Drug treatment center and sober home fraud (also known as recovery home residences) are on the rise in South Florida. One telling example is the Reflections Point prosecution. In that case, the president of Reflections, (a convicted felon), Kenny Chatman was handed a sentence of nearly 30 years. The federal prosecutor had asked for 35 years even though the Government reinforced that Mr. Chatman was the “most dangerous” sober home owner in Florida. Yet, equally as important, the federal prosecutor noted at sentencing that the reason for the 35 year sentence recommendation (and not a higher sentencing recommendation) was because, according to the Government, with the number of other corrupt treatment center operators the FBI is investigating, she’ll need to convince them to take plea deals, and giving Chatman a life sentence after taking a plea deal could discourage them to confess.
Without diving into the details of Mr. Chatman’s health care fraud and kickback scheme, let’s just say that you do not see a health care fraud indictment every day which also includes a charge of sex trafficking. Mr. Chatman’s case was certainly ground-breaking with respect to the inclusion of that charge. In a nutshell though, the Indictment (which includes 6 defendants whom have already pled guilty), accused Mr. Chatman and his wife of concealing Mr. Chatman’s felony conviction (and making Mrs. Chatman the straw owner) in order to operate a sober home in Palm Beach. According to the Indictment and the subsequent guilty pleas, once opened, the homes paid kickbacks to induce patients to live in the homes free of charge in order to bill insurance programs, provided substandard services, converted patients into prostitutes, failed to report overdoses or other adverse incidents occurring in the homes, provided urine samples to be billed to insurers which were not patient samples.
So while not all drug treatment center and sober home prosecutions will contain the same gory details as the Chatman prosecution did, it is clear from the Government’s statement at Chatman’s sentencing, that the Government will continue to crack down on drug treatment center fraud and sober home fraud in South Florida. In South Florida, for example, there is a Sober Homes Task Force which is largely managed by Department of Children and Families (DCF) which is understaffed and underfunded. Florida has 931 licensed substance abuse treatment providers, but DCF only employs 25 licensing specialists — an inadequate number to ensure the industry is following the rules, according to a report by a grand jury in December.
In 2016, the Florida legislature also heightened the requirements for commencing operations as a sober home – which are distinct from drug treatment or drug rehabilitation centers which provide in-patient and direct, and often, intensive every day treatment. Florida has selected a “voluntary” credentialing entity responsible for approving certification of a sober home/recovery home residence, denying certification, establishing requirements for sober homes, and disciplining sober homes. The credentialing entity is also responsible for monitoring and approving certification of a recovery residence home administrator. The Florida Association of Recovery Residences (FARR) is the current entity ( a non profit watchdog) tasked with this responsibility.
As of July of last year, no licensed substance abuse treatment center could refer a current or discharged patient to a sober home unless the sober home holds a valid certificate of compliance as provided in s. 397.487 and is actively managed by a certified recovery residence administrator as provided in s. 397.4871 or the sober home is owned and operated by a licensed service provider or a licensed service provider’s wholly owned subsidiary. The term “refer” means to inform a patient by any means about the name, address, or other details of the recovery residence.
Yet, according to Florida legislators, these baby steps were not enough to combat the growing fraud in South Florida in the drug treatment and sober home space.
Accordingly, while Florida has attempted to increase the barriers for entrants into the sober home market through legislation and the formation of local task forces, the Government has made it crystal clear that they intend to investigate and prosecute more drug treatment centers and sober homes in South Florida.
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