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Is There an End in Sight for the “Golden Age” of Rogue Treatment Profiteers?


We are all familiar with the horrific stats:

  • “Drug overdoses killed about 72,000 Americans last year, a record number that reflects a rise of around 10 percent, according to new preliminary estimates from the Centers for Disease Control” (Sanger-Katz, 2018).
  • “The death toll [from opioids] is higher than the peak yearly death totals from HIV, car crashes, or gun deaths” (Sanger-Katz, 2018).

Clearly, it is going to take a monumental effort by the medical community, public health agencies, and federal and state governments to climb out of this country’s worst-ever drug epidemic. This is a huge challenge in and of itself. In the process, we cannot allow bad or ineffective actors make the problem even worse.

This was the overriding message from the Subcommittee on Oversight and Investigations which held hearings “Examining Advertising and Marketing Practices within the Substance Use Treatment Industry” on July 24, 2018. Previously, this Subcommittee learned about patient-brokers who profit from recruiting patients with opioid addiction and sending them to dubious treatment centers in other states.

Before we look at the testimony provided to the Subcommittee on this latest occasion, let us wind the clock back just a few years to get a better handle on the setup for some of these nefarious practices.

This is what Rohit Chopra, Commissioner of the Federal Trade Commission, included in a letter to the subcommittee:

When the foreclosure crisis devastated neighborhoods across the country, there were many actors who saw big opportunities for profit. When it comes to the devastation wrought by the opioid crisis, it is déjà vu. The opioid epidemic has led to a boom in the for-profit substance use treatment industry. Billions of dollars of capital have been flowing into the sector from Wall Street, primarily from private equity investors. Many nonprofit treatment centers report that investors are seeking to buy them in order to convert them to a for-profit model. A decade ago, 60 percent of treatment centers were nonprofit; today, 60 percent are for-profit.

. . . While private equity and other investments into the industry can support capacity expansion and facility upgrades, I am concerned that investors’ financial incentives may create the conditions for unfair or deceptive practices to flourish. Bad actors employ these practices to lure in patients and soak their insurers with excessive bills, rather than setting them on the road to recovery.

. . . As Congress continues its work to investigate advertising and marketing practices in this industry, it must carefully look at how the billions of dollars of new investment in the sector may be spawning scams that harvest profits from patients and their families.

Congress should closely examine incentive compensation practices for employees and operators of treatment centers, as well as financial conflicts of interest with other firms. Importantly, we must work to crack down on illegal lead generation practices, both online and offline, for-profit and nonprofit.

Too many firms are looking to profit off the pain of families dealing with addiction. In the absence of vigorous enforcement and sensible safeguards, the opioid crisis will inflict even more financial, physical, and emotional damage throughout our country (Chopra, 2018).

Turning its attention specifically to advertising and marketing practices in the industry, the Subcommittee cited reports of aggressive advertising and marketing strategies by treatment facilities—such as websites and 1-800 numbers—that do not clearly disclose who patients are contacting or to where they are being referred.

Some facilities also try to lure in patients with promises of luxurious treatment, including daily yoga sessions and free housing. More damning is that the Subcommittee heard of call centers, for example, that sell customer referrals to treatment providers. Some also hide the fact that they are making referrals for a fee, or that the call center is owned by the same company that owns the treatment center.

One of the themes that has emerged in the Subcommittee’s one-year examination of the opioid crisis is that families need much better information about the types of treatment available.
The Subcommittee has long heard from medical experts that evidence-based treatment, including medication-assisted treatment (MAT), is the most effective method for overcoming opioid use disorder. But not all facilities provide that treatment, and some make vague promises about the effectiveness of the various treatment models they offer.

Individuals seeking treatment for themselves or for loved ones often turn to the Internet to find resources to guide them in choosing a treatment center. Such online searches can prove overwhelming. Patients are often at the mercy of what they find online with little or no guidance from a medical professional.

While some centers disclose their relationships with treatment facilities, others may engage in deceptive marketing tactics to hide them. Moreover, these call centers are often staffed by sales representatives rather than medical professionals.

In some of the worst cases, call aggregators or call centers may refer patients to facilities that do not meet their needs based on a financial arrangement. And once patients enter treatment, they may be vulnerable to exploitation by unscrupulous business owners.

Concerns raised about deceptive advertising and marketing practices have already led to action. For example, several states have passed legislation designed to prohibit unethical marketing and advertising practices; the National Association of Addiction Treatment Providers (NAATP) updated its code of ethics; and Google placed a temporary restriction of online advertising by treatment providers due to misleading experiences among rehabilitation treatment centers.

The Subcommittee heard testimony from the following:

  • Jason Brian, founder of Redwood Recovery Solutions and TreatmentCalls.com
  • Michael Cartwright, chairman and CEO of American Addiction Centers
  • Mark Mishek, president and CEO of Hazelden Betty Ford Foundation
  • Robert Niznik, CEO of Addiction Recovery Now and Niznik Behavioral Health
  • Kenneth Stoller, director of Johns Hopkins Hospital Broadway Center for Addiction
  • Marvin Ventrell, executive director of NAATP

Ventrell reported that his association—which represents 850 member facilities—has removed ninety-nine treatment campuses, operated by twenty-four parent companies, for failures to meet NAATP’s new code of ethics. This new code covers patient brokering; billing and insurance abuses; license and credential misrepresentation; and predatory and deceptive web practices. With respect to marketing ethics, NAATP’s new code describes and specifically prohibits the deceptive, misleading, and nontransparent marketing of treatment services.

It is definitely a start.


Chopra, R. (2018). Letter to the House Energy and Commerce Committee. Retrieved from https://docs.house.gov/meetings/IF/IF02/20180724/108592/HHRG-115-IF02-20180724-SD004.pdf

Sanger-Katz, M. (2018). Bleak new estimates in drug epidemic: A record 72,000 overdose deaths in 2017. The New York Times. Retrieved from https://www.

Editor’s Note: Readers can access the complete hearing by clicking here