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Addiction Treatment Attack by Payers Grows

by admin on April 13, 2016 1 comment

money viseBy: Jeff Cohen

Addiction treatment providers continue to react to an assault by payers to run them “out of town.”  The first round of attacks (in the Fall of 2014) focused on the practice of copay and deductible write offs.  The phrase cooked up by lawyers for Cigna, “fee forgiveness,” wound its way into the courts system in Texas in a case (Cigna v. Humble Surgical Hospital, Civ. Action No. 4:13-CV-3291, U.S. Dist. Ct., S.D. Tex., Houston Division) against a surgery center, where Cigna argued that the practice of a physician owned hospital in waiving “patient responsibility” relieved the insurer from paying ANYTHING for services needed by patients and provided to them.  Though the case did not involve addiction treatment providers, it gave addiction treatment lawyers a look into what was going to come.  The same argument made in the Texas case was the initial attack by Cigna in a broad attack of the addiction treatment industry, especially in Florida.

As addiction treatment providers fielded Cigna’s “fee forgiveness” attack in the context of “audits,” providers held firm to the belief that justice would prevail and that they would soon restore a growing need for cash flow.  “If we just show them that we’re doing the right thing,” providers thought, “surely they will loosen up the purse strings.”  After all, this was a patient population in terrific need of help, with certain [untested] protection by federal law (the Mental Health Parity Act).

After, in many cases, more than a year, the basis of the audit expanded to include claims that addiction treatment providers and tox labs lack the medical necessity to provide the care at all (AFTER care was authorized and provided).  To illustrate the bizarreness of the payer attack, a couple payers required the tox labs to provide medical records justifying the treatment provided.  Now, mind you, labs have no legal basis to obtain those records.  Moreover, patient privacy laws forbid them obtaining those records.  Still, the payers developed expanding bases for their audits, while treatment providers’ resolve to respond to the audit on their own (or with counsel, but instructed not to file suit) persisted, to the point that cash reserves dried up and their leverage to withstand even the time required by litigation (now an inevitability) weakened.

So where are providers now?  Some have sold (presumably at drastically reduced prices from when the buying spree started in early 2014).  Some have closed.  There is now a trend to fewer, larger options for patients.  And the payers?  Their “deal of the day is typically a “wash” proposal.  “If you release us [insurance company] from claims for payment for services you [treatment provider] rendered, we’ll release you from claims that you basically stole money from us for years.”  This sort of unbelievable approach can only occur when the “audit attack” has succeeded in substantially weakening provider and also in cases where the treatment provider is unsure of its ability to withstand a countersuit for wrongdoing (e.g. improperly paying for patient health insurance premiums).

But it’s worse than all this.  In fact, behind the scenes lay scads of unfiled lawsuits against addiction treatment provider billing and collection companies that sometimes made the situation far worse by misbilling, altering records and, in some instances, not billing at all.  The next wave of lawsuits should be by providers against BOTH payers and billing and collection companies whose misdeeds causes many in the industry to flop.

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