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Health Net: The Bad, the Ugly and No Good
By Lise Millay Stevens

06-01-18 Category: Substance Abuse

Health Net:  The Bad, the Ugly and No Good <br><small>By Lise Millay Stevens</small>

Insurance giant Health Net (a subsidiary of Centene Corp.) has lost yet another legal challenge in connection to their business practices. According to a press release from Consumer Watchdog (a non-profit and non-partisan public interest organization), a recent class-action lawsuit compels Health Net to reimburse current and former clients who purchased Health Net preferred provider (PPO) insurance plans in 2014 and inadvertently received out-of-network medical care. This latest story is another in a string of unflattering reports on the insurance giant.

A Litany of Abuses

The lawsuit was brought by attorneys for Consumer Watchdog, The Arns Law Firm and Shernoff Bidart Echeverria, LLP. Centene has been scrutinized and fined millions of dollars by state and federal authorities for a wide range of questionable business practices over the years, and in 2018, the beat goes on. Just five months into 2018, negative exposés about Centene’s business practices appear at a rate if one or more monthly:

  • In April, after Health Net announced reductions in reimbursement of provider services for some of its California insurance plans, the California Medical Association issued a statement expressing concern over the “adverse impact these policies would have on physician practices,” alleging that, although the changes were supposedly in line with the Centers for Medicare and Medicaid Services guidelines, “only one of the four changes actually aligns with CMS guidelines”
  • In March of this year, Healthcare Finance reported that the Washington State Insurance Commission fined Centene after one of its satellite firms failed to meet deadlines, submitted provider contracts with illegal arbitration clauses and failed to meet state requirements to show its provider networks were adequate
  • Also in March, 11 senators slammed Health Net for ‘miserable’ provider customer service in a formal letter to the VA, calling the insurer’s Veterans Choice program a ‘failure’
  • In February 2018, Centene/Health Net, which holds contracts with U.S. government agencies, refused to allow the Office of Personnel Management to carry out an audit of the company’s IT systems, although such audits are stipulated in Health Net’s government contract, according to a report from Nextgov; the refusal was termed a breach of contract
  • In January, Health Net was slapped with a federal lawsuit alleging that the company has inadequate provider networks and misrepresents the number of in-network providers, misleading beneficiaries who purchase health coverage, according to one report

Unfortunately, taking subscribers’ money and providing sub-standard service seems to be in Health Net’s DNA. For subscribers to it’s plans, the results can be deadly.

Dire Consequences

In 2017, a woman insured by Health Net died after waiting four months for the company to identify an out-of-network transplant specialist to treat her failing liver, according to one report. She repeatedly contacted the company, explaining that her health was deteriorating. She never received the referral and she expired from her disease. Her family, charging that she suffered “death by bureaucracy,” is suing the insurance behemoth.

In a 2017 LA Times report titled, ‘Health Net Became the Favored Insurer of Drug Abuse Patients in California. Then It Stopped Paying Their Bills,’ the newspaper detailed how, in 2016, Health Net abruptly cut off payment to hundreds of substance abuse centers that had provided treatment to its subscribers. The company had suddenly started issuing form letters demanding extensive documentation about patient services that had, for the most part, been preapproved by the insurer. Providers and patients alike were stymied by the new policy.

The effect of withheld payments was devastating for Health Net subscribers. Patients returning home clean and sober faced bills upwards of $30,000 for care Health Net had already approved but ultimately would not reimburse. Other patients, many of them in dire need of mental health and/or addiction treatment, lost access to care; as news spread that Health Net was bilking health care providers, treatment centers began to turn away patients covered by the insurer.

The treatment industry was similarly ravaged; small facilities and networks became insolvent and were forced to cut staff and services, or simply close. In response, Florida and California providers banded together and filed a class action lawsuit to recover their losses. Sovereign Health of California filed its own suit for $55 million Health Net owed the firm, castigating the insurer for discriminating against vulnerable and very ill patients.

Health Net Reviled

The lawsuits were applauded by the Addiction Treatment Advocacy Coalition, the largest trade association of substance use treatment providers in California. “People who suffer from substance use disorder are seeking treatment in record numbers, commented Joan Borsten, Vice President of ATAC. “It is critical that the substance use treatment industry be financially healthy enough to expand and accommodate demand.”

There was more dodgy business from Health Net. In 2017, the Los Angeles City Attorney filed a lawsuit charging the company used unlawful, unfair and fraudulent business practices, and purposefully used false and misleading marketing practices to gain more subscribers. The City Attorney also launched a criminal probe into Health Net’s payment of bonuses to employees who find ways to cancel policy holders’ coverage. The irony would be funny if the consequences weren’t so sobering.

What might motivate a company to go to such lengths to dupe subscribers and shareholders, and bilk sorely-needed behavioral health networks out of millions of dollars? There is an obvious – and hideous – answer. Greed. According to a recent article in Healthcare Finance, Centene’s profits for the last quarter of 2017 were a cool $173 million. A fortune in a single quarter.  The company’s CEO, Michael Neidorff, is the highest paid in the industry, with a reported net worth of more than $25 million.

Health Net:  The Bad, the Ugly and No Good <br><small>By Lise Millay Stevens</small>

The U.S. opioid epidemic is killing more people daily than gun and traffic deaths combined and has been growing exponentially for a decade. A lack of adequate insurance, a shortage of accredited behavioral health facilities and providers has left thousands, if not millions, of people in need of help on waiting lists or worse – they simply give up and remain hopelessly addicted. Many of these individuals will overdose and die.

Despite the lawsuits, violations of state and federal insurance and consumer laws, charges of deliberate and fraudulent practices, and Congressional scrutiny, the company is growing.  Regardless of the ongoing exposure of unsavory business practices by diligent reporters, Centene /Health Net continues to expand into new markets and acquire smaller insurance companies.

Definition of ‘blood money’ per Merriam-Webster: money obtained at the cost of another’s life. Does the shoe fit?

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