Cigna Loses Texas Case Against Humble Surgical Hospital, Hit with $16 Mil Judgment

anti kickbackBy: Karina Gonzalez

Cigna recently sued a Texas hospital, Humble Surgical for overpayments.  Humble Surgical is an out-of-network (OON) provider.  Cigna alleged fraudulent billing practices and that the hospital engaged  in a scheme to defraud payors by waiving members’ financial responsibility.

While the suit involved many other  allegations  our article focuses on the arguments Cigna made on failure to collect co-payments, deductibles, and co-insurance and fee-forgiving practices by the hospital.   There were several other issues raised that are important to various practices that Cigna has engaged in with out-of-network providers.  Cigna has consistently audited South Florida providers alleging failure to collect patient financial responsibility or fee-forgiveness, then informing the provider that it was not entitled to any reimbursement because these practices fell within the exclusionary language of the member’s plan.

The suit brought under federal law, ERISA and also Texas common law seeking reimbursement for all overpayments. Cigna was seeking equitable relief including imposing a lien or constructive trust on  fees paid to the hospital.

Humble Surgical counter sued against Cigna for  nonpayment of patients’ claims, underpayment of certain claims and delayed payment of all claims in violation of ERISA, including other causes of action. Here’s what happened:  Continue reading

ASAM & Cigna to Collaborate on Performance Measures in Addiction Treatment

cigna asamBy: Karina Gonzalez

ASAM and announced a collaborative effort with  Brandeis University to test and validate three ASAM performance measures for addictions treatment. ASAM hopes that this project will provide measure testing of performance measures that will be accepted and adopted in the treatment of patients with addiction.

Three measures will be tested using two years of de-identified Cigna claims data  for  substance abuse.  The measures to be  tested in the study will be: use of pharmacotherapy for individuals with alcohol use disorders; pharmacotherapy for individuals with opioid use disorders and follow-up after withdrawal.  This is expected to be a six month project. Continue reading

Recovery Residence Law Set to Take Effect in 2016

florida health care attorneyBy: Jacqueline Bain

Several clients have inquired in the past few weeks about the new Florida law regarding recovery residences, or sober living facilities. Implementation of the new law has been slow, leaving a lot of questions unanswered and room for opinions to be taken as facts.

Many have asked us if recovery residences are required by law to obtain certification. It is not mandatory for all sober homes to become certified prior to July 1, 2016. However, as of that date, a DCF-licensed substance abuse treatment facility may not refer a current or discharged patient to a recovery residence unless any of the following applies:

  • the recovery residence holds a valid certificate of compliance or
  • the recovery residence is owned and operated by a licensed service provider or
  • the recovery residence is a licensed service provider’s wholly owned subsidiary.

The term “refer” means to inform a patient by any means about the name, address, or other details of the recovery residence. The effect of the law is to squeeze sober homes into obtaining certification if they are not owned and operated by a DCF-licensed treatment provider. Continue reading

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.      Continue reading

Addiction Treatment is a Story in Search of a Villain

healthcare business

Hastiness and superficiality are the psychic diseases of the twentieth century, and more than anywhere else this disease is reflected in the press— Alexander Solzhenitsyn

By: Jeff Cohen

I read an article in a local paper the other day.  It was about (a) a guy who owned a treatment center (who has not been charged with committing a crime), (b) a lawsuit filed by a large insurance company against a toxicology lab that the insurer owes millions, and (c) the fact that insurance companies pay a lot for toxicology lab testing.  I scratched my head, wondering how there was anything newsworthy there.  The “story” being sold by the paper, however, created a story with a villain (the providers of services to people in recovery from drug and alcohol addiction) and a “victim” (people receiving care for addiction).  I can’t resist responding.

There’s a difference between something that’s interesting and worthy of comment vs. a journalistic attempt to concoct controversy and intrigue that people might buy.  There’s not much of the former, but a lot of the latter.  People in recovery being victimized by horrible, greedy people is an interesting story.  Unfortunately, it’s off the mark and really not helpful to anyone.

There are three pretty safe assumptions we can almost all agree on:  first, there are a lot of people who want to live life without active addiction.  Second, many of them think they need help to create a better life.  Third, some providers of help to people in recovery make a bunch of money providing that service. Continue reading

Florida Recovery Residences on the Chopping Block

gavelTwo separate legislative proposals are aimed to tighten up the sober home industry.  The Bills follow on the heels of legislation proposed last year, which did not become law.  We have a couple weeks left till the Legislative session ends (May 1st), after which time we will see what regulation made its way through the process.  Until then, it’s important to have an idea of what is on the horizon.

Committee Substitute for House Bill 21 and Committee Substitute for Senate Bill 326 contain the following interesting features—

Creates “voluntary” certification for recovery residences;

A. Specifies the requirement of a “recovery residence administrator;”

B. Specifies that the credentialing entity of both the recovery residence and the recovery residence administrator will be a nonprofit organization (not necessarily one that is tax exempt) that “develops, administers professional, facility, or organization certification programs according to applicable nationally recognized certification or psychometric standards,” and requires the credentialing entity to:

  • Establish the recovery residence certification requirements. Interestingly, the Legislature, which states that those in recovery are vulnerable and need to be protected, is offloading to an unspecified nonprofit organization (which anyone can form in five minutes) the responsibility for developing certification requirements;
  • Establish procedures to, among other things, to monitor, inspect and insure compliance with the certification requirements established by this unspecified nonprofit organization entrusted by the state of Florida with this responsibility;
  • Require recovery residences (who are volunteering to be regulated) to submit documents such as job descriptions, drug testing procedures and requirements, to be managed by a “certified recovery residence administrator.”

The Bill also states that a recovery residence cannot be certified if an owner, director or CFO plead guilty, no contest or was found guilty of certain offenses.  Moreover, the non-governmental, not for profit certifying body has authority to suspend or revoke a certification if the entity determines the residence isn’t complying with the law.  No due process is required.  Oh, and finally, as of July 1, 2016, a provider licensed under Chapter 397 may not refer a patient (current or discharged) to a recovery residence unless the residence, which is not required to be certified, actually becomes certified, making the voluntary certification requirement, ummm….mandatory! Continue reading

Recovery Business Industry Forced to Grow Up Fast

bcbs lawsuitBy: Jeff Cohen

When Horizon Blue Cross/Blue Shield of New Jersey blasted Avee Laboratories in connection with a variety of business practices, some of which included kickback violations (in connection with the provision of POCT cups), businesses in the drug and alcohol recovery space took notice.  With the recent FBI raid on a Palm Beach County sober house and the amped up attention of managed care payers to clinical lab testing, the industry is reeling!  The good news, however, is that these recent developments, along with increased payor scrutiny (and payment denial!), is a call to compliance that has long seemed inapplicable to an industry that has been able for many years to operate with simplicity not found in other segments of the healthcare business community.  Where facilities once viewed DCF as the only regulatory parent they had to please, they are now learning there is a far greater degree of regulatory complexity to be considered; and they are rushing towards compliance. Continue reading