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Harry Nelson Discusses Health Insurance Giant, Health Net, and its Battle with Treatment Facilities in Calif.

Harry Nelson Discusses Health Insurance Giant, Health Net, and its Battle with Treatment Facilities in CalifHealth Net, one of California’s largest health insurance companies, is under investigation for withholding reimbursements to more than 100 behavioral health treatment providers. In January 2016, Health Net’s Director of Special Investigations, Matthew Cignek, sent letters to treatment facilities, citing a “number of potential concerns” about alleged “false and/or fraudulent claims.” Three months later, California’s mental health and addiction treatment facilities received thousands of denied payments for “lack of medical necessity” from either Ciganek or Health Net’s Medical Director and Torrance-based psychiatrist, Dr. Matthew Wong, who allegedly signed the denials of payments that were processed overseas without even reviewing them.

This week’s “In Your Right Mind” show discusses Health Net, one of the fourth largest insurance providers in California, and the negative effects it has had on out-of-network behavioral health treatment providers and its policyholders. Guests Harry Nelson, A.B., J.D., the founder and managing partner of Nelson Hardiman, and Stampp Corbin, M.B.A., president of the American Treatment Advocacy Coalition (ATAC) and CEO of a behavioral health company called Toxicology Laboratory, discussed how Health Net has fallen short in providing behavioral health treatment facilities reimbursements for services that were already provided to its paying members, as well as in ensuring patients receive timely treatment for alcohol and drug use problems.

We spoke to Nelson about Health Net and the reasons why it has denied insurance claims to more than 100 behavioral health treatment facilities. The show, “Health Net,” airs on Sunday, August 27, 2017, on Talk Radio 790 AM KABC Los Angeles. To hear more about Health Net, you can listen to the show on demand here.

Question: Do you think Health Net stopping reimbursements had anything to do with its merger with Centene? Why or why not?

Answer: There have been rumors that Health Net’s payment stoppages were intended to improve the appearance of its finances for purposes of the Centene merger.  We have yet to see any evidence supporting that theory. Having worked with Health Net’s leadership over the years, I have trouble believing that they would take the serious risks that such a maneuver would entail. There are too many internal and external eyes on financial reporting to permit Health Net to game its financial reporting. The high stakes make this theory unlikely. If this turned out to be true, we would expect that heads would roll. It seems more plausible that the timing was coincidental and that Health Net acted simply because Health Net was hemorrhaging money at the time as a result of the claim submission volume that Health Net was convinced was overwhelmingly attributable to fraud and abuse.

Q: Can you tell me more about why Health Net is withholding reimbursement/payments to these treatment facilities? 

A: Only Health Net itself can provide the exact reasons why it withheld payments to so many addiction treatment facilities. What we have gathered and inferred from working with numerous clients on these denials is that they were tied to Health Net’s suspicions about the types of fraud and abuse that were occurring. In several cases, there were irregularities in patient addresses submitted for insurance purposes, indicating that patients had recently moved, in some cases from out of state, and that the information provided was at odds with their previous last known addresses.

While there may be innocent explanations for many of these irregularities, Health Net representatives believed that they were attributable to marketers engaging in illegal patient brokering or other improprieties, which led to suspensions of several brokers who issued policies that Health Net believed were fraudulently procured.

Another issue was Health Net’s belief (which was validated in many cases) that many centers were engaging in inappropriate waiving and discounting of patient copays, co-insurance, and deductibles. Yet another was unusual patterns around urine drug testing.  All of these are issues where many providers attempting to act in good faith were deeply confused about what is appropriate and legal from a compliance standpoint, in many cases because the provider community has not had access to reliable information and misinformation gets passed around irresponsibly from second-hand sources. The challenge is that this led to Health Net reacting in a draconian way that hurt many patients and program.

Q:  How is the current healthcare system compounding the problems due to opioid drugs, and what can we do to find relief?

A: The opioid crisis has many roots, including drug company marketing that has promoted opioid sales even as they climbed hand in hand with death rates. Our health system has exacerbated the problem in several ways. The Joint Commission, which accredits providers, pushed hospitals and healthcare providers to have patients rate their pain on a scale of 1-10, leading to inflated reports of pain and pressure on physicians to treat it.

Part of the problem is systemic pressure for low cost solutions, and giving people pills is cheaper and easier than providing support for wellness through exercise, meditation, or other forms of pain control. One short-term solution is increasing access to Naloxone to treat overdoses, and making more treatment options available, particularly for Medicaid beneficiaries. Longer-term solutions include expanding access to forms of pain treatment other than opioids, and addressing the underlying reasons that certain areas of the country, such as West Virginia and the New England states, are experiencing much higher overdose rates.

 More About Harry Nelson

Harry Nelson, A.B., J.D., is the founder and managing partner of Nelson Hardiman, a healthcare specialty firm which is annually ranked among the best “Health Care Law” firms by U.S. News & World Report. Harry has a solid track record of leadership developing practical solutions to many industry challenges with particular expertise in post-acute and behavioral health. He has written extensively about the national opioid epidemic and addiction treatment, speaks regularly at behavioral health conferences, and launched the American Addiction Treatment Association (AATA), serving on its board. AATA is a national trade association which prides itself on being the first organization to offer national legal, regulatory, and compliance resources in the area of addiction treatment, enabling recovery industry professionals, owners, and operators to navigate the evolving clinical and regulatory landscapes.

Proactively tackling timely healthcare issues, Harry is the co-author of the recently released book, “From Obamacare to Trumpcare: Why You Should Care.” This new book offers a comprehensive survey of healthcare policy leading up to the Affordable Care Act, examines its strengths and weaknesses, and portends the direction the Trump administration and the GOP will take on healthcare policy. It provides an unbiased assessment of the potential impact this historical policy transition will have on patients and practitioners. Harry’s thought leadership around the future of the healthcare and life sciences industry has also driven many next-generation healthcare ideas and initiatives to realization, including in telehealth and other modalities of digital health and behavioral health.

Follow Harry on Twitter @nelsonh. His most recent ideas can be found at: www.harrynelson.com. For more information about the American Addiction Treatment Association (AATA), please visit the website at www.addiction-tx.com.