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?

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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.

“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.

An earlier version, SB 35, won support but was held up over concern about costs. “We’re arguing that allowing local government to step in is money saved,” said Grinder. “If DHCS doesn’t have capacity, let’s use the capacity of local government. We see a financial savings within the department.”

Last month, Grinder told the Sober Living and Recovery Task Force that the new strategy is to introduce many bills focusing on smaller change. “Get legislators talking about them. Get some over the finish line,” she said.

That can add up. Recent successes include AB 424 by Davies, which requires the state to communicate better with people who lodge complaints, acknowledge receipt within 10 days, then inform them when an investigation is done and if violations are discovered; as well as AB 492 by Assemblymember Avelino Valencia, D-Anaheim, which requires the state to notify cities and counties when licensed addiction treatment centers set up shop.

“Small changes,” Grinder said, “but progress.”

Enforcing distance requirements between facilities to prevent overconcentration have proved dead on arrival, and anything with a price tag will be a challenge as California stares down an $18 billion deficit. But the League is stressing that progress on addiction issues goes hand-in-hand with progress on homelessness, as the two are so tightly intertwined.

The continuum of behavioral health care — safety, quality — is a message that resonates in Sacramento, Grinder said.

Life or death

Addiction treatment is often life-or-death health care and should finally be treated as such. It should be associated with clinical support and furnished in professional settings, not in tract homes in residential neighborhoods, overseen by people whose main credential is that they were once addicts themselves.

Vulnerable people struggling with addiction — too often seen by too many operators as dollar signs on legs — need real and tailored support, Girand, from Advocates for Responsible Treatment, said. Spaces for people still using, so they have a roof over their heads and aren’t shooting up in the streets; for people interested in recovery but who aren’t quite there yet; for people who have been sober, relapsed, are ready to be sober again.

The Southern California News Group has been examining the industry for almost as long as Girand has been trying to change it, and finds that it’s still peppered with financial abuse that bleeds untold millions from public and private pockets; body brokers still recruit addicts and offer kickbacks; operators still jack up insurance billings; users still are recruited from other states and enrolled in private health plans (so treatment centers can collect higher payments than what they’d get from Medi-Cal, the government-funded health insurance for the poor).

The state still exercises weak and ineffective oversight, and still resists much meaningful change. We still pay for this in the form of higher health insurance premiums, higher taxes for government-funded programs and lost productivity. Tragically, some people pay with their lives.

Girand’s journey into this netherworld was sparked by neighborhood chaos and an attempt to understand what was happening. Advocates for Responsible Treatment would pair its knowledge of where rehab facilities were with emergency calls for service; there were scores of calls in a single year for everything from overdoses to suicide attempts.

“Rehab house states a 20 y/o client broke down the door to the med office trying to obtain drugs and is acting irrational. No weapons. Has only been sober for two days,” one Sheriff’s Department log said. “Fem calling on a wireless cell crying… saying she will go to jail if she leaves and a (sic) employee is sexually harassing her and showing her porn and she does not know what to do….” “Male patient who grabbed his suitcase and ran screaming down the street barefoot…. Has serious mental health issues, gravely disabled, and a danger to himself.”

Until the governor’s office grasps the severity of the problem, and until the health insurers are tasked with stopping the fraud, Girand isn’t optimistic there’ll be much change. But lawmakers vow to keep working, and work they must: The neighborhood impacts are bad enough, Warren Hanselman, also of Advocates for Responsible Treatment, once said. What’s happening to the patients is tragic.

That, unfortunately, is as true today as it was nearly a decade ago.