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Paul Zimmerman
pzimmerman@mrllp.com
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Health Net And Other Payers Ramp Up Audits Against Addiction Treatment Providers

Over the past several months, we have seen a tremendous amount of payer attention directed at addiction treatment providers. Payers are sending increasing numbers of requests seeking a range of medical records, billing records and other documentation concerning the provision of substance abuse treatment and related services, with several major payers seeming to aggressively investigate providers’ claims. Payer requests range from commonplace medical record requests, on the one hand, to requests for information about patient residency and co-payment obligations on the other, and have included requests for facility licenses, state and county certifications, and CLIA certificates. 

Some providers, such as Health Net, are going even further and requesting that providers attest that they “ha[ve] not made any payments to, or received any payments from, any third party with the intent to induce the referral of Patients for Services.”  In other words, providers are being asked to attest that they are not breaking the law. Health Net’s requests are not accompanied by any evidence or allegations against the specific provider, but rather appear to be sent out on a large scale to numerous recipients.

Beyond requesting documentation and further information, we also are aware of large payers who have frozen payments, and others still who have requested recoupments in the range of seven figures. These demands put a tremendous amount of pressure on providers, who may not have the luxury of time to wait and argue over hundreds of thousands of dollars to compensate them for services they have already provided.

These payer requests need to be handled carefully to ensure a provider’s rights are protected, while also preserving the provider’s ability to continue treating that payer’s patients. Not every request is reasonable or warranted. Providers should be aware of their rights, but should also cooperate -- where appropriate -- in order to benefit themselves, the payers, and most importantly, the patients.

This article is not offered as, and should not be relied on as, legal advice. You should consult an attorney for advice in specific situations.