Without stable housing, recovery for substance use disorder is nearly impossible. “Recovery housing” (or more commonly referred to as a “sober home” or a “sober living residence”) is a broad term that describes a safe, supportive, and substance-free living environment, particularly for individuals transitioning from a formal treatment program to independent living. Recovery homes may have rules, curfews, or encourage therapy, but they also allow residents substantial independence. Studies have confirmed that such communal housing has significant positive effects such as decreased substance use, reduced likelihood of return to use, lower rates of incarceration, increased employment, and improved family relationships.[1] However, insurance payers do not reimburse for a recovering behavioral health patient’s stay in a recovery home because it is not considered medically necessary for treatment, essentially ignoring a vital component in the recovery process. While recovery housing remains a non-reimbursable service, increased attention is being given to the issue following recent legislation—the Consolidated Appropriations Act, 2023[2]—which requires that best practices for recovery housing be made publicly available and published on the Substance Abuse and Mental Health Services Administration’s (SAMHSA’s) website. The Act provides the industry with unified standards for recovery housing, and therefore, it is a significant step towards recovery housing becoming a reimbursable service by health care payers.

In 2023, Arizona uncovered one of the largest behavioral health fraud schemes in the United States. The scheme targeted homeless individuals and/or Native Americans for fraudulent substance use treatment. Organizers of the scheme bribed victims by providing them housing in unlicensed “sober living” homes. They also enrolled victims into Arizona’s American Indian Health Program, even if they were not Native Americans. The victims were then sent to behavioral health treatment centers, not for the purpose of receiving proper treatment, but simply so that the treatment centers could bill for services to the Arizona Health Care Cost Containment System (AHCCCS). The fraud fell into two major categories: (1) fraudulent billings by behavioral health treatment providers and (2) patient brokering (referring patients to addiction treatment providers in exchange for payment).