Excerpted from The Orange County Register
By Teri Sforza
In that unwieldy stack of newly proposed laws atop Gov. Gavin Newsom’s desk: Four bills that aim to require licensing, reduce fraud and false advertising and raise standards in California’s notoriously under-regulated addiction treatment industry.
“This has been a long time coming,” said reformer Ryan Hampton, author of “American Fix.” “Governor Newsom has the opportunity to make right what Governor Brown got wrong last session; and that’s to sign these bills immediately.”
One proposal that could be a game-changer is Assembly Bill 920, by Assemblywoman Cottie Petrie-Norris, D-Laguna Beach, and Sen. Jerry Hill, D-San Mateo. It would require outpatient centers, which are now completely unsupervised by the state, to be licensed, regulated, and to adopt treatment criteria set by the American Society of Addiction Medicine as the minimum standard of care.
“Anyone can hang that shingle and open an outpatient treatment center today. No license, no training or prior experience necessary at all. Nothing,” said Hill when he unveiled the plan earlier this year.
“We don’t know how many outpatient facilities are operating in the state, or how many people are returning to outpatient treatment after they relapse. If you wanted to know how many people died at outpatient facilities, we couldn’t tell you today.”
The bill is modeled after Hill’s SB 823, requiring the same rules of live-in treatment centers, which was signed into law last year.
Wendy McEntyre of Sky Forest lost her son, Jarrod, to an overdose in a sober living home in the San Fernando Valley in 2004. Twenty-four men were living in the three-bedroom, two-bath house at the time, and one brought in speedballs to share. McEntyre founded the nonprofit Jarrod’s Law in his memory and began fighting to change California’s laws. AB 920 is named in his honor.
“It really is phenomenal,” McEntyre said. “There’s so much more that needs to happen — we need to overhaul the system, and committees are meeting and working hard on that. But right now, this is phenomenal.”
Also making it to the governor’s desk is Senate Bill 589 by Sen. Pat Bates, R-Laguna Niguel, which would prohibit rehabs and sober homes from making false or misleading advertising statements. The law also would prevent one rehab operator from hijacking web traffic intended for another.
“We’re tightening the noose on these guys profiteering off the most vulnerable, and telling stories that are totally distorted about what a person is going to get in these facilities,” Bates said. “Kick the habit in 30 days? Come on. I hear these ads on TV, drawing people in. But these are lifetime problems. They’re not solved in 30 days. They’re promising things that can’t be delivered.”
Under Bates’ bill the California Department of Health Care Services would have the responsibility to respond to allegations of false claims and to sanction advertising.
No free rent
Insurance fraud, which is already illegal, has also been a big problem in the industry. But AB 919, also by Petrie-Norris, would crack down on financial conflicts-of-interest among rehab operators.
It would require that laboratories that test blood or urine for drugs, or outpatient treatment programs that lease, manage, or own housing offered to clients, have separate housing contracts, specifically stating that payment for housing is the patient’s responsibility. Rent should not be indirectly billed to health insurance, a practice that has become common in the industry.
If discounted housing or transportation is offered, the patient must enter into a repayment plan for any subsidized rent. The bill would empower the Department of Health Care Services to provide enforcement.
And AB 290, by Assemblymember Jim Wood, D-Santa Rosa, would remove the financial incentive for treatment providers to lure people to California by promising “free” insurance coverage. Primarily directed at kidney dialysis schemes, the proposal also would rein in addiction treatment centers.
Addiction treatment centers have provided plane tickets to addicted people from other states, flown them to California, and then signed them up for private health insurance policies and paid the premiums. That allowed the centers to then bill up to hundreds of thousands of dollars, while paying a fraction of that to insurers.
When the insurance benefits run out, centers stop paying the premiums and kick patients out, often to the street. In the industry, the practice is common enough that it has a name — “curbing.”
AB 290 would crack down on what’s known as “financially-interested third-party payments.”
“This practice has led to the untimely death of countless people,” said reformer Hampton, who over the years has seen rehab bills gutted, watered down and killed over the years. “Our community has faith that the Governor will do the right thing and stand by family members and people impacted by the addiction crisis.”
The Southern California News Group has been chronicling reports of death, sexual assault, drug abuse and paying for patients inside California’s addiction treatment industry for years. Lawmakers have been trying to tighten regulation of the industry, but with limited success.
This year’s crop of legislation is the most far-reaching to make it to the governor’s desk to date, and observers credit the new Bi-Partisan Legislative Substance Abuse Treatment Working Group, led by Petrie-Norris, with the progress.
The group seeks to significantly expand state oversight, improve patient protections and ensure that taxpayer dollars are spent on programs that work.
“I’m really, really thrilled we were able to get this done,” Petrie-Norris said. “I absolutely think the working group has allowed us to elevate the discussion and move things along. Unfortunately, more legislators are having to struggle with this as the problems become more widespread.”
Newsom’s spokeswoman, Vicky Waters, said the bills will be evaluated by the governor on their merits. He has until Oct. 13 to act.
Mark G. Mishek, chief executive of the Minnesota-based Hazelden Betty Ford Foundation, was stunned by California’s lenient rules when his organization merged with the Rancho Mirage-based Betty Ford Center. He has been urging officials to step up their game for years, and sent a letter to the governor asking him to sign the legislation.
“We like all of it,” said Mishek, “California is long overdue on licensing outpatient treatment.”
Laurie Girand of Advocates for Responsible Treatment in San Juan Capistrano has also been pushing for stronger legislation for years. She asks people to contact the governor to urge him to sign.
“Requiring licencing would be a big step forward,” she said. “You’d think we’re protected from false advertising — but we’re not. And a lot of times, insurance premiums are getting paid by the people hoping to profit from them.
“Gavin Newsom has an opportunity to turn around drug and alcohol rehab in California for the betterment of patients,” Girand said. “It’s on his desk. What are we waiting for?”