UMR and the CorVel Corporation: Buyer Beware
Disclaimer: I am a former Peace Corps Volunteer and investigative reporter. My past makes it impossible not to red flag predatory practices of the health insurance industry.
This is a story about UMR, a health insurance company, which was determined to demonstrate to the Florida school district whose employees it insures, just how good UMR is at keeping health costs down. Unfortunately Malibu Beach Recovery Center was a recent victim of their unscrupulous and unprofessional tactics.
Malibu, California is home to about 24 high-end rehabs, more than any other zip code in the country. Why Malibu? Sweeping views, clean air, close proximity to the beach, the Los Angeles International airport, the best hospitals in West Los Angeles (St. John’s, UCLA, Cedar-Sinai) and of course great doctors.
The cost of treatment at Malibu Beach Recovery Center is about average for Malibu, even though we are the only treatment center with a program based on neuroscience – very much in keeping with the American Society of Addiction Medicine’s revised definition of addiction (a chronic brain disease which impacts the reward center of the brain). Decades of science is why we focus for 30-90 days on raising dopamine levels and expediting brain repair through a low glycemic diet, yoga breath work and specially designed food supplements. It is not cheap, and neither is cost of our stellar clinical team. or the 3:1 staff to client ratio.
The first goal of UMR was to demonstrate that Malibu Beach Recovery Center charges more than the other treatment centers in our “geographic area”. To do this, UMR hired CorVel Corporation, a publically traded firm based in Irvine, California. CorVel offers health insurance companies a service called “Medcheck” which is billed as a “state-of-the-art, web-enabled bill review.”
As we do not charge more than most treatment centers in Malibu zip code 90265, CorVel decided to compare Malibu Beach Recovery Center to all treatment centers whose zip codes begin with 902xx. That meant pitting the daily cost charged for 203 high-end Malibu beds and 12 high-end beds located in Beverly Hills (90210), with the daily cost of 257 beds in Compton (90221), Bell (90201) Gardena (90247-90249), and Hawthorne (90250) – all of which exist to serve the indigent. 157 of those low-end centers offer beds on a sliding scale of $0-$5,000 per month. Another 100 beds in Hawthorne are offered absolutely free by the Salvation Army.
UMR’s justification for allowing CorVel to compare apples to oranges? “The reviews are based on the recommended global average of geographical data for that area…”
UMR also needed CorVel to establish that we charge more than is “usual and customary.” To facilitate the desired results UMR changed the revenue code we use to bill for round the clock residential treatment (including a concierge doctor, therapists, and psychiatrists) to a revenue code for something called “milieu therapy.” I asked our well-educated, very professional clinical team for a definition of “milieu therapy” and was told it means getting rehab clients to “share” stories about their addiction in a designated smoking area or in the van enroute to AA meetings.
UMR defended he revenue code swap this way: “Our system can’t take a four digit revenue code so we substituted something similar”.
Similar? Who are they kidding?
UMR’s Senior Provider Data Specialist emailed me that UMR (and CorVel) had to resort to such mercenary tactics because they were unable “to obtain an itemized bill from the facility.”
As a residential treatment center, Malibu Beach Recovery Center is required by the AMA to use a type UB04 claim form and all charges are inclusive. We are not reqjuired to submit itemized bills. Without raising our prices significantly, we cannot give discounts to every health insurance company that asks (and most of them do). Instead we give back to the community. We support the A&E television show Intervention – to date we have more than 365 days of free treatment to the addicts who are offered a chance to change their lives. We are in the forefront of the campaign to make the public aware of the prescription drug epidemic sweeping California and the nation.
Based on the mega discount UMR forcibly deducted from our bills based on their phony research, let us imagine what fun UMR and CorVel Corporation would have had done with a line item budget.
I imagine a conversation that goes something like this:
1) Concierge doctor specialized in addiction? Take the UMR client to a Free Clinic.
2) Professional chefs? Clients can cook for themselves.
3) Organic fruits, vegetables? How about frozen pizza?
4) Yoga? Let the clients do jumping jacks in the back yard.
5) PhD level therapists? Use addiction counselors who have a few months of recovery.
6) 3:1 staff to client ratio? Let the more senior clients babysit the newbies.
7) Art therapy? How about collage?
8) Family weekend? Use Skype.
The kicker is that UMR is putting Malibu Beach Recovery Center through the hoops, but they happily paid for the much cheaper rehab where our client spent 30 days prior to arriving at Malibu Beach Recovery Center. There he managed to smoke pot every day.