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Health Insurance Scammer Strands Alaska Natives in California

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A marketer has been signing Alaska Natives up for commercial health coverage, then sending them to unlicensed drug treatment centers in California.

When health insurers cancel the coverage or decline to cover the care, the treatment centers dump the patients, often leaving them with no means of support and no way to get home.

State insurance regulators are talking about the drug treatment scam problem at the American Indian and Alaska Native Liaison Committee, an arm of the National Association of Insurance Commissioners.

Lori Wing-Heier, director of the Alaska Division of Insurance, gave the liaison committee an update on the problem at an in-person meeting in August, according to a summary included in a document packet for an upcoming meeting in Orlando, Florida.

The regulatory backdrop: The Affordable Care Act, state health insurance laws and federal behavioral health parity laws prompted many health insurers and self-insured employer health plans to provide generous coverage for substance use order treatment.

Alaska was trying to cope with a shortage of health care providers by requiring state-regulated plans to pay out-of-network providers above-average rates, if necessary, to get enrollees care.

Special ACA provisions let American Indians and Alaska Natives sign up for individual coverage at any time of the year, rather than having to wait for annual open enrollment periods, and they reduce the enrollee’s share of the premiums to zero for American Indians and Alaska Natives with income at or below 300% of the federal poverty level.

Industry reactions: Wing-Heier noted in an email that drug abuse treatment scams have affected Americans in every community.

The impact has been greater on American Indians and Alaska Natives because scammers know that they can sign members of those communities up for individual health coverage at any time, Wing-Heier said.

“Once coverage is established, the scammer arranges a flight for the person to a treatment center in California and claims are submitted,” she said. “The claim is flagged, as there are currently only two facilities that the scammer is working with.”

The insurer then cancels the coverage, and the patient is stranded.

Alaska has been trying to fight the problem by repealing the rule that required insurers to pay above-average prices for out-of-network care, to reduce scammers’ incentive to target Alaska residents.

Credit: Jason Doiy/ALM


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