Addiction Recovery Abuses In NJ Fueled By Lax Oversight: State Report

TRENTON, NJ — Narrow, out-of-date laws and insufficient oversight have led to abuses in the addiction treatment industry in New Jersey, often harming the very people who are supposed to be helped, the state Commission on Investigation said in a scathing report released Tuesday.

The report, titled “The Dirty Business Behind Getting Clean: Fraud, Ethical Misconduct and Corruption in the Addiction Rehabilitation Industry,” was the result of a lengthy investigation by the commission into the industry’s operations.

Patient brokering, overcrowded and illegally operating sober living homes, and a lack of licensing for “peer recovery coaches” along with insufficient penalties for those who violate laws and regulations have left the industry ripe for wrongdoing as New Jersey and private entities poured millions of dollars into addiction treatment, the report said.

“The Commission’s in-depth investigation into the recovery industry revealed unchecked abuses by so-called professionals, owners and operators of addiction-related businesses who routinely engaged in corrupt practices that were more about making profits and promoting their
own interests and less about getting their clients clean and sober,” the commission said.

The commission conducted more than 150 interviews, with 40 speaking under oath, as it looked into the depth of the problems that have allowed people to take advantage of those seeking to break their addictions. Investigators talked "with recovery industry professionals, the owners of entities engaged in suspect or unlawful behavior, state and county officials, hospital administrators and addiction advocates.

"Additionally, the SCI interviewed those with firsthand experience with these businesses: the patients and clients who sought help in overcoming their addictions," the commission report said.

"Fraud, unethical conduct and wrongdoing were found in businesses at every stage of the recovery process, sometimes starting as early as an overdose victim’s first encounter with an addiction professional at their hospital bedside or during an online search for treatment," the report said.

The commission’s 106-page report details wrongdoing throughout the state that ramped up in the early days of the state’s fight against the heroin crisis. The wrongdoing continued even after a federal law against patient brokering was passed in 2018 and after Gov. Phil Murphy signed a state law addressing patient brokering, because it has become more sophisticated, the commission said.

Among the Commission’s findings:

• “Patient brokering has evolved in new and unseen ways not adequately addressed by New Jersey’s patient brokering law.
• “Questionable financial conduct – including fraudulent billing, tax evasion and other wrongdoing – by treatment center owners who then took their ill-gotten gains or used accounts assigned to the business to fund their lavish lifestyles.
• “Financial arrangements between the owners of sober homes and substance abuse disorder centers that enabled both entities to profit by ensuring residents continue to receive services at specific treatment facilities.
• “Corruption and abuse of government programs that help individuals get access to treatment or finance rent at sober living homes.
• “Deceptive marketing tactics used by the addiction rehabilitation industry to lure in customers persist because New Jersey has not banned the practice like other states. ”

With New Jersey expected to receive millions of dollars as its share of a national settlement with pharmaceutical companies and consultants for their roles in the opioid epidemic, the commission said the state needs to “double down on its regulation of government expenditures for addiction-related services and programs as well as the private entities or individuals providing such services.”

“The Commission recommends greater scrutiny of the businesses and individuals working in the addiction industry, particularly the facilities that provide treatment and house sober living patients, and expanding and strengthening New Jersey’s patient brokering law,” the report says.

“Further, New Jersey should adopt consumer protections to guard against deceptive marketing tactics used by corrupt operators to lure clients.”

The full report can be read here.