Orange County guide
Rehab scams and patient brokering: red flags and how to report them
Patient brokering means someone is paid to steer you to a rehab, sober living home, or lab. The giveaway is anything "free": flights, rent, cash, or gift cards in exchange for enrolling. It's illegal under federal law and California law. If you see it, report it to the California Department of Health Care Services (DHCS) at (877) 685-8333.
How the scheme works
- The hook. A recruiter, "hotline," or social media account offers help, usually free travel or a free place to stay.
- The insurance check. The first serious questions are about your insurance, not your health.
- The placement. You're sent to a program that pays the recruiter or sober living home for each patient.
- The churn. When benefits run out, you're discharged, sometimes back to the street or to another program that will bill a new plan.
The people harmed most are the ones looking for help: they get care chosen for someone else's profit, surprise bills, and sometimes no place to go when the insurance stops.
What the law says
Federal: the Eliminating Kickbacks in Recovery Act (EKRA), 18 U.S.C. § 220. EKRA makes it a federal crime to pay or receive anything of value for referrals to a recovery home, clinical treatment facility, or laboratory. It applies to private insurance as well as public programs. Each occurrence carries a penalty of up to $200,000 in fines, up to 10 years in prison, or both. The law defines a recovery home as a shared living environment that is free from alcohol and illicit drugs and centered on peer support, which describes a sober living home.
California: Health and Safety Code §§ 11831.6–11831.7 (SB 1228, in effect since January 1, 2019). These sections prohibit licensed and certified treatment programs and recovery residences from giving or receiving anything of value for patient referrals. DHCS can fine a program up to $2,000 per occurrence and suspend or revoke its license or certification.
Examples DHCS gives of prohibited conduct include:
- Paying referral fees or commissions per patient
- Paying patients, or recruiting them at 12-step meetings with offers of money, housing, or gifts
- Paying call centers for each patient they deliver
- Selling patients' information to other programs
Red flags
On the first call
- Free flights, free rides across the country, or a free place to stay if you enroll
- Cash, gift cards, phones, or cigarettes for enrolling or staying
- A "helpline" that won't tell you which program you're talking to
- Pressure to decide today, before anyone asks about your health
- Requests for a photo of your insurance card before anything else
At a sober living home
- Free or "insurance-paid" rent
- You must attend one specific program to keep your bed
- Staff hold your ID, phone, or insurance card
- You're moved to a new program, or out of the house, as soon as benefits end
At a treatment program
- The name or address doesn't match its DHCS license (see how to check a rehab's license)
- Bills for frequent, expensive drug tests you didn't know about
- The program waives your deductible or copays across the board with no financial-need review
How to protect yourself
- Ask directly: "Do you pay anyone for referrals, or offer anything of value for enrolling?" Write down the answer and who gave it.
- Verify the license before you travel or sign anything.
- Pay your own way when you can, and get the program's cost estimate in writing.
- Keep your own documents. Don't hand over your ID or insurance card to hold.
- Read your insurer's explanation of benefits for services you never got.
- Keep a family member in the loop with names, addresses, and phone numbers.
Where to report
| What happened | Where to report |
|---|---|
| A California treatment program or recovery residence paid or offered anything for referrals, or an unlicensed home provided treatment | DHCS: [email protected], (877) 685-8333 |
| Medicare or Medi-Cal was billed | HHS Office of Inspector General: tips.hhs.gov, 1-800-447-8477 |
| Your private insurance was billed | The fraud line on your insurance card |
| Someone's in danger | 911 |
Where The District stands
The District is sober living. We don't pay or accept payment, or anything else of value, for referrals, to or from any treatment program. Your choice of program never affects your bed. If you're comparing programs near our Orange County homes, call admissions 24/7 and we'll help you check them out.
This guide explains the law in general terms. It isn't legal advice.
Common questions
What is patient brokering?
Patient brokering is paying or receiving money or anything of value for sending a person to a treatment program, sober living home, or lab. It's illegal under the federal Eliminating Kickbacks in Recovery Act and California's Health and Safety Code § 11831.6.
Is a free flight to rehab a scam?
Treat it as a red flag. Travel, rent, or gifts offered in exchange for enrolling are how brokers get paid. A legitimate program can explain its costs and won't make your bed or your travel depend on a particular insurance plan.
Can a sober living home require me to go to a certain treatment program?
A home that requires one program, especially one it has a financial tie to, is a red flag. You should be free to choose any licensed program.
Am I in trouble if I accepted something from a broker?
The laws target the people who pay and receive referral money, not patients looking for help. If you're unsure, report what happened and talk to a lawyer. This guide isn't legal advice.
Where do I report patient brokering in California?
Report programs and recovery residences to DHCS at [email protected] or (877) 685-8333. Report fraud against Medicare or Medicaid to the HHS Office of Inspector General at tips.hhs.gov. Tell your health plan's fraud line if your insurance was billed.
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