SB 636 – the bill that can deal with patient brokering in California - Sovereign Health Group
Articles / Blog
01-30-18 Category: Addiction, Addiction Treatment

SB 636 – the bill that can deal with patient brokering in California

Imagine a person addicted to drugs being taken to a substandard facility instead of providing the best rehabilitation treatment available, which leads to the deterioration in his or her condition. Probably, it happened because the person guiding the addiction patient was actually a “broker” who had received a hefty commission for the referral to that particular facility.

The above phenomenon of patient brokering has been a rampant problem in the field of addiction treatment. When the health of an individual plays second fiddle to unscrupulous elements looking for easy money, the dire need to have a law in place to maintain proper checks and balances is realized. On these lines, Senator Steven Bradford (D-Gardena) had introduced the Senate Bill 636 (SB 636) to eradicate patient brokering in California and the practice of “pay-to-patient” by insurance companies in Feb. 2017. Despite a consensus on the implementation of the above-mentioned change, the bill was referred and re-referred to various committees and has not been passed into a law yet.

Generally, “patient brokers” – also known as “body brokers” or “junkie hunters” – make money from recruiting patients to addiction treatment centers. Such brokers pose as buddies, or even as fellow patients, and lure vulnerable people addicted to drugs in and out of rehab programs and addiction treatment centers for a profit.

Being a form of human trafficking and associated with insurance fraud, the practice of patient brokering is considered unethical and illegal. It hurts the addiction treatment and recovery industry by giving unfair advantages to certain treatment centers. Since drug addiction is a complicated and challenging disorder, the prevalence of such practices has exacerbated the ongoing opioid crisis and led to fatal results.

Moreover, the focus of addiction treatment centers using patient brokers is to collect a hefty fee rather than ensuring long-term recovery from addiction. These so-called “friends” take advantage of the increased dependence of patients on drugs for windfall. They lure them by giving money, prepaid debit cards and other incentives. By “selling” patients to the highest bidding rehab center, it is quite common for brokers to receive a fee as high as $10,000 for a single referral. Since brokers are not certified professionals, they lack the competency to assess a patient’s issues and identify an appropriate treatment program that meets his or her needs.

The continuance of “patient brokering” can affect the addiction treatment industry by forcing insurance companies to withdraw coverage even for the legitimate treatment programs. Moreover, patients will gradually lose faith in treatment.

Even as California failed to bring the law, some states have prohibited the unethical practice in the addiction treatment industry. For example, the Florida Patient Brokering Act introduced in 2017 made it a third-degree felony for treatment facilities or rehab centers to offer any type of kickback or financial incentives for the referral of a patient. Such reforms are needed across the U.S. through a uniform federal action.

Why resistance to SB 636?

SB 636 aims to eradicate patient brokering by banning the payment of kickbacks or other compensation for referring any patient to any certified or license program. The bill proposes a $2,500 fine and revocation or suspension of facility license and professional certification. Moreover, it insists on allowing out-of-network treatment facilities to receive payments directly from insurance companies. The critics believe that the low fine amount and the provision of direct payment will not serve the goal.

People supporting SB 636 believe that it will serve as a watchdog by curtailing patient brokering and ensuring patient safety. Since California has witnessed an alarming increase in the number of cases related to patient brokering, this bill would prevent brokers from steering patients to facilities with poor services for financial gain than to the centers offering high-quality treatment.

Another issue plaguing the current California insurance payment system that would be rectified by SB 636 is “pay-to-patient” practice or direct payment of insurance money to patients during the early stages of their treatment. SB 636 would include the insured’s right to reimburse his or her health benefit payments directly to a designated person or facility, such as a physician or a hospital. This will allow the utilization of funds for the intended purpose. Despite the fact that 27 states have already prohibited the direct payment of insurance money to patients undergoing addiction treatment, powerful lobbies like the Association of California Life & Health Insurance Companies (ACLHIC) and the California Association of Health Plans (CAHP) are against this change. As a result, it has been sent for revisions.

The concern raised by the insurance companies is that recovery centers usually avoid entering into a contract directly with them and may not necessarily agree in advance on the rates of reimbursement or the standards of care required to treat a particular patient. They fear that SB 636 would compromise one of the bargaining chips used to encourage providers to come in-network and provide high-quality care.

No time to lose

If SB 636 gets through, patients would directly benefit by not being lured into substandard treatment centers by money-grubbing and unethical brokers. Moreover, people suffering from substance abuse would receive appropriate treatment and become the contributing members of the community. Moreover, health costs would dramatically go down.

There is no time to lose for the patients, their loved ones, neighbors, communities and the Golden State’s well-being. The lives of thousands of Californians are at stake. For more information on SB 636 and patient brokering, listen to the podcast of In Your Right Mind: Protecting California’s Most Vulnerable Patients on Talk Radio KABC 790 AM.

If you or your loved one is struggling with any kind of substance use disorders (SUD), contact Sovereign Health of California for evidence-based treatment. The specialists at our addiction treatment centers are well-equipped to identify the underlying causes and prescribe customized medical care and group psychotherapy based on a patient’s requirements. Call at our 24/7 helpline or chat online with one of our counselors for more information on rehab programs in California.

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