(The Health Net SIU: a Shrewd Game Plan to Deny Claims)
The Special Investigation Unit (SIU) formed illicit activities to scam healthcare providers.
With nearly 650 sites, Orange County was refused funds and dragged into an unjustified fraud probe. When clients with Health Net insurance had their treatment claims refused, providers had to present the bills directly to the patients who could not afford to pay, making some treatment providers devastated.
The Secret Scheme Solidifies over Dishonesty
Matthew Ciganek, Director of Health Net SIU, blasted form letters to behavioral health centers across Arizona and California back in January 2016. The letters were made to disregard complications on the drug and alcohol treatment centers and were pre-planned to dodge payments. The hostile form letters include:
- Health Net asserting rights to file and seek proper judicial sanctions despite failing to establish any specific misbehavior by treatment centers.
- An extensive and unusual amount of documents and requirements from the facility within fifteen days of receiving the letter.
- A collection of follow-up emails asking for copies of the treatment facilities’ licenses and other inconsequential information, sometimes even after Health Net had already received it.
- Imposing high compliance costs in terms of administrative effort and delivery costs. Centene first refused to accept any of the required information electronically and declined to give their street addresses for overnight delivery.
On January 8, 2016, the California Department of Insurance (CDI) announced a hearing by January 22 regarding the Health Net Centene merger. On the same day, The Health Net Special Investigations Unit (SIU) began a dragnet audit by sending letters to many out-of-network drug misuse providers in California.
The facilities were keen to abide by the SIU requirements to get paid eventually. No provider attended the CDI hearing and flag Health Net’s failure to pay millions of dollars in claims dating back to August 2015 amid the mad rush to present documentation and evidence before the deadline.
Absurdly Revoking Policies and Dismissing Claims
Everyone was being investigated despite being notified that some centers had passed the audit. Health Net paid them only a fraction of what they were owed according to Stampp Corbin, the Head of the Addiction Treatment Advocacy Coalition.
Even though there was no investigation, no evidence of fraud or billing issues and all treatments were pre-authorized by Health Net, they put every behavioral health professional under investigation. Treatment clinics believe they were all caught up in a dragnet audit, as stated by Stampp Corbin.
Matthew Ciganek is an auditor who deals with finances and SEC compliance and an authority on the Sarbanes-Oxley Act and has failed to distinguish between copayment and coinsurance in a court-ordered deposition
Dr. Matthew Wong, the Medical Director of Health Net, also sent multiple denial letters to the health clinics including his refusal to pay for the procedure, claiming that it was medically unnecessary.
The drug addiction treatment sector began to strike back when the ATAC wrote to Commissioner Jones of the California Department of Insurance (CDI) to inform him about the situation. The letter was signed by 120 substance abuse treatment professionals in California who had been frustrated by HealthNet’s inaction.
Club Soba, a Los Angeles-based provider, complained to CDI in June 2016 that HealthNet had refused $2 million in claims due to Robo-signing denials. According to ATAC, CDI received so many complaints that it had to shut down its website temporarily.
Health Net maintains that the purpose of its broad inquiry was to ensure that all treatment claims were authentic. However, Health Net’s investigation timing shows that its devious aims may have been to fudge its financial records following Centene’s $6.3 billion acquisition of the company in 2015.
Assured patients in Peril
Patients and health care facilities in California and Arizona have suffered irreparable losses and were unable to function as a result of Health Net’s reprehensible probe. Treatment providers claim that they can’t afford to take Health Net patients without payment and that the insurer is harming policyholders by restricting treatment options. Similar complaints concerning Health Net have been lodged with local insurance officials by behavioral health institutions in Arizona.
Centene’s investor relations chief, Edmund E. Kroll admitted that Health Net had underpaid several drug treatment providers during a health industry conference in September 2016.
”Centene had denied a lot of claims that we subsequently determined should be on the books. They were owed,” Kroll stated.
Centene is well aware that it owes money and that payment is long late. Instead of keeping medical providers and their patients on the hook, the firm should bite the bullet and pay up.
