Cigna Points to Tox Costs and Fraud in Quitting Florida Obamacare

gavelBy: Jeff Cohen 

Cigna just announced it is withdrawing from Florida’s Health Insurance Marketplace.  As reported by Carol Gentry in Health News Florida, Cigna blamed its decision to withdraw on fraud and abuse and on “out of network substance abuse clinics and labs.”  Interestingly, Cigna spokesman, Joseph Mondy, pointed to a recent article in the Palm Beach Post (“Addiction Treatment Bonanza:  How urine tests rake in millions”) in support of Cigna’s announcement.

Media reports regarding the treatment industry and Cigna’s announcement go unquestioned by reporters.  For instance, the Palm Beach Post article claims “the sky-high charges have exploited addicts and alcoholics seeking help, gouged insurers and spurred law enforcement interest….”  It pictures a young, tattooed man as a recovery business owner, but does not mention any wrongdoing or charges against him.  It restates claims in a lawsuit against a toxicology lab without any counterbalancing input from the lab that is the subject of the lawsuit.  It expresses certainty that insurers are being gouged, but does not mention that the rates actually paid by insurers for out of network services are determined entirely by the insurers, not the treatment providers.  It’s an article full of allegations and innuendos, but no meaningful coverage of any of the issues.     

As far as Cigna’s announcement is concerned, most media reports simply transmitted Cigna’s release, without question or inspection.  To date, there is NOTHING at all in the media that questions in any way the basis for Cigna’s reported excuses for leaving the market.  This is curious, especially given the serious issue of addiction.  In simply transmitting the insurance industry’s messages contained in press releases and lawsuits by insurance companies, the opportunity for serious and meaningful inquiry about public health issues is missed.  What if Cigna’s story about fraud and abuse in the treatment industry isn’t true?  What if there’s more to the story?  What if it’s a PR cover story to avoid saying what many insurers have already said about Obamacare plans—they aren’t profitable or profitable enough.  By acting as a conduit of whatever insurance companies have to say about the addiction treatment industry, the public loses out.  Though there likely is wrongdoing in the industry (just because people and money are involved), by painting the industry with that brush and failing to at least question the message leaves the reader and public hypnotized and powerless.

According to a recent Forbes article written by Dan Munro, the National Council on Alcoholism and Drug Dependency estimates that over 23 million Americans are addicted to drugs or alcohol, while just about 11% (2.5 million) actually receive treatment.

The 2014 Cigna Annual Report is an interesting read.  It states, for instance:

  • “For the fifth consecutive year, Cigna delivered competitively attractive financial results to our shareholders.”
  • Its consolidated revenue was about $35 billion
  • Its share price grew about 9% in 2014
  • “We grew premiums and fees by seven percent, to $24.5 billion…” which represents 14% growth
  • Their “Go Deep, Go Global, Go Individual” strategy is positioning them well to grow revenues by 8-10% in 2015, double the size of their business over 7-8 years and deliver on their 10-13% annual compound growth in earnings per share

It’s interesting to note that, despite Cigna’s very clear finger pointing at the entire addiction treatment industry, neither the Annual Report nor their 10-K mention anything about it!  Nada.  And that leaves me wondering:

Although Cigna has what appears to be enormous resources invested in their Special Investigative Unit, which spearheads their fraud and abuse detection and enforcement for ALL healthcare services paid by them, they’re unable to handle or manage this one aspect of their total healthcare investment?

If Cigna doesn’t like what they have unilaterally decided to pay out of network providers of services (including for addiction treatment), why don’t they just unilaterally reduce the payment?  Why do Cigna’s press releases express the perspective that they are being victimized by out of network providers, when the decision of what to pay out of network providers is 100% the decision of Cigna?

Is Cigna being honest when they claim that their enormous fraud detection and prosecution infrastructure for all of healthcare has failed, but only with respect to the drug and alcohol treatment industry?  They can control and handle it when it comes to physicians, hospitals, DME providers, pharmaceuticals, but not the industry that is treatment maybe just 2.5 million people?

It’s great that law enforcement and others are concerned about people in recovery.  They should be.  But simply swallowing what is fed to us by insurance companies and by the media that refuses to question their messaging distracts us from important things like:  what addiction treatment works well?  What’s the right amount and frequency for providing treatment services?  What measures can be put in place to distinguish the good guys from the bad guys and whose job should that be?

One thing is clear to me:  serious treatment providers need to create an organization that enables them to define and drive quality and round out the public dialogue re addiction elated issues.

2 thoughts on “Cigna Points to Tox Costs and Fraud in Quitting Florida Obamacare

  1. Very few health care providers or entities can report that growth in the previous years. Drug addiction and alcoholism are real life threatening medical conditions that have taken the lives of many admired and productive Americans, including relatives, friends, professionals, actors, athletes, etc..

    This may be a premeditated business decision not to get involved or the inability to have an adequate network of providers and labs necessary to help these patients. Only through random screening tests can drug abuse and pain clinics, or providers that treat chronic pain in some of their patients can monitor and provide the best care to these patients. This is also required by the regulatory agencies.

    The allegations of fraud and abuse are concerning and criminal, but these issues should be left to law enforcement organizations. Only through active involvement of all the affected, networking, policy making, adequate funding and reimbursement of providers will this significant health care problem be prevented, alleviated or reduced.

    Lastly, this decision sets a precedent that maybe be regarded as discriminating on the basis of a specific medical problem and raises concerns about the well being and potential risks of the already insured that receive care during their transition to a different insurance.

  2. Pingback: Act or React? Rehab Industry Transformation | Florida Healthcare Law Firm Blog

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