Investigation of Drug Treatment Centers Finds Widespread Corruption

A recent investigation into drug treatment centers in southern California found rampant financial corruption and inflated reporting of patient attendance.

The investigation, conducted by the nonprofit Center for Investigative Reporting and CNN, found that dozens of clinics showed signs of deception and questionable billing practices. The two worst offenders, Able Family and GB Medical Services, were virtually empty storefronts run by convicted criminals that bribed clients and submitted fake names to a government insurance provider in order to collect millions in taxpayer money. Over the past two years alone, the clinics indicted by the investigation received $94 million in public funds.

According to CNN’s interviews with former state officials, California’s Department of Health Care Services has “fielded concerns about rehab clinic fraud for at least five years yet has done almost nothing to combat it.”

While these findings demonstrate the need for reform in California’s regulation of drug treatment centers, they also provide additional evidence that the number of people in treatment for marijuana use is inflated.

A 2010 report by the U.S. Department of Health and Human Services found that a majority (57%) of participants in drug treatment programs for marijuana were referred there by the criminal justice system. In other words, users who were arrested for simple possession were offered the choice of “treatment” or jail time.

With all of the money to be made from these programs – through forced attendance or unscrupulous government agencies forking over taxpayer money for fake clients – it is of little surprise that some of the most vocal critics of marijuana policy reform own and operate treatment clinics.