Patient Brokers Exploiting Texans
HB 1161 (Murr)- establishing a report on state actions to prevent chemical dependency facilities from engaging in certain prohibited solicitation practices.
- Assigned to House Public Health committee
- written report regarding prohibited solicitation practices by SUD service providers
- annual report is posted publicly on the State Attorney General's website
HB 3331 (Murr)- establishing a report on state actions to prevent chemical
dependency facilities from engaging in certain prohibited solicitation practices. We are excited that this bill passed the House. Unfortunately, we ran out of time before it had a chance to pass the Senate and make it's way to the Governor's desk. We are hopeful that Rep. Murr will refile in the 88th and are very grateful for his and his staff hard work and support of recovery in Texas.
- Creates a task force to make recommendations for prevention of violations;
- Written report regarding prohibited solicitation practices by SUD service providers;
- Strengthens current statute by implementing enforcement mechanisms and stronger penalties;
- Clearly defines solicitation, deceptive marketing parameters and kickback activities.
What is Patient Brokering?
Within healthcare, the term patient brokering means giving or getting anything of value to induce a patient/client referral. This practice is also known as receiving kickbacks, body brokering or patient trafficking. While referral fees may be a best practice in some industries, it causes underlying problems in healthcare1:
- Fraud: From intentional misrepresentation to submission of unwarranted claim for payment
- Waste: Behavior inconsistent with sound fiscal, business, or clinical practices, resulting in unnecessary cost, and reimbursement of unnecessary services.
- Harm: Ineffective treatment by financially-driven patient referral patterns without a focus on clinical needs, resulting in
substandard care or patient deaths (overdose, suicide, medication mismanagement)
- Exploitation: Mines financial resources such as insurance benefits and personal savings, especially out-of-network billing that can result in families being responsible for the amount not covered by insurance.
Example: An Emergency Room, detox, residential or outpatient treatment facility or a drug confirmation lab offers or provides compensation to a treatment provider or recovery home operator, their staff or family in exchange for referring an individual to their service. The kickback is funded by overcharging the insurance company or exploiting other financial resources tied to service delivery. The referring agent may even require the client to utilize the services as a condition of admission or continued stay. In the case of recovery homes, residency may be contingent on utilization of these services. Clients or residents with “good insurance” may be offered an inducement (e.g. cash, gifts or “fee forgiveness”) to participate in fraudulent activity. “Fee forgiveness” waives the individual’s deductible, copays and coinsurance.
Prevalence in Texas’ Addiction Treatment and Recovery Field
Patient brokering has plagued healthcare for decades and was prevalent in Texas in the late 1980s and early 1990s. Numerous investigations occurred, and as a result of legislation passed in the 1990s2, patient brokering was drastically reduced. Since then, the marketplace has changed and laws have become outdated and forgotten. A new wave of patient brokering has arisen across the nation, and as other states address this issue, “bad players” move to states, such as Texas, where patient brokering is less scrutinized.
As highlighted in a 2019 U.S. Government Accountability Office (GAO)3 Report, patient brokers have recently targeted recovery housing residents. Four of the five states studied had investigated and taken legislative action to address patient brokering between clinical service providers and recovery housing. The fifth state, Texas, had not. If we look beyond Texas state agencies, there is ample evidence that patient brokering is occurring in our State:
Patient Brokering Cases in Texas
- Current - [Houston case. Still ongoing investigation].
- Past Civil Courts- In the last 5 years, Sun Clinical Laboratories and Mission Toxicology, both based in Texas, have been sued for over $153 million in “fee forgiveness” schemes, illegal kickbacks and fraudulent billing by Aetna4 , Blue Cross and Blue Shield and United Healthcare.
- 2019- United Healthcare sues Axis Diagnostic, Sky Toxicology Ltd., Frontier Toxicology Ltd., Hill Country Toxicology Ltd., and Eclipse Toxicology Ltd5 operating out of San Antonio for $56 million claiming illegal kickbacks to healthcare providers and addiction treatment facilities. Cigna sued two of these companies for $20 million in 2015 claiming another “fee forgiveness” scheme.
- 2018- United Healthcare sues Sun Clinical Laboratories and Mission Toxicology for $44 million in fraudulent billing and kickbacks.
- 2017- Blue Cross and Blue Shield sued Texas based labs, Sun Clinical Laboratories and Mission Toxicology for $33 Million for fraudulent billing and kickbacks6
- 2015- Health Diagnostics was sued by Cigna for $84 million “fee forgiveness” scheme.
Current System Is Not Stopping Patient Brokering in Texas
- Federal patient brokering laws (Anti-Kickback Statute7 and Recovery Kickback Prohibition8) are too narrow to protect Texans. Plus, federal law enforcement are selective about where to get involved.
- Texas patient brokering laws 2,9 are not enforced and are too narrow.
Few local, county district attorney's focus on healthcare fraud, let alone addiction treatment/behavioral health fraud.
- State oversight agencies have limited oversight and resources.
- Whistleblowers are reluctant to come forward in fear of losing their housing, support or job. Barriers include stigma and marginalization, confusion around where and what to report, disbelief that change will occur.
Policy Recommendations
- Update and strengthen Texas’ patient brokering laws 2,9
- Create a task force in Texas similar to the one in Florida10, and add a recovery community liaison to facilitate reporting and provide peer support for whistleblowers who may need new housing or employment.
- Implement and incentive voluntary recovery housing certification linked to nationally recognized standards as outlined in National Council for Behavioral Health policy toolkit11.
References
1. Gilbert, P., & Nelson, H. (2018, September 06). Trends in Behavioral Health: Is Your Organization At Risk for Patient Brokering
[PowerPoint slides]? Epstein Becker & Green, P.C.
https://www.ebglaw.com/content/uploads/2018/09/Behavioral-Health-Webinar-Is-Your-Organization-at-Risk-for-Patient-Brokering- 20180906.pdf
2. Texas Health and Safety Code. Title 2. Subtitle H. Chapter 164. Treatment Facilities Marketing and Admission Practices.(Acts 1993, 73rd Leg.). https://statutes.capitol.texas.gov/Docs/HS/htm/HS.164.htm
3. United States Government Accountability Office. (2019). Substance Use Disorder: Prevalence of Recovery Homes, and Selected States’ Investigations and Oversight. (GAO Publication GAO-20-214T). https://www.gao.gov/assets/710/702271.pdf
4. Aetna Inc. v. People's Choice Hosp., LLC, CIVIL ACTION No. 17-4354 (E.D. Pa. Mar. 13, 2018)
5. Sky Toxicology, Ltd. v. Unitedhealthcare Ins. Co., 5-16-CV-01094-FB-RBF (W.D. Tex. Sep. 4, 2018)
6. Blue Cross & Blue Shield of Miss., Ins. Co. v. Sharkey-Issaquena Cmty. Hosp., CIVIL ACTION NO. 3:17-CV-338-DPJ-FKB (S.D. Miss. Dec. 13, 2017)
7. United States Code, 2006 Edition, Supplement 4, Title 42 - The Public Health And Welfare. 42 U.S.C. 1320a-7b(b) (Federal AKS). https://www.govinfo.gov/app/details/USCODE-2010-title42/USCODE-2010-title42-chap7-subchapXI-partA-sec1320a-7b
8. SUPPORT ACT: An act to provide for opioid use disorder prevention, recovery, and treatment, and for other purposes. Public Law 115 - 271, Title 8, Subtitle J, section 8122. Eliminating Kickbacks in Recovery- section 8122
9. Texas Occupation Code: Title 3.Subtitle A. Chapter 102. Solicitation Of Patients - Subchapter A. (Acts 1999, 76th Leg.). https://statutes.capitol.texas.gov/Docs/OC/htm/OC.102.htm#102.001
10. Florida Office of the State Attorney 15th Circuit. (2020).Sober Home Task Force. http://www.sa15.state.fl.us/stateattorney/SoberHomes/indexSH.htm
11. National Council on Behavioral Health. (2018). Building Recovery: State Policy Guide for Supporting Recovery Housing. Building Recovery: State Policy Guide for Supporting Recovery Housing
