California and Oklahoma are separated by more than 1,000 miles. Within that range, there are hundreds – if not thousands – of addiction treatment programs.
“And yet, just in the last few years, thousands of alleged Oklahoma residents has been trafficked across the country to California under the guise of obtaining (substance disorder) treatment,” claims a trial filed in federal court Dec. 11 against two Orange County rehabs, South Coast Behavioral Health and Rad Life Recovery of Costa Mesa, as well as others.
“This surprising migration is not the result of quality treatment. Rather, it is driven by an army of fraudsters who have overrun certain parts of California’s SUD (substance use disorder) treatment industry to prey on alleged Oklahoma residents, many of whom are members of Native American tribes. “
The only thing these people had in common, the lawsuit said, is that they were enrolled Blue Cross Blue Shield of Oklahoma health plans shortly before their treatment in California began.
“These SUD providers employ a variety of deceptive tactics,” the lawsuit said. “They hire ‘body brokers’ to hunt down potential patients in exchange for kickbacks. Body brokers work with insurance agents to fraudulently enroll individuals in insurance plans. Once enrolled, patients are sent across the country to receive ‘treatment’ whose main goal is to enrich themselves the suppliers, brokers, insurance agents and the others involved in the systems.
“There are illegal kickbacks at every level. In fact, many patients themselves receive cash, free ‘treatment’ and accommodation, which illegally influences their choice of provider and induces them to stay under the control of a particular provider so that their insurance can continue to It is becoming extremely difficult for good, high-quality suppliers to operate in an industry full of kickbacks and de facto bribes.”
Also named in the suit are Excellence Recovery and Everything in Excellence Recovery of Arizona, as well as three people connected to the alleged scheme, Cari Passmore, Brett Pershall and Randall Eisworth. Pershall, who had a Santa Ana address, said he was in the process of hiring an attorney and would not comment.
In an email on Tuesday, Dec. 17, South Coast said it provides life-saving addiction treatment to patients and will vigorously defend itself in court.
“The claims made by the BCBSOK are unfounded,” the statement said. “South Coast denies all allegations of wrongdoing and remains steadfast in its mission to ensure that all individuals have access to quality addiction treatment, regardless of their location. South Coast remains committed to transparency, ethical practices and compliance with all applicable laws and regulations .”
South Coast’s top priority is saving lives and providing comprehensive care, attorney Harry Nelson said in the statement. “South Coast stands firm in its commitment to helping those in need, regardless of geographic boundaries, especially given the lack of available treatment resources in Oklahoma,” he said. “We firmly believe that no one struggling with addiction should have to wait for the care they desperately need.”
The suit is part of a broader strategy by Blue Cross Blue Shield of Oklahoma to discourage Oklahomans from seeking care outside the state’s borders, despite the clear need for more treatment access, he said. It harms precisely the individuals who most urgently need help.
“Instead of focusing on litigation, we urge BCBSOK to partner with treatment providers to expand access to care and resources in Oklahoma,” Nelson said in the statement.
‘Lie’
In a modus operandi familiar to followers of SCNG Rehab Riviera coverage, Blue Cross Blue Shield of Oklahoma said in the lawsuit that when insurance benefits are exhausted, “providers kick patients to the curb, leaving these vulnerable individuals to fend for themselves thousands of miles from their homes.”
These defendants are among the worst perpetrators of this tactic, the lawsuit said, and have received more than $36 million in improper payments from Blue Cross Blue Shield of Oklahoma alone. The insurer is suing for fraud, negligent misrepresentation, unjust enrichment, intentional interference with financial/contractual relationships and conspiracy under the Racketeer Influenced and Corrupt Organizations Act.
The suit claims the scheme worked like this:
South Coast Behavioral Health used body brokers Passmore and Pershall to lure patients west. They tracked down potential clients on social media and through word of mouth, with promises of free addiction treatment.
Of course, that treatment was not free, but had to be paid for with the health insurance. Oklahoma insurance agent Eisworth procured the policies and told addicts to lie about their annual income, employment status and residency so they would be eligible for Blue Cross Blue Shield plans and government subsidies.
One member, identified as “A,” told Eisworth that she had a job that paid far less than the federal poverty level. But that made her eligible for Oklahoma’s Medicaid program, public insurance with low reimbursement rates (which wouldn’t cover treatment outside of Oklahoma, “much less across the country in California,” according to the lawsuit.
Eisworth told her to create a false monthly income statement showing that she was self-employed and that her income totaled more than $18,000 a year — high enough to avoid Medicaid but low enough to qualify for private insurance with much more generous reimbursement rates, as well as cost-share reductions and a tax subsidy that shrunk A’s monthly insurance bill from more than $500 to less than $100.
A staggering two-thirds of the hundreds of Blue Cross Blue Shield members receiving treatment on the South Coast were enrolled by Eisworth, according to the lawsuit.
After completing their “free” inpatient treatment, the members went to a sober living facility affiliated with the body broker who found them, the lawsuit said. People lived in these homes for free as long as they allowed South Coast to charge their insurance. South Coast split these insurance payments with the brokers.
When benefits ran out, members were often evicted with little or no notice. After that, according to the lawsuit, they suddenly find themselves on the street with no money to afford housing or the necessities of daily life, let alone an expensive trip home. Placing these already vulnerable individuals in such desperate circumstances only increases the chances of recidivism.”
This has been going on as far back as 2020 and, to this day, “they continue to hunt down individuals to enroll in Oklahoma plans and have taken additional steps to infiltrate Oklahoma,” the lawsuit said.
In addition to locations in Costa Mesa, Huntington Beach, Newport Beach and Irvine, South Coast Behavioral Health’s website also lists a location in Oklahoma City.
Blue Cross Blue Shield of Oklahoma is not the only insurer affected by this “extortionate operation,” the lawsuit said. The well-intentioned Affordable Care Act increased addiction treatment coverage and access to enrollment, the suit said, creating a landscape ripe for just this kind of fraud. Oklahoma has the fifth highest rate of substance abuse in America — more than 16% of the population, according to the lawsuit.
“The combination of a state plan offering robust out-of-state benefits and a large population in need of treatment was a perfect target for profiteers like Responsible,” it said.
Déjà vu?
Last month, Blue Cross and Blue Shield of Oklahoma told the Southern California News Group that it will stop paying for all addiction treatment in California on Jan. 1, with a few exceptions.
If 1,000 people left facilities linked to embattled treatment operator Nathan Young after this decision. Former patients in the Young network said they were enrolled in Blue Cross Blue Shield of Oklahoma insurance even though they never lived in the state, and sometimes without their knowledge.
Young and associates are being sued by the insurance company Aetna in a fraud case that reflects this. Young has sued Aetnasays the insurer is just trying to avoid paying what is owed.
It all echoes the fight between Health Net and now-defunct Sovereign Health that began in 2016. Health Net won big, with $45 million in damages and interest against Sovereign.
In this case, Blue Cross Blue Shield of Oklahoma said in its suit that it is seeking damages “sufficient to punish the defendants and deter other persons similarly situated from engaging in similar conduct in the future.”
After so many years of this scenario repeating itself, one wonders if such injuries really exist.
Updated 9:45 12/17 with statement from South Coast
Originally published:
