Ep. 049: Insurance Fraud at a Detox: Pled Guilty but Tells a Different Story. You Decide.
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In 2018, David Johnson, who was the owner of Southern California detox was charged with 30 counts of insurance fraud. He pled guilty but tells of a different story. Prosecutors claimed that David Johnson had illegally double-billed over 90 Health Net policies and pocketed over $250,000 before he was discovered. The FBI revealed evidence showing that Southern California Detox’s address as the address for the patients, and allegedly paid the initial premiums for 62% of the policyholders using his personal credit card. According to Health Net, they would not have paid the claims if they had been aware of the treatment center’s cost waiving practices. The insurance provider requires all patients to pay 50% of their deductible before the insurance kicks in towards out of network providers.
In 2014, with the passing of the Affordable Care Act, the treatment industry changed drastically and for what some may define as good as everyone was able to seek drug and alcohol treatment if desired because insurance companies were required to include those services on policies while others defined it as a nightmare as greed took over and fraud became more of the norm. Treatment programs started seeking out people and offering to purchase insurance by paying for premiums to fill their beds, in some cases these providers would offer financial incentives for coming into their programs by offering cash if they stayed. Questionable people were opening rehabs because of the money they saw that could be made. Referrers and referral companies began giving financial incentives to people to enter treatment programs as these referrers were charging thousands of dollars to programs for giving them clients.
Safety and ethics was thrown out the window as providers began breaking the law by committing insurance fraud and in some case they were billing for services that weren’t being provided and even charging for people who weren’t even in their program. I spoke to the DHCS and was informed that unless I can definitively prove it; they could do nothing. I closed a program in Lake Elsinore because I wasn’t willing to pay for my clients by these dangerous referral companies which almost seemed to be the only way to secure clients to pay the bills to stay open. I was defeated.
Dave Johnson was an owner of treatment program who was raided by the FBI and Riverside District Attorney’s office. He was charged with many of these crimes. Did he do it? Was he a culprit in these schemes. Do we trust him? His story that he tells isn’t what he has been accused of. Did the DA wrongfully charge him and commit crimes to make their case? Listen to his story.
