A Deadly Practice

Huge insurance checks put patients in harm’s way and could lead to relapse.

In an ideal world, health insurance is meant to keep us healthy by covering necessary doctor visits, treatments, and procedures, whether preventive, curative, or palliative. When we visit the doctor or receive care, our insurance gets billed by the treatment provider, and the insurer pays the provider a predetermined rate. With treatment for many disorders including substance use disorders, the provider calls first and gets verification that the treatment is covered by the insurance policy and, further, gets “approval” for the service from the insurer prior to delivering treatment. In this way, the treatment provider and insurer partner together to make sure the patient receives adequate and necessary services.

Currently, all insurance plans are mandated to cover treatment services for substance use disorders. When an individual completes formal treatment for a substance use disorder, unnecessary challenges to their successful recovery and hard-won sobriety should be as limited as possible.

But what happens when the patient’s focus on their sobriety and recovery are diverted because they receive a large sum of money from their insurance company? Such scenarios are increasingly occurring. Even when patients instruct their health insurance companies to send reimbursement payments for approved services directly to treatment providers to pay for treatment – known as an “assignment of benefits” – this money is instead being put in the hands of the patient. This suddenly becomes a very real temptation to return to drug use. It could even mean and has meant death for some.

In fact, some states, such as Nevada, see this as such a problem that they are drafting and passing legislation to stop this practice. Nevada’s Senate Bill 262 “Protecting Patient and Providers” was signed by the Governor very recently and requires that every payment made pursuant to a health insurance policy for treatment related to mental health, alcohol or drug abuse treatment be made directly to the provider of the treatment when a legal assignment of benefits has been executed.

One patient at our treatment center recently received nearly $8,000 from her insurance company, even though she had a signed assignment of benefits on file indicating that she wanted the insurance company to send reimbursement for her care directly to our center. What’s to stop this newly recovering young woman from taking this money and relapsing? Does the insurance company even recognize this as a potential threat to her recovery?

It seems some health insurance companies are routinely sending payments for treatment for substance use disorders directly to patients even with a clear assignment of benefits. Do insurance companies routinely pay the patient instead of the hospital for surgeries? Emergency room visits? The answer is no. So why the double standard?

As a mechanism to encourage in-network participation, Physicians News Digest says that insurance carriers do issue payments directly to participating/in-network providers for patients who receive services, but many ignore the assignment of benefits with non-participating, or out-of-network, providers and purposely send the payment to the patient.

Could these situations be simple oversights or are some health insurers doing this purposely to spite treatment centers for being out-of-network? It’s a serious accusation to make, but it is what we’re hearing and it saddens and infuriates me at the same time. After all, this shouldn’t be an issue of scheming to sway providers when we’re dealing with people’s lives.

Each state’s laws differ, and while the majority of reimbursement payments go directly from the insurance company to the medical provider, in our field, there is still a percentage of this money being paid to patients. The job of retrieving these payments can be difficult as many patients have no idea what to do with these checks. Your contract with the insurance company most likely requires that you willfully repay your medical provider if you receive payment intended for the services they have already provided. Failure to repay may result in wage garnishment, legal action, and termination of your insurance policy and coverage.

But legal ramifications aside (although very real and very enforceable), putting a large sum of money in the hands of someone in the midst of addiction treatment or who is newly sober can literally be deadly. A person’s early recovery can be fragile and newly recovering people are susceptible to the temptations that come with receiving a cash windfall right after their time in rehab.

One Anthem executive (who did not want to be named) acknowledged the situation and said he personally opposes the policy of putting large checks meant for out-of-network providers into the hands of clients. “My decades of clinical experience tell me that this can only lead to unnecessary relapse and recidivism, which means additional unnecessary costs for the insurance carrier.” I agree with him and believe that providers and insurers should act in partnership to assist people in their recovery from all illnesses.

The insurance companies’ argument is about patients having the right to assign health insurance benefits to out-of-network providers at all. The issue has garnered the attention of state legislators around the country. Insurers argue that assigning benefits would weaken networks, which in turn would lead to higher costs for policyholders, their employers, and others. But the empirical data related to this argument is weak and the whole situation may really just be about finding a way to make out-of-network reimbursement difficult so that providers will reject patients outside of their network, even if they are uniquely qualified to help them. Why are insurance companies able to dictate where patients get treatment?

The solution to this entire problem is actually a simple one that would not cost healthcare insurers nor providers any additional money but could certainly save lives. Health insurers just need to send reimbursement checks to the healthcare providers rather than the patient, particularly when the patients ask them to by assigning their benefits to the provider who delivered their care. Simple and straightforward as that.

If you have a loved one in treatment, please be aware of this issue to help make your loved one’s recovery as smooth as possible. The temptation of a lump sum of money, making it easier to return to drugs and alcohol, is not something people need added to their list of challenges in early recovery. Especially when this challenge can be life-threatening.

Need help with substance abuse? In the U.S., call 1-800-RECOVERY or 800-662-HELP (4357) for the SAMHSA National Helpline.

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