Elevance Health filed a lawsuit Nov. 4 against autism therapy group Perfect Child, alleging the in-network applied behavior analysis provider leveraged out-of-network shell entities to secure higher reimbursement.
The complaint, filed in New York state court, said Perfect Child’s owner, Simcha Bendet, “owned or controlled” more than 100 such entities. After plan members filled out intake forms, Perfect Child allegedly transferred members to out-of-network entities without informing them.
“To keep members silent about this bait-and-switch, defendants waived member cost-sharing obligations — but threatened collection actions if members questioned such tactics or if they failed to turn over reimbursement checks to defendants in a timely manner,” the complaint said.
According to the lawsuit, Perfect Child has billed less than $500,000 to Elevance plans since 2020, while the alleged shells have billed about $800 million since 2021.
The lawsuit said Elevance has paid the defendant out-of-network entities more than $160 million. According to the complaint, the company denied more than $102 million in claims as duplicates and lowered billed charges by $70 million for surpassing the usual and customary amount.
Upon detecting possible billing issues, Elevance made Perfect Child and other entities submit more documentation to support claims. However, the lawsuit said Perfect Child’s owner created more shell entities to avoid pre-payment review.
Elevance notified Perfect Child June 5 that it was terminating the provider agreement, as of Sept. 3. The insurer is now seeking damages, punitive damages and legal fees on eight counts, including breach of contract, fraud and civil conspiracy.
On Nov. 3, The Wall Street Journal reported that the FBI is investigating Perfect Child’s billing practices.
Becker’s has reached out to Perfect Child for comment and will update this story if more information becomes available.
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