Protect Your Organization and Provider Network from Insurance Fraud

Ten years ago managed care organizations were primary and foremost referral agents for those seeking addiction treatment. This was a time when case-management and referrals were managed by real people in real time. Since that time, insured members find SUD treatment providers independently and often through misleading call-centers/ patient brokers on the internet. Head hunters get paid top dollar by out-of-network providers for PPO insured or well-funded candidates.

As some unscrupulous entrepreneurs build profitable businesses through unethical practices, their abundant marketing budgets have overtaken the market. Ethical, in-network, insurance contracted providers do not have comparable marketing capital to compete. They operate off of a highly discounted rate of reimbursement which result in meager marketing/ promotion budgets.

SUD providers are incentivized to drop or avoid insurance contracts. Reimbursement is too low and contractual restrictions are too high.

The entrepreneurs are being rewarded by the same PPO plans they abuse, by being paid a percentage of their indiscriminately escalated “usual and customary” rates. Rather than managing ASAM continuing care where the patient resides, the PPO carrier enable the continuation of long residential stays away from home. Insurance carriers willingly pay out-of-area residential programs to extend residential stays by using the day treatment and intensive outpatient treatment benefit while the patient continues to reside in residential, away from home care. No benefits are left to assist the patient integrate recovery back where the wreckage, triggers and real-life problems reside. “Institutionalization” is reinforced by today’s commercial healthcare market.

Following are increasingly common breaches in lawful or ethical practice allowed by an absence of regulation and oversight and willing reinforcement by third party payers:

• 1) Out of network providers pay for prospective patient premiums (new PPO policies and COBRA) for the duration of treatment then allow the policies to lapse.
• 2) Patients are induced to admit by out-of-network providers waiving co-pays and providing sober living to IOP patients.
• 3) “Usual and customary” services rates are overstated (X10) by out-of-network providers to enhance revenues.
• 4) Out of network providers escalate their retail “usual and customary rate” for PPO which differs from that offered to their self-pay clientele. Out of network PPO reimbursement is maximized.
• 5) Payment for referrals are exchanged between out-of-network providers and to “call centers posed as treatment programs” on the internet.
• 6) Patients are brokered to out-of-network providers from internet call-centers which gage the rate of kick-back based upon the quality and quantity of the caller’s insurance coverage or capacity to pay top-dollar out of pocket.
• 7) Revenues are enhanced by unnecessarily elaborate, costly and frequent urinalysis testing by out of network providers and laboratories.
• 8) Intensive outpatient program providers provide “sober living” residence to clientele through the combination of overstated “reasonable and customary” service rates and urinalysis over utilization.
• 9) UR and billing is contracted out by providers to specialty companies which overstate/ falsify acuity levels and “lethality” to heighten level of care need and length of stay.
• 10) Internet call-centers and corporate providers mislead viewers and callers about the level of care, type and location of services needed for their condition.
• 11) Patients are flown from state to state, across the country to engage in out-of-network residential treatment. Once the patient arrives, their choices for level of care and between service providers end.
• 12) Patients are misled about the amount that the insurance will pay and what will be their likely self-pay amount. “We take your insurance and whatever they don’t cover, we’ll put on a reasonable payment plan”. Residential treatment lengths of stay of thirty to ninety days are rarely medically necessary or covered by insurance.

Following are a few suggestions for third party payer oversight, investigation and enforcement:

• 1) Require that day treatment and intensive treatment benefits are paid when the patient returns to their residence to enable recovery to be integrated in real time to their real life circumstances.
• 2) Price up PPO options and replace with affordable EPO plans in benefit offerings.
• 3) Publicize to service providers and members ethical business standards.
• 4) Publicize investigations and prosecutions to provide warnings and precedents.
• 5) Verify acuity levels through second opinions provided by in-network providers.
• 6) Monitor new policy dates correlated by contemporaneous SUD treatment admission and investigate.
• 7) Call patients to verify acuity levels.
• 8) Investigate accuracy of contracted UR and billing.
• 9) Notify members or require authorized out-of-network providers to notify effected patients of their out of network coverage at the point of admission, including co-pay and deductible amounts and estimated length of authorized reimbursement in real time.
• 10) Notify or require authorized out-of-network providers to notify effected members and patients the ethical and legal requirements of the out of network provider to collect co-payment and notify them of lapsed level of care authorization.
• 11) Notify or require authorized providers to notify effected members and patients of in-network treatment providers and alternatives.
• 12) Deny out of state, out-of-network PPO authorization if in-state providers are available.
• 13) Deny authorization to providers who lack Joint Commission accreditation.