In a recent development, Scott Raffa, the owner of three Orange County rehabilitation centers, has been indicted on charges of orchestrating an insurance fraud scheme. Federal prosecutors allege that Raffa conspired with “body brokers” to fill his facilities with well-insured patients, enabling him to collect substantial sums from their insurance providers. The indictment claims that Raffa paid these brokers handsomely, amounting to $174,600 over a year and a half.
Raffa’s rehab centers, namely Sober Partners Waterfront Recovery Center, Sober Partners Reef House, and Sober Partners Beach House, marketed themselves as places where recovering individuals could have fun while undergoing treatment. However, behind the scenes, Raffa allegedly engaged in fraudulent practices to ensure his properties were occupied by patients with lucrative insurance coverage.
According to prosecutors, Raffa entered into sham contracts with body brokers, who would locate new patients for his facilities. The brokers were compensated based on the patient’s insurance coverage and the expected duration of their stay. If a patient did not remain at the rehab center for at least three weeks, Raffa reportedly refused to pay the brokers. The indictment further alleges that Raffa made 12 illegal kickbacks during the operation of this scheme, with payments totaling up to $34,600 going to two different businesses.
The use of body brokers in the addiction industry is not uncommon. These brokers often entice prospective patients with promises of financial incentives, ranging from hundreds to thousands of dollars, to check into specific rehab centers. In some cases, individuals with no intention of getting clean are lured into treatment due to the promised pay. The prevalence of this system has led legitimate facilities that refuse to engage with body brokers to struggle with a lack of patients, as stated by FBI agent Kathleen Kennedy in court documents.
Raffa was indicted by a grand jury on April 10 and subsequently arrested on Saturday. He pleaded not guilty to the charges on Monday. This case is part of a broader crackdown on addiction industry fraud in Orange County, as declared by federal prosecutors in 2021. These schemes often assign a value to patients based on their insurance coverage, trapping victims in a cycle of rehabilitation and relapse.
1 Response
This is a concerning development indeed. I would be interested to know the author’s thoughts on the impact of such fraudulent schemes on the reputation and effectiveness of rehabilitation centers. Additionally, I would like to hear their opinion on what steps should be taken to prevent and address insurance fraud in the healthcare industry.