Deceptive practices are at the heart of the first case brought under the Opioid Addiction Recovery Fraud Protection Act
By Jason Langendorf
The Federal Trade Commission this week announced that it is suing a Florida agency and its owner for deceptive practices in the marketing of addiction treatment facilities, marking the first case the FTC has brought under the Opioid Addiction Recovery Fraud Protection Act.
The civil suit, filed May 16 in the U.S. District Court for the Southern District of Florida, alleges that R360, a Fort Lauderdale-based marketing agency, led by owner Steven Doumar, misled and defrauded people seeking treatment services for substance use disorder (SUD). The FTC has secured a $3.8 million civil penalty judgment and an order requiring R360 to cease making false claims or engaging in misleading practices.
“We’ll continue to use the authority Congress gave us to go after companies that prey on those suffering from addictions.”—Samuel Levine, Federal Trade Commission
“Our order stops R360 and its owner from deceiving people about addiction treatment,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection. “We’ll continue to use the authority Congress gave us to go after companies that prey on those suffering from addictions.”
Increasingly, it seems, the agency’s help is needed to do just that. Yet the FTC and others also seem more motivated than ever to answer the bell, ramping up the pursuit of bad actors in the addiction treatment space and protections for people seeking relief from SUD.
Fraud and Abuses in the Treatment Space
Cases like the R360 suit have become all too common in the Sunshine State, where corruption has become so rampant that a specific treatment fraud strategy has been dubbed “The Florida Shuffle.”
In April, for example, a federal jury convicted Carie Lyn Beetle of Lake City, Fla., and others for unlawfully billing health insurers more than $58 million for addiction treatment services that were never rendered or were deemed unnecessary at two facilities she operated.
Addiction treatment fraud and corruption, however, isn’t just a Florida problem. Over a 10-month period last year in California, the Department of Justice prosecuted 10 defendants for their participation in kickback schemes at treatment facilities in Orange County. In February, the Department of Labor recovered $221,307 in back wages and damages for 32 employees at a Pennsylvania treatment center that intentionally shortchanged its workers on overtime pay.
Although just a small slice of recent instances of successful litigation—from what is likely a much larger swath of abuses across the space—these cases may represent a shift toward something not previously seen in treatment care: accountability.
Going After Bad Actors
Yet countless hurdles remain in order to establish a national standard for conduct, protocols and evidence-based practices across treatment facilities, let alone an infrastructure with the resources to enforce them. Legitimate concerns have been raised about whether accountability measures could undermine the good works of centers struggling to keep their doors open for people with SUD.
“These cases reflect the continued efforts of the Department of Justice to combat fraud by substance abuse treatment facilities and patient recruiters.”—Kenneth A. Polite Jr., Department of Justice
But given the number of sketchy operators who have set up shop to take advantage of the treatment field’s light regulations and the big money moving around, the public’s growing will to help people with SUD may lead to more muscle being thrown behind efforts to clean up the grimy corners of addiction care.
“These cases reflect the continued efforts of the Department of Justice to combat fraud by substance abuse treatment facilities and patient recruiters,” Kenneth A. Polite Jr., assistant attorney general for the Justice Department’s Criminal Division, said of the California cases. “These schemes take advantage of vulnerable members of our society—addiction patients seeking help. These cases illustrate the government’s commitment to protecting patients and prosecuting those who try to victimize them.”