Latest Drug Treatment Scam: Lying To Get Coverage

Dec. 31--Cigna Inc., the insurance giant that backed out of Florida's federal insurance marketplace in October because of an "exponential increase" in fraudulent drug testing claims in treating addicts has uncovered another type of fraud -- lying about Florida residency to get insurance.

Company investigators found a small number of insurance brokers who used multiple common addresses to enroll hundreds of out-of-state addicts in Cigna's marketplace health plan in Florida -- created by the Affordable Care Act.

"For example, one broker was found to have enrolled nearly 100 customers -- none of whom appear to have had any prior connection to Florida -- at an apartment that was connected to a relative of the broker," wrote Cigna spokesman Joseph Mondy in an email response to questions posed by The Palm Beach Post. "In other instances, customers enrolled using the address of a substance-abuse treatment facility as their claimed residence."

Some out-of-state addicts told Cigna investigators that they were given free airfare and promised free treatment, Mondy wrote.

Only Florida residents are eligible to buy insurance on Florida's Health Insurance Marketplace. To prove Florida residency, newcomers can file court documents swearing under oath that they are or intend to become Florida residents. Driver licenses, voter and car registration and utility bills can also be used to prove residency.

Insurance is the key ingredient to the corrupt business model used by some in the county's billion-dollar drug treatment industry. The urine of drug addicts with insurance is worth millions of dollars to the operators of labs, sober homes, intensive outpatient programs and treatment centers.

A Palm Beach Post investigation found that insurance companies are often billed as much as $5,000 for a single urine drug screen. Although insurance companies pay a fraction of that -- between $1,500 and $2,000 -- with addicts tested three or more times a week, the profits add up fast.

To ensure a steady supply of urine, some operators of labs and intensive out-patient programs that collect urine samples for complex drug tests are suspected of paying kickbacks to the owners of sober homes, where addicts live while getting clean.

Although Cigna would not put an exact dollar amount on the fraud, the impact was "significant enough that we concluded that we had to suspend offering health plans on Florida's federally facilitated marketplace for 2016," Mondy wrote.

Whether addicts knew they were breaking the law or were coached to do so by insurance brokers or operators of treatment centers and sober homes is not known. However, Cigna has sent letters to some addicts saying the company has cancelled their policies and will not pay pending claims.

"The evidence gathered to date shows that you misrepresented information that you provided in your application for coverage," states Cigna's letter to policyholders. "Had you accurately and fully disclosed your address of residence on your application ...your application for coverage would have been declined and no benefits under the policy would have been provided."

Cigna will reimburse the premiums paid by policyholders but "all claims previously paid by Cigna will be retroactively denied." That means addicts who lied about their residency could be stuck owing hundreds of thousands of dollars that Cigna paid for their treatment at rehabs, intensive outpatient programs and labs where their urine was tested. They would be required to pay for services at the regular billed rate, not the reduced rate that Cigna negotiated with the rehabs, labs and intensive outpatient providers.

Whether Cigna will try to recover millions of dollars it paid to those providers on the policies of non-Florida residents is not known.

As part of its ongoing investigation of the industry, Cigna also learned that some operators of labs, intensive out-patient programs and rehabs waived co-pays and deductibles -- an illegal practice called "fee-forgiveness," Mondy wrote.

In Florida it is a felony for providers -- such as rehabs, intensive out-patient programs and labs -- to waive the patient's portion of the bill, deductibles or copayments.

Some providers send several letters to policyholders -- often parents whose children are under age 26 and still on their policies -- in an attempt to collect. But parents who spoke to The Post on the condition of anonymity said those providers told them they would not actually have to pay, they could disregard the letters and their accounts would not be sent to a collection agency.

The demand letters, the parents were told, were merely efforts to show the providers made a good faith attempt to collect -- a maneuver that some believe will protect them from criminal charges.

Insurance companies such as Cigna claim fee-forgiveness drives up premiums for everyone. By waiving co-pays and deductibles, the usual and customary charge is not the amount billed but rather the amount billed minus the co-pays and deductibles that have been waived.

"Higher than expected medical costs, whether driven by fraudulent practices or not, will result in higher future insurance premiums for everyone as the insurer increases premiums to cover these unexpected claim costs," Mondy wrote.

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