Sober Living Operators Brace for Fraud Risk, Medicaid Redetermination Churn
In a BHB+ feature, Behavioral Health Business examines how sober living facilities face thin margins, regulatory gray areas, and heightened fraud scrutiny even as demand for recovery housing grows. The piece cites a recent Department of Justice case alleging $1.6 billion in false claims against a California addiction treatment and sober living network, and notes operators increasingly link housing to clinical billing through PHPs and IOPs to stay financially viable, a practice sources warn invites fraud risk. Industry sources also describe operators having patients use sober living addresses for mail so they don't miss Medicaid eligibility communications ahead of redeterminations and other changes tied to the One Big Beautiful Bill Act taking effect in 2027. Sources warn that coverage losses will likely push more patients with substance use disorders into emergency rooms and longer hospitalizations.