[REPLY ALL THEME]

SRUTHI PINNAMANENI: From Gimlet, this is Reply All. I’m Sruthi Pinnameneni.





So, here’s an idea that is so good and so agreeable that it’s almost boring for me to say it out loud. People who get addicted to drugs should be able to go to rehab, and when they do, health insurance should cover it.





OBAMA: Today, after almost a century of trying, today, after over a year of debate, today, after all the votes have been tallied, health insurance reform becomes law in the United States of America—today.





SRUTHI: That, is obviously President Obama. It was back in 2010, he was signing The Affordable Care Act, Obamacare. And included in this act, was a seemingly non-controversial idea. For the first time, everybody’s insurance had to cover drug rehab.. And it also had to cover the people most likely to have drug problems—young adults.





OBAMA: And this year, young adults will be able to stay on their parents' policies until they're 26 years old. That happens this year.





SRUTHI: All these people who wouldn’t have had access to help before, now they could get it.





But … what happened next wasn’t what anyone expected or would have wanted. And today I’m going to tell you the story of what happened next. How quickly this seemingly good idea turned into basically the evil twin of a good idea. And I’m going to start with this gentleman.





He’s a 77 year old psychologist named Alan Goodwin. And e has spent his entire life trying to make rehab better. You can’t even ask him his name without him bringing this up.





SRUTHI: I just want you, um, to introduce yourself.

ALAN: I’m Dr Alan Goodwin. 1961...I walked into a large state hospital. I was this freshman at the University of Alabama. And, I saw there was a lot to be done. And what is scary, there’s so much that needs still to be done. We just have to really try and figure this out, that’s how I’d introduce myself.





SRUTHI: So that is Alan.





Alan told me that that he, like most people in the field, was thrilled with the passage of Obamacare. But then a couple years after the law passed, he started to notice these changes that gave him pause. And they were right in his backyard, Palm Beach, Florida.





ALAN: If you drive between here and West Palm, going south. you’ll see a bunch of treatment centers. Now those suddenly over the last 4, 5 years, just appeared. They just popped up, they were like weeds.





SRUTHI: Almost overnight, it seemed as if there were treatment centers everywhere, like these tiny outpatient rehab places, and sober homes—these halfway houses that people would stay at when they were going to rehab.



And none of this made sense to Alan, because Palm Beach County was not the center of the opioid epidemic. It was mostly filled with resorts and retirement communities. And so Alan’s wondering who is going to all these places.





He decided to investigate.



ALAN: I drove over to Atlantic Avenue in Del Ray and I saw you know, a group of 3 or 4 young folks —

SRUTHI: Mhmm.

ALAN: Sort of stereotypic looking drugs kids. I hate to use that but..

SRUTHI: Okay.

ALAN: I would make some pretense—ask directions or something—and start talking to them. And just getting some information...







SRUTHI: Alan would ask them where they were getting treatment, where they were from. And he said that again and again he would hear the same story.





ALAN: Pattern was most of these people were treatment failures. They've been multiple treatments, most of them were from out of state.

SRUTHI: Huh.





SRUTHI: So these were young people who were going from rehab to rehab without getting better. And they’d come from far away to get this treatment in Palm Beach.





Alan wanted to know exactly what was going on inside of those treatment centers. And so he devised a plan. He figured out that the centers were spending a ton of money on internet advertising, because by this point you couldn’t Google anything addiction

related without seeing all these sponsored ads promising solutions to addiction. Like:





Addiction Treatment Helpline. Stop Dying, Start Living.





No Cost Rehab Assistance. MAKE THE CALL, WE ARE AVAILABLE 24/7.





And so Alan decides to that he would call the numbers that he saw online, he would pretend to be a potential patient, some person doing drugs … like this one time, he said he was a teenager with autism who’d just tried pot:





GOODWIN: I was the 18 year old who had smoked a little weed during my freshman year at Duke.

SRUTHI: Wait did you really. Are you telling me that you on one call convince somebody that you were 18 and high?

GOODWIN: Well I...I did change my voice.





SRUTHI: I am going to now play you Dr. Alan Goodwin’s impression of this 18 year old kid.





ALAN: I have autism and I went to the mall and I ran into the bad boys and I think I may have done some drugs. And my father is terribly upset with me. And then the father came on, probably in my natural voice, and I again repeat it. My son has autism. Can he bring his toys to treatment.





SRUTHI: Alan acknowledges that this is the worst possible impression of an eighteen year old kid or a person with autism. But the point for him is what happened next.





What happened next is that the person on the other end of the line, the rehab call center salesman—he asked him, do you have insurance?





And when Alan said yes, the call center person told him, ok, I’m connecting you with a rehab in Palm Beach County. Your kid needs to fly down here right away.





GOODWIN: They were going to put me in a this home full of heroin addicts, I have nothing against heroin addicts, but you don’t put an impressionable 18 year old kid who just smoked a little weed and tell him to dropout of college. Crazy crazy crazy shit. Excuse me.





SRUTHI: Alan made dozens of these calls, and he said that no matter how outlandish his story or how ridiculous his character, the advice he got from the other end was always the same.





If he had insurance, they would pack him off to rehab in some far away state—often Florida—even if rehab was a terrible option for the person he was pretending to be.





So all of this just made him worry more. Like what was happening to these poor people when they actually showed up at these treatment centers?





And then, in 2015 Alan got his chance to find out. An investor called him and said can you take a look at treatment center I just bought? He wanted to woo Alan into referring patients there.





And Alan took the invitation, and he got inside. And there, he ended up meeting this one patient whom he clicked with right away. We’re gonna call him Michael. Here he is.





SRUTHI: Do you remember like first seeing Alan, what it was like?

MICHAEL: Um, uh, I thought he was a- just a weirdo goofball.

SRUTHI: Can you tell me why you thought he was a weirdo goofball. Like what did he say or do that made you think that?

MICHAEL: Um, because he's pretty, he's pretty old, but. Yeah, he’s- he's very zany. Um, he's like Albert Einstein kind of character, you know, he's just got a lot of energy like coming from his face. He's just stoked to be alive, and you can sense that in just how he carries himself and how he talks to people. And I don’t know. He was not the same kind of person as any of the people that I had met on my entire Journey.





SRUTHI: His journey had started a couple years earlier. He’d been addicted to heroin, he had been suicidal, and his mom had called a bunch of those rehab hotline numbers off Google. Next thing he knew he was making the 4 hour drive to this new rehab place in Palm Beach.





MICHAEL: Yeah it was pretty big... you know, big driveways and stuff like that. Basically like four little, I guess you could call them like villas. And a lot of us you know we're drug users for a while there so we weren't used to being in very nice conditions at all. So then to put us in a place with nice marble countertops and whatever, you know, was cool.





SRUTHI: But Michael only stayed at that place for a 30 days. By the time he met Alan, he’d been through a succession of sober homes and treatment centers.





SRUTHI: How many treatment centers would you go to in the next year. Like in total.

MICHAEL: Jesus Christ. I would say probably about 18.

SRUTHI: 18?

MICHAEL: Yeah.





SRUTHI: Michael and Alan struck up a relationship. And over many conversation, Michael described to his experiences, cycling through different rehab centers. Relapsing occasionally. And the more Alan learned, the more alarmed he became.





For example, Michael told Alan he would sign lots of paperwork for labs or therapy that he’d need to get, and on all of this paperwork he would see a doctor’s name, but he never actually saw a doctor. All his therapy sessions were run by counselors, and these counselors basically acted like bored substitute teachers, like there were days where they would just plunk the kids in front of a movie.





MICHAEL: So some of the films that they would show us were Diary of a Mad Black Woman. Leaving Las Vegas, That’s the one with Nicholas Cage. At the time I really didn’t understand how that fit in. We were all making jokes about it. But it was basically just, it was like study hall time in school, where we’re not really there to study.





SRUTHI: It all sounded worse and worse to Alan. And then, there was this time where actually went to see where Michael was living.





ALAN: Um, I remember going to visit Michael at the sober home.

SRUTHI: Mhmm.

ALAN: Um, there were these sad looking, couldn’t even call them women. They were girls.

SRUTHI: Mhmm.

ALAN: Just unhappy, who obviously were being prostituted. I could not believe what treatment had become.





SRUTHI: He noticed that it was in this kind of like not great area —

MICHAEL: Ha, that’s putting it lightly —

SRUTHI: but he said that right next to your home was another home that was just like—

MICHAEL: It was a crackhouse. They were actually actively, day and night, selling crack house selling crack out of that house right next to us.

And Alan would be like that's not normal. That shouldn't be happening ever. For a while I argued with him about it and was like yeah okay, Alan. You know you do your thing and I'll do mine, buddy.





SRUTHI: In Michael’s mind, this sober home, as crappy as it was, was the thing saving him. He didn’t know how to be a person in the real world anymore. Leaving meant overdose, leaving meant death.





And there were people in the sober home reinforcing this message. LIke the guy who ran it, a gruff-talking former addict named Anthony.





MICHAEL: This is almost a little embarrassing but, you know, fuck it, it's for the greater good. When Alan first picked me up—and when I say pick me up, you know, met me in that treatment center—I mean I was… What's that shit when you're in love with your captor? You know the Stockholm Syndrome. Yeah. Yeah … I mean I was totally Stockholm Syndrome on Anthony. I remember telling Alan like oh no, like he's hard but you don't understand, like he really goes out of his way to help us. And everyone else's has, has really fucked us in this industry and all this kind of stuff, and you know we can't trust anybody but Anthony’s the one that's always there for us and- and I know I can go to him.

This is me saying this shit.

I don’t know why I felt that way.





SRUTHI: For months Alan and Michael would just go back and forth like this. Alan would tell Michael you have to leave this home, you have to leave this place. This whole system is doing you harm. But Michael would not budge. Until one day, after their millionth argument, Alan just got this look on his face.





MICHAEL: He was just like hey, I got this idea. And I was like, uh okay. And he just pulls the phone out and puts it on speaker phone and is just like "Uh, hi!" you know and he just starts up his little spiel...





SRUTHI: Alan had just dialed up one of those rehab hotlines, and the guy on the other end, the call center agent, was asking how he could help.





GOODWIN: I told him I was a 67 year old gentleman with Alzheimer's. And I was just crazy as a loon. I would giggle. I would say "What did I tell you? Can you— I don't remember what I told you." And I told him that my 22 year old son had said if I shot heroin it would help my Alzheimer's.





MICHAEL: At first, cause he didn’t tell me what he was going to do, I was like Alan stop that. I was like, what are you doing? You know, I- I didn't know if he was just trying to play a prank on these people?





GOODWIN: And I told them I was very rich and I was not interested in using my insurance, I had a company and I would write a check. And they were immediately sending a car to pick me up with my cashiers check.





SRUTHI: This whole time Michael had thought that Alan was just exaggerating, like about the state of treatment. But hearing this whole phone call play out this way … it was clear to him that the person on the other end of the line did not care about this old man.





MICHAEL: For what he said that he was suicidal and doing heroin, and he was an old man with Alzheimer's I mean totally unstable.. And to hear that they were they were just ready to send him on a plane. Just kablam.

MICHAEL: By the time he hung up, you know he said immediately to me, “Do you realize- can you see what the problem is with this?” And I had already been hashing the whole thing out in my head the whole time.

SRUTHI: Were you seeing like a montage of everything that you had been through, like from like from that first place with the marble countertops all the way through bare mattresses—

MICHAEL: Yes. All the way into the ghetto with the gunshots outside, from the top to the bottom. I had put everything together and could understand what the problem was here.





SRUTHI: Michael says that the thing he realized at that moment was that it was not just that this one sober home owner, Anthony, who might not have have his back. It was something way bigger than that. It was that he had been fed into this much larger system, which was scooping up addicts from all over the country and then extracting every possible insurance dollar out of them.





Coming up: just how ruthless and efficient that system became according to one of the guys who helped operate it.





Break





SRUTHI: So here was what had started everything in motion. By 2013, when insurance companies had started paying people’s rehab bills, they created a rehab market overnight. Alan said this was like billions of dollars all a sudden.





ALAN: With the affordable care act—suddenly people saw gold in them hills.





SRUTHI: And that gold was really easy to get. Remember, up until this point insurance companies had never had to reimburse for rehab before, not on this scale. Like they didn’t know how many drug tests you’re supposed should get, or how long should people be in treatment.

Mostly they just paid the bills that came to them.





So, the only thing standing between a scammer and those billions of dollars in insurance money was a license—a license to open a new treatment center.





SRUTHI: What does one need to do to get a license?

ALAN: Um, it’s basically you fill out a stupid form. You hire a consultant who cuts and pastes, and you set up shop. You know, it’s like opening a...

SRUTHI: It sounds almost like opening a hair salon. I think you need a licence to do a hair salon...

ALAN: Yeah, in fact I think the requirements in a hair salon are more stringent.





SRUTHI: There are some ways in which it is harder to open a rehab clinic than a hair salon. For instance, you cannot get a license if you are a convicted felon. But it turned out that was very easy to get around. The guy who ran Michael’s center for instance, Anthony’s boss, was an ex-felon, convicted of credit card fraud.





Obviously not every treatment center was run by a former credit card scammer, but if you were a criminal and your only intention was to take patients and turn them into insurance money, you could thrive in this system. In fact, you actually had a competitive advantage over do-gooders, who weren’t in this for the money.





For example, the ex-felon who ran Michael’s treatment center, he would have worked out exactly what kinds of things insurance would pay for. Like tests. Michael would get tested all the time … for everything! Allergy testing. DNA testing. And then their favorite test of all: the urine test.





MICHAEL: Every single day. And It was something that if you didn’t do it, of your own volition, you were punished very heavily for. They were just so strict about it; it was so important. I mean,They would run around and yell for people to do their tests.

They tell you like wow you're an addict and we can't trust you and this is for your own good and blah blah blah. If you've got nothing to hide then you shouldn't have a problem with it, so it doesn't take long until you're pretty much like yeah, well everybody has to pee every day and that's just the way that treatment centers work.





SRUTHI: Michael’s treatment center could bill insurance for up to $5,000 per pee test. They were making millions off of pee. The people I talked to for this story who worked in rehab, they actually referred to urine as liquid gold..





Some treatment owners got so good at wrenching every single insurance dollar out of patients, that they realized they could actually pay for kids to fly to Florida, and still make a profit.





And so the question became “how do we find those kids?” And they didn’t have to invent this part—they could hire people on the internet to do it for them.





VID 3: Your program has been created. You have a beautiful location to help people and you're ready, but the phone is not ringing. This is the problem that all addiction centers have at some point. So what now? Diversify your lead generation for one cost with our lead generation service, you pay one price and allow our leave generation experts to do the job of generating leads directly to your center …





SRUTHI: This is an ad for a rehab SEO company. There are many of them, they all sprung up around the same time, and they had all sorts of tricks for snagging out-of-state patients who Googled looking for rehabs. Like for instance, they could make it look as if a rehab was right around the corner from you, even if it was way out there in Florida. And there was this other thing.





VID 3: Are you in start-up or growth mode and don't have an intake staff dedicated to the phones? We can help with that too. We employ over 45 people in recovery to answer the phones for you …





SRUTHI: They are talking about the next step in the chain, the rehab call center. It’s the place you go when you call the number on one of these Google ads. I talked to a guy who worked at one.





SAM: Uh, we had a script that said, of course, it said, we work with numerous locations and facilities. We want to find the one it's best for you. However we worked at one specific place. We only put them in one place. So that was a lie, but that was in the script.





SRUTHI: I’m going to call this person Sam, and, to protect Sam’s identity, we have changed his voice.





Sam’s title at the call center at the call center was “Client Advocate." But really what he was was a salesman. His job was to pluck these kids out of wherever they were from, and get them into this system.





SRUTH: Could you tell if they were high when they were calling.

SAM: Yes. Um, most of them- the late nights usually the really drunk people that will never remember that they called you.

SRUTHI: And how do you treat people like that. What are the...

SAM: I treat them all the same. I mean… you go, oh where you calling yourself or a loved one? OK. Are you drinking too much you mind sharing more about that? Have you tried to do anything about it before? How'd that work out for you? Not too good, huh? OK.

Um, let me ask you a question. If you could see yourself in six months not doing anything about your problem, where do you see yourself in six months? And usually they say something like… oh I... probably dead or divorced or anything.

Well that wouldn't be good would it? No. Alright, let's say you do go get help. Six months down the road, where do you see that job, that relationship. Everything else? Probably a lot better. So how can I help you tonight…?

I need to go to treatment! OK great...That- that- that line of questioning is called the Pain Funnel.

SRUTHI The what phone?

SAM: The Pain Funnel.

SRUTHI: The Pain Funnel. OK and it works?

SAM: Yeah, and it does work.





SRUTHI: Sam said that for every person he was able to get to rehab, he got a commission—up to 1500 dollars.





And the thing that made him good at this job was that, like everybody else he worked with, he was a former drug user. He’d been in rehab, first in Pennsylvania, and then in Florida, and this was an experience that he was able to use while making his pitch.





SRUTHI: How do how do you convince them like what's the what's the script there.

SAM: OK. I swear I tried to like block all this out of my head. (laughs)

SRUTHI: I’m sorry!

Okay so one of the ways, one of the scripts—I remember it so clearly that I was handed. It said, you know, Psychology Today said you are 90 percent more, um, successful if you leave your immediate area to seek treatment.

And what I would tell people was the truth.

When I was in Pennsylvania, everyday I thought, I could easily make it home. I'm two hours away. I'll walk back if I want to. And it was on my mind 24/7. When I was in Florida that wasn’t even a thought.

SRUTHI: You're a good salesman.

SAM: (Sighing) Oh god that sucks.





SRUTHI: When Sam first got his job at that call center, he said that he actually thought that he was helping kids. Like, these kids whom he’d convinced to fly down to Florida, he would sometimes pick them up from the airport, and he’d check up on them like during their treatment.





But he noticed that over time, they weren’t actually getting any better. In fact, most of them, he said, were getting worse. And he saw that they would just circulate from facility to facility.





And this is a thing that I heard a lot, like in Michael's story, in other people's stories, and I didn't understand why this would happen, like why wouldn't these kids just go home. And then I found out that this is actually the most devious part of this entire rehab machine.





I talked to this one journalist, Cat Ferguson who has done some of the best reporting on this entire rehab economy down in Florida. And she explained it to me.





CAT: The first time I went to Florida I was sitting in a Starbucks and- with a guy, and he pointed outside and he said those people sitting at those tables are holding court.

Those are body brokers.





SRUTHI: Body brokers. Cat explained that body brokers are basically just guys who deliver kids to treatment centers or sober homes for cash.





CAT: … and there were suitcases all around the Starbucks and he said those are kids who had been kicked out of sober homes and they need a place to go.

And so they have a meeting with the marketer and they find out how much their insurance benefits are worth. And they find out if they can make money because a lot of times they'll get paid 500 bucks to go into detox.





SRUTHI: These kids were looking for a treatment center because for whatever reason they’d left their old one. I talked to this one mid-level patient broker who told me about the mechanics of this moment. He’d meet the kid, send a photo of that kid’s insurance card to his boss, the marketer, and if it was good insurance, they would give the kid money to go to a new rehab, and also money to buy drugs.





CAT: In order to go into detox and have insurance pay for it you have to be on drugs. So that’s why body brokers will give kids drugs or give kids money and say come back when you piss dirty.

SRUTHI: Ugh that’s so dark.

CAT: It is really dark. You're getting clean and you're learning a whole new way to be alive. And the people who are telling you the rules of this new life are telling you it's totally fine to shoot up one time and take 500 bucks to go back to detox

Something that I heard a lot was treating your insurance card like an Amex Black Card.





SRUTHI: It was the dark funhouse mirror version of rehab.





That pivotal phone call where Michael got over his stockholm syndrome? That happened late 2016. And after that, he said he turned over all his treatment records to Alan Goodwin.



GOODWIN: He shared with me this one inch thick packet of insurance bills for $400,000 or whatever it is. And it was just I mean half of it was on urine screens, uh seem to be multiple overlapping dates but it was so obviously criminal.





SRUTHI: Alan was now part of a new task force that was investigating the rehab industry in Palm Beach County. By this point, the problem that he’d been seeing, they were becoming clear to more and more people.





CLIP 2 : In Palm Beach County, Florida, 460 duge overdoses last year alone. The number quadrupled in four years….

CLIP 3: The crisis is so out of control, Gov Rick Scott wants to declare a public health emergency…





SRUTHI: The FBI arrested a handful of treatment centers owners. Including the guy who ran Michael’s treatment center, the former credit card scammer, Kenny Chatman. IThe details that emerged in his trial made it clear that what Michael experienced was just a fraction of the bad stuff that was going on.





CLIP 5: Kenneth Chatman faces a longer list of charges...

CLIP 6: Accused of health care fraud, money laundering and prostituting female clients...

CLIP 3: that he allowed patients to keep using drugs, as long as he could keep using still bill their insurances and that he threatened patients and forced some of them into prostitution...





SRUTHI: By most accounts, in the past year, things have actually gotten better in Palm Beach. Florida passed this big law against patient brokering, and Google suspended selling any search terms related to rehab.





That’s the good news. The bad news is, people I talked to in Florida say that the worst offenders basically just picked up and moved their operations to another state—California. Alan’s actually been talking to the authorities there, trying to help.





Before I started reporting this story, I’d been reading about the opioid crisis like everybody else. And so it was shocking for me, to learn how ignorant I was about this huge piece of it.





I’d always thought that the problem was just getting people into treatment. It never occurred to me to ask what happened when they got there.





Turns out it didn’t occur to a lot of people.





CREDITS





PJ VOGT: Sruthi Pinnamaneni. She’s a producer for our show.





Our show is produced by Sruthi Pinnamaneni, Phia Benin, Damiano Marchetti, Kaitlin Roberts, and Elizabeth Kulas. Our editor is Tim Howard. We had extra editing help this week from Alex Blumberg and Sara Sarasohn. Our intern is Devon Guinn. Sruthi has a very long list of thank yous, which she is going to say.





SRUTHI: Yeah, so, this entire story was built on incredible reporting by other people. First of all, Cat Ferguson, whose series on google and rehab you have to check out on the Verge. David Segal who did his own series about rehab entrepreneurs for the New York Times. He’s the one who introduced us to Alan Goodwin—thank you, David. And Ryan Hampton who wrote American Fix which comes out in August. I got to read it early and it’s very very good.

Also, special thanks to Alan Johnson Justin Kunzelman, Katrin O’Leahry, Christine Stapleton, Andy Manjuck, and Greg Horvath, you can check out his documentary. It’s called “The Business of Recovery.”





Matt Lieber is just getting to do credits in a normal way without some weird interloper coming into the room.





We were mixed by Rick Kwan, Haley Shaw, and Dara Hirsh. Fact checking by Michelle Harris. Our theme music is by the mysterious Breakmaster Cylinder. You can find more episodes of the show on Itunes and Spotify. Thanks for listening, we will see you soon!





