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After allegations of insurance fraud totalling tens of millions of dollars were brought to the attention of lawmakers last week, other state groups are looking for ways to assist in fixing the "mess" created by centers falsely claiming to help those seeking treatment for substance abuse.

Members of the Utah Substance Abuse Advisory Council on Tuesday discussed why these facilities don't have anyone monitoring regulation and the loopholes that exist in the system.

Last week's case highlighted treatment centers that collected insurance checks for patients who, in some cases, received little or no care.

Doug Thomas, director of the Utah Division of Substance Abuse and Mental Health (DSAMH), said after insurance companies like Regence Blue Cross Blue Shield and Bridge-Span raised alarms, they tried to do an investigation of the centers in question but didn't get far.

"Because it's an out-of-network benefit, they don't have a contract, so they can't go in and have oversight," he said of the insurance companies.

He said the companies later turned to state agencies, like DSAMH and the office of licensing in the Department of Human Services (DHS).

"And the truth is, we don't have a lot of statutory authority to go in and regulate and view these things," Thomas said.

He said a big part of the issue is that none of the providers in question are "in the public system."

Brent Kelsey, who also represents DSAMH on the Council, said the policy of Utah's DHS is to license all residential programs and all outpatient programs that use public dollars.

"So if you're an outpatient program and you're only billing commercial insurance, there really is no requirement that you have a license with the Department of Human Services," he said. "That's one loophole."

He said another problem is that the state was "really pulled back about 15 years ago in terms of the level of their oversight and authority," so the DHS' office of licensing now uses "just a very simple health and safety standard."

"They really don't have the authority to take a look at some of these other practices, like billing practices, unless it jeopardizes the health of a client," Kelsey said. "And in some cases I think you could make the case that it does."

He said that going forward, the state needs to "come up with sensible and appropriate, not onerous, regulatory standards" for providers.

"There has to be an element of transparency. The public has a right to know who's doing a good job and who's doing a bad job, and somebody ought to be doing qualitative review," he said. "Nothing makes me as angry as this issue. ... It's absolutely predatory."

He said he's received phone calls from parents whose children were sent to a center that overcharged them and did not help their child. He's also spoken with out-of-state insurance companies asking who is regulating these facilities that drop kids off at an emergency room.

"And the reality is I don't know," Kelsey said.

Thomas said the Division of Occupational and Professional Licensing has some authority over those whom they've licensed, but even though there "should be" some licensed professionals providing services in these centers, "it's not a requirement."