attention paid because, without funding flowing, nobody seemed to really care. The more these programs are part of the traditional (health) care system, the better off everyone will be.”
Said Keith Humphreys, director for mental health policy at Stanford University’s Department of Psychiatry and Behavioral Sciences: “These problems are not common in oncology.”
Solutions
The Southern California News Group has talked to hundreds of people about how to address problems in rehab industry, and reviewed thousands of pages of regulatory documents and academic studies. Some recommendations from experts include:
• Establish national accreditation standards for all addiction treatment facilities and programs that reflect evidence-based care.
• License addiction treatment facilities as health care providers.
• Collect patient outcome data and make it available to the public.
• Mount a national health campaign educating people about medical responses to addiction and improve addiction treatment training in medical schools.
• Tighten up truth-in-advertising laws to rein in call centers that intercept and broker patients to facilities that pay them.
• Require more formal education, criminal background checks and state licensing for addiction counselors and those who work in treatment centers.
• Expand the state’s power to license, regulate and shut down facilities.
• Tighten the special enrollment period for buying health insurance, making it harder to do mid-year enrollments.
• Forbid financially interested third-parties from paying health insurance premiums, except for parents.
• Just as Medicare rewards good hospitals for not having readmissions, insurers can do same for addiction treatment providers. “Pay the good ones more and the bad ones less,” said Florida state attorney Aronberg.
“It is long past time for (the rehab industry) to catch up with the science. Failure to do so is a violation of medical ethics, a cause of untold human suffering and a profligate misuse of taxpayer dollars,” concluded the National Center on Addiction and Substance Abuse at Columbia University.
Ling, of UCLA, believes California can start small — by appointing a commission to review how things are done, and how they might be done.
“I think Jerry Brown is a pretty decent guy,” Ling said. “(But) can he authorize a group to actually look at this? The regular channels are all bogged down on their routines. It’s hard to change what is going on. They’re entrenched.”
Ling said California has the resources and compassion to make such changes, and suggested the first step to fixing Rehab Riviera is actually obvious
“We don’t need more treatment that is not treatment. If we want to find sensible solutions, we should stop doing things that don’t work.”
Staff writer Jordan Graham contributed to this report.