More Hard Facts About Addiction Treatment

“Yes, we take your insurance.”

Recent reportage, such as Anne Fletcher’s book, Inside Rehab, has documented the mediocre application of vague and questionable procedures in many of the nation’s addiction rehab centers. You would not think the addiction treatment industry had much polish left to lose, but now comes a devastating analysis of a treatment industry at “an ethics crossroads,” according to Alison Knopf’s 3-part series in Addiction Professional. Knopf deconstructs the problems inherent in America’s uniquely problematic for-profit treatment industry, and documents a variety of abuses. We are not talking about Medicaid, Medicare, or Block Grants here. Private sector dollars, Knopf reaffirms, do not “guarantee that the treatment is evidence-based, worth the money, and likely to produce a good outcome.” Even Hazelden, it turns out, is prepared to offer you “equine therapy,” otherwise known as horseback riding.

Knopf, who is editor of Alcoholism and Drug Abuse Weekly, was specifically looking at private programs, paid for by insurance companies or by patients themselves. Who is in charge of enforcing specific standards of business practice when it comes to private drug and alcohol rehabs? Does the federal government have some manner of regulatory control? According to a physician with the Substance Abuse and Mental Health Services Administration (SAMHSA), the feds rely on the states to do the regulating. And according to state officials, the states look to the federal agencies for regulatory guidance.

All too often, the states routinely license but do not effectively monitor treatment facilities, or give useful consumer advice. Florida state officials do not even know, with any certainty, exactly how many treatment centers are in operation statewide. And even if state monitoring programs were effective and aggressively applied, “just because something is legal doesn’t mean it’s ethical,” said the SAMHSA official.

“We see this as a pivotal time for the treatment field as we have come to know it,” said Gary Enos, editor of Addiction Professional, in an email exchange with Addiction Inbox. Enos said that “the Affordable Care Act (ACA) will move addiction treatment more into the mainstream of healthcare, and this will mean that treatment centers' referral and insurance practices will come under more scrutiny than ever before.”

 Among the questionable practices documented by Knopf:

—Paying bounties and giving gifts to interventionists in return for client referrals.

Under Medicare, paying interventionists for referrals is banned. “In the private sector,” says a California treatment official, “it’s not illegal. But it is unethical.” According to treatment lobbyist Carol McDaid, “kickbacks happen all the time. Treatment centers that are doing this will do so at their own peril in the future,” she told Knopf.

—Giving assurances that treatment will be covered by insurance even though only a portion of the cost is likely to be covered.

Under the Affordable Care Act (ACA), says the SAMHSA official, “We are trying to position people to know more about their benefit package. And the industry has to be more straightforward about what the package will cover.” John Schwarzlose, CEO of the Betty Ford Center, told Knopf that “it’s very hard for ethical treatment providers to compete against insurance bait-and-switch,” when patients are told their insurance is good—but aren’t told that the coverage ends after 7 days, or that the daily maximum payout doesn’t meet the daily facility charges.

—Billing patients directly for proprietary nutrient supplements, brain scans, and other unproven treatment modalities.

“Equine therapy, Jacuzzi therapy, those are nice things, and maybe they help with the process of engagement,” said one therapist. “But people need to recognize that these ancillaries aren’t the essence of getting sober.”

—Engaging in dubious Internet marketing schemes.

You see them on the Internet: dozens and dozens of addiction and rehab referral sites. They list private services in various states, and look, on the surface, like legitimate information resources for people in need. As the owner of a blog about drugs and addiction, I hear from them constantly, asking me for links. “Family members and patients frequently have no way of knowing that a treatment program was really a call center they got to by Googling ‘rehab,’ writes Knopf, “and that the call center gets paid for referring patients to the actual treatment center. They don’t know that a program that promises to ‘work with’ health insurance knows full well the insurance will cover only a few days at the facility, and the rest will have to be paid out of pocket.” She points to a 2011 Wired magazine article, which said the Internet marketing cost of key words like “rehab” and “recovery” can be stratospheric. But “by spending that money—not necessarily providing good service—treatment provides can come out on top on searches. It’s the new marketing to the desperate.”

The group with the most to lose from revelations of this nature is the National Association of Addiction Treatment Providers (NAATP), the association representing both private and non-profit rehab programs. The Betty Ford Center has discontinued its membership in NAATP, a move that reflects the turmoil of the industry today. “It’s crazy that we have treatment centers inviting interventionists and other referents on a cruise, and then giving everyone an iPad,” Schwarzlose said.

As one man who lost his son to an overdose said: “I don’t get it. There’s the American Cancer Society, but I look for drugs and alcohol and I can’t find anything. There’s no National Association for Addictive Disease. How can this be?”

The investigative series will be featured in Addiction Professional’s March/April print issue. Enos believes that “influential treatment leaders are more interested than ever to see this debate aired more publically,” and says that the online publication of Knopf’s articles for the magazine has sparked “a great deal of discussion in treatment centers and on social media, including comments about other questionable practices that harm the field’s reputation.”

Broken Treatment: How the Addiction Industry is Failing its Clients

It’s not medical. It's not psychiatric. What is it?

1. Most clinicians who treat addicted patients are counselors, not physicians; thus they cannot prescribe medication and they generally don’t “believe” in the use of medication for addictive disorders.

2. Most patients have medical insurance that excludes or severely limits treatment of addictive disorders, so payment for service is not good. This situation may change in the near future with the advent of healthcare reform in the United States.

So writes Dr. Charles O’Brien of the University of Pennyslvania Perelman School of Medicine, in a recent article for The Dana Foundation’s website.  In his article—“If Addictions Can Be Treated, Why Aren’t They?”—Dr. O’Brien asks a basic question: “Why are most patients not even given a trial of medication in most respected treatment programs?”

Even though pharmaceutical companies have throttled back on their interest in anti-craving drugs in recent years, there are, in fact, a few medications recognized by the FDA, primarily for use in the treatment of alcoholism. But they are not much in favor, and O’Brien believes he knows why:

The answer seems to be that there is a bias among treatment professionals, perhaps passed down from past generations when addictions were not understood to be a disease. Medically trained personnel are minimally involved in the addiction treatment system and most medical schools teach very little about addiction so most physicians are unaware of effective medications or how to use them.

What is on offer at most addiction treatment facilities is not actual rehabilitation, but rather short-term detoxification. And what we’ve learned from neuroscience is that taking away the drug is only stage one. The addiction remains, the reward and memory systems still operating erratically. We understand some of this circuitry better than at any time in history, but the concrete effects of these insights at the level of the community treatment clinic have been small to nonexistent. Money, of course, is part of it, since addiction has only recently, and sporadically, gotten the attention of funding agencies in the public health community. 

Health journalist Maia Szalavitz, writing at Time Healthland concurs: “Unlike most known diseases, the treatment of addiction is not based on scientific evidence nor is it required to be provided by people with any medical education—let alone actual physicians—according to a new report.” The report in question, from Columbia University’s National Center on Addiction and Substance Abuse (CASA), notes that most people are shoehorned into a standardized approach built around the 12 Step model of Alcoholics Anonymous. “The dominance of the 12-step approach,” writes Szalavitz, “also leads to a widespread opposition to change based on medical evidence, particularly the use of medications like methadone or buprenorphine to treat opioid addictions—maintenance treatments that data have show to be most effective.”

  Szalavitz also believes she knows why, and her thinking is similar to O’Brien’s. “Other medications that are known to treat alcohol and drug addiction, such as naltrexone, are also underutilized,” she writes, “while philosophical opposition to the medicalization of care slows uptake.”

There is a straightforward reason for considering the use of medication in the treatment of addiction: strong suggestions of recognizable genetic differences between those who respond to a given medication, and those who don’t. As O’Brien explains, a prospective study now in progress will be looking to see if alcoholics with a specific opioid receptor variant show a better outcome on naltrexone than those with the standard gene for that opioid receptor. And if they do, the FDA may allow a labeling change “stating that alcoholics with this genotype can be expected to have a superior response to naltrexone.”

But that won’t be happening tomorrow. In the meantime, we are stuck with the addiction treatment industry as it is. “The [CASA] report notes that only 10% of people with substance-use problems seek help for them,” Szalavitz concludes. “Given its findings about the shortcomings of the treatment system, that’s hardly surprising.”

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Is Addiction Deductible?

You're free to write off the cost of addiction treatment—if you can afford to.

The cost of addiction treatment is a legitimate medical expense, as long as you are talking about drug and alcohol addiction, which the IRS recognizes as a genuine medical disease. If you go to Betty Ford on the advice of your doctor for alcoholism, it’s deductible. If you go to Passages for cocaine addiction, it’s deductible. If you buy nicotine gum and patches and fill a prescription for Chantix, in a stop-smoking effort, it’s deductible. But if you want to write off the cost of a weight-loss clinic, or a gambling cessation program, or treatment for compulsive sexual activity, you’re a bit ahead of the curve.

According to Dave Hutchison, Planned Giving Officer at the Betty Ford Center Foundation: “Generally, medical expenses, including amounts paid for medical treatment, drugs and medicines, nursing care and certain transportation and travel required for medical care, are deductible as an itemized deduction.  Amounts paid for inpatient treatment of alcoholism or drug addiction at a therapeutic center and for meals and lodging furnished as a necessary incident to the treatment are deductible.”

Officially, IRS Topic 502 says that “payments for acupuncture treatments or inpatient treatment at a center for alcohol or drug addiction are also deductible medical expenses.” So just about any loopy treatment is covered, as long as the official diagnosis is alcoholism or drug addiction, including cigarettes.

And while theoretically the IRS is open to the idea of allowing deductions for the “cost of participating in a weight-loss program for a specific disease or diseases, including obesity, diagnosed by a physician,” the tax people aren’t yet persuaded that obesity, per se, is an addictive disease. They don’t allow most deductions for the cost of health food diet items or health club dues, for example, even if health food and gym workouts are doctor’s orders.

So, in theory, the cost of drug and alcohol rehab is a legitimate medical expense. Or at least those expenses over and above 7.5% of your income that haven’t been paid for by medical insurance. In practice, whether you can deduct the cost of drug rehab depends entirely on your total amount of itemized medical expenses. You can write off the cost of addiction treatment—if you can afford to.
Kelly Phillips Erb, who blogs at Forbes as Tax Girl, explains it all:

As a general rule, the costs of rehabilitation for drug and alcohol abuse and addictions are deductible as medical expenses, assuming that you itemize your deductions on Schedule A. Like other medical and dental expenses, rehab and addiction treatment expenses are only deductible to the extent that they exceed 7.5% of your adjusted gross income (AGI). So, for example, if your AGI was $40,000, you can only deduct expenses which exceed $3,000 (7.5% of $40,000). If the total of your expenses, including treatment costs $5,000, then you can deduct $2,000 ($5,000 expenses less the $3,000 threshold).

And that’s after you’ve parsed the IRS definition of qualifying medical care: “The diagnosis, cure, mitigation, treatment, or prevention of disease.” According to Tax Girl, that’s it. Other than throwing out a few examples—nursing services, x-rays, ambulance expenses—there is precious little help in defining what counts as a disease. Tax Girl says that the “IRS allows deductions for expenses related to the treatment of alcoholism and drug addiction because it agrees that those behaviors are a disease—even if many taxpayers think differently.” But the IRS won’t allow deductions for the cost of treatment with illegal drugs, thereby making the likelihood of write-offs for medical marijuana and marijuana addiction treatment unlikely, as long as marijuana remains illegal at the federal level. Furthermore, certain promising treatment options are not deductible for the same reason. Tax Girl writes that “despite evidence in Europe that “prescription” heroin taken together with methadone might lessen heroin dependence in addicts, the treatment remains illegal in the U.S. and is, therefore, not be deductible for federal income tax purposes. Methadone on its own, however, is a legal treatment for drug addiction in the U.S.” and is therefore deductible for federal income tax purposes.

Furthermore: “The IRS does not necessarily agree that all behaviors considered to be ‘addictions’ qualify as a disease.” Given the broad net cast across the medical waters in the name of addiction—everything from Internet addiction to cornstarch addiction—it’s probably just as well that the IRS is taking a jaundiced view of the so-called behavioral addictions. But they have taken some heat for being hard-nosed about obesity, while at the same time allowing write-offs for medical expenses associated with sex change operations.

Okay. But what if you’re Charlie Sheen, living on the other end of the income scale, until recently pulling down $2 million dollars per TV episode, starring in a mildly amusing sitcom? He’ll make maybe $40 million this year. How much would Charlie have to spend on rehab to make it tax-deductible? As it happens, there are tax geeks like Kay Bell at MSN Money who wonder about such things. Remember, Charlie can only deduct the amount of qualifying medical expenses that exceed 7.5% of his adjusted gross income. Bell says that Sheen “would have to spend lots of time at a pretty swanky rehab center to run up the more than $3 million required for him to claim the medical expenses deduction. He’s in Los Angeles, so it’s possible, but still, that’s a big recovery bill.”

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