Health Net lawsuit reveals the financial engine of drug rehab industry - 0 views
www.azcentral.com/...907734001
personal+freedoms healthcare narcotics social+healthcare opioid+crisis
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The only "Obamacare" health insurer in metro Phoenix and Pima County is ensnared in a legal dispute with several addiction treatment centers over the cost of care amid an Arizona opioid epidemic that is taking an average of two lives each day.
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Maricopa County Superior Court lawsuit
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widespread fraud among Arizona and California drug rehab centers in 2015 and 2016, when it alleges"teams of brokers" recruited out-of-state clients to fraudulently obtain insurance policies and to seek treatment in Arizona.
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residential “sober homes”
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headaches for local government officials as they try to determine how to manage the unregulated industry.
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Prescott, which once claimed more than 100 sober homes, has adopted regulations to provide more oversight of them.
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Federal and state prosecutors have aggressively pursued cases in Florida and California in connection with fraudulent activities such as patient brokering.
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There have been no criminal cases filed in Arizona, however.
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Six of the rehab facilities that accuse Health Net of improperly withholding payments are in Prescott: Chapter 5 Counseling, Prescott House, Compass Recovery Center, Clean Adventures of Sober Living, Decision Point Center and Carleton Recovery Centers.
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Three others, T R U Recovery Solutions, North Ridge Counseling and Desert Cove Recovery, list Scottsdale addresses.
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The rehab facilities allege that Health Net improperly withheld payments to virtually every rehab center in Arizona and southern California beginning in January 2016. Health Net halted the payments as part of an investigative audit that demanded each center provide detailed records such as proof of patients' residency and assurances that patients did not receive incentives to sign up for rehab.
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Health Net said in court documents that claims filed by rehab centers in Arizona soared because of widespread fraud
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Health Net's PPO plans paid $2.4 million to all Arizona rehab centers in 2014. Those payments soared to $47.4 million in 2015
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Those plans paid more for rehab care that year than all other types of care in Arizona, including typically expensive medical care such as cancer, heart disease and child births, according to the insurer’s counterclaim.
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Here’s how the fraud worked, the insurer said in its counterclaim:Brokers would scout out people in 12-step programs, Alcoholics Anonymous meetings, homeless shelters and jails, then refer these clients to the “highest-bidding clinic.”Clinics that were not part of the insurer’s network paid clients’ insurance premiums and out-of-pocket costs such as deductibles and co-payments.The result was that people secured Health Net coverage “arranged and bought for them by financially-interested providers for one purpose only: to obtain coverage for the limited time needed to rack up millions of dollars in substance abuse treatment.” Some clinics misrepresented the home addresses of patients, many of whom lived out of state.
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“a sophisticated fraud involving the fraudulent enrollment of non-Arizona residents,” who signed up for Arizona insurance policies.
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misrepresenting their home address
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Clean Adventures staff member told him to list the rehab facility's address on his insurance application.
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put him in contact with an insurance agent who suggested using Clean Adventures' address on his insurance application
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The insurer named 10 other examples of people who lived in California, Indiana, New Jersey, New York, Tennessee and Wisconsin but represented that they lived in Prescott or Scottsdale.
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The insurer also said the rehab centers engaged in fraudulent billing, charging for services that were not medically necessary or in amounts that exceeded what the plan allowed.
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A 2008 law called the Mental Health Parity and Addiction Act requires insurance plans to provide equitable coverage for substance abuse and addiction treatment. The Affordable Care Act also requires health insurance plans cover essential health benefits, including behavioral health services, and it forbids insurers from denying coverage to individuals based on existing medical conditions.
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The unintended consequence was (some) addiction treatments centers began taking advantage of that and over-billing," said Angie Geren, executive director of Addiction Haven, a grassroots and advocacy organization focusing on addiction issues.
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House Bill 2333
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curb the practice of paying referral fees to brokers who steer patients to rehab centers.
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bill never made it out of committee.
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Florida
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"The scam starts with deceptive advertising at the beginning," Aronberg said. "You are lured down to sunny Florida with a free plane ticket, which is illegal. You are given illegal benefits to keep you there."
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patients often find themselves booted from treatment when their insurance benefits run out.
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incentive for people to relapse so they can obtain another round of coverage.
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Sober Home Task Force targeting the practice of buying and selling patients battling addiction
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Johnson said rehab centers that provide legitimate services are being harmed as insurance companies scrutinize payments and bad actors poach patients away.
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ken.alltucker@arizonarepublic.com
