25 Investigates: $1 million bill for man's out-of-state drug rehab

By: Eric Rasmussen

Updated:

The family of one local man, struggling with an addiction to heroin, says he visited 22 drug rehabilitation programs over five years and tallied more than $1 million in insurance claims before he overdosed and died in Florida last year. The story of Michael Elliott of Chester, New Hampshire is just the latest uncovered by 25 Investigates in a year-long investigation of bogus, out-of-state, recovery programs accused of preying on addicts and cashing in on the billion-dollar drug treatment industry.

Deadly Game

Linda Demmons says her son, Michael’s addiction problems started with pills, but quickly progressed to heroin. Despite initially seeking out help near their home in New Hampshire and in Massachusetts, Demmons says her son’s condition went “downhill fast.”

“I wanted him to prove to me that he was getting better. And what he was telling me and what was happening wasn't the same,” said Demmons.

In May, 25 Investigates first reported how many out-of-state recovery programs illegally recruited addicts from New England, enticing them with free flights, free lodging and even cash – all while billing their insurance for millions of dollars.

MORE: 25 Investigates: Deadly consequences for some who seek addiction rehab

But Demmons insists her son was not recruited. Instead, she says he took advantage of a fraudulent system that was already taking advantage of addicts. She says her son’s insurance card, on his family’s plan, was all he needed to get several recovery centers to pay his way, free of charge.

“All he had to do was pick up the phone. And it was like having a gold card,” said Demmons. “He used it as his way to live.”

Michael Elliott’s chaotic journey from one rehab program to another came to an end on April 1st, 2016. Police found his body in the backyard of a halfway house in Riviera Beach, Florida. Elliott, 25, died from an overdose involving a combination of drugs, according to the coroner.

More Claims After Death

A 25 Investigates review of Elliott’s insurance statements revealed claims continued to roll in nearly two months after he died.

Aetna Insurance confirms it received a claim of $1,300 for “medical services” for Elliott, provided on May 30, 2016 by Dr. Rostislav Ignatov, Medical Director of The Treatment Center of the Palm Beaches in Lake Worth, FL.

When 25 Investigates visited the center in person, a receptionist told Investigative Reporter Eric Rasmussen the doctor was “out” even though a Mercedes SUV was parked in the personal parking space reserved for Dr. Ignatov.

In an email, the treatment center's interim CEO told 25 Investigates the patient's insurance was "billed incorrectly" and has since been corrected.    

MORE: 25 Investigates: Mass. AG Launches Rehab Scam Investigation

Aetna tells 25 Investigates it is now conducting its own review of the insurance claims.

Costing Everyone

“There's a lot of folks taking advantage of the situation,” says Louis Saccoccio, CEO of the National Health Care Anti-Fraud Association, based in Washington, D.C.

Saccoccio, who leads a public-private effort to combat health care fraud, says abuse of insurance benefits in the addiction recovery industry has become significant enough to impact insurance rates paid by everyone.

“That has an impact on insurance premiums. It has an impact on taxes that you pay for Medicare, federal taxes, state taxes for Medicaid,” said Saccoccio.

The “Florida Shuffle”

Advocates for those fighting addiction say the story of Michael Elliott has become so common, it has a name: “The Florida Shuffle.”

“What the Florida Shuffle is exactly what you're looking into and investigating. Place to place to place, on the streets, overdosing and dying,” said Bill Pfaff, who leads a volunteer effort in Massachusetts to help addicts and get them into legitimate treatment programs.

MORE: 25 Investigates: South Florida leaders to New England rehab patient - 'stay away'

The State of Florida recently passed a new law requiring telemarketers in the recovery industry to be licensed. The law also expands prosecutors’ powers to go after so-called patient brokers who illegally target people in need of help.

While Pfaff says he’s seeing improvements, more needs to be done.

“Bouncing from facility to facility to facility, with insurance companies being billed millions of dollars, and the person ends up deceased?” said Pfaff. “It's not right.”

Next Up: