California and Oklahoma are separated by more than 1,000 miles. Within that span there are hundreds — if not thousands — of addiction treatment programs.
“And yet, in the last few years alone, thousands of alleged Oklahoma residents have been trafficked across the country to California under the guise of obtaining (substance use disorder) treatment,” claims a lawsuit 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.
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“This surprising migration is not a result of quality treatment. Rather, it is driven by an army of fraudsters that have overrun certain parts of California’s SUD (substance use disorder) treatment industry to prey upon alleged Oklahoma residents, many of whom are members of Native American tribes.”
Google Maps screenshot
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The one thing these folks had in common, the suit said, is that they were enrolled in Blue Cross Blue Shield of Oklahoma health plans shortly before their treatment in California began.
“These SUD providers employ a range of fraudulent tactics,” the suit 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 shipped across the country to receive ‘treatment,’ the main goal of which is to enrich the providers, body brokers, insurance agents and the others involved in the schemes.
“There are unlawful kickbacks at every level. In fact, many patients themselves receive cash, free ‘treatment’ and housing, which unlawfully influences their choice of providers and induces them to stay under the control of a particular provider so that their insurance can continue to be billed. It is becoming exceedingly difficult for good, quality, providers to operate in an industry awash in 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 be commenting. Phone messages, emails and texts to the others Monday were not immediately returned.
Screenshots included in the lawsuit filed by Blue Cross Blue Shield of Oklahoma against South Coast Behavioral Health, Excellence Recovery, Everything in Excellence Recovery, Rad Life Recovery, Cari Passmore, Brett Pershall and Randall Eisworth (Blue Cross Blue Shield of Oklahoma v. South Coast Behavioral Health et al)
In a modus operandi familiar to followers of SCNG’s Rehab Riviera coverage, Blue Cross Blue Shield of Oklahoma said in the suit that once 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 these tactics, the suit said, and they’ve received more than $36 million in wrongful payments from Blue Cross Blue Shield of Oklahoma alone. The insurer is suing for fraud, negligent misrepresentation, unjust enrichment, intentional interference with economic/contractual relationships and conspiracy under the Racketeer Influenced and Corrupt Organizations Act.
‘Lie’
The suit alleges that the scheme worked like this:
South Coast Behavioral Health used body brokers Passmore and Pershall to entice patients west. They tracked down potential clients on social media and through word-of-mouth, with promises of free addiction treatment.
Screenshots included in the lawsuit filed by Blue Cross Blue Shield of Oklahoma against South Coast Behavioral Health, Excellence Recovery, Everything in Excellence Recovery, Rad Life Recovery, Cari Passmore, Brett Pershall and Randall Eisworth (Blue Cross Blue Shield of Oklahoma v. South Coast Behavioral Health et al)
That treatment was not free, of course, but would be paid for with health insurance. Oklahoma insurance agent Eisworth obtained the policies, telling addicts to lie about about their annual income, employment status and residency so they’d be eligible for Blue Cross Blue Shield plans and government subsidies.
One member, identified as “A,” told Eisworth that she held 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 (that wouldn’t cover treatment outside Oklahoma, “much less across the country in California,” according to the lawsuit.
Eisworth told her to create a fake monthly income statement showing she was self-employed and that her income added up to more than $18,000 per 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 shrank 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 who received treatment at South Coast were enrolled by Eisworth, the suit said.
Screenshots included in the lawsuit filed by Blue Cross Blue Shield of Oklahoma against South Coast Behavioral Health, Excellence Recovery, Everything in Excellence Recovery, Rad Life Recovery, Cari Passmore, Brett Pershall and Randall Eisworth (Blue Cross Blue Shield of Oklahoma v. South Coast Behavioral Health et al)
After completing their “free” in-patient treatment, members went to the sober living facility connected to the body broker who found them, the suit said. Folks lived in those homes for free as long as they allowed South Coast to bill their insurance. South Coast split those insurance payments with the brokers.
When benefits dried up, members were often evicted with little or no notice. After that, according to the suit, they “suddenly find themselves on the streets with no money to afford housing or the necessities of daily life, much less an expensive trip back home. Putting these already-vulnerable individuals in such desperate circumstances only heightens the chances for relapse.”
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 further actions to infiltrate Oklahoma,” the suit said.
In addition to locations in Costa Mesa, Huntington Beach, Newport Beach and Irvine, South Coast Behavioral Health’s web site lists a location in Oklahoma City as well.
Blue Cross Blue Shield of Oklahoma is not the only insurer to be victimized by this “racketeering activity,” the suit said. The well-intentioned Affordable Care Act increased coverage for addiction treatment and access to enrollment, the suit said, creating a landscape ripe for this particular type of fraud. Oklahoma has the fifth highest rate of addiction in America — more than 16% of its population, according to the suit.
“The combination of a state plan offering robust out-of-state benefits and a large population in need of treatment provided a perfect target for profiteers like Defendants,” it said.
Deja 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.
About 1,000 people left facilities linked to embattled treatment operator Nathan Young after this decision. Former patients in the Young network said they were signed up for Blue Cross Blue Shield of Oklahoma insurance despite never living in the state, and sometimes without their knowledge.
Young and associates are being sued by insurer Aetna in a fraud case that echoes this one. Young has countersued Aetna, saying the insurer is just trying to avoid paying what’s owed.
It all echoes the battle 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 seeks damages “sufficient to punish 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 might wonder if damages like that really exist.
