Recovery centers sue insurance company

Three local recovery centers and another from Scottsdale are suing the Health Net insurance company for actions that allegedly have had “a severe and adverse effect” on the treatment centers, as well as the clients.

The legal complaint by Chapter 5 Counseling Center LLC, Prescott House Inc., Desert Cove Recovery Center LLC, and Compass Recovery Center LLC was filed in Maricopa County Superior Court July 22.

The complaint deals with many of the accusations that an insurance-company investigator made this week to the Prescott Mayor’s Ad Hoc Committee on Structured Sober Living Homes. At that Aug. 10 meeting, Centene Corp. lead investigator Dan Kreitman maintained that many local group homes have been engaging in fraudulent practices, which, in turn, led the insurance company to change its payment structure.

The lawsuit notes that Health Net (the insurance provider recently acquired by Centene Corp.) sold health insurance policies to Arizona customers and accepted premiums in exchange. But when customers then sought medically necessary treatment, the lawsuit contends, “Health Net subsequently refused to reimburse or significantly underpaid plaintiffs for the services that were rendered to patients as required by the policies of insurance.”

An Aug. 12 news release from Phoenix law firm Gallagher & Kennedy, which is representing the treatment centers, pointed out that “a large number of behavioral health centers in Arizona and California have filed separate lawsuits” against Health Net for “unlawfully refusing to pay millions of dollars in claims to treatment centers …

The law firm maintains that Health Net deliberately stopped paying “as part of a plan to save money at the expense of the people who bought Health Net policies, all while seeking to consummate its sale to a larger insurance holding company (Centene).”

The news release adds that the lawsuit was filed “only after the centers, Northern Arizona Recovery Association and Addiction Treatment Advisory Coalition, and counsel, aggressively pursued regulatory, political, and non-litigation options in an attempt to resolve the disputes with Health Net.”

The treatment centers are asking for award damages, “in an amount to be proven at trial,” as well as punitive damages, attorneys’ fees, and pre-judgment interest.