SB 1228 – Body Brokering:
A Promise Not Met
M. David (Mick) Meagher, Esq. © 2018
I have been in the addiction treatment field for over 43 years. I have held virtually every position from Intake counselor to CEO. I have restructured 8 treatment centers of various sizes and licenses. I am a licensed attorney with over 25 years of health care law experience. I have witnessed the addiction treatment field settle for crumbs from the federal and state governments, from insurance companies as well as others. In spite of all of the hard work by many outstanding individuals and their agencies, once again we have settled.
As has been widely reported over the past several years, the issue of body brokering has reached to every level of the addiction treatment field. This obscene practice of unqualified salespeople, conspiring with unethical and unqualified program owners using patently unethical and illegal acts to line their pockets must be crushed. In this paper I am defining body brokering as payment to or from a business or individual for the referral of a client, or a client’s biological fluids for drug testing. How the payment is made is not relevant, it is a function of securing a referral by trading something of value, such as money, trips, cars etc.
There are state and Federal laws with real teeth that prohibit body brokering when they are enforced. These laws are described below. The new law signed by Governor Brown is a toothless tiger.
Senate Bill No. 1228
On September 26, 2018, Senate Bill No. 1228 was approved by Governor Brown. This law is aimed at a practice commonly known as “Patient Brokering.” It adds Sections 11831.6 and 11831.7 to the California Health and Safety Code, relating to public health.
I am aware many addiction treatment industry leaders, individuals for whom I have great respect for their tireless efforts to make treatment ethical, have mistakenly promoted this bill as the “end” to patient brokering in California. So, while I strongly agree we need to get these parasites who are engaged in body brokering out of the addiction treatment world, this bill falls woefully far short of the mark to accomplish this vital goal.
It is critical to understand what these amendments to the Health and Safety code does, as well as what it fails to do.
This amendment to the Health and Safety code merely offers the potential for administrative remedies against a licensed residential treatment center. These administrative remedies will likely have a minimal effect on a certified outpatient or PHP program. Because IOP’s and PHP’s are not licensed, the most adverse action they face is their certification may be revoked. This would not prevent these programs from continuing to offer services. It may adversely impact a certified addiction counsel. However, before any action can be taken, these administrative remedies require the Department overseeing licensed treatment centers to investigate.
Following an investigation, at the Department’s discretion, they may fine the center, they may revoke or suspend a license or certification. They are not mandated to do so. In my experience, the Department is overworked and understaffed. This makes actual enforcement under this law very unlikely since the investigators will likely not be able to identify body brokering in any writings.
What SB 1228 Does Not Do
It does not create any form of criminal penalty for Body Brokering. This means a body broker can sell a client to any program without fear of consequence. If the body broker is a certified counselor, they may lose the certification. Most body brokers are not certified, and the loss of the certification would not have any actual adverse effect on
a. The maximum penalty if caught is a possible loss of a residential treatment license if overworked state investigators can and do find evidence of the brokering. Most body brokering deals are hidden in handshakes and paid for under the guise of marketing.
b. In contrast, CA Insurance Code Section 750, makes body brokering a criminal offense. This law has been on the books for It applies to both the facility and the body broker equally.
c. To show the contrast of these two laws, you need only look at the consequences. CA Insurance Code Sec. 750 says in section (a) “any person acting individually or through his or her employees or agents, who engages in the practice of processing, presenting, or negotiating claims, including claims under policies of insurance, and who offers, delivers, receives, or accepts any rebate, refund, commission, or other consideration, whether in the form of money or otherwise, as compensation or inducement to or from any person for the referral or procurement of clients, cases, patients, or customers, is guilty of a crime.”
1. This law applies to the body brokers, as well as any sober living, outpatient, PHP, or licensed residential treatment
d. Ins. code 750 goes on to say: “A violation of subdivision (a) is punishable upon a first conviction by imprisonment in a county jail for not more than one year, or by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code, or by a fine not exceeding fifty thousand dollars ($50,000), or by both that imprisonment and fine. A second or subsequent conviction is punishable by imprisonment pursuant to subdivision (h) of Section 1170 of the Penal Code or by that imprisonment and a fine of fifty thousand dollars ($50,000).”
2. The new law, SB 1228, does not create any specific legal risk for the body broker. Most body brokers I have encountered lack any professional training in addiction. Many are nothing more than drug dealers and actively addicted themselves, preying on the sickest of the sick. They poach clients from other treatment centers and self help meetings for their own financial gain. In theory they could lose any certification they might hold as a counselor, but this seems meaningless where they have shown a total lack of regard for ethics or the law;
a. Body brokers who are not licensed professionals (MFT, LCSW, Ph.D. M.D ) are not subject to this new law.
i. Body brokers who are certified as counselors, or licensed as a professional therapist “MAY” lose their certification or license, but the law does not require this.
ii. If a body broker has a professional license issued by the State of California (M.D., Ph.D., Psy.D. LCSW or MFT), California has a law defining body brokering as unprofessional misconduct and license losses for the licensed therapist. Business & Professions Code, Section 2273(a) “Except as otherwise allowed by law, the employment of runners, cappers, steerers, or other persons to procure patients constitutes unprofessional conduct.” This new law adds nothing to this administrative remedy.
3. SB 1228 does not ensure the center involved in paying the body broker is significantly penalized. A licensed or certified treatment center “may” be fined or lose their license. There are no fines or other penalties that might impact the facilities that participate in this unethical behavior.
a. However, a loss of a license or certification is not assured. Of greater significance is the fact there is nothing in this law preventing the owner of a center that loses its license or certification from simply applying for a new license or certification with a new name. A family member could be substituted as the “owner” and nothing would change.
Real Teeth can be Found in the Federal Law
18 U.S.C. § 1347. Health care fraud
a. Whoever knowingly and willfully executes, or attempts to execute, a scheme or artifice—
(1) to defraud any health care benefit program; or
(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, in connection with the delivery of or payment for health care benefits, items, or services, shall be fined under this title or imprisoned not more than 10 years, or If the violation results in serious bodily injury (as defined in section 1365 of this title), such person shall be fined under this title or imprisoned not more than 20 years, or both; and if the violation results in death, such person shall be fined under this title, or imprisoned for any term of years or for life, or both.
(b) With respect to violations of this section, a person need not have actual knowledge of this section or specific intent to commit a violation of this section.
Recently, President Trump in response to the Opioid crisis, signed the Recovery Act of 2018 reflects long-held public health policy concerns on how financial considerations or conflicts of interest influence medical decision making. The Act applies to anyone providing any level of service in addiction treatment or care!
The enforcement of this law was shown by the successful prosecution of a father and son recently. The Whites pled guilt when charged with their fraudulent scheme. The scheme involved recruiting clients in need of treatment and buying health insurance plans under the Affordable Care Act, using falsified addresses and telephone numbers to appear the client was from a specific state such as California. The Whites then sold the client to a treatment center and arranged for transportation.
As one government agent stated: “The ACA was to expand health insurance coverage, not to line the pockets of crooks…”
The government has not yet made public the names of the treatment centers that conspired with the Whites in this fraudulent scheme. The stated reason for withholding this information is that there is an ongoing investigation. I would suggest this means additional indictments will come forward against the owners an operators of treatment centers that paid the Whites for clients.
We can and must do better for the families who still suffer.
If you have questions, I suggest you consult with an attorney who practices Health Care law. An attorney who understands the significant differences between general business practices and health care.
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