Many Minnesota addiction treatment providers help pay for clients’ housing, which they say supports recovery and prevents homelessness.
It also may be illegal.
The practice has long raised some eyebrows, but an FBI raid of St. Paul-based Evergreen Recovery this summer put treatment providers on high alert. Federal investigators said the organization defrauded Medicaid by luring people with free housing, then billing them for treatment “induced with illegal kickbacks.”
Now recovery service providers are waiting to see if a state or federal crackdown is coming for the widespread practice of offering free or subsidized housing to people in outpatient treatment. Some are shifting away from the model. And many are asking: What could happen to the thousands of people who rely on the housing?
“Our treatment system would totally collapse,” Hennepin County chemical health unit supervisor Tom Turner said. “If all of a sudden we didn’t have outpatient with housing, where are all of these people going to go?”
Roughly 4,000 Minnesotans rely on such housing programs, he estimated, though no one tracks the exact number.
This year, the Minnesota Department of Human Services’ Office of Inspector General, which looks into Medicaid fraud, advocated for a state anti-kickback law that would mirror the federal one. Lawmakers did not pass it.
Offering free housing to someone on Medical Assistance — Minnesota’s version of Medicaid — in exchange for them agreeing to get services would likely be a kickback if the proposal passed, DHS officials said. But without a change in state law, the agency said it can’t take action against providers.