Opioid crisis fuels patient-brokering fraud
MARVIN VENTRELL, executive director of the National Association of Addiction Treatment Providers, has seen a practice called patient-brokering become so prevalent that late last year his organization adopted rules banning members from taking part in it.
The practice involves a third party, often a treatment center that may not meet adequate care standards, paying a recruiter to fraudulently enroll an opioid-addicted patient in a flexible Obamacare individual market plan offering out-of-state coverage. Then the patient heads out to the treatment center. If the fraud is discovered and can be proven to the CMS, the agency rescinds coverage and the patient is expelled from the treatment center.
Pressure is building on Congress to act on the fraudulent practice, which has been fueled by the opioid epidemic.
“The law has been confusing and sometimes nonexistent, state by state,” Ventrell told the House Energy and Commerce oversight subcommittee last week.
It is unclear how much money the fraud has cost insurers. Industry representatives who spoke with Modern Healthcare would not say how many cases they’ve seen or whether that number is rising. One consultant who works with insurers said related claims can total upward of $100,000. In June, the U.S. Justice Department arrested addiction treatment center operators who filed more than $106 million in fraudulent insurance claims related to the scheme.
But insurers concede that a legislative push would be complicated because patient-brokering schemes span different states’ regulatory and licensing issues while also touching on the CMS’ overarching role in managing the federally facilitated marketplace for some states’ Obamacare exchanges.
First, the states have explicit authority to license treatment facilities. So Kim Holland, who focuses on state issues for the Blue Cross and Blue Shield Association, said she plans to focus lobbying efforts on strict licensing standards when state legislative sessions resume early next year.
The role Obamacare individual market plans play in the fraud add another layer of complexity. For one thing, third parties are allowed to pay for part or all of an enrollee’s premiums—a practice that facilitates patient-brokering. For another, the CMS manages many state Obamacare markets and is ultimately responsible for rescinding or pre-empting fraudulent enrollments in those states.
Rachel Jones, a financial investigations official with Pittsburgh-based Highmark Blue Cross and Blue Shield, said there are few controls in place to catch fraudulent enrollments before the plans have been approved unless the patient broker is a repeat offender who’s been flagged as such.
Jones said the CMS is trying to tighten upfront verification of applicants during the special enrollment periods. This is when the fraudulent brokers are more likely to strike—citing a major life change like a permanent move, and then setting up a false address that may lead to a vacant lot or a house listed for sale. Highmark also hired a vendor to try to capture likely fraudulent addresses as soon as possible. But that takes time: It involves finding the person who is supposedly signing up for an exchange plan and seeking proof of identity after a fraudulent broker has used a false address.
Once Highmark concludes that a plan is fraudulent, the company then has to prove it to the CMS so that the plan can be rescinded. Before the agency can remove a person from the insurer’s rolls, Highmark must fully document the fraud and hand over supporting documents.
A consultant who works extensively with plans on the issue said the process can drag on for months. Michael Adelberg, a former CMS official who now works as a consultant with the Washington firm Faegre Baker Daniels, said qualified health plans find the process isn’t efficient or transparent.
For last week’s congressional hearing, America’s Health Insurance Plans submitted a statement that reiterated the industry push for a policy to deal what the group calls a “serious, potentially widespread issue.”
“These practices raise overall health system costs and increase premiums for everyone, not just those who are sent to ‘sober homes,’” AHIP said.●