Substance Use Disorder: Information on Recovery Housing Prevalence, Selected States' Oversight, and Funding

Substance abuse and illicit drug use, including the use of heroin and the misuse of or dependence on alcohol and prescription opioids, is a growing problem in the United States. Individuals with SUD may face challenges in remaining drug- and alcohol-free. Recovery housing can offer safe, supportive, drug- and alcohol-free housing to help these individuals maintain their sobriety and can be an important resource for individuals recovering from SUD. However, the media has reported allegations about potentially fraudulent practices on the part of some recovery homes in some states.

GAO was asked to examine recovery housing in the United States. This report examines (1) what is known about the prevalence and characteristics of recovery housing across the United States; (2) investigations and actions selected states have undertaken to oversee such housing; and (3) SAMHSA funding for recovery housing, and how states have used this or any available state funding. GAO reviewed national and state data, federal funding guidance, and interviewed officials from SAMHSA, national associations, and five states—Florida, Massachusetts, Ohio, Texas, and Utah—selected based on rates of opioid overdose deaths, dependence on or abuse of alcohol and other drugs, and other criteria. State information is intended to be illustrative and is not generalizable to all states.

Nationwide prevalence of recovery housing—peer-run or peer-managed drug- and alcohol-free supportive housing for individuals in recovery from substance use disorder (SUD)—is unknown, as complete data are not available. National organizations collect data on the prevalence and characteristics of recovery housing but only for a subset of recovery homes. For example, the National Alliance for Recovery Residences, a national nonprofit and recovery community organization that promotes quality standards for recovery housing, collects data only on recovery homes that seek certification by one of its 15 state affiliates that actively certify homes. The number of homes that are not certified by this organization is unknown.

Four of the five states that GAO reviewed—Florida, Massachusetts, Ohio, and Utah—have conducted, or are in the process of conducting, investigations of recovery housing activities in their states, and three of these four states have taken formal steps to enhance oversight. The fifth state, Texas, had not conducted any such investigations at the time of GAO's review. Fraudulent activities identified by state investigators included schemes in which recovery housing operators recruited individuals with SUD to specific recovery homes and treatment providers, who then billed patients' insurance for extensive and unnecessary drug testing for the purposes of profit. For example, officials from the Florida state attorney's office told GAO that SUD treatment providers were paying $300 to $500 or more per week to recovery housing operators for every patient they referred for treatment and were billing patients' insurance for hundreds of thousands of dollars in unnecessary drug testing over the course of several months. Some of these investigations have resulted in arrests and other actions, such as changes to insurance payment policies. Florida, Massachusetts, and Utah established state certification or licensure programs for recovery housing in 2014 and 2015 to formally increase oversight. The other two states in GAO's review—Ohio and Texas—had not passed such legislation but were providing training and technical assistance to recovery housing managers.

The Substance Abuse and Mental Health Services Administration (SAMHSA), within the Department of Health and Human Services (HHS), administers two federal health care grants for SUD prevention and treatment that states may use to establish recovery homes and for related activities. First, under its Substance Abuse Prevention and Treatment block grant, SAMHSA makes at least $100,000 available annually to each state to provide loans to organizations seeking to establish recovery homes. Second, states have discretion to use SAMHSA funding available under a 2-year grant for 2017 and 2018 primarily for opioid use disorder treatment services, to establish recovery homes or for recovery housing-related activities. Of the five states GAO reviewed, only two, Texas and Ohio, have used any of their SAMHSA grant funds for these purposes. Four of the five states—Florida, Massachusetts, Ohio, and Texas—have also used state general revenue funds to establish additional recovery homes.

Substance abuse and illicit drug use, including the use of heroin and the  misuse of alcohol and prescription opioids, is a growing problem in the  United States. Individuals recovering from substance use disorder (SUD)  may face challenges remaining alcohol- or drug-free. Recovery housing— peer-run or peer-managed supportive residences—can offer safe,  supportive, stable living environments to help individuals recovering from  SUD maintain an alcohol- and drug-free lifestyle. In addition, such  housing can also help improve individuals’ ability to work, their physical  health, and their relationships with friends and family, and help them gain  skills and resources to sustain their recovery. There are no federal laws  or regulations governing the operation of recovery housing, and there is  no federal agency responsible for overseeing recovery housing. Within  the Department of Health and Human Services (HHS), the Substance  Abuse and Mental Health Services Administration (SAMHSA)— responsible for promoting SUD prevention, treatment, and recovery to  reduce the impact of SUD on communities—makes some funding  available to states to support recovery housing.

The media has reported allegations that some unscrupulous recovery  housing operators and associated SUD treatment providers have  engaged in fraudulent and misleading practices and exploited residents  for the purposes of profit. In addition, at least two states—California and  Florida—have conducted criminal investigations into recovery housing  and recovery housing operators within their states. Following reported  allegations, members of Congress have raised questions about the  oversight of recovery housing.

You asked us to review federal and state oversight of recovery housing.  This report examines  1.  what is known about the prevalence and characteristics of recovery  housing across the United States;  2.  any investigations and actions selected states have undertaken to  oversee recovery housing; and  3.  SAMHSA funding for recovery housing, and how selected states have  used this or any available state funding.

To address these three objectives, we reviewed available information and  interviewed officials from national organizations that provide or have  missions related to recovery housing, state agencies and related entities  in five selected states, and federal agencies. Specifically, we reviewed  information and available documentation and interviewed officials from  the National Alliance for Recovery Residences (NARR) and Oxford  House, Inc. to obtain information on the prevalence and characteristics of  recovery housing across the United States. To obtain information on  actions states have taken to investigate and oversee recovery housing  and how they used federal and any available state funding to support  such housing from fiscal year 2013 through fiscal year 2017, we also  interviewed officials from five states we selected for review—Florida,  Massachusetts, Ohio, Texas, and Utah. We identified the states that met  at least three of the following criteria: (1) had high rates and numbers of  opioid overdose deaths in 2015 (the most recent publicly-available  information), (2) had high rates of dependence on or abuse of illicit drugs  and alcohol in 2013-2014 (the most recent publicly-available information),  (3) had an active NARR affiliate, (4) received certain SAMHSA funding for  recovery services, and (5) were reported in the media or by other sources  to have enacted legislation pertaining to the regulation or oversight of  recovery housing. We then selected five states from different areas of  the country. In each state, we interviewed officials from the state  substance abuse agency, the state Medicaid agency, the state Medicaid  Fraud Control Unit, the state insurance department, and others. For a  complete list of state agencies and related state entities we interviewed,  see appendix I. We also interviewed officials from two insurance  companies operating in Florida. The results of our state analyses are  intended to be illustrative and are not generalizable to all states. To obtain  information on SAMHSA funding for recovery housing, we also reviewed  available documentation and interviewed agency officials.

We conducted this performance audit from February 2017 to March 2018  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Definitions of and terms for recovery housing can vary, and recovery  housing may differ in the types of services offered and resident  requirements. Alcohol- and drug-free housing for individuals recovering  from SUD may be referred to as “recovery residences,” “sober homes,” or  other terms. NARR has defined four levels of recovery housing (I through  IV) based on the type and intensity of recovery support and staffing they  offer, up to and including residential, or clinical, treatment centers. For  the purposes of this report, we use the term “recovery housing” to refer to  peer-run, nonclinical living environments for individuals recovering from  SUD in general, and “recovery homes” to refer to specific homes. These  homes generally are not considered to be residential treatment centers,  not eligible to be licensed providers for the purposes of billing private  insurance or public programs—such as Medicaid and Medicare—and  residents typically have to pay rent and other housing expenses  themselves. Recovery home residents may separately undergo outpatient  clinical SUD treatment, which is typically covered by health insurance. In  addition, recovery homes may encourage residents to participate in  mutual aid or self-help groups (e.g., 12-step programs such as Alcoholics  Anonymous) and may require residents to submit to drug screenings to  verify their sobriety. Residents may be referred to recovery homes by  treatment providers, the criminal justice system, or may voluntarily seek  out such living environments.

In addition to SAMHSA, two national nonprofit organizations that have  missions dedicated to recovery housing include NARR and Oxford  House, Inc. NARR promotes standards for recovery housing, provides  training and education to recovery housing operators and others, and  conducts research and advocacy related to recovery housing to support  individuals in recovery from SUD. As of January 2018, NARR’s  membership comprised 27 state affiliates that work to promote and  support NARR’s quality standards for recovery housing and other  activities in their states. Of the 27 NARR affiliates, 15 were actively  certifying recovery homes. Oxford House, Inc. connects individual Oxford  Houses across the United States and in other countries. Individual Oxford  Houses, which operate under charters granted by Oxford House, Inc., are  democratically run, self-supporting homes. According to the Oxford  House manual and related documents, all Oxford Houses are rentals, and  residents are responsible for sharing expenses, paying house bills on  time, and immediately evicting residents who drink or use illicit drugs  while living in the house. Oxford House, Inc. maintains a directory of  houses on its website, and individuals can search this directory for  vacancies by state. Oxford Houses align with NARR’s definition of level I  residences; that is, peer-run, self-funded, typically single family homes  where residents have an open-ended length of stay.

SAMHSA and other organizations recognize recovery housing as an  important step in SUD treatment and recovery. Research has shown  positive outcomes of recovery housing on long-term sobriety, such as at  6-, 12-, and 18-month follow up. However, according to SAMHSA and  NARR officials, much of the available research on effectiveness of  recovery housing focuses on the Oxford House population, and research  on other types of recovery homes is limited.

Nationwide Prevalence of Recovery Housing Is Unknown, but National Organizations Collect Data on the Number and Characteristics of a Subset of Recovery Homes

The nationwide prevalence of recovery housing is unknown because  there are no comprehensive data regarding the number of recovery  homes in the United States, although NARR and Oxford House, Inc.  collect data on a subset of recovery homes across the United States.  Specifically, NARR collects data only on recovery homes that seek  certification from one of its 15 state affiliates that certify homes. However,  NARR-certified homes may represent only a portion of existing recovery  homes, as NARR does not know how many such homes are uncertified.  As of January 2018, NARR reported that its affiliates had certified almost  2,000 recovery homes, which had the capacity to provide housing to over  25,000 individuals; NARR-certified recovery homes include recovery  housing across all four NARR levels, including residential treatment  centers that provide clinical services, which are outside the scope of our  study.

Oxford House, Inc. collects data annually on the prevalence and  characteristics of Oxford Houses across the United States. In its 2017  annual report, Oxford House, Inc. reported that there were 2,287 Oxford  Houses in 44 states that provided housing to a total of 18,025  individuals. Of the total number of Oxford Houses in 2017, 71 percent  served men and 29 percent served women, with the average resident  aged 37 years. The Oxford House, Inc. report also provides information  on other characteristics of Oxford House residents. For example, of the  18,025 Oxford House residents in 2017, Oxford House, Inc. reported the  following:

79 percent were addicted to drugs and alcohol; 21 percent were  addicted to alcohol only.

68 percent had previously experienced homelessness.

98 percent regularly attended 12-step meetings, such as Alcoholics  Anonymous or Narcotics Anonymous.

45 percent attended weekly outpatient counseling in addition to

Average length of sobriety was 13.4 months.

Most States We Reviewed Have Investigated Potential Fraud Related to Recovery Housing and Taken Steps to Enhance Oversight

The five states we selected for review have taken actions to investigate  and oversee recovery housing. Four of the five states have conducted law  enforcement investigations of recovery homes in their states and some of  these investigations have resulted in arrests and changes to public and  private insurance policies. In addition to actions taken in response to state  investigations, three of the five states in our review have also taken steps  to formally enhance their oversight of recovery homes, and the other two  states have taken other steps intended to increase consistency,  accountability, and quality across recovery homes.

Four of Five States Have Conducted Investigations of Recovery Housing

Officials from four of the five states we reviewed (Florida, Massachusetts,  Ohio, and Utah) told us that since 2007, state agencies have conducted,  or are in the process of conducting, law enforcement investigations of  unscrupulous behavior and potential insurance fraud related to recovery  housing, and outcomes of some of these investigations included criminal  charges and changes to health insurance policies. An official from the fifth  state, Texas, told us that the state had not conducted any recent law  enforcement investigations related to recovery housing. This official, from  the Texas Department of Insurance, told us that the department received  two fraud reports in 2014 and 2016 related to recovery homes and that  the state was unable to sufficiently corroborate the reports to begin  investigations.

Across the four states, officials told us that potential insurance fraud may  have relied on unscrupulous relationships between SUD treatment  providers, including laboratories, and recovery housing operators,  because recovery homes are not considered eligible providers for the  purposes of billing health insurance. For example, treatment providers  may form unscrupulous relationships with recovery housing operators  who then recruit individuals with SUD in order to refer or require residents  to see the specific SUD treatment providers. This practice is known as  patient brokering, for which recovery housing operators receive kickbacks  such as cash or other remuneration from the treatment provider in  exchange for patient referrals. The extent of potential fraud differed  across the four states, as discussed below.

Officials from several state agencies and related entities described  investigations into fraud related to recovery housing in southeastern  Florida as extensive, although the scope of the fraud within the industry is  unknown. In 2016, the state attorney for the 15th judicial circuit (Palm  Beach County) convened a task force composed of law enforcement  officials tasked with investigating and prosecuting individuals engaged in  fraud and abuse in the SUD treatment and recovery housing industries.  The task force found that unscrupulous recovery housing operators or  associated SUD treatment providers were luring individuals into recovery  homes using deceptive marketing tactics. Deceptive marketing practices  included online or other materials that willfully misdirected individuals or  their family members to recruiters with the goal of sending these  individuals to specific treatment providers, in order to receive payments  from those treatment providers for patient referrals. According to officials  from the Florida state attorney’s office, these individuals, often from out of  state, were lured with promises of free airfare, rent, and other amenities  to recover in southern Florida’s beach climate. Recruiters brokered these  individuals to SUD treatment providers, who then billed their private  insurance plans for extensive and medically unnecessary urine drug  testing and other services. Officials from the Florida state attorney’s  office told us that SUD treatment providers were paying $300 to $500 or  more per week to recovery housing operators or their staff members for  every patient they referred for treatment. In addition, these officials cited  one case in which a SUD treatment provider billed a patient’s insurance  for close to $700,000 for urine drug testing in a 7-month period. Officials  from the state attorney’s office noted that the recovery homes that the  task force was investigating were not shared housing in the traditional,  supportive sense, such as Oxford Houses, where residents equally share  in the rent and division of chores, but rather existed as “warehouses”  intended to exploit vulnerable individuals.

As a result of these investigations, as of December 2017, law  enforcement agencies had charged more than 40 individuals primarily  with patient brokering, with at least 13 of those charged being convicted  and fined or sentenced to jail time, according to the state attorney’s  office. In addition, the state enacted a law that strengthened penalties  under Florida’s patient brokering statute and gave the Florida Office of  Statewide Prosecution, within the Florida Attorney General’s Office,  authority to investigate and prosecute patient brokering.

An official from the Massachusetts Medicaid Fraud Control Unit told us  that the unit began investigating cases of Medicaid fraud in the state on  the part of independent clinical laboratories associated with recovery  homes in 2007. The unit found that, in some cases, the laboratories  owned recovery homes and were self-referring residents for urine drug  testing. In other cases, the laboratories were paying kickbacks to  recovery homes for patient referrals for urine drug testing that was not  medically necessary. According to the Medicaid Fraud Control Unit  official, as a result of these investigations the state settled with nine  laboratories between 2007 and 2015 for more than $40 million in  restitution. In addition, the state enacted a law in 2014 prohibiting clinical  laboratory self-referrals and revised its Medicaid regulations in 2013 to  prohibit coverage of urine drug testing for the purposes of residential  monitoring.

Ohio has also begun to investigate an instance of potential insurance  fraud related to recovery housing, including patient brokering and  excessive billing for urine drug testing. Officials from the Ohio Medicaid  Fraud Control Unit told us that the unit began investigating a Medicaid  SUD treatment provider for paying kickbacks to recovery homes in  exchange for patient referrals, excessive billing for urine drug testing, and  billing for services not rendered, based on an allegation the unit received  in September 2016. As of January 2018, the investigation was ongoing,  and the Ohio Medicaid Fraud Control Unit had not yet taken legal or other  action against any providers. Officials from other state agencies and  related state entities, such as the state substance abuse agency and the  state NARR affiliate, were not aware of any investigations of potential  fraud on the part of recovery housing operators or associated treatment  providers when we spoke with them and stated that this type of fraud was  not widespread across the state.

In August 2017, officials from the Utah Insurance Department told us that  the department is conducting ongoing investigations of private insurance  fraud similar to the activities occurring in Florida, as a result of a large  influx of complaints and referrals it received in 2015. These officials told  us that the department has received complaints and allegations that SUD  treatment providers are paying recruiters to bring individuals with SUD  who are being released from jail to treatment facilities or recovery homes;  billing private insurance for therapeutic services, such as group or equine  therapy, that are not being provided, in addition to billing frequently for  urine drug testing; and encouraging patients to use drugs prior to  admission to qualify patients and bill their insurance for more intensive  treatment. In addition, insurance department officials told us that they  believed providers are enrolling individuals in private insurance plans  without telling them and paying their premiums and copays. According to  these officials, when doing so, providers may lie about patients’ income  status in order to qualify them for more generous plans. Officials found  that providers were billing individual patients’ insurance $15,000 to  $20,000 a month for urine drug testing and other services. Officials noted  that they suspect that the alleged fraud was primarily being carried out by  SUD treatment providers and treatment facilities that also own recovery  homes. Officials told us that the department has not been able to file  charges against any treatment providers because it has been unable to  collect the necessary evidence to do so. However, according to insurance  department officials, the state legislature enacted legislation in 2016 that  gives insurers and state regulatory agencies, such as the state insurance  department and state licensing office, the authority to review patient  records and investigate providers that bill insurers. This authority may  help the insurance department and other state regulatory agencies better  conduct investigations in the future.

Three States Have Established Oversight Programs, and Two States Are Taking Other Steps to Support Recovery Housing

In addition to actions taken in response to state investigations, three of  the five states in our review—Florida, Massachusetts, and Utah—have  taken steps to formally increase oversight of recovery housing by  establishing state certification or licensure programs. Florida enacted  legislation in 2015 and Massachusetts enacted legislation in 2014 that  established voluntary certification programs for recovery housing. Florida  established a two-part program for both recovery homes and recovery  housing administrators (i.e., individuals acting as recovery housing  managers or operators). According to officials from the Florida state  attorney’s office and Massachusetts Medicaid Fraud Control Unit, their  states established these programs in part as a result of state law  enforcement investigations. In 2014, Utah enacted legislation to establish  a mandatory licensure program for recovery housing. According to  officials from the Utah substance abuse agency and the state licensing  office, the state established its licensure program to, in part, protect  residents’ safety and prevent their exploitation and abuse.

Although state recovery housing programs in Florida and Massachusetts  are voluntary and recovery homes and their administrators can operate  without being certified, there are incentives for homes to become certified  under these states’ programs, as well as incentives to become licensed  under Utah’s program. Specifically, all three states require that certain  providers refer patients only to recovery homes certified or licensed by  their state program. Thus, uncertified and unlicensed homes in Florida,  Massachusetts, and Utah would be ineligible to receive patient referrals  from certain treatment providers. Further, state officials told us that state  agencies are taking steps to ensure providers are making appropriate  referrals. For example, according to officials from the Florida substance  abuse agency, treatment providers may refer patients to certified recovery  homes managed by certified recovery home administrators only and must  keep referral records. These officials also told us that the state substance  abuse agency can investigate providers to ensure they are referring  patients to certified homes and issue fines or revoke providers’ licenses if  the program finds providers are referring patients to uncertified homes.  Recovery homes may also view certification as a way to demonstrate that  they meet quality standards. For example, the official from the  Massachusetts NARR affiliate told us that some residential treatment  centers that are required to be licensed by the state are also seeking  certification to demonstrate that they meet the NARR affiliate’s quality  standards.

To become state-certified or licensed, recovery homes in Florida,  Massachusetts, and Utah must meet certain program requirements— including staff training, documentation submissions (such as housing  policies and code of ethics), and onsite inspections to demonstrate  compliance with program standards—though specific requirements differ  across the three states. For example, while all three state programs  require recovery housing operators or staff to complete training, the  number of hours and training topics differ. In addition, for recovery homes  to be considered certified in Florida, they must have a certified recovery  housing administrator. Similar to Florida’s certification program for the  homes, individuals seeking administrator certification must also meet  certain program requirements, such as training in recovery residence  operations and administration and legal, professional, and ethical  responsibilities. Features of the state-established oversight programs may  also differ across the three states, including program type, type of home  eligible for certification or licensure, how states administer their programs,  and initial fees. See table 1 for additional information on features of state- established oversight programs for recovery housing.

State-established oversight programs in Florida, Massachusetts, and  Utah also include processes to monitor certified or licensed recovery  homes and take action when homes do not comply with program  standards. For example, an official from the Florida Association of  Recovery Residences—the state NARR affiliate and organization that  certifies recovery homes in Florida—told us that the entity conducts  random inspections to ensure that recovery homes maintain compliance  with program standards. State-established oversight programs in the  three states also have processes for investigating grievances filed against  certified or licensed recovery homes. Further, officials from certifying or  licensing bodies in all three states—the Florida Association of Recovery  Residences, Massachusetts Alliance for Sober Housing, and the Utah  Office of Licensing—told us their organizations may take a range of  actions when they receive complaints or identify homes that do not  comply with program standards, from issuing recommendations for  bringing homes into compliance to revoking certificates or licenses.  According to officials from the certifying body in Florida, the entity has  revoked certificates of recovery homes that have acted egregiously or  have been nonresponsive to corrective action plans. Officials from the  certifying and licensing bodies in Massachusetts and Utah told us that  these entities had not revoked certificates or licenses when we spoke to  them for this review, but may have assisted homes with coming into  compliance with certification standards or licensure requirements.

Officials from Ohio and Texas told us that their states had not established  state oversight programs like those that exist in Florida, Massachusetts,  and Utah, but their states had provided technical assistance and other  resources to recovery homes that were intended to increase consistency,  accountability, and quality:

Officials from the Ohio substance abuse agency told us that since  2013 the state has revised its regulatory code to define recovery  housing and minimum requirements for such housing. Officials also  told us that the agency does not have authority to establish a state  certification or licensure program for recovery housing. According to  these officials, the state legislature wanted to ensure that Ohio’s  recovery housing community maintained its grassroots efforts and did  not want a certification or licensure program to serve as a roadblock  to establishing additional homes. However, officials from the Ohio  substance abuse agency told us that the agency encourages recovery  homes to seek certification by the state NARR affiliate—Ohio  Recovery Housing—to demonstrate quality. In addition, these officials  told us that the state substance abuse agency also provided start-up  funds for Ohio Recovery Housing and has continued to fund the  affiliate for it to provide training and technical assistance, as well as to  continue certifying recovery homes. According to officials from Ohio  Recovery Housing, the NARR affiliate regularly provides the state  substance abuse agency with a list of newly-certified recovery homes,  as well as updates on previously-certified homes, as part of ongoing  efforts to develop a recovery housing locator under its contract with  the agency.

Officials from the Texas substance abuse agency noted that  establishing a voluntary certification program, such as one that  certifies homes according to NARR’s quality standards, would be  beneficial. However, the state legislature has not enacted any  legislation establishing such a program to date. The agency is in the  process of developing guidance for providers on where and how to  refer their patients to recovery housing, which includes a  recommendation to send patients to homes certified by the Texas  NARR affiliate, but officials could not tell us when they expected the  guidance to be finalized.

Certain SAMHSA Grant Funding Can Be Used for Recovery Housing, and Selected States Have Used SAMHSA and State Funding to Support Recovery Housing

SAMHSA provides some funding for states to establish recovery homes.  Of the five states we reviewed, two used SAMHSA funding and four used  state funding to help support recovery housing from fiscal year 2013  through fiscal year 2017.

SAMHSA Provides Funding for Recovery Housing and Has Undertaken Other Initiatives to Support Recovery Housing

SAMHSA makes funding available to states for recovery housing through  certain grant programs for SUD prevention and treatment. Specifically,  under its Substance Abuse Prevention and Treatment block grant, which  totaled approximately $1.9 billion in fiscal year 2017, SAMHSA makes at  least $100,000 available annually to each state to provide loans for  recovery housing. States that choose to use this funding may provide up  to $4,000 in loans to each group that requests to establish alcohol- and  drug-free housing for individuals recovering from SUD. The loan can be  used for start-up costs such as security deposits and must be repaid  within 2 years. Loans are to be made only to nonprofit entities that agree  to requirements for the operation of the recovery homes outlined in the  authorizing statute, namely that (1) the homes must prohibit the use of  alcohol and illegal drugs; (2) the homes must expel residents who do not  comply with this prohibition; (3) housing costs, such as rent and utilities,  are to be paid by the residents; and (4) residents are to democratically  establish policies to operate the homes. According to SAMHSA officials,  states are prohibited from using block grant funding other than the loan  funding for recovery housing. However, the block grant application does  not require states to provide a description of whether and how they will  use the loan.

SAMHSA has also made funding for recovery housing available under the  agency’s State Targeted Response to the Opioid Crisis grant (opioid  grant), a 2-year grant program under which SAMHSA anticipated  awarding up to $485 million for each of fiscal years 2017 and 2018. The  opioid grant is intended to supplement states’ existing opioid prevention,  treatment, and recovery support activities, and SAMHSA requires most of  states’ funding to be used for opioid use disorder treatment services, such  as expanding access to clinically appropriate, evidence-based treatment.  States may also use their opioid grant funding for recovery housing and  recovery support services—which SAMHSA recognizes as part of the  continuum of care—such as establishing recovery homes and providing  peer mentoring. (See the next section of this report for information on  how states have used SAMHSA funding.)

In addition to providing funding, SAMHSA has undertaken other initiatives  related to recovery housing, including an assessment of needs for  certifying recovery housing in the future. In 2017, SAMHSA held two  recovery housing meetings that covered topics including research on  emerging best practices in recovery housing, state recovery housing  programs, available funding for recovery housing, and challenges that  state entities have experienced regulating recovery homes in their states.  SAMHSA contracted with NARR at the end of fiscal year 2017 to provide  technical assistance and training to recovery housing organizations,  managers, and state officials on NARR’s quality standards and  certification process, including presentations at three to four national and  regional SUD conferences, such as those held by the National  Association of State Alcohol and Drug Abuse Directors and other  associations. NARR is also required to submit a final report to SAMHSA  before the 1-year contract ends with recommendations for future needs  for certifying recovery housing and establishing additional NARR state  affiliates. SAMHSA officials told us that this is the agency’s first contract  with NARR, and SAMHSA plans to conduct an internal assessment at the  end of fiscal year 2018 to determine next steps.

Selected States Have Used SAMHSA and State Funding for Recovery Housing

Two of the five states we reviewed used SAMHSA funding to help support  recovery housing in their states from fiscal years 2013 through 2017,  according to state officials. Texas was the only state in our review that  used the loan funding available under SAMHSA’s block grant. Officials  from the Texas substance abuse agency told us that from fiscal years  2013 through 2017, the state used at least $150,000 of this funding  annually to increase the number of Oxford Houses in the state and hire  Oxford House outreach workers. Texas and Ohio also used a portion of  their SAMHSA opioid grant funding for recovery housing. For example, in  fiscal year 2017, officials from Ohio’s substance abuse agency told us  that the state used $25,000 of its approximately $26 million in opioid grant  funding to support and train recovery housing operators, with the goal of  increasing the number of recovery homes that accept individuals who  receive medication-assisted treatment. The other states we reviewed— Florida, Massachusetts, and Utah—did not opt to use the loan funding  available under the SAMHSA block grant and did not use their SAMHSA  opioid grant funding for recovery housing services, according to state  officials.

Four of the five states in our review—Florida, Massachusetts, Ohio, and  Texas—have used state funding to establish and support recovery  housing and recovery housing-related activities. For example, officials  from the Texas substance abuse agency told us that, since 2013, the  state legislature has authorized at least $520,000 annually for recovery  housing. In fiscal years 2015 through 2017, the state used this funding for  personnel costs and related expenditures, such as hiring seven Oxford  House outreach workers and establishing a state loan fund of $200,000 to  supplement the SAMHSA loan funding to support the establishment of an  additional 25 new Oxford Houses. Officials from the Massachusetts  substance abuse agency told us that the agency has received annual  state appropriations in the amount of $500,000 since fiscal year 2015 to  contract with the entities that inspect and certify recovery homes for the  state certification program and to contract with the state NARR affiliate for  technical assistance with developing recovery housing certification  standards and supporting the certification process. State substance  abuse agency officials from the fifth state, Utah, told us that the state did  not use state funding to establish recovery homes during fiscal years  2013 through 2017. See table 2 for states’ use of SAMHSA and state  funding for recovery housing activities.

We provided a draft of this report to HHS. HHS did not have any  comments.

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If you or your staff have any questions concerning this report, please  contact Katherine M. Iritani, Director, Health Care at (202) 512-7114 or  iritanik@gao.gov. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this report.  GAO staff who made key contributions to this report are listed in appendix  II.

Appendix I: State Agencies and Related Entities GAO Interviewed

Appendix II: GAO Contact and Staff Acknowledgments

In addition to the contact named above, Tom Conahan, Assistant  Director; Shana R. Deitch, Analyst-in-Charge; Kristin Ekelund; and  Carmen Rivera-Lowitt made key contributions to this report. Also  contributing were Lori Achman, Jennie Apter, Colleen Candrl, and Emily  Wilson.

Recovery housing allows people recovering from addiction to alcohol or illicit drugs to live together in a safe, supportive, stable, and alcohol- and drug-free environment. However, there have been reports that some recovery housing owners are exploiting residents to profit from them—for example, by sending them to doctors who bill their insurance for extensive and unneeded drug testing and share insurance payments with the owners.

We looked at federal health care funding for recovery homes, as well as the actions of five states—Florida, Massachusetts, Ohio, Texas, and Utah—to investigate and oversee these homes in their states.