State issues cease-and-desist against insurance agents

DIFP Director Doug Ommen has issued a cease-and-desist order against Kevin Louderback, of Springfield, and Justin Barnes, of Battlefield, who allegedly deceived Missouri consumers, MO HealthNet and two insurance companies, according to a department news release.

The order states that Louderback and Barnes acted as representatives of Premier Financial Services and nonprofit corporation Citizens for AIDS Assistance and Prevention, or CAAP & Associates, to enroll more than 800 employees in a small-business group plan through UnitedHealthcare Insurance Co.

A majority of enrollees were Medicaid-eligible and had applied for the health insurance premium payment program, which determines if MO HealthNet is more cost-effective than paying straight Medicaid on medical claims, according to the release.

State officials allege Louderback and Barnes misrepresented the work hours of eligible employees and the employer’s share of the premium to obtain a small-group health policy with UnitedHealthcare. The men artificially increased the premium rates charged by UnitedHealthcare to receive the entire premium – rather than just the employee’s share – and an unallowable broker’s fee, which was, in some instances, more than double the premium rate.

In March 2007, the payment program reimbursed CAAP & Associates nearly $538,000 for April 2007 insurance premiums, but the agents only owed about $444,000 to UnitedHealthcare – a debt that has not been paid, according to the release.

UnitedHealthcare representatives performed an audit and terminated their contract with CAAP & Associates in early 2007. At that time, Louderback and Barnes allegedly told employees a new policy with a different company had been put in place when, in fact, no new policy was in effect, according to the release.

“The agents’ reckless disregard for the health care of Missouri consumers is absolutely appalling,” Mary Kempker, director of DIFP’s Consumer Affairs Division, said in the release. “This scam left some consumers without access to health care or unable to obtain necessary drugs.”

Ommen encourages consumers to report insurance fraud by calling the Consumer Insurance Hotline at (800) 726-7390.