Insurance Fraud NEWS

Coalition Against Insurance Fraud

Trump plan could lead to wave of fake health scams

June 18, 2018, Washington, DC — A pending Department of Labor final rule would lower state oversight of association health plans and loosen the definition of what constitutes an employer, two moves that could open the floodgates to fraud, some people in the industry told me.

The Department of Labor final rule would expand small business access to so-called association health plans, which allow small businesses to band together and offer health insurance. The White House Office of Management and Budget completed a review of the rule June 13, and publication of the final rule is imminent.

The proposed rule included sections that would exempt some self-insured association health plans from state oversight, which could lead to the formation of fake health plans, James Quiggle, director of communications for the Coalition Against Insurance Fraud, told me.

Without effective state oversight, fake association health plans could saddle patients with large and unpaid medical bills and even threaten their health, Quiggle said, noting that the final rule has to be clear that states have broad authority to regulate association health plans in tandem with the federal government.

The Trump administration says the final rule will give consumers more health insurance choices, increase competition, and lower premiums.

AHIP is also concerned over the expanded fraud possibilities the final rule might bring, Cathryn Donaldson, director of communications at America’s Health Insurance Plans, told me. Expanding association health plans also raises insolvency risks for patients if they’re left with large medical bills after a fraudulent association health plan goes out of business, Donaldson said.

Source: Bloomberg BNA

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