An Illinois insurance provider has asked a federal judge to void its policy with a Norcross drug treatment center that, over the past year, has lost its operating license and settled a wrongful death claim filed by the parents of a former patient.
The Evanston Insurance Company alleges Narconon of Georgia told underwriters in June 2012 it was operating an outpatient facility, even after inspectors from the state Department of Human Resources had accused the Church of Scientology-affiliated clinic of running a residential program, in violation of its license.
The suit by Evanston comes on the heels of a joint probe by the state insurance commissioner and Gwinnett County District Attorney Danny Porter into allegations that the center had filed nearly $3 million in fraudulent claims with insurance companies. The probe was launched after an Atlanta-Journal-Constitution investigation into claims by a mother of a former patient who said her insurer was billed $166,275 for doctor visits that never occurred and treatment that was never provided.
“I don’t think there’s any doubt that there was some insurance fraud going on,” State Insurance Commissioner Ralph Hudgens said in an interview last week. He said investigators have duplicated all of the hard drives seized in an April raid of Narconon’s offices and “We’re going through them one at a time. I think we’ve got an excellent case.”
Narconon’s attorney, Brian McEvoy, declined comment on the Evanston complaint, the latest in a series of lawsuits that have dogged the facility. In February, Narconon settled a wrongful death claim brought by the parents of Patrick Desmond, who died four years ago from a lethal combination of alcohol and opiates while he was a patient at the Norcross clinic.
Evanston became aware of the allegations that Narconon was illegally operating an in-patient treatment center after the parents of five former patients filed a class action lawsuit against Narconon in June. Their suit claims the facility misrepresented its success rate in helping treat addicts while hiding its connection to Scientology. The plaintiffs also allege Narconon misrepresented itself as an in-patient facility, a charge that has prompted at least 11 investigations by the state since 2002.
Claiming to run a residential treatment facility does not constitute a violation — actually operating one without a license does, Department of Community Health Director David Cook told the AJC last year. The DCH finally revoked the license after said uncovering sworn statements from Narconon of Georgia’s executive director confirming that it was knowingly operating as a residential program when licensed only for outpatient services
Narconon’s appeal of the revocation is scheduled for Sept. 30.
If the insurance policy isn’t voided, Evanston has asked the court to rule that it should not have to pay out liability claims to Narconon.
“(The) acts, errors and omissions identified in the underlying action do not constitute ‘professional services’ as those services are defined in the policy,” according to the complaint.