Health insurance company Moda is suing a California addiction treatment center, claiming the center falsified Alaska patients’ income in a scheme to overbill Moda by $3.3 million.
Moda filed the suit Thursday in federal court in Alaska. It says employees of New Life Treatment Center recruited Alaskans struggling with addiction, and then either coached them to lie about their income on insurance enrollment forms or filled in false information for them.
According to the lawsuit, the patients’ income was actually lower than what they claimed on the forms, and the patients should’ve been enrolled in free, public health insurance, like Medicaid, rather than with Moda, one of two private insurers in Alaska’s insurance marketplace.
The lawsuit says a state regulation made Alaska patients particularly lucrative targets. The regulation obligates private insurers to pay for services outside of Alaska and to pay more than the average rate.
“This allowed New Life to maximize the profitability of its scheme,” the lawsuit says. “But Moda was not the scheme’s only victim. The vulnerable Alaskans that New Life recruited to participate in its scheme were also harmed by the substandard care they received at New Life’s facility.”
Moda says they were billed up to $9,000 a day per Alaska patient, some of whom were at New Life’s facility for months.
New Life did not immediately respond Friday to requests for comment by phone and email.
Casey Grove is host of Alaska News Nightly, a general assignment reporter and an editor at Alaska Public Media. Reach him at cgrove@alaskapublic.org. Read more about Casey here.
