California and Oklahoma are greater than 1,000 miles apart. Within that time-frame, there are a whole lot – if not 1000’s – of addiction treatment programs.
“And yet in the last few years alone, thousands of alleged Oklahoma residents have died were smuggled across the country to California under the guise of procurement (substance use disorder). Treatment,” claims a suit filed Dec. 11 in federal court against two Orange County rehab facilities, South Coast Behavioral Health and Rad Life Recovery of Costa Mesa, and others.
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“This surprising migration is not the result of quality treatment. Rather, it is being driven by an army of fraudsters who have overrun certain parts of California’s substance use disorder (SUD) treatment industry to take advantage of suspected Oklahomans, many of whom are members of Native American tribes.”
“These SUD providers employ a variety of deceptive tactics,” the lawsuit states. “They hire 'body brokers' to hunt down potential patients in return for kickbacks. Body brokers work with insurance agents to fraudulently enroll people in insurance plans. Once registered, patients are sent across the country to receive “treatment” whose important goal is to counterpoint the care providers, body brokers, insurance agents and others involved within the programs.
“There are unlawful kickbacks at every level. In fact, many patients receive cash, free “treatment” and accommodation themselves, which unfairly influences their alternative of provider and entices them to stay under the control of a specific provider in order that their insurance can proceed to be billed. It is becoming increasingly difficult for good, high-quality providers to operate in an industry awash with kickbacks and de facto bribes.”
The lawsuit also names Excellence Recovery and Everything in Excellence Recovery of Arizona, in addition to three people connected to the alleged scheme, Cari Passmore, Brett Pershall and Randall Eisworth. Pershall, who had an address in Santa Ana, said he was within the means of hiring an attorney and wouldn’t comment. Phone messages, emails and text messages to the others on Monday weren’t immediately returned.
In an approach familiar to supporters of SCNGs Rehab Riviera Blue Cross Blue Shield of Oklahoma said within the lawsuit that after insurance advantages are exhausted, providers “kick patients to the side of the road, leaving these vulnerable individuals to fend for themselves thousands of miles from home.”
These defendants are among the many worst perpetrators of this tactic, the lawsuit says, and so they have received greater than $36 million in improper payments from Blue Cross Blue Shield of Oklahoma alone. The insurer is suing for fraud, negligent misrepresentation, unjust enrichment, intentional interference with economic/contractual relationships and conspiracy under the Racketeer Influenced and Corrupt Organizations Act.
'Lie'
The lawsuit alleges that the plan worked like this:
South Coast Behavioral Health used body brokers Passmore and Pershall to lure patients west. They identified potential clients through social media and word of mouth and promised them free addiction treatment.
Of course, this treatment was not free, but was paid for by medical insurance. Oklahoma insurance agent Eisworth obtained the policies and asked addicts to offer details about their annual income, employment status and residency in order that they could be eligible for Blue Cross Blue Shield plans and government subsidies.
One member, identified as “A,” told Eisworth that she had a job that paid well below the federal poverty level. But that made her eligible for Oklahoma's Medicaid program, a low-reimbursement public insurance plan (which wouldn't cover treatment outside of Oklahoma, “let alone anywhere in the country in California,” the lawsuit says).
Eisworth asked her to create a fake monthly income statement showing that she was self-employed and that her income totaled greater than $18,000 a 12 months – high enough to avoid Medicaid but low enough to qualify to have private insurance with far more generous reimbursement rates. Added to this were cost-sharing discounts and a tax subsidy that reduced A's monthly insurance bill from greater than $500 to lower than $100 US dollar fell.
A staggering two-thirds of the a whole lot of Blue Cross Blue Shield members treated on the South Coast were enrolled at Eisworth, the lawsuit says.
After completing their “free” inpatient treatment, the members went to the sober living facility related to the body broker who found them, the lawsuit says. People lived in these houses free of charge so long as they allowed South Coast to bill their insurance. South Coast split these insurance payments with the brokers.
When advantages dried up, members were often terminated abruptly. After that, the lawsuit says, “they suddenly find themselves on the streets with no money left to afford housing or everyday necessities, let alone an expensive trip home.” If you set these already vulnerable people in Putting you in such desperate circumstances only increases the likelihood of relapse.”
This happened back in 2020 and thus far, “they continue to prey on individuals seeking to enroll in Oklahoma plans and have taken additional actions to infiltrate Oklahoma,” the lawsuit states.
In addition to locations in Costa Mesa, Huntington Beach, Newport Beach and Irvine, South Coast Behavioral Health's website also lists a location in Oklahoma City.
Blue Cross Blue Shield of Oklahoma isn’t the one insurer affected by this “extortion activity,” the lawsuit says. The well-intentioned Affordable Care Act increased coverage for addiction treatment and access to enrollment, the lawsuit said, creating an environment ripe for this particular sort of fraud. According to the lawsuit, Oklahoma has the fifth highest addiction rate in America — greater than 16% of the population.
“The combination of a state plan that provides robust out-of-state benefits and a large population in need of treatment provided a perfect target for profiteers like defendants,” it said.
Deja vu?
Last month, Blue Cross and Blue Shield of Oklahoma told the Southern California News Group that it should stop paying for all addiction treatment in California, with limited exceptions, starting Jan. 1.
Following that call, about 1,000 people left facilities linked to embattled treatment operator Nathan Young. Former Young Network patients said they were enrolled in Blue Cross Blue Shield of Oklahoma insurance although they never lived within the state and sometimes without their knowledge.
Young and employees are being sued by insurer Aetna in a fraud case just like this one. Young filed a countersuit against Aetna, saying the insurer was simply attempting to avoid paying the amounts owed.
This all reflects the battle between Health Net and the now-defunct Sovereign Health that began in 2016. Health Net won $45 million in damages and interest against Sovereign.
In this case, Blue Cross Blue Shield of Oklahoma said in its lawsuit that it’s in search of damages “sufficient to punish the defendants and to deter other similarly situated persons from engaging in similar conduct in the future.”
After this scenario has been repeated for thus a few years, one might wonder if such damage really exists.
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