Rehab Centers Lure In Patients for Insurance Money —Then Leave Them on the Street

A person persuading an individual to sign up for a rehab facility

October 20, 2025 

Robert Kent, Author and Legal Drug Policy Expert, President, Kent Strategic Advisors, LLC 

Jonathan Russell, Subject Matter Expert

On October 8, The Wall Street Journal published an article citing operators who promise high-end treatment, help those with addiction sign up for insurance, then pile on charges for little in return, say former patients and insurers.

The exploitation of vulnerable individuals in America's booming rehab industry, which has become a multimillion-dollar problem, is deeply concerning. State officials, lawsuits filed by insurers and former clients, and federal indictments and convictions all highlight this troubling trend.

Lawsuits and federal cases argue that rehab centers can charge insurance companies hundreds of thousands of dollars for just a few months' stay, but provide minimal treatment. When the funds run out, they discharge patients without support or referrals, regardless of whether they have recovered—a practice known as "patient dumping" or "curbing." In court documents, these rehab centers often blame insurers, accusing them of trying to avoid paying for legitimate treatment by filing lawsuits. This industry's lack of accountability emphasizes the urgent need for stricter regulations. Rehab facilities are frequently located in areas that encourage travel, such as beachside cities in Florida. This has become especially common in California, where operators generate steady revenue by attracting individuals with addiction from across the country and billing their private insurance.

Patients are often lured into exploitation through recruiters, commonly known as body brokers in the industry. These brokers are hired to target individuals addicted to drugs with promises of recovery at glamorous California seaside rehabs. This underscores the need for stricter enforcement against such predatory tactics.

When I read this article, I first asked members of our Vital Voyage community if they had similar experiences mentioned in the Wall Street Journal. I promised to keep their anonymity. I then sought legal guidance from a substance use disorder expert, Robert Kent, to advise our Vital Voyage Blog subscribers.

According to a Patient 

I was thrown into an insurance scam cycle. I became known to body brokers as a gold mine client because I couldn't stay clean; I always called them for "help," and I had a fantastic insurance policy through my father's business. I would go to detox at least once a month for the next two years. There were a lot of bonuses made off of my last name, I'll tell you that. By that same token, I watched places that spoke about "just wanting to help the next addict ", pack people up and kick them out on the street before their taper was done because their insurance had expired. 

According to an Employee

As an employee, I worked there for a year and had to resign after witnessing fraud. Medicaid fraud is at absurd levels and at an alarming frequency. Clients are being admitted with no ID, no insurance card, just trusting that the number they memorized is their medicaid number. Reports of services being administered that were not. Unfortunately, there was little I could do—reporting to governing bodies is the first step, and anonymous reports to the managed medicaid office, but they do little to nothing. And the problem is - there were little to no alternative options for clients on Medicaid. 

I also worked with the opposite side, being at an in-network facility and being restricted by what insurance "deems necessary," which I also believe is coercion and bullying, as well as unethical for clients' treatment. Suppose I, as a licensed master ''s-level counselor, and a team of psychiatrists and psychologists, deem that a client needs more treatment, in agreement with the client. How does insurance have the ability (not knowing the client) to refuse to continue paying for services found necessary? I've been on several doc's with insurance companies, and more times than not, continued treatment is denied, regardless of the evidence provided to support the case.

What Actions Should Patients and Employees Take If Suspecting SUD Fraud Is Occurring at Their SUD Treatment Center?

According to Attorney Robert Kent:

To both the patient and the employee. First, I am sorry that you had to experience this type of illegal behavior. There are plenty of reputable treatment providers across the country, and I hope you can find one. 

Thankfully, because of stories like yours being publicized, the federal government and many states have enacted laws that make it a crime to engage in patient brokering. 

In fact, I helped create such a law while working in the NYS government. However, these laws can only be enforced when individuals such as yourselves bring your stories to law enforcement, especially to your state's Attorney General or the United States Attorney for your jurisdiction. 

Laws are meaningless when they are not followed and enforced. 

Patients and former employees, such as you, telling your stories is critical to bringing meaning to the patient brokering laws. I know that it is hard to speak up; however, I implore you to do so. Your bravery will allow us to remove bad actors from the addiction treatment system, which will make recovery possible for so many.

Kent Strategic Advisors (KSA)

Robert Kent is the President of Kent Strategic Advisors, LLC, and serves as a healthcare strategic policy advisor, helping clients maximize their opportunities to serve those in need. Robert is a graduate of the Syracuse University College of Law.

Robert previously served as the General Counsel for the White House Office of National Drug Control Policy (ONDCP). In this role, Robert provided overall legal support to all components of ONDCP. He has also served similarly in New York State as the General Counsel for the New York State Office of Addiction Services and Supports (OASAS).  

 -----------------------------------------------------------------------------------------------------

Robert Kent can be reached at https://www.kentstrategicadvisors.com/

Jonathan Russell, our Subject Matter Expert, is a Licensed Professional Counselor - Associate (LPCA).

If you enjoyed this article, 

Please forward this to a friend or colleague who might benefit from it!