Highlight on Florida: Cigna pulls exchange plans, blames substance abuse treatment fraud

Florida is losing some health insurance coverage options just ahead of the federal health insurance marketplace’s open enrollment period. Cigna, Inc. has decided that it will withdraw all plans from the Florida Exchange. About 30,000 Florida residents are covered by Cigna plans and will need either to choose another plan offered on the Exchange or enroll through an insurance agent. However, marketplace enrollment is the only option for receiving tax credits. Federal data shows that over 90 percent of Florida residents who use the marketplace receive credits.

Cigna cited fraud and abuse in “out-of-network substance abuse clinics and labs” as the reason for the soaring costs in its Florida plans. A spokesman, Joseph Mondy, backed up this assertion by mentioning articles from The Palm Beach Post, such as “Addiction treatment bonanza: How urine tests rake in millions.” Cigna’s plans offer coverage for treatment obtained outside of its network of providers, and stated in email communications with insurance brokers that certain testing labs and clinics targeted plans with out of network benefits. Cigna stated that kickbacks were offered in exchange for referrals and excessive testing was ordered.

Mondy stated that Cigna had no option but to pull out of the market for the 2016 plan year. The company had already submitted its plan applications to HHS and was unable to make changes by the time it realized how widespread the problem of fraud and abuse truly was. Cigna plans to reenter the Florida market in 2017.

Drug tests pay the bills

Florida’s health care system is no stranger to fraud and abuse. The Palm Beach Post story cited above revealed just how lucrative the business of drug testing can truly be. After a couple sought addiction treatment for their son in Palm Beach County, they were stunned to receive a bill totaling $304,318 for nine months of urine drug screens alone. Palm Beach County is known for its $1 billion addiction treatment industry, which has drawn FBI scrutiny. Articles reveal that those offering housing to the newly sober barely made enough money to cover costs until it became clear that these homes could rake in the cash by over-charging for urine tests.

These facilities began charging hundreds and even thousands of dollars per test, despite the fact that a $25 drug store test could reveal the presence of drugs. Many facilities tested far too often or too extensively without justification. Despite the astronomical costs, insurance companies as well as Medicare and Medicaid would pay when doctors verified the tests as medically necessary.

Fighting back

In addition to pulling Florida plans from the exchange, Cigna decided to sue Sky Toxicology and two other labs in Florida federal court. Cigna alleged that providers were paid kickbacks for sending urine tests to Sky and claimed $20 million in civil fraud. Millennium Health, one of the largest testing labs in the country, decided to pay $256 million to the U.S. government to settle allegations of overbilling for drug tests. The whistleblower was Omni Healthcare, Inc., located in Florida.

Sober living companies have become the target of investigations. Owners, seeing major opportunities, have bought up condominiums to offer housing arrangements and opened their own testing labs in order to keep a bigger chunk of the money. These companies have been raided by various government agencies, and the state of Florida and the FBI created a task force to address the problem last year.