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The Watershed, Fed Up, Sues Giant UnitedHealth
May 2007

After Years of Smooth Payments, Relations Suddenly Worsen, Big Retroactive Reviews

The Watershed, Fed Up, Sues Giant UnitedHealthFor quite a few years, The Watershed Treatment Programs had excellent relations with UnitedHealth, garnering at one point as much as 20 percent of its business from the Minnesota-based health insurance behemoth.

That’s why the Watershed, a 200 bed inpatient provider with most of its operations in South Florida, with another small facility in Texas, was surprised about two years ago when payments from the insurer stopped coming on time.

The Watershed soon began to liase with a unit of UnitedHealth called Ingenix, which is a medical information company whose central mission, then unbeknownst to the Watershed, often is to help insurers, not just UnitedHealth, screen claims. At fi rst, a friendly Ingenix rep assured offi cials at the Watershed that the payments slow down was just the result of change over in a software system and nothing to worry about.

“We were quite relieved at that as the accounts receivable from UnitedHealth were piling up,” says Chris Crosby, the Watershed’s CEO. Later court fi lings indicate they were piling up quite fast, with the Watershed claiming that, in a fi ve month period in 2005, accounts receivable from UnitedHealth grew to almost $3 million. But, apparently, Crosby’s and his colleagues’ relief was premature, because it was later to become obvious that there had not been so much a change over in a software system at the insurer, but rather a drastic change in UnitedHealth’s policy stance toward the Watershed. That change in policy has led, after protracted efforts to get paid amicably, to the Watershed’s filing suit in late January alleging that UnitedHealth has helped itself, without paying, to treatment services worth more than $5 million from the Watershed.

The suit also alleges that UnitedHealth engaged in a civil conspiracy to deny its insured members appropriate levels of addiction care, while, in denying the Watershed payment, seeking to coerce the Watershed into joining UnitedHealth’s network or to stop treating UnitedHealth insureds altogether. Certainly, the Watershed isn’t the only residential treatment provider that has been at loggerheads with UnitedHealth, which is renowned for its alleged reluctance to pay for residential, instead allegedly preferring to have its
insureds treated at outpatient. Seabrook House, a New Jersey non-profit, late last year issued a press release announcing it would no longer accept UnitedHealth insureds, saying it was terminating its provider contract with United Behavioral Health, UnitedHealth’s behavioral health arm.

The Watershed, Fed Up, Sues Giant UnitedHealthAt issue, according to Seabrook House, were the semantics involving the definition of terms like “residential” by UBH, which were continually being changed like a moving target and used by UBH to deny authorization for treatment. And while the Watershed action alleges similar verbal gymnastics on the part UnitedHealth with respect to the Watershed’s “Intensive Inpatient” Florida licensure designation, the Watershed has not declined to continue accepting UnitedHealth insureds, because the Watershed alleges that is precisely what UnitedHealth is attempting to force. Through coercion by means of intimidation, and denial and delay of payments, the Watershed alleges UnitedHealth is engaged in a conspiracy to force the Watershed to discontinue treatment of its insureds, thus denying them the option to be treated at the Watershed.

And in the case of the Watershed, the treatment provider says that at no point has UnitedHealth actually been denyin authorization for treatment. Instead, UnitedHealth has sought to delay and deny payment based on onerous and hugely expensive retroactive reviews. And, thus, the Watershed says it has meticulous documentation proving authorization, which amounts to an enforce able contract requiring payment to the Watershed by UnitedHealth, according to the lawsuit.

And the introduction into the equation of Ingenix - which later on in the dispute put their aggressive lawyers on to the Watershed - has its own touch of irony. That’s because Ingenix not only sells services to insurers that help them screen claims from providers, but Ingenix also sells a fast growing new type of service, known broadly as “denial management,” that it sells to providers to help them deal with denials from insurers. Thus, we were wondering, if the Watershed bought some “denial management” from Ingenix, could it help the Watershed finally to get paid ? PD

Comments (1)Add Comment
The watershed is like a zombie apocalypse
written by Zombie, November 20, 2012
Going to the watershed treatment center is like going to a zombie apocalypse. Almost everyone gets labeled bipolar and given those psychiatic pills they use in mental hospitals to dumb down the psychos. Those pills are like getting hit in the head with a truck.
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