At 24, Boyd was living in Chicago when he decided to get help. He had been drinking alcohol since a young age, but more recently he’d been drinking far more often – and dangerously.
He found a rehabilitation center online and reached out to the facility in Orange County, an affluent coastal area of Southern California, for treatment.
Boyd, a pseudonym used at his mother’s request, checked in at the facility, where he completed his initial detox and participated in therapy sessions. He was later readmitted to the same rehab program twice after his initial intake, his mother told the coroner’s office of the Orange County Sheriff’s Department.
Eventually he was moved to another nearby location operated by the same treatment program. However, despite the stated policy of sobriety on the treatment program’s website, Boyd began to use fentanyl.
In June 2024, two weeks after his final readmission, Boyd was found unresponsive in the bathroom at that facility, according to the coroner’s report.
He arrived at the emergency room in cardiac arrest; his heartbeat was restored, but he had minimal brain function, the coroner’s report later found. He remained on life support and died six days later.
The coroner’s office ruled his death an accidental fentanyl overdose.
Boyd’s story is not an isolated one. It points to a larger problem in the treatment industry. We are psychologists who research societal factors that contribute to overdoses. Our recent study found that out-of-state residents overdose in excessive numbers in Orange County, a hub for addiction treatment centers, compared with the rest of the state.
This finding runs counter to previous research that consistently shows that areas with more treatment facilities tend to have fewer overdoses.
Exploiting addiction and insurance fraud
In response to the opioid crisis in the United States, federal laws now require most private health insurance plans to cover addiction treatment. These laws have been mostly beneficial, providing millions of Americans access to treatment they otherwise could not afford.
However, the large amounts of insurance money flowing into the treatment industry have also attracted dishonest operators looking to score easy profits, especially in areas with weak regulatory oversight of treatment facilities.
A common scheme is to recruit patients with generous insurance plans to enroll at treatment centers, then bill their insurance companies for unnecessary or poor-quality services at inflated prices. These reimbursement payments can allow owners to pocket enormous sums of money, from a few hundred to US$3,000 per day for each patient.
These schemes are most profitable when patients have out-of-network private insurance, which tends to have higher spending limits.
Even the most generous insurance plans cover treatment for a limited time, perhaps a few weeks to a few months. Once that coverage runs out though, a patient who relapses can be readmitted to treatment, and the expensive insurance billing cycle can begin again.
This creates a perverse financial incentive for unethical operators to provide substandard care – or even interfere with recovery. Numerous investigations have documented how patients can become trapped in a revolving door of treatment, relapse and reenrollment, with each relapse putting them at risk of overdose and death.
Far from a local problem
Some patients travel outside their home state to receive treatment, and unscrupulous rehab operators often recruit such patients.
Their websites promise expert care and feature photos of luxurious accommodations. Prospective patients are sometimes given free one-way plane tickets, along with free housing and living expenses. There is even a market of third-party patient recruiters – or patient brokers – who get large kickbacks from treatment centers for each patient they bring to the facility.
Even when patients arriving from other states do not already have private insurance, they can purchase a California insurance policy as soon as they arrive. Patient brokers sometimes arrange this coverage and pay the insurance costs on the patient’s behalf.
People who travel long distances for treatment are particularly vulnerable to exploitation. Before arriving, they have little opportunity to see the actual conditions of the facility. Once they arrive, they are separated from their support network of family and friends back home, making them even more dependent on the facility.
When a patient’s insurance coverage comes to an end, they can be kicked out regardless of whether they’ve recovered. Patients who are far from home may not be able to afford the return trip. In some cases, they may face a difficult choice between homelessness or relapsing in order to stay in the treatment system that at least provides them with a place to live.
A hot spot of treatment facilities
Orange County, California, has a large concentration of addiction treatment programs and has long been identified as a major center of treatment-related fraud.
California’s oversight of the addiction-treatment industry has been frequently criticized as inadequate, and the unusually large number of treatment facilities in Orange County makes misconduct even harder to detect.
According to 2019 federal data, there were 14 treatment centers per 100,000 residents in Orange County, compared with 5 per 100,000 residents nationwide.
One question we had was whether the large addiction treatment industry might contribute to more drug overdoses in the area. We reasoned that even if only a small fraction of treatment programs exploit patients, a larger industry would give rise to more of these programs – and potentially more overdoses.
We identified a 10-city region in Orange County with the highest number of rehab facilities, which had 35 treatment centers per 100,000 residents. We call this the study area.
We then compared overdose cases treated at the eight emergency departments in the study area with overdose cases treated at all of California’s other emergency departments.
Our analysis examined over 33 million visits to 323 hospitals throughout California from 2019 through 2021, the most recent data available when we began the study. To protect patient identities and comply with our data-sharing agreement, we can’t name the cities or hospitals in the study area.
Excessive overdoses
To determine whether overdoses were unusually high or low, we compared them with bodily injuries, which is one of the most common reasons for treatment at an emergency department. In other words, bodily injuries served as a benchmark for the overall number of emergency department cases seen in the area. This approach can be useful when population sizes, such as the total population of visitors to the study area, are unknown.
Specifically, we compared the relative frequency of overdoses and injuries in the study area with the rest of California. A larger share of overdose cases in the study area would suggest overdoses were disproportionately high there.
We also identified how far people were from their homes when treated at the emergency department. We looked at three groups: Californians treated in their home counties, Californians who were outside their home counties, and out-of-state residents who were visiting California.
The differences were striking.
Emergency patients who lived in the study area were treated for 4,108 overdoses. Relative to injuries, overdoses were 10% higher than expected when compared with patients who lived in other parts of California. However, this effect was dwarfed by what we observed in the other two groups.
California residents who visited the study area were treated for 370 overdoses. Again, relative to injuries, overdoses were 68% higher than expected when compared to Californians who visited other parts of the state.
Finally, out-of-state visitors to the study area were treated for 316 overdoses. Here, overdoses were a staggering 159% higher than expected relative to out-of-state visitors to the rest of California.
One possible explanation is that the region’s many treatment centers simply attracted more visitors who are already struggling with addiction and thus more susceptible to overdose. We suspect there is some truth to this. However, we do not think it accounts for the more than twofold difference we observed between in-state and out-of-state visitors.
We believe this difference is at least partially the result of out-of-state visitors put at risk by predatory treatment schemes in Orange County, and especially in the study area.
Gaps in oversight
Weak oversight has allowed these predatory schemes to persist in California.
The California Department of Health Care Services, the state agency that licenses and oversees addiction treatment centers, has been criticized as having lax regulations governing how most private-pay rehabs can operate.
The agency is also slow to investigate complaints, taking an average of nearly a year to complete most investigations and about three months to do so after a patient dies at a treatment center, according to an audit by the state.
In an email to The Conversation, a DHCS spokesperson said the audit covered fiscal years 2020-21 through 2022-23, “a period significantly affected by pandemic-related delays,” and that improvements to its investigation processes were already underway. The agency “proactively assigned staff to Orange County to address the region’s high volume of complaints and ensure timely investigations,” the spokesperson said.
A facility’s license can be revoked or suspended for extreme violations, but even in these cases its owner can continue to operate other rehab centers under a different company name and resume the same predatory practices there.
Although our research focused on one area in California, treatment fraud has also been occurring at rehab centers across the United States, especially in places with looser oversight of the treatment industry. Many follow a similar pattern and target people from outside the local area.
One important takeaway for people considering treatment, and for their families, is to be very cautious about traveling far from home to enter a facility you have never seen in person.
Besides causing real harm to vulnerable patients and their families, these schemes also undermine people’s trust in legitimate treatment providers and drain vast sums of money from the healthcare system – costs that are passed on to insured patients and taxpayers.
FraudAlert: Remote work has increased opportunities for internal fraud.
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Fun South African Fact: South Africa is the Rainbow Nation.
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