FTC Staff Comment to Department of Labor on Proposed Amendments to Regulations Implementing the Mental Health Parity and Addiction Equity Act

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UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
September 29, 2023
RIN: 1210-AC11
Docket No. REG-120727-2
Attention: 	Office of Health Plan Standards and Compliance Assistance
Employee Benefits Security Administration, Room N–5653
U.S. Department of Labor
200 Constitution Avenue NW, Washington, DC 20210
Staff Comment from the Federal Trade Commission on Proposed Amendments to
Regulations Implementing the Mental Health Parity and Addiction Equity Act
The staff of the Bureau of Consumer Protection of the Federal Trade Commission
(“FTC”) submit this comment in support of the proposed amendments to regulations
implementing the Mental Health Parity and Addiction Equity Act, 1210-AC11.1 FTC staff share
the concerns of the Department of the Treasury, the Department of Labor, and the Department of
Health and Human Services regarding the devastating toll of substance use disorders (“SUDs”)
on individuals, families, and communities, and are deeply concerned about the ways in which
those seeking treatment may be preyed upon by unscrupulous actors. Consumers faced with
financial impediments, such as lack of insurance coverage, may be particularly susceptible to
scams, which may in turn further impede their access to treatment or even derail treatment
entirely.
In addition to over a century of promoting free and fair competition in the U.S. economy,
the FTC has worked for decades to protect consumers from unfair and deceptive business
1 This comment expresses the views of staff of the FTC’s Bureau of Consumer Protection. It does not necessarily
represent the views of the Federal Trade Commission or of any individual Commissioner. The Commission has,
however, voted to authorize the submission of this comment.
Bureau of Consumer Protection

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practices, including in the health care sector. The agency has brought hundreds of law
enforcement actions challenging deceptive health claims and has obtained significant injunctive
and monetary relief. In 2018 Congress passed the Opioid Addiction Recovery Fraud Prevention
Act (“OARFPA”), which gave the FTC additional enforcement tools to combat SUD treatment
scams, including the authority to obtain civil penalties. In the past two years the FTC has brought
four enforcement actions under OARFPA. These cases illustrate the labyrinth of potential
deception that people seeking SUD treatment must navigate to access care, in addition to
financial and other impediments addressed in the proposed amendments.
The FTC’s first case under OARFPA, FTC v. R360 LLC,2 filed in May, 2022, targeted
allegedly false statements that the defendants would connect patients seeking addiction treatment
with “handpicked” and “cream of the crop” treatment centers after evaluating patients’
individualized needs. In reality, incoming calls from consumers were automatically routed to
treatment centers without any individualized assessments. Moreover, R360 allegedly provided
little to no vetting of any of the treatment centers to which it referred patients. The Order settling
the FTC’s complaint included a $3.8 million civil penalty judgment against R360 and its owner,
Steven Doumar, and enjoined them from continuing to make further misrepresentations.
In March 2023, the FTC sued AWAREmed Health & Wellness Resource Center and its
owner Dr. Dalal A. Akoury for allegedly making a wide range of false or unsupported claims
about the success of their services in treating addiction and other serious conditions.3 In their
2 FTC Press Release, FTC Hits R360 and its Owner With $3.8 Million Civil Penalty Judgment for Preying on
People Seeking Treatment for Addiction (May 17, 2022), https://www.ftc.gov/news-events/news/press-
releases/2022/05/ftc-hits-r360-its-owner-38-million-civil-penalty-judgment-preying-people-seeking-treatment-
addiction.
3 FTC Press Release, FTC Sues Medical Clinic and its Owner for False or Unsubstantiated Claims its Treatment
Could Cure Addiction and Other Diseases (Mar. 16, 2023), https://www.ftc.gov/news-events/news/press-
releases/2023/03/ftc-sues-medical-clinic-its-owner-false-or-unsubstantiated-claims-its-treatment-could-cure-
addiction. .

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advertisements, the defendants described their clinic as the “Most Effective Medical Clinic
Anywhere,” and claimed that it “Boasts a 98% Improvement Rate…Treating Just
About…Anything,” including addictions to methadone and other drugs. The settlement barred
Dr. Akoury and her AWAREmed clinic from making such unsupported claims and required her
to pay a $100,000 civil penalty.
In addition to targeting false claims involving treatment centers, the FTC has also brought
enforcement actions against companies that touted over-the-counter products with deceptive
claims of addiction treatment. In June 2023, the FTC charged Michael J. Connors and his
companies with deceptively marketing Smoke Away products—tablets and sprays comprised of
vitamins and herbs such as alfalfa and licorice root—for the quick elimination of nicotine
addiction and withdrawal symptoms.4 The final order in that case permanently banned Connors
and his companies from marketing or selling any SUD treatment product or service. It also
contained a $7.1 million redress judgment and a $500,000 civil penalty.
Most recently, in July 2023, the FTC sued Rejuvica, LLC and its owners, Kyle
Armstrong and Kyle Dilger, alleging that they deceptively marketed their Sobrenix product for
the elimination of alcohol cravings and the management of alcohol consumption, including
through fake website reviews and advertisements masquerading as objective news coverage.5
The final order against Rejuvica and its owners prohibited them from making any
unsubstantiated claims about health care products or services, and required them to pay $650,000
in redress to consumers.
4 FTC Press Release, FTC Acts to Stop Owner, Marketers of ‘Smoke Away’ from Deceptively Claiming Products
Enable Users to Quit Smoking (June 30, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/06/ftc-
acts-stop-owner-marketers-smoke-away-deceptively-claiming-products-enable-users-quit-smoking.
5 FTC Press Release, FTC Takes Action Against Makers of Sobrenix Supplement That Deceptively Claimed to
Reduce Alcohol Cravings, Relied on Fake Endorsements (July 19, 2023), https://www.ftc.gov/news-
events/news/press-releases/2023/07/ftc-takes-action-against-makers-sobrenix-supplement-deceptively-claimed-
reduce-alcohol-cravings.

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FTC staff are concerned that a lack of insurance coverage or high out-of-pocket costs
might increase the appeal of nontraditional methods of SUD treatment for some consumers,
leaving them more susceptible to the types of scams the FTC has recently addressed. For
example, Smoke Away advertised its vitamin-and-herb-based products as “less than the cost of
gum, patches, or prescriptions that often don’t work[.]” Rejuvica touted its Sobrenix product as
“not an expensive rehab center.” Such advertising demonstrates how scammers target consumers
burdened by the cost of SUD treatment.
As the agencies pursue the laudable goal of parity of SUD treatment coverage, FTC staff
also want to highlight that insurance coverage does not insulate consumers from scammers. In
fact, our own enforcement, reinforced by discussions with our law enforcement partners, has
alerted us to fraudulent practices specifically geared towards exploiting insured consumers as
well. Accordingly, local, state, and federal enforcement agencies must have resources to combat
all illegal practices in the addiction space, including insurance fraud. FTC staff believe that
nothing in the proposed amendments would prevent current systems and authorities from
monitoring waste, fraud, and abuse, and that the proposed amendments strike the right balance
between leaving intact previous enforcement systems while promoting better insurance coverage
for SUD treatment.
The FTC is deeply committed to holding accountable bad actors who prey on consumers
seeking SUD treatment, and FTC staff support the proposed amendments’ aim to diminish the
financial impediments that make consumers vulnerable to SUD treatment scams. FTC staff thank
the Department of the Treasury, the Department of Labor, and the Department of Health and
Human Services for the opportunity to provide this comment.