Sentenced to 18 months after pleading guilty to a health care fraud-related charge, former Willow Grove and Cherry Hill addiction center owner Joseph Lubowitz — who was once something of a celebrity in local recovery circles — told a federal courtroom he’s sorry for illegally profiting from the pain of people he was supposed to help, and wants to make amends. But federal, state, and local agencies also need to take more responsibility to regulate and oversee addiction treatment and recovery facilities, programs, and residences, which are proliferating due to the opioid abuse epidemic and sometimes exploit desperately ill human beings. Slapdash oversight and ad hoc regulations more suited to a bygone era of boarding houses are enabling the profiteers.
Lubowitz participated in the practice known known as “brokering”— sending patients to rehab centers in exchange for cash kickbacks — demonstrating the ease with which profits can be made through what could be described as a form of human trafficking. This despicable yet widespread activity is a growing concern nationally, as well as locally. In August, Jason Gerner, the former CEO of a rehab chain in the Philadelphia suburbs, pleaded guilty to “a wide-ranging fraud scheme that exploited patients as profit generators and bilked insurance companies out of tens of millions of dollars,” the Inquirer’s Jeremy Roebuck reported.
There’s plenty of money to be made, legitimately, in treatment of addiction: One published estimate charts private equity investment in treatment facilities rising from $11.4 million in 2011 to $2.9 billion last year. And since 2013, the Affordable Care Act has required coverage for mental health and substance abuse disorders.
In the two Philly area cases, scammers cycled patients in and out of treatment facilities in order to make money on their urine; reimbursement for tests is so lucrative that the humble bodily fluid is called ‘liquid gold.’ Congress last year passed the Eliminating Kickbacks in Recovery Act, which criminalizes and penalizes paid referrals of patients with substance abuse disorder to clinical treatment facilities, sober living homes, or labs that test urine samples. But much more needs to be done.
It’s become common for people leaving rehab to seek community based, privately run, and supportive sober houses, which do not provide treatment but in some cases are affiliated with for-profit or nonprofit rehabs. In 2017, Gov. Tom Wolf signed a measure to better regulate sober houses; Pennsylvania is now developing a program to license at least some of these facilities beginning next year. And New Jersey established a separate licensing classification for “cooperative sober living residences” in 2018. But officials said they did not have a current count of how many sober houses are operating in either state.