Rehab Rat Race: Putting profits over patients?

By: - June 12, 2018 4:48 pm

A Solutions Recovery facility in Las Vegas, June 2018 (Nevada Current file photo).

Cody Arbuckle was 23 years-old when he left Indianapolis and headed for Las Vegas and a future free from addiction. Like countless others tethered to alcohol or drugs, Arbuckle chose to kick his opiate addiction in Southern Nevada, known for its many temptations but also a plethora of rehabilitation options.

Arbuckle spent 19 days at Solutions Recovery, a Las Vegas treatment facility where clients gather during the day for treatment and return in the evening to homes scattered throughout the valley, where some patients live for weeks or even months at a time.

Arbuckle was found dead at one of Solutions’ homes on the west edge of Las Vegas on the morning of July 14, 2017. The Clark County coroner says Arbuckle died of toxic levels of Loperamide, better known by the brand name Imodium A-D, a common anti-diarrhea drug sold over-the-counter.

cody arbuckle
Cody Arbuckle, Photo Credit: Indiana Funeral Care

The drug is popular among opiate addicts for two reasons – it relieves the digestive symptoms that often accompany detox, and at levels far exceeding the recommended dose, it’s said to mimic the effects of opiates.

The FDA warns of “serious heart problems and deaths with much higher than the recommended doses of Loperamide, primarily among people who are intentionally misusing or abusing the product, despite the addition of a warning to the medicine label and a previous communication.”

The missive goes on to say Loperamide is a safe drug at approved doses, “…but when much higher than recommended doses are taken, it can lead to serious problems, including severe heart rhythm problems and death.”

Solutions Recovery and other AAC facility websites tout the drug’s therapeutic benefits and warn of its dangers.

Neither AAC nor its Las Vegas-based Vice President, David Marlon, would say why Arbuckle, who was confined to Solutions, had access to Loperamide, nor would they discuss Arbuckle’s death, citing privacy laws.

Nevada law requires non-medical rehab facilities to report disasters including fires to the state, but not the deaths of clients. Patient deaths, which are only reported to the coroner, often go unnoticed by the public.

Solutions Recovery declined to say whether it alerts prospective patients to deaths at its facilities.

The State of Nevada reports three deaths between 2010 and 2017 in which Loperamide was a contributing factor. All were females between the ages of 25-35. The state statistics do not include Arbuckle, whose cause and manner of death were listed as undetermined until this year.

Arbuckle’s mother, Kathryn Deem, is contemplating legal action against Solutions and its parent company, American Addiction Centers. She’s hired an attorney from a California firm that recently won a $7 million verdict against AAC for wrongful death at one of its facilities near San Diego.

The National Institute of Drug Abuse says 408 people in Nevada died of opioid-related causes in 2016, equal to the national rate of 13.3 deaths per 100,000 persons. From 2011 to 2014 opioid overdoses declined in Nevada, but increased again in 2015. Only nine of the state’s 80 rehab facilities have opioid treatment programs and treated 899 clients in 2016.

Deaths related to heroin, a popular and less expensive alternative to prescription pills, doubled in Nevada from 40 to 86 between 2011 and 2016.

While access to treatment is a key factor in combating the epidemic of addiction, some experts blame greedy treatment providers for exploiting the enhanced benefits available via the Affordable Care Act and expanded Medicaid coverage. Critics complain the $35 billion a year rehab industry is mired in fraud, corruption and profiteering.

“I hate to paint this picture that they are all corrupt because I don’t think that’s the case,” says Jeff Iverson, a former methamphetamine addict and founder of Freedom House, an apartment complex-turned rehab facility. “But I certainly think there are a number of people out there in this industry who have figured out how to work the system and I don’t think they are producing good results in their treatment programs.”

Some states are taking steps to combat the practices that increase costs for everyone and leave patients in debt and no closer to recovery. Nevada is not one of them.

American Addiction Centers

American Addiction Centers, a publicly traded behemoth in the rehab world, has the dubious distinction as the only corporation in California to ever be charged with murder. A judge dismissed the second-degree charge filed by then-Attorney General Kamala Harris, but the 2010 death of a patient caused the company’s stock to temporarily nosedive. Several deaths and millions of dollars in settlements later, the Tennessee-based company is thriving, with revenue jumping from $133 million in 2014 to $318 million in 2017.

AAC boasts 19 standalone outpatient centers and five sober living facilities in eight states – a total of 1,348 residential and sober living beds.  Solutions Recovery and Desert Hope, both in Las Vegas, are owned by AAC.

AAC is also an internet marketer with referral sites, and others providing a never-ending stream of clients. Neither site makes prominent mention on its homepage of its affiliation with AAC.

Congress is investigating patient brokering and the role of rehab call center marketing. Late last year the House Subcommittee on Oversight and Investigations held a hearing on fraud in the treatment industry, alleged by the committee to “rely, in part, on call centers and call aggregators to generate leads on potential patients. Rather than focus on the health needs of the individuals who are seeking treatment, however, the emerging patient brokering industry views potential patients as commodities that can be bought, sold, or traded.”

Now, in a six page letter to AAC Chief Executive Officer and Chairman Michael Cartwright, the Committee on Energy and Commerce is demanding answers to questions regarding the company’s practices.

“Some treatment facilities and marketers are upfront about their use of call aggregators and disclose the names of companies or facilities that answer potential patients’ calls.  Others reportedly engage in deceptive tactics to hide the fact that they refer patients to treatment facilities that pay for referrals or to facilities owned by the same company that is operating the hotline,” the letter says.

AAC says it welcomes the industry scrutiny.

“Our websites disclose common ownership with our facilities,” says AAC Vice President David Marlon of the disclosures which can be found on the sites but do not appear prominently on their homepages.

In a statement to the Current, AAC suggests potential clients in the throes of addiction can do an Internet check to weed out corporate conflicts of interest.

Attorney Jude Basile, who won the $7 million judgment on behalf of the family of a man who committed suicide at AAC’s facility near San Diego, told Tampa station WFTS “They were negligent in how they marketed and brought people in. These people took calls from their mass marketing program and were paid a commission and had sales quotas.”

Critics contend the practice of paying intake staff on commission results in patients going to rehab when they may require intensive medical care.

“I think there could be a lot of conflicts there with a person in the medical field working on commission.  If you’re working on an ‘eat what you kill’ basis, you may categorize your leads and focus on those that are a slam dunk,” Iverson says.

“Our compensation practices are legally compliant; in fact, we have advocated for legislation that removes conflicts of interest in addiction industry compensation structures,” says AAC Vice President David Marlon.

Another AAC sideline, its urinalysis business, has faced fraud charges related to excessive testing and over billing.

“Blue Crossing America”

Alcohol, heroin, meth, opiates. Pick your poison and there’s likely a nearby for-profit addiction center ready to treat you. If not, help is a plane ride away.

“They put my daughter on a plane to Florida,” says Neil, a Las Vegas resident who doesn’t want to be identified by his last name. Neil’s daughter was a patient at Desert Hope. The American Addiction Centers-owned facility arranged her transfer to one of its recovery centers in Florida, where the industry giant caters, as it does in Las Vegas, to out-of-state clients.

Neil’s daughter is not alone.  She’s one of countless recovery patients consigned by their treatment providers to “Blue Crossing the Country” – a reference to rehab-hopping on a health insurance company’s dime, while facilities seek to fill beds and reap the benefits. In 2008, President George W. Bush required insurance companies to cover treatment for addiction. The Affordable Care Act expanded the coverage, turning the 25 million Americans with addictions into valuable commodities for the treatment industry.

Neil says Solutions Recovery admissions personnel were so anxious to admit his daughter, they offered to buy her health insurance, a practice a Solutions executive admits to the Current. It’s called incentivizing treatment.

AAC’s Marlon denies the practice, despite being provided text messages from a company executive acknowledging that the company sometimes helps patients pay premiums.

The practice has been outlawed in Florida, and a bill before the California Legislature seeks to end it in that state. But here in Nevada’s there’s no prohibition. Insurance Division officials say insurers have the discretion to reject the policy.

It’s a practice that sounds alarms for Iverson, who says the insurance industry is well aware of the problem, if not yet willing to discuss openly.

“If you have treatment providers who are walking the ethical line and willing to do things like pay the premium for a policy, what else are they capable of doing and how sincere might they be about actually getting someone clean and into long-term recovery?” he asks.

When it comes to AAC’s business model, Nevada punches well above its weight class. According to the 2017 corporate annual report, “approximately 11% of our revenue came from Anthem Blue-Cross Blue-Shield of Nevada, 11% came from Blue-Cross Blue-Shield of Texas and 10% came from Blue-Cross Blue-Shield of Florida. No other payor accounted for more than 10% of our revenue for the year ended December 31, 2017.”

Nevada has a fraction of treatment facilities and clients compared with Florida and Texas. Blue-Cross Blue-Shield of Nevada declined to comment for this story.

AAC’s annual filing for 2017 notes “In-network providers typically provide services through third-party payors for a negotiated lower rate or other less favorable terms…. We receive the majority of payments from commercial payors at out-of-network rates.”

What percentage of Solutions’ patients are covered out-of-network? And what’s the difference in reimbursement?  AAC and Marlon refused to say.

Fair Health, a non-profit that tracks private insurance claims, reports annual spending by private insurers on opiate addiction treatment increased more than 1,000 percent between 2010 and 2015 to $721 million.

Despite a lot of promises and a revolving door of stints in rehab, Neil’s daughter remains addicted to meth and financially hobbled by the $50,000 liability to Solutions’ AAC affiliate, Desert Hope, an agreement Neil says his daughter signed while high on meth.

Marlon says many clients come to AAC under the influence.

“No patient is forced by us to sign anything he or she does not want to sign,” Marlon says. “It is our practice to go back over the paperwork clients signed on intake, once they have detoxed, to double check their understanding. Which is good practice for all psychiatric caregivers.”

“They would threaten to send me to a mental hospital.”

Laura D. sought treatment at Solutions Recovery for post-traumatic stress disorder and addiction to painkillers.

”They threatened to beat my ass. They would threaten to send me to a mental hospital,” she says. “It was a terrible experience. I have worse PTSD now than when I went in. They were verbally abusive, rude, spoke down to me and didn’t help me. I was overmedicated. They gave me two gallon size bags of pills. I thought I was going to die. The doctor is a geriatric psychiatrist.”

Solutions Recovery’s website lists Dr. Robert L. Horne as Chief Psychiatrist of its clinical team, noting his certifications in Psychiatry, Geriatric Psychiatry, Pain Management and Forensic Medicine.  Marlon says the facility has 15 additional psychiatrists on staff.

“Most of our patients come to us with co-occurring psychiatric disorders and are on one or more prescribed medications,” Marlon says. “It is standard operating procedure both at our facilities and in the industry, to put the medications in a large, clear Ziploc bag, so that the medicines stay in one place and are appropriately administered or taken.”

Laura says she was drugged to remain quiet because her pleas for help and requests to make phone calls were a deterrent to potential clients and families visiting the facility.  Laura says she was even threatened with arrest.

While at Solutions Recovery, Laura became friends with Cody Arbuckle, who she says confided to her that he feared he was going to die in rehab.

“He pulled me aside during a movie. He told me he was afraid he was going to die. The staff was bullying him and accusing him of giving drugs to his roommate, who had OD’d and was in the hospital. He said ‘I feel like I’m going to die here.’”

Laura says she got off pain medications at Solutions Recovery but relapsed shortly after leaving. She says she’s been to a number of facilities, some owned by AAC and some not, where she’s been billed for treatments that were never provided.

The House committee letter notes “perhaps the most disturbing allegation is that some patient brokers follow these individuals with substance use disorder after their release and provide them with drugs to induce relapse so that the entire process can be repeated.  This scheme creates an incentive for relapse and profit rather than treatment and ultimately sobriety.”

How effective is drug and alcohol rehab and what works? Read more of the Current’s investigation.

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Dana Gentry
Dana Gentry

Dana Gentry is a native Las Vegan and award-winning investigative journalist. She is a graduate of Bishop Gorman High School and holds a Bachelor's degree in Communications from the University of Nevada, Las Vegas.