Nathan Young and his addiction treatment empire have mounted a full-throated defense of how they do business, turning the tables on Aetna — their accuser — by asserting that the insurance giant greedily endangers addicts’ lives by cutting treatment short.
“In addiction treatment, more is generally better,” the counterclaim by Young and associates filed on Thanksgiving eve said. “Decades of research point to longer treatment as the number one predictor of a successful addiction treatment outcome.
“Aetna, one of America’s largest health insurance companies, disagrees. Aetna believes — contrary to the evidence and to common sense — that less is more when it comes to addiction treatment. Why? Because that way Aetna (and/or the plans it administers) keep more money.”
This building at 240 South Rodeo Drive in Beverly Hills housed one of the state-licensed detox facilities in Nathan Young’s network. It was closed by the state, and Young is fighting to have it reopened. Seen on Thursday, Nov. 7, 2024.(Photo by Axel Koester, Contributing Photographer)
In the $40 million lawsuit that kicked off this confrontation, Aetna accused Young and associates of weaponizing addiction for profit. They lured patients into their programs by offering kickbacks, such as free or low-cost living arrangements in “sober living homes” in highly desirable locations throughout California, the suit asserted. “In reality, the sober living homes were little more than drug dens, used to ensure patients remained in Defendants’ treatment ‘programs’ for as long as possible…. ensuring reliance on treatment rather than recovery from treatment,” the suit said.
Young and Co. denied Aetna’s charges of fraud and wrongdoing, said Aetna failed to state facts sufficient to constitute a cause of action, has exceeded statutes of limitations, and lacks standing to bring its claims in court.
Their counterclaim “seeks redress for Aetna’s fraudulent and unlawful business practices, breaches of express and implied contracts, and failure to comply with state and federal mandates protecting those suffering from (substance use disorder), which wrongful conduct Aetna has unleashed to unjustly enrich itself to the tune of millions of dollars in unpaid claims, causing Counterclaimants yet millions more in damages.”
Attorneys for Aetna did not comment on the countersuit Monday.
Three deaths connected to rehab facilities in 2024 have something in common: The addicts who died all were seeking help in the vast rehab empire overseen by Nathan Young, aka “Pablo Lopez,” and associates. From left, Margaret Dickerson, Benjamin Barragan and Emmanuel Mitchell. (Illustration by Jeff Goertzen, Orange County Register/SCNG)
Deja vu?
The Southern California News Group has been documenting the experience of former employees who said they were asked to lie or commit fraud, of former patients who assert that they received poor care, and of regulators who’ve suspended licenses for some Young-related facilities, saying they were “harmful to client health and safety due to significant non-compliance with regulatory standards.”
Young and associates have denied any wrongdoing. Managers chalked up complaints to disgruntled ex-employees who didn’t perform up to expectations and have axes to grind. Attorneys for Young have contested actions against the licenses.
If you’re having a slight sense of deja vu, it might be because now-defunct Sovereign Health had a similar suit-and-countersuit tussle with insurer Health Net some years back.
In the back-and-forth over who was truly evil — the big bad insurance company, refusing to pay for desperately needed addiction treatment for vulnerable patients or the greedy, manipulative treatment provider, milking those vulnerable patients for every last cent it could wring out of their insurers, then kicking them to the curb when benefits ran out? — Health Net won big, with $45 million in damages and interest against Sovereign.
‘Love and acceptance’
A sober living house in East Los Angeles on Wednesday, Sept. 18, 2024. (Photo by Mark Rightmire, Orange County Register/SCNG)
The countersuit paints Young’s operations in a saintly light. Unlike many other treatment facilities, Young’s are willing to treat homeless people, those with behavior issues, prior convictions or other law enforcement history that “fancier” providers might turn away, the countersuit said.
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“Providers thus distinguish themselves in the treatment community by their diverse client base and philosophy of love and acceptance, not judgment,” the countersuit said. They provide high-quality, invaluable services, and Aetna’s real gripe is that they provided “too much healthcare to too many addicted Aetna enrollees,” the countersuit said.
The insurer “cynically and unscientifically” conflates multiple treatment episodes, which are common in the recovery process, with fraud, the countersuit said. But relapse is a common reality and one of the criteria used to diagnose substance use disorder, it said.
“Aetna’s assumptions are dangerous and wrong,” the countersuit said. “Recovery is a continuous, nonlinear process for most. Recovering addicts often require life-long support to stay sober. Aetna does not want to deal with such complexity and its cost. It would prefer if someone else paid to keep addicted individuals safe and sober. It is that simple.”
While Aetna claimed that Young’s scheme was to cycle patients from one business to another and encourage relapse so billing cycles could start anew, Young claimed that Aetna’s scheme was to indefinitely delay paying claims “by implementing a sham ‘prepayment review’ audit” that allowed Aetna to avoid paying more than $16.4 million in claims and sought to wear down Young’s operation “with endless and repetitive audit processes leading nowhere.”
“Aetna knows that erecting obstacles to addiction treatment will result in less treatment, meaning less cost to Aetna and plan sponsors,” the countersuit said. “But addicted individuals who receive less treatment are more likely to fall deeper into addiction, to give up on recovery altogether, to lose their jobs…. They are at greater risk of becoming houseless and even dying. They are a problem for government healthcare, for first responders, and for local emergency rooms, not Aetna.”
‘Devastated’
Aetna sued Young and Co. only after Young and Co. threatened to sue Aetna for multiple state and federal law violations, the countersuit said. Only then did they learn of Aetna’s “body brokering” charges – which were alleged when the facilities had different owners and without evidence, it said.
“Aetna’s policies and practices (1) stigmatize and blame the victim and assisting provider, (2) mischaracterize relapse as inherently fraudulent, (3) mischaracterize repeated treatments or ‘prolonged’ treatments as inherently fraudulent, (4) mischaracterize courses of treatment in excess of a week or two as inherently fraudulent, and (5) mischaracterize Providers’ lawful actions facilitating access to treatment for addicted individuals as inherently fraudulent or illegal,” the countersuit said.
Aetna’s actions have devastated Young’s businesses and attracted unwarranted scrutiny from other insurers, the countersuit said. And the insurer is no angel: The state has taken 191 enforcement actions against Aetna Health of California since 2001, including fines for failure to provide coverage for medically necessary mental health treatment, failure to provide clear written explanation of denials, and not contesting claims within required time frames, the counterclaim said.
“Aetna’s practices likely contribute to increased and prolonged suffering, and even death, of enrollees suffering from addiction,” the countersuit said.
Young demands a jury trial and seeks to recover damages, interest, attorneys’ fees and expenses.