(Centene & Manatt – A Collaboration that Conspires to Dupe Policyholders)
Centene manipulated the law and devised a fraudulent scheme to advance false accusations against credible behavioral healthcare providers with the help of Manatt. Centene’s tactics are directed at profiteering by instituting a policy of withholding and underpaying claims for certain types of behavioral health services.
Problems after Health Net entered ACA
Health Net began offering health insurance products on the exchanges in 2014, after outlining policy terms to boost its market share. The terms stated that they were required to pay for out-of-network mental health facility claims for inpatient, residential or outpatient treatment based on 75-100% of the billed amount.
During 2014 and 2015, Health Net saw a dramatic expansion in the number of policyholders which came with an abrupt increase in the number and dollar amount of claims, leaving the company afflicted with financial losses.
Health Net-Centene Merger Problems Progress
On July 2, 2015, Health Net announced that it has entered into a merger deal with Centene under which it would acquire 100% of Health Net. The acceptance of the merger agreement with Centene was approved by Health Net stockholders in October 2015, valued at $6.8 billion.h
After the effective date of its merger with Health Net, Centene was unable to avoid disclosing that Health Net had incurred $390 million in liabilities to its shareholders which existed as of the March 24, 2016 merger date. The increased indebtedness, which was at least $140 million, was greater than Health Net’s entire pre-tax annual earnings.
The Game of Fraud and False Accusations
Health Net conspired to create and implement a systematic campaign of targeting and refusing to pay or underpaying certain claims to stem the financial bleeding from Health Net’s PPO policies in mid-2015. Health Net revised its claims handling manual to instruct personnel on how the claims should be handled, denied, and underpaid to implement the policy and ensure it was followed by claims personnel.
Benefit payments were refused to over 1,000 California substance abuse treatment clinics.
Covering up the Fraud by Hiring Manatt
In January 2016, Health Net hired Manatt to collaborate on a strategy about the outstanding claims by out-of-network substance abuse providers.
After a special investigation unit (SIU) audit of California substance use disorder treatment clinics for declining to pay claims, Health Net told its employees to re-route all claims from providers on the watchlist.
The audit led to an exponential increase in the number of claims that Health Net refused to pay while Centene was planning and executing the plan of harassing the facilities that were working relentlessly to help people recover from their illnesses.
