Embattled Sovereign Health closing and consolidating centers
The San Clemente-based mental health and addiction treatment provider is closing its facility in
The
"These changes were made in order to streamline our portfolio and improve our financial performance by focusing on our top-performing facilities: San Clemente, Palm Desert and
The company's financial problems can be tracked, at least in part, to an ongoing legal dispute with an insurance company in which both sides accuse the other of wrongdoing.
"As has been widely reported, health insurance corporation Health Net has reneged on its legal obligation to reimburse
Raids
In June, dozens of law enforcement agents stormed Sovereign's offices and related centers waving guns, seizing computers, scaring workers and confusing already-fragile patients, CEO
Sharma said he believes the raids were punishment for suing Health Net over the disputed
Health Net, in a counter-suit filed a year ago, said Sharma and his companies were engaged in massive fraud. Within the span of a single year, Sovereign's companies went from billing Health Net less than
"This scheme, which involves fraudulently obtaining insurance policies and the submission of thousands of false and fraudulent claims, also raises the costs of healthcare coverage to consumers, who ultimately will have to pay higher insurance premiums," Health Net's suit said.
When the
A spokesman for the
The
Sovereign demanded that the
The
Some operators have been criticized for using charitable foundations to buy insurance for patients, or to pay premiums, copays or deductibles, then billing insurers millions.
The paperwork filed by Sovereign also indicates that a criminal grand jury was gathering evidence that might be used against it. The
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