Bay Ridge

Donovan warns of ‘patient brokering’ by drug clinics

Lawmaker says facilities pay 3rd parties for referrals

August 30, 2016 By Paula Katinas Brooklyn Daily Eagle
U.S. Rep. Dan Donovan is sounding the alarm over so-called “patient brokering” allegedly conducted by drug treatment centers. Photo courtesy of Donovan’s office

Brokers aren’t just on Wall Street, according to U.S. Rep. Dan Donovan, who said there are brokers in the healthcare industry as well.

Donovan expressed concern over what he said is a growing trend of “patient brokering” in the drug rehabilitation industry.

“Patient brokering” is a practice in which drug treatment centers or third-party referral services offer cash in exchange for patient referrals, Donovan said.

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As a result, patients addicted to heroin or prescription painkillers (opioids) might not be getting the help they need, according to Donovan, who said that in many cases, they are being referred to a treatment facility not because of the services it provides, but because money has exchanged hands.

In an effort to determine how widespread the problem of “patient brokering” is, Donovan (R-C-Southwest Brooklyn-Staten Island) has written U.S. Department of Health and Human Services Secretary Sylvia Burwell. 

“People struggling with addiction are among the most vulnerable populations in a community, and they look to supposed experts for guidance in seeking treatment. It’s cruel and dangerous to base referrals on murky financial arrangements instead of the best interest of the patient. I’m gathering the facts at this stage to see what action is necessary to end abusive patient brokering practices,” Donovan said in a statement.

Donovan’s spokesman, Patrick Ryan, told the Brooklyn Eagle that the lawmaker might consider crafting legislation aimed at combating the problem, but is waiting to hear back from Burwell before moving forward.

“We learned of the extent of the problem a few months ago. This is all coming about in part due to changes in health care laws and the fact that treatment is covered by insurance,” Ryan told the Eagle.


Laws enacted over the past 10 years have expanded private insurance coverage of substance abuse treatment, making the industry more lucrative, Donovan said.

Anti-drug advocates said they support Donovan’s fact-finding mission. “The brokers and their business partner, the 28-day magic wonder rehab clinics, need to be challenged on their ethics and efficiency,” said Luke Nasta, executive director of Camelot of Staten Island, a treatment facility. 

Adrienne Abbate, project director for Tackling Youth Substance Abuse, an anti-drug coalition, said her group looks for facilities that are fully licensed by the New York State Office of Alcoholism and Substance Abuse Services. “As a coalition, we have made the mindful decision to promote licensed facilities, as they are subject to oversight to ensure compliance with state and national standards, and we urge patients to connect to services in their own communities to ensure a seamless transition after rehabilitation,” she stated.

“Families in the throes of addiction are desperate,” said Jacqueline Filis, executive director of YMCA Counseling Services. “They are desperate for answers, for guidance and for services. It is essential that every effort be taken to ensure that this desperation is not preyed upon, but that those who are struggling are referred to the treatment service most appropriate for their needs.”

In other industries — law and real estate, for example — existing statutes and ethical guidelines include strict disclosure requirements of referral fees and similar financial arrangements. The Federal Anti-Kickback Statute also forbids patient brokering for treatment services that are billed to Medicare or Medicaid.

But the substance abuse industry is still growing and it’s not clear whether current laws are sufficient in addressing patient brokering, Donovan said. 

Donovan said his letter to Burwell is the first step in identifying whether legislative remedies might be necessary to combat patient brokering.


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