Addiction and Recovery

Nelson Hardiman has unrivaled depth of knowledge and experience on the licensing, operational, and reimbursement issues facing substance abuse and addiction treatment providers, including residential (licensed drug rehab and sober living, transitional, and extended care), medical and non-medical detoxification, outpatient programs, as well as health professionals treating addiction. The Mental Health Parity Act of 2008 and Affordable Care Act have transformed the landscape of drug rehab reimbursement, opening up new opportunities to provide needed services. At the same time, this unprecedented growth has led to rising levels  of concern over patient safety and fraud and abuse issues.

With respect to patient safety, reports of patient deaths in drug rehab and government reports concerning “rogue rehabs” ignoring state laws have led to serious concerns with compliance. Nelson Hardiman has deep experience assisting providers internally in addressing these safety and regulatory concerns. Our familiarity with the distinctions in the law from state to state, including the interplay between regulatory requirements and corporate practice of medicine laws, makes us uniquely qualified to assist in addressing the interplay between social model programs and clinical care from physicians and mental health professionals. We have been called upon to handle the most sensitive of challenges, including designing and instituting compliance programs to reduce and prevent risk in cases where confusion and sub-optimal practices have led to patient suicides, deaths, and other harm.
With respect to reimbursement, payors and regulators are paying growing attention to inappropriate waivers of patient financial responsibility, questionable relationships between behavioral providers and marketers, diagnostic laboratories (for example, urine toxicology screening), and behavioral health billing and coding. Nelson Hardiman has deep experience with both setting up compliant business relationships, operations, marketing, and billing, and with remediating problems that have arisen, including investigations by federal government agencies, state and local government, and health plan special investigations units.

We have unique experience in issues involving unlicensed sober living, transitional living, and extended care facilities, including disputes with state agencies who object to relationships with outpatient programs on the basis that they are improperly operating in an integrated manner (so-called “Florida model”) and bypassing licensure. We have also advised and defended numerous land use issues, and have deep knowledge and experience with the Fair Housing Act and Americans with Disabilities Act protections for residential operators.  We are regularly called upon to negotiate with cities and municipalities in resolving zoning and neighborhood disputes.

We have represented providers ranging from large nonprofit addiction treatment providers and managed behavioral health organizations (MBHOs) to start-ups and small providers.  We have significant experience with the regulatory requirements in over 25 states, often advising entrepreneurs and investors in the process of initial licensing and accreditation.

We are frequently called upon at the launch of new ventures and new service lines to ensure not only compliance with all laws and regulations, but also to advise on evolving best practices and make recommendations. Our work has extended to programs focusing on treatment of adolescents, teens, and young adults, Medicaid programs, and a wide range of specific patient populations..

Our work includes business, regulatory, and strategic counseling and representation, including:

  • Investment Advisory and Business Transactions
    • Advising on scope of service offerings, including medical and non-medical detoxification, social model programs, dual diagnosis models, and the widest range of treatment modalities, including medical, mental health, and integrative care;
    • Recommending for-profit and non-profit structures, including structures involving management service organizations (MSOs) and professional service corporations;
    • Negotiating and handling transactions involving behavioral care businesses.
  • Regulatory Defense
    • Defense of investigations (administrative, civil, and criminal) before state agencies regulating facilities, outpatient programs, and professionals;
    • Defending reimbursement audits and investigations by public and private payors
  • Licensing, Certification, and Accreditation
    • Recommending optimal licensing and accreditation strategies for scope of services and reimbursement purposes;
    • Overseeing applications for licensure to state agencies, including the California Department of Health Care Services (DHCS) Substance Use Disorders Division (which licenses and certifies residential facilities for drug and alcohol treatment and certifies outpatient intensive outpatient (IOP) and partial hospitalization (PHP) programs;
    • Overseeing applications for licensure of dual diagnosis residential facilities for individuals, including social rehabilitation facilities licensed by the California Department of Social Services;
    • Assisting with accreditation by the Joint Commission (JCAHO), CARF International, and other accrediting agencies.
  • Compliance
    • Developing compliance programs (including policies and procedures, training, governance, auditing and other compliance program elements) consistent with industry best practices and state licensing and operational requirements for behavioral care entities
    • Compliance with HIPAA, Title 42 substance abuse privacy requirements, and state patient data privacy and security requirements
  • Litigation
    • Defense of False Claims Act/qui tam whistle-blower litigation against behavioral healthcare providers
    • Payor and reimbursement disputes