By Mary Hladky
The numbers are staggering.
The addiction treatment industry generates an estimated $1 billion in revenues a year in Palm Beach County, making it an economic engine ranking below only tourism, agriculture and construction.
Those who study the industry say that number, reported by The Palm Beach Post, almost certainly understates the size. It could be, at a minimum, twice that large.
Costs associated with the industry are huge. They include $1.1 billion a year as of 2015 in heroin-related hospital charges across Florida that are largely paid for by Medicaid and Medicare, with taxpayers footing the bill, according to a Post analysis.
Unnecessary urine testing of addicts, paid for by insurers, adds at least another $1 billion a year to the tab, according to one industry expert.
And that’s before adding in heroin-related costs incurred by police, fire rescue, courts and prisons.
It also doesn’t count the cost of lives cut short by opioid use, or lost wages and workplace productivity.
The industry is fueled by the opioid crisis gripping the nation and the thousands of mostly young and out-of-state users who flock to Florida, especially to Palm Beach County, to get help as word has spread about the many treatment centers nestled within a tropical paradise.
They can land in corrupt centers and bed-providing sober homes that engage in deceptive marketing, insurance fraud and patient brokering. The business model of the fraudulent operators isn’t intended to cure addiction, since operators make money when addicts relapse and new treatment costs can be billed to insurers.
But all too often, their lives end in tragedy. Opioid deaths in the county spiked 314 percent between 2012 and 2016, according to data Dr. Michael Bell, the county’s medical examiner, shared with Palm Beach County commissioners at their April 4 meeting.
Deaths jumped from 305 in 2015 to 592 last year, largely because heroin is now cut with fentanyl and carfentanil, making it exponentially more potent — and deadly.
“I’ve been doing this for 38 years,” Alton Taylor, executive director of the Drug Abuse Foundation of Palm Beach County in Delray Beach, told commissioners. “I’ve seen a lot during that time, but I’ve never seen anything like this. Its lethality is unprecedented.”
‘Horrendous abuses’ found
Critics of the unscrupulous treatment centers and sober homes have been sounding the alarm since 2012, with limited success at getting reforms. But the pace of efforts increased dramatically in the last year.
The push started when the state Legislature gave Palm Beach County State Attorney Dave Aronberg $250,000 to investigate allegations of fraud and abuse and propose solutions.
Aronberg convened a grand jury. Its report, issued in December, outlined the vast scope of the problems and made recommendations for new legislation.
The grand jury recommended, among other things, laws that make deceptive advertising a crime, establish oversight of sober homes and strengthen patient brokering penalties.
While noting there are good operators in the county who help addicts, the report also said: “The grand jury has seen evidence of horrendous abuses that occur in recovery residences that operate with no standards. For example, some residents were given drugs so they could go back into detox, some were sexually abused and others forced to work in labor pools. There is currently no oversight on these businesses that house this vulnerable class.”
Aronberg also formed the Sober Homes Task Force, which reached similar conclusions about the problems and what to do about them.
“The lack of effective oversight of this industry, especially in the private sector, has allowed bad actors to flourish, significantly contributing to the rising death toll,” its January report said.
Significant legislation based on those recommendations was introduced this year by state Sen. Jeff Clemens, D-Lake Worth, and state Rep. Bill Hager, R-Boca Raton. Hager’s bill unanimously passed the Florida House of Representatives in late April. The bill then moved to the Senate, where Clemens sponsored the partner legislation.
At press time, Aronberg and his chief assistant were in Tallahassee to lobby connections in the Senate. They hoped to substitute the Senate version with the House bill. The House bill is seen as the stronger bill as it allows the Department of Children and Families to regulate recovery residences.
“Everyone is walking on eggshells,” said Mike Edmondson, state attorney spokesman. The legislative session was scheduled to end on May 5.
An unrelated bill would add deadly synthetic drugs to the state’s drug-trafficking statute, giving state prosecutors the ability to seek stronger sentences. This bill also unanimously passed the House and moved to the Senate.
Law enforcement ramps up
The task force’s law enforcement arm has swung into action, arresting nearly two dozen people as of mid-April on charges including insurance fraud and patient brokering, which involves taking kickbacks to steer patients to particular treatment facilities.
The County Commission weighed in on April 4, approving the hiring of a county opioid czar, as well as two new staff members for the swamped Medical Examiner’s Office, and spending $3 million over the next two years to pay for these positions as well as treatment efforts.
New federal guidelines issued last year by the Department of Justice and the Department of Housing and Urban Development have clarified how cities can enact their own ordinances regulating sober homes. Cities had been stymied after Boca Raton fought to keep sober homes out of residential neighborhoods, but lost a court case in 2007 after racking up $1.3 million in costs and legal fees.
Boynton Beach issued a six-month moratorium on applications for sober homes in December while city staff reviews the new guidelines. Delray Beach is crafting new regulations that Mayor Cary Glickstein expects to be considered by city commissioners this summer.
And a bevy of Palm Beach County officials — including Aronberg, county commissioners and Palm Beach County Chief Circuit Judge Jeffrey Colbath — called on Gov. Rick Scott to declare the opioid crisis a public health emergency to marshal resources to fight it. On April 11, Scott declined to do so — or to pledge more funding to fight the epidemic. Instead, he and Attorney General Pam Bondi scheduled four “listening” workshops around the state to seek solutions to the crisis. But, on May 3, following the last of the workshops, Scott issued a statewide public health emergency acknowledging the opioid epidemic in the State of Florida. This action allows communities access to $27 million in federal grant money from the Department of Health and Human Services’ Opioid State Targeted Response Grant. Florida was awarded the grant on April 21 to provide prevention, treatment and recovery support services.
Delray hit especially hard
While the problems of addiction and bad actors in the treatment industry are everywhere, no Palm Beach County city has felt the brunt more than Delray Beach.
In 2016, city workers responded to about 1,600 emergency calls related to opioid overdoses, according to the mayor. Every overdose call costs the city nearly $2,500, Glickstein said. And while no one knows the exact number of sober homes in the city, they could number as many as 700.
Another impact is the cloud cast over the city as a result of its reputation as the epicenter for the crisis in the county. Companies considering location or expansion in Delray Beach ask about it, Glickstein said.
“The overdose recovery industry has no doubt made it more difficult for the city to retain and recruit businesses here,” he said, adding this is also true across the county. “It is part of the conversation of whether [a company] should stay or go.”
So it is unsurprising that Glickstein is passionate about reining in unscrupulous operators.
“We are being crushed,” Glickstein told legislators in March. “We are losing businesses. We are losing tax revenue. These people [addicts] are ending up homeless, penniless. We need help. We need the cavalry and we need it now.”
Glickstein isn’t alone in feeling overwhelmed.
Palm Beach County Fire Rescue Capt. Houston Park said county and city first responders rushed to at least 4,661 heroin-related incidents last year. Each response to a call costs county fire rescue between $1,000 and $1,500. Narcan, administered to reverse an overdose, costs $75 for 8 milligrams. As heroin’s potency has increased, first responders often need to administer 10 mg.
“Our responders are seeing a higher incidence of younger people dying,” Park said. “We are trained to handle and respond to these emergencies, but it does have an increased emotional toll.”
Medical Examiner Bell said his office’s workload has increased dramatically over the last two years.
“There are certainly days when we feel overwhelmed,” Bell said. The addition of an associate medical examiner and forensic technician will help, he said, but the problem isn’t going away. “Certainly I don’t see any end in the immediate future. People are still dying of overdoses.”
Bad operators find benefits
Addiction treatment centers and sober homes have long existed in Palm Beach County, without causing problems.
“Until 10 years ago, sober home operators in Delray were by and large law-abiding, quality providers. It was part of their calling,” said John Lehman, president of the Florida Association of Recovery Residences, a not-for-profit organization that oversees voluntary certification of sober homes for the Department of Children and Families.
“Then somebody figured out how to make big money doing this. Big money.”
The spigots began to open with the 2008 Mental Health Parity and Addiction Equity Act, which resulted in a huge increase in coverage for substance abuse treatment. Then, in 2010, the Affordable Care Act, or Obamacare, allowed young adults to stay on their parents’ policies until age 26, eliminated exclusions for pre-existing conditions and required treatment for mental health and substance abuse to be included in every insurance policy.
That meant people had coverage to treat substance abuse, and insurers had to pay for it. If an addict relapsed, insurance would cover new rounds of treatment.
The onset of the opioid crisis ensured there were plenty of addicts who would seek treatment. Unscrupulous operators rushed in to take advantage.
But addiction is recognized as a disability under the Americans with Disabilities Act and the Fair Housing Act, making it difficult for government to oversee the industry.
The grand jury found that insurance fraud is rampant, citing one treatment provider who billed a patient’s insurer over $600,000, mainly for drug tests, over seven months.
Particularly problematic are urinalysis tests, which are used to confirm an addict is staying clean. But unscrupulous operators are requiring them frequently and billing inflated amounts. While a test kit costs under $10 at a pharmacy, the grand jury said these operators are charging more than $5,000 per test.
Deceptive marketing has become standard practice in the treatment industry, the grand jury said. Operators falsely represent their services and locations and act improperly to lure patients to their centers, regardless of whether they can provide appropriate treatment.
Illegal patient brokering also is commonplace, the Sober Homes Task Force report states.
Treatment providers pay a kickback to sober homes in return for the homes’ referral of patients to those providers. The patients, who often have no income, in turn get a free place to stay while they attend outpatient treatment programs, although the task force found the homes are often nothing more than flophouses.
Some operators illegally offer gym memberships, weekly massages, gift cards and more, with brokers known as “body snatchers” persuading addicts to move to another home or provider who offers “better stuff.”
Progress with lawmakers
The bills introduced by Clemens and Hager were not identical, but both addressed key grand jury recommendations.
They cracked down on fraudulent marketing, stiffened existing penalties for patient brokering and prohibited kickbacks for patient referrals. They also expanded the jurisdiction of the Statewide Prosecutor to investigate and prosecute patient brokering.
The skyrocketing number of overdose deaths “is why we are getting significant support for this legislation,” Chief Assistant State Attorney Al Johnson said.
But the bills don’t resolve all the problems, he said.
“The legislation is not the end of it. More needs to be done,” Johnson said. “But it is a game changer on the private side of the industry.”
Glickstein agreed there will be more work to do next legislative session. “If those are passed, we are going to see much more accountability as it relates to the operation of sober homes and the relationship between sober homes and treatment providers,” he said. “It is no silver bullet … but it is a very positive step in the right direction.”
If strong legislation clears the Legislature, “that is going to create a new risk-reward matrix for the bad guys,” Lehman said. “I think we will see a lot of them disappear overnight.”
Marc Woods, a Delray Beach code enforcement inspector, said that is already happening because of the arrests made by the task force. He estimates 40 have shut down in the city.
“When the state attorney started making arrests for patient brokering, I noticed houses were closing. I noticed kids with suitcases standing outside of houses,” he said.
Good ones want bad out
Good riddance, say legitimate treatment center and sober home operators.
Tony Foster, the interim CEO and chief operating officer of The Treatment Center of the Palm Beaches in Lake Worth and a task force member, said bad actors tarnish a needed industry.
“You don’t hear about the good operators. You only hear about the bad ones. The bad ones taint the good ones,” he said. If the bad ones close down, “the industry will be left with a much more professional group of people operating the business,” he said.
George Jahn, who owns Sober Living in Delray with his wife, Sue, and is a task force member, said only about three sober homes in Delray Beach are operating legitimately.
The bad ones make it more difficult for him to remain in the business he started 24 years ago, because they are accepting kickbacks and can provide addicts with free rent, while he charges $245 a week.
The legal operators want the bad ones shut down, he said. So when they become aware of illegal activity, they report it to a hot line set up at the State Attorney’s Office.
Arrests of the bad actors “all derived from someone filing a complaint,” he said.
That is just one way legitimate business owners are trying to be part of the solution, they said.
Foster donated $25,000 to county Fire Rescue in December to help it buy Narcan after he heard its cost strained the agency’s budget. “We wanted to do our part,” he said.
Foster also is assisting a pilot study at JFK Medical Center in Atlantis that is giving patients treated for overdoses Suboxone, a drug that curbs withdrawal symptoms, and counseling. He has set aside five beds at his facility for people released from JFK who need a free place to stay.
Joe Bryan, who with his two brothers owns The Beachcomber treatment center near Briny Breezes, said the outcry about problems in the industry obscures the fact that good operators employ a lot of people and pay them good wages, creating a big economic benefit.
The three largest legitimate treatment centers in Delray Beach employ about 640 people, he said.
At Bryan’s facility, counselors earn $50,000, with health insurance and paid vacation and sick time. Everyone earns well above minimum wage, he said.
Clients’ family members travel to Palm Beach County for visits, staying in hotels and eating at restaurants and giving the economy another boost.
And then there is the hard-to-calculate benefit of those who get help and beat addiction, get good jobs, raise families and live productive lives.
“You hear about the troubles,” Bryan said. “You won’t hear about all the teachers we get back to work. There are a lot of families that are back together because of what we do.”
Jane Smith contributed to this story.