(CNN) A woman received nearly $375,000 from her insurance company over several months for treatment she received at a California rehabilitation facility. A man received more than $130,000 after he sent his fiancée's daughter for substance abuse treatment.
Those allegations are part of a lawsuit winding its way through federal court that accuses Anthem and its Blue Cross entities of paying patients directly in an effort to put pressure on health care providers to join their network and to accept lower payments.
The insurance giant is accused of sending more than $1.3 million in payments to patients -- money, the suit claims, that is owed to the facilities that treated people with addiction and mental health problems.
The suit by Sovereign Health highlights part of an ongoing war between insurance companies and providers over payment and billing issues, one that puts the patient right in the middle of the fighting by sending payments straight to patients after they seek out-of-network care. Patients are supposed to send the money on to providers. Many times, they do; other times, they don't.
Critics say it's a revenge tactic against doctors, hospitals, treatment facilities and other medical providers that don't agree to insurance companies' demands to be "in-network," by making them chase down money. The insurance industry disputes any such characterization.
Regardless of who and what is to blame, Arthur Caplan, the director of medical ethics for New York University's School of Medicine, called the idea of insurers sending money to patients "insane."
"My overall, moral reaction is: Are you kidding me?" he said of the notion of paying patients."It's almost like winning the lottery, it seems to me. So, I'm not surprised that there are misuses -- and I'm enormously surprised that anyone would think this is a doable approach.
"Only in our crazy, market-driven, bureaucratic mess of a system," Caplan added, "would we think about this kind of a solution."
Lisa Kantor, one of the lead attorneys representing five Sovereign Health corporate entities and seven treatment facilities at the heart of the federal case, said she had major concerns over the issue, especially since Sovereign treated such a vulnerable population.
"One of the things we have to worry about is that kind of money getting into the hands of someone who has an addiction problem," Kantor said.
Instead of paying the facilities, she said, Anthem sent checks directly to patients, some while they were still in rehab. It's a strategy that put the providers in the tricky and tenuous position of trying to collect money -- in some cases, very large sums -- from the very people they were trying to help, Kantor said.
"They were trying to get better," she said, "and Anthem was giving them every opportunity not to."
When a patient sees an out-of-network provider, she explained, patients sign an "assignment of benefits" contract that instructs their benefit plan or its administrator to pay the provider for services rendered to the patient.
But some insurance plans have "anti-assignment" clauses that allow for payments to patients, not providers.
Anthem, the parent company of Blue Cross health plans, declined comment for this story, citing the pending litigation.
In court filings, Anthem doesn't dispute that checks are made out to patients for various out-of-network care. But the insurance giant argued that the treatment centers don't have legal standing to make a case in federal court under the Employee Retirement Income Security Act, known as ERISA, because patients "do not transfer any of their ERISA rights to the provider."
"For this reason alone," Anthem said in the filings, "each claim alleged by Plaintiffs fails as a matter of law and should be dismissed with prejudice."
ERISA is the federal law that establishes minimum standards for most voluntarily established retirement and health plans, covering an estimated 141 million workers and beneficiaries.
Anthem also said in court filings that previous court decisions determined that "anti-assignment" provisions are legal and that the insurer is doing nothing wrong: "Indeed, courts in many other jurisdictions have held that anti-assignment clauses in ERISA plans are valid and enforceable."
Health care providers, medical professionals and attorneys familiar with this insurance practice told CNN that patients who receive money from insurers typically cannot be held criminally responsible if they never turn the cash over to their provider. But the patients can be held financially responsible.
Though many patients send the money on to the providers, they said, others might realize they're onto a bonanza, pocketing the money and ducking and dodging every time a doctor or medical office reaches out.
Many are simply confused as to why they're receiving money.
Candyce Ayn, a Georgia resident who recently underwent surgery with an out-of-network doctor, said she received more than $3,500 from Anthem, but she said that amount paled in comparison to the more than $240,000 sent to a family member by Anthem after a surgery a few years ago.
"The large check was surprising," she wrote in an email. "It was more than we had paid for our house!"
Checks are still arriving for her recent surgery, she said; adding to the confusion, the checks were made out to her spouse, the main policy holder. She also said Anthem didn't make clear or explain why the money was sent.
"Checks arrived for partial amounts, some were for amounts different than expected, and I received more checks than I had anticipated," she said.
She paid her providers, she said, and she believes that most patients are probably like her. "Maybe there is a small percentage who think 'Vegas, here I come!' but I believe it is mostly confusion on the patient's part and not at all malfeasance. Especially if there are many checks involved and they have not had the experience of going 'out of network' before."
She's thankful to have insurance, but "putting the checks in the patient's name introduces an opportunity for things to go wrong."
Insurance companies also make it hard for doctors, hospitals and other providers to know whether a check has been issued to a patient, refusing to disclose the information, according those familiar with the insurance practice. One Blue Cross letter, shared with CNN, told a provider that the insurer doesn't have the "authority to disclose the financial information" and that "we are only able to instruct the provider to contact their patient."
Sometimes, it pushes health care professionals to file suit against patients.
"I can tell you categorically that a health care provider never wants to be in a position of having to sue one of his patients for money that should've been paid by the patient's insurance company," said David King, a Nashville attorney who regularly represents providers in disputes with insurance companies. "This insurance company practice unnecessarily brings its own member into the dispute -- and forces the provider to pursue the patient for the money."
Cathryn Donaldson, a spokeswoman for the insurance advocacy group America's Health Insurance Plans, defended the practice of insurers sending checks to patients, saying it's because insurance companies don't have "a contractual relationship in place with the hospital, physician or care provider." She also took issue with the term "paying patients," saying that "reimburses" is more appropriate.
"In the case of out-of-network care, I want to be clear that the term 'revenge tactic' is inaccurate and not reflective of how health insurance providers handle out-of-network costs," Donaldson said.
She added that insurance companies are protecting patients, because out-of-network doctors, hospitals and specialists "charge whatever rates they like," resulting in millions of patients receiving "surprise, unexpected medical bills that can often break the bank."
NYU's Caplan found the idea of sending money to patients ludicrous. "You're going to be giving out these sums of money that a lot of people never see in a year and tell them their duty is to shift it over to the out-of-network service provider?" he said. "You can't be serious."
In a country where the vast majority of people live paycheck to paycheck, Caplan said, such policies would put most anyone in a moral and ethical bind, because "it's ridden with almost irresistible temptations."
"There's a temptation, I suspect, to take the money and run," Caplan said. "I can certainly empathize with the temptation to not play ball. ... I just think that's a ludicrous burden to put on the individual."
Barbara L. McAneny, president of the American Medical Association, blasted what she called insurance "bully tactics" that seek to force physicians to go "in-network" -- tactics that she said have become more widespread as insurance companies have grown in size and power.
"Physicians want the ability to negotiate fairly with larger health insurers without fear of strong-arm tactics that antagonize patients," McAneny said in a written statement to CNN.
She said many health insurers ignore "assignment of benefits" agreements between patients and physicians, deciding to send payments straight to patients.
"The reality is that insurers refuse to recognize these agreements to create a market advantage for themselves against physicians who do not participate in the insurer's network," McAneny said.
Kantor put it this way: "How can you run a business and stay in it if you can't get paid?"
Kantor is representing Sovereign Health, which closed last year amid financial woes and a federal probe and after being accused of fraud by another insurance company -- allegations it has disputed in a countersuit.
The case against Anthem and its Blue Cross entities has been tied up in litigation for years. Kantor recently joined the case on behalf of provider Sovereign Health, streamlined it and began focusing on the payments she said went directly to patients.
She filed a motion in late January targeting the $1.3 million she says went to patients from 2012 to 2015. She said they are waiting for a hearing on the amended complaint.
In one case, a woman from Washington state received nearly $375,000, Kantor said, and the treating facility tried for more than a year to recover the money from the patient. She said a Blue Cross entity sent more than 50 checks to the woman between August 2014 and May 2015 after she sought treatment over five months in 2014.
"We don't know what happened to the money in this case," Kantor said. "We just know that Sovereign, our client, didn't get any of it."
It's also not clear what became of the woman, she said.
In another case, a man in New York sent his fiancée's daughter for two months of treatment at an out-of-network facility in San Diego in late 2014, Kantor said. The man is alleged to have received more than $130,000, including one check worth $79,700.
"I don't know about you, but seeing a check for $80,000, I think, would ring alarm bells in my head," said Tim Rozelle, an attorney working with Kantor.
Anthem lost an "anti-assignment" case in federal court last year. A Los Angeles-area hospital sued the insurance company, accusing it of "an act of retaliation" for not agreeing to the insurer's "unreasonably low contract rates."
The Martin Luther King Jr. Community Hospital accused the insurance giant of engaging "in this practice knowing that in many instances the patients will not forward the checks to their healthcare providers or otherwise use those funds to pay for their healthcare services."
The hospital documented three patients from the same place of work who sought emergency care, complaining of chest pains and other ailments dozens of times. The insurance company paid those three individuals a total of about $250,000, the suit said.
During one deposition, Eric Chan, the attorney for the hospital, pressed the human resources director who helped administer the health plan for the three workers about the plan's intent.
"The intention of the plan isn't to enrich the employees, to give them bonuses, in addition to receiving medical care, is it?" Chan asked.
"No, it's not," the HR director said.
But she acknowledged that she had no idea Anthem sent money directly to employees until the lawsuit arose.
Anthem's director of group contracts and compliance said under oath that patients get "paid directly" by Anthem if they go out-of-network "because the benefit is theirs." By contrast, the in-network providers get reimbursed directly, the Anthem representative said in her deposition.
In a ruling against Anthem, US District Judge Otis Wright described the predicament the hospital was put in: "Plaintiff realized that these individuals had no intention of paying their hospital bills and were instead profiting from Anthem's practice of sending checks directly to patients.
"However, Plaintiff could not turn these patients away because under both state and federal law Plaintiff is obligated to treat every individual who presents to its emergency room in good faith."
The judge entered a final judgment in December, ordering Anthem and the other defendants to pay the hospital more than $400,000. Anthem has appealed the decision.
Last year, the hospital agreed to go in-network with Anthem -- a sign, critics said, that the insurance giant's overall strategy worked.
Sam Fenderson, a surgical assistant in the Atlanta area, said Anthem's tactics have very real consequences for providers like him.
He said that about $147,000 owed for his services over the past three years was sent to patients, and it's been draining trying to recover the funds. "That was really frustrating, because the payment was there," he said. "It was just a matter of the patient sending the payment on to me."
He said he's had to go to the extraordinary measure of suing 17 patients to try to get the money. He said four people declared bankruptcy, meaning he couldn't try to recoup that money. Some of the other cases are still in small-claims court.
While most counties view the issue as a civil matter, Fenderson said, he's found one county in Georgia that considers it a crime when patients keep the cash. Newton County considers it "theft by conversion" felony for amounts over $1,000; prosecutors said they've charged two people in the county.
When his patient in that county was threatened with arrest, Fenderson said, the money was turned over rather quickly.
Suing a patient to get money, he said, is a last resort and "not the way we want to operate." The tactic even creates tension among surgical staff: Some surgeons get angry if you sue patients, Fenderson said, because they still need to see the patients for followups.
But if you don't act, he said, "you're working for free, essentially."
He said the issue seems to be more common now than just a few years ago. "This is not something that's just happening to me," he said. "Hundreds of people I work with are going through the same thing."
Kantor said she hopes her case shakes up the system.
"We're going to have to change what Anthem does," she said.