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Mercury News - Will there be reform for California’s fraud-plagued addiction treatment in 2026?

Oh, there’s more than a bit of Sisyphus rolling the rock uphill here.

Laurie Girand has been pushing to reform addiction recovery for nearly a decade. Combing police logs. Meeting with lawmakers. Briefing committee staffers. Conjuring PowerPoints to help the Powers-That-Be understand the deadly system they control, and how cruel profiteers abuse it, and what lawmakers might do to improve care and save lives.

Why the hell is it so hard?

Over the past decade, there have been successes, to be sure, on the Rehab Riviera Reform front. Today, insurance-money-fueled, private-pay, residential addiction treatment centers — often just tract houses in residential neighborhoods with nary a doctor in sight — must adhere to standards set by the American Society of Addiction Medicine or something like them (not just the 12 steps, yoga and horse petting that was so prevalent before). But outpatient centers — where most treatment happens in California — do not have to adhere to those same standards, and proposals to require state licenses for such centers have been repeatedly quashed.

Today, there are more laws aiming to curb “patient brokering” — the ugly practice in which operators lure addicts from afar, signing them up for California health insurance and providing housing (and, too often, money and drugs) in exchange for the opportunity to bill insurers hundreds of thousands of dollars per patient (sobriety not necessarily required). But still, such brokering continues. Unfortunately, California’s laws are more like gummy bears than bear traps, barely a slap on the wrist compared to federal and Florida anti-brokering laws that come with the threat of stiff financial penalties and serious prison time.

And today, public addiction treatment programs spending public money (read: Medicare/Medical) have higher quality bars and stricter oversight than private programs, which turns expectations on their heads. Attempts to subject private programs to public standards have been repeatedly rejected. Addiction treatment remains siloed from the larger medical health system, despite experts saying medication is the most effective path to long-term sobriety for many conditions.

Girand, a key force behind Advocates for Responsible Treatment in San Juan Capistrano, has floated a slate of sensible, bipartisan reform ideas to lawmakers for 2026.

How about we raise standards for all treatment providers to 21st century, evidence-based practices?

Align the treatment of substance use with the rest of the healthcare system?

Treat business-run sober homes the same way we treat other business-run group homes?

Make more treatment beds available to Californians?


Have half of beds be public-pay, which would automatically boost the standards for private-pay?

Improve oversight and penalties to match federal levels?

Cap the role of urine testing — the “liquid gold” that scammers have used as a tool to extract millions from insurers?

Require criminal background checks for everyone who wants to work in recovery, not just workers in facilities that get public money?

Brick wall

It has been so much harder than it should be to make even the most painfully obvious changes.

Girand has met with scores of lawmakers and their staffers over the years, been insulted by committee experts and lobbyists, taken pains to raise alarms about industry-sponsored “Trojan Horse” reform bills that sound fancy but do nothing to strengthen oversight or raise standards.

Some ideas from Advocates for Responsible Treatment have been picked up by legislators. Some have become law. Several in this latest crop were proposed as bills but, as so often happens, stalled.

Assembly Bill 877, by Assemblymember Diane Dixon, R-Newport Beach, would have said the unspeakable out loud — explicitly notifying health insurance companies that residential treatment in California is mostly non-medical and should be billed that way. (Dixon’s AB 3, aiming preventing overconcentration, has stalled as well.)

AB 423, which would have required business-operated recovery residences to register their location with officials, also is on ice. This would have involved acknowledging the difference between true sober homes (where people, say, come together in recovery and are longer-term residents, like a little family) and business-run homes (where residents pay per bed to the operator, often while in outpatient treatment, and stay just a few weeks or months). Acknowledging that difference has been something the state is loathe to do.

Late in the week, Girand learned that bills she was championing won’t even get a hearing in committee. Not even a hearing.

“The chair of health committee does not understand the magnitude of rehab fraud and abuse that’s taking place in California,” she said.

Lives literally depend on having an effective “continuum of care,” Girand said. “There’s this idea out there that somehow a spectrum of care is available. But it’s really not. Outside a clinical hospital setting, people go to detox, then are thrown to the wolves. To the wolves.”

Small steps

The message, however, is getting out — if slowly.

The California Sober Living and Recovery Task Force has helped educate lawmakers. The League of California Cities has thrown its weight behind several successful reform bills that made modest changes.

California Department of Insurance

California Department of Insurance 

“We’ve come a long way over the last couple years,” said the League’s Caroline Grinder. “There’s a shift to stressing that these are policies that protect patients, and communities as well.”

Hopes are high for Senate Bill 490 by Sen. Tom Umberg, D-Santa Ana. A revamp of an earlier Umberg proposal, it would require timely complaint investigations by the Department of Health Care Services (some investigations have taken state more than a year to resolve). If DHCS can’t do the work on time, county behavioral health officials could request permission to step in and pick up the slack.

Read more here: The Mercury News