BCBSM Lawsuit Alleges Reduced Treatment Payments

Numerous substance abuse facilities have hit Blue Cross Blue Shield of Michigan (BCBSM) with a lawsuit arguing that the company has cut the rate of reimbursement that they pay to substance abuse treatment facilities.

The plaintiffs say that because of this change in policy, many substance abuse treatment centers have been forced to reject patients. In addition, the lawsuit states that some patients who complete treatment receive invoices in the “tens of thousands of dollars for services that they thought were covered.”

Despite the allegedly decreased drug treatment payments, the lawsuit claims that the CEO of BCBSM earned $19.2 million and the company’s profits soared $580 million to $29.3 billion.

The BCBSM lawsuit states, “While BCBSM and its executives enjoy astronomical returns, many of their plan members are literally dying in the streets while desperately needed treatment programs are shutting their doors. BCBSM executives would rather pay themselves than pay for lifesaving substance abuse treatment for their insureds.”

According to the BCBSM lawsuit, the denied claims come from Preferred Provider Organization (PPO) health plans meaning that providers do not not need to be in the network with BCBSM to be eligible for coverage.

The plaintiffs argue that all of the patients who made the claims were actively registered with a PPO plan and had coverage for the treatment of substance abuse and mental health issues.

“All patients who received or currently receive treatment at Plaintiffs’ facilities execute a notarized, durable power of attorney and endorse a separate assignment of benefits form to the respective facility, permitting Plaintiffs to stand in the shoes of their patients with the same rights to appeal, litigate and receive payment under the health plan as the patients themselves,” the BCBSM lawsuit claims.

The plaintiffs say that they have tried for more than 4 years to resolve the drug treatment reimbursement problems, but continue to have claim and payment issues with BCBSM.

As an example, one of the plaintiffs, Best Drug Rehabilitation (BDR), began submitting claims to BCBSM around October 2011. BDR claims that BCBSM did not process the claims at all and rejected their claims. BDR allegedly discovered that the issue for the rejection of claims was that BCBSM did not have the systems in place, nor the staff, to accept claims for out-of-state members, thus they denied all of the claims at once.

The plaintiffs say that BCBSM has a history of denying claims. They argue that “for a period of over two years, BCBSM would not process Plaintiffs’ claims because Plaintiffs’ facilities were OON providers.”

The BCBSM lawsuit says that the plaintiffs have filed numerous appeals that are permitted under the health plans and even had “face-to-face” meetings with lawyers and executives at BCBSM. The plaintiffs claim that any further attempts to negotiate with BCBSM would be pointless.

“While their members continue to overdose and die, BCBSM continues to earn record profits, and BCBSM’s executives continue to be paid record bonuses, amounts that are absurd even by Silicon Valley standards,” the lawsuit argues.

The plaintiffs have filed suit under the Employee Retirement Income Security Act (ERISA) of 1974 and bring claims of breach of contract, violation of Nonprofit Health Care Corporation Reform Act, breach of covenant of good faith and fair dealing, breach of implied contract, unjust enrichment, breach of oral contract, and more.

The plaintiffs are represented by Matthew M. Lavin and Aaron R. Modiano of Napoli Shkolnik PLLC, Julie W. Allison and Anelia Shaheed of Julie W. Allison PA, and Phillip B. Slot of the Slot Law Group PLLC.

The Blue Cross Blue Shield Reimbursement Lawsuit is Serenity Point Recovery Inc. et al v. Blue Cross Blue Shield of Michigan, Case No. 1:19-cv-00620, in the U.S. District Court for the Western District of Michigan.

Read More Lawsuit & Settlement News:

Prudential Center Class Action Challenges ‘No Outside Food’ Ban

Johnson & Johnson Baby Powder Lawsuits Will Stay in State Courts

Lyft Class Action Alleges Unwanted Telemarketing Calls

Asbestos Cancer Risks Remain After Decades of Regulation