In the past few years, no doubt you’ve heard the opioid epidemic mentioned many times. The addiction to opioids in the U.S.—including prescription pain relievers, heroin and synthetic opioids like fentanyl—is a serious national crisis affecting public health and costing $78.5 billion a year for healthcare, lost productivity, addiction treatment and criminal justice involvement.

The opioid epidemic has also fueled the rapid emergence of “sober homes,” halfway houses where recovering addicts live together in a substance-free setting to help them transition from rehab back to mainstream society.

Identify potential fraud schemes in sober homes

The facilities are owned by private landlords, not credentialed addiction professionals. While most sober homes are ethically operated, some participate in insurance fraud. Among the schemes often found are:

  1. Kickbacks

    Most sober homes require residents to have frequent drug tests. The sober home can choose the lab that does the testing and determine the frequency. They may have an arrangement with a lab that gives them a kickback for each test done.

  2. Referral fees

    Some sober homes require that residents go to counseling or participate in outpatient treatment programs. They may direct the resident to a specific treatment center, receiving a referral fee for each patient they recruit. They may also collude with those providers to bill for services not needed or not delivered, meant solely to maximize insurance reimbursements.

  3. Identity theft

    Sober homes may steal the identities of residents and then collude with a provider to submit phony bills to payers. In some cases, the patient is complicit, allowed to live for free at the sober house or receive a kickback fee.

  4. Multi-state benefits

    Sober homes enroll patients in health plans in multiple states and bill for services not rendered for patients who also aren’t residents.

Fraudsters have largely been able to fly under the radar, but fortunately, that’s changing. Now an advanced analytic, linking and visualization solution can detect patterns of behavior and identify collusive relationships to uncover their schemes.

Want to know more? Check out our information on Relationship Mapping.

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