Twittering away to prevent fraud
Iranian dissidents aren’t the only twitterers seeking justice these days. The city of Chandler, Arizona on Friday sent a message to local residents via Twitter to warn about a scam artist trying to stage a pedestrian accident in a city parking lot.
A city employee sent out the warning after viewing video footage of the alleged scam from a security camera. The suspect seems to clearly wait for a car to back up and hit her, and then as the car goes forward to pull into a parking space, she maneuvers in front of the car to try again.
After making what appears to be a call on her cell phone — and a full two and a half minutes later — she falls to the ground. The other oddity is that a women she was with (perhaps a convenient witness?) doesn’t come to her aid until three minutes after the car brushed her.
The driver of the car is unconcerned and walks away calmly.
Passerbys who witness the scene apparently aren’t convinced she’s injured either because they stroll by like nothing’s happened.
She stays on the ground for three minutes and then gets up when police and an ambulance show up. The women was taken away and filed a police report, which should be available later today. Stay tuned to see if any charges are levied against her.
Kudos to the folks in Chandler for posting the warning and for uploading the video. If more cities took such initiatives, fewer people would chance committing these scams that not only raise everyone’s insurance rates but also make it more difficult for real victims to get the help they need.
Anti-fraud proposals advance on Capitol Hill
Watching the “sausage making” in the Senate health committee this week was both entertaining and inspiring. It was interesting to see the posturing as the committee made decisions about health care fraud — Republicans trying to limit anti-fraud provisions to government programs; Democrats wanting to extend them to private insurers.
I cringed at some of the uninformed comments that were made by senators, but with all the issues they deal with, I guess that should be expected.
Still, it was great to hear the acknowledgement from key senators that health care fraud affects both federal programs and private insurers. That’s been a mantra that the coalition, NICB and others have echoed in recent weeks in meetings on Capitol Hill. As a result of those efforts, the anti-fraud provisions in the Senate bill survived its first hurdle.
This is a major advancement in developing more public/private partnerships to combat medical fraud. The senate bill contains three important elements for the fraud-fighting community:
(1) Creates a permanent structure in the federal government to coordinate anti-fraud activities within the government and with states and private insurers;
(2) Promotes the idea of greater information sharing among all fraud fighters, public and private;
(3) And lastly, gives states more powers to crack down on bogus health insurers who claim they are exempt from regulation because of the federal Erisa act.
The legislation is potentially a breakthrough for both health insurers and property/casualty carriers in their campaign to deter, detect and investigate fraud by medical providers. This is but a first step, albeit an important one.
P.S. A letter that the coalition, NICB and the National Health Care Anti-Fraud Association sent to the committee in support of the bill was referenced during yesterday’s hearing. C-SPAN carried a video of it.
Solid appointment by the FBI
It’s nice to see a familiar name advance at the FBI. The agency announced today that Kevin Perkins will be the new head of the criminal investigations division. Kevin has more than 20 years of experience in combating white-collar crime and formerly managed the insurance fraud program in the days when that area was just starting to ramp up.
His history in the fraud area — combined with renewed efforts by federal law enforcement for more public/private cooperation — gives us hope that greater priority will be given to fraud cases.
We wish him continued success with his new assignment.
Republicans offer their own health care plan
Congressional GOPers today unveiled a list of some 25 elements of an alternative plan to reform health care. No details are available yet, but included in the list is this gem:
Allow states, small businesses and other organizations and associations to increase their purchasing power by banding together and offering health insurance at lower costs.
Sounds like the association health plan proposal that was rejected a few years back. Such a plan calls for loose regulation that would draw bogus operators out of the woodwork and result in large-scale fraud schemes against small businesses. That was the conclusion of state regulators and the coalition. You can read more about it here.
Billion here, billion there . . .
In a speech before the AMA this afternoon, President Obama said this:
“… we can save about one billion more by rooting out waste, abuse, and fraud throughout our health care system so that no one is charging more for a service than it’s worth or charging a dime for a service they did not provide.”
I don’t deal in waste or abuse, but if the White House is planning to wring out only $1 billion in fraud, I say go back and try harder.
Health care fraud is estimated at between $48 billion and $200 billion each year. A billion hardly is breaking a sweat. The White House and Congress need to get serious and build a comprehensive program to deter, detect and prosecute health care fraud so that at least 20 percent is saved, not two percent.
No jail, no restitution for arsonist?
I’m not one to second-guess judges’ decisions on sentencing. There can be extenuating circumstances in any case that warrant seemingly lenient or severe sentencing decisions.
But still, I wish someone could enlighten me on how a person could set fire to a building, jeopardize the safety of others and get off with just probation — and not even be required to provide restitution to the insurer:
A Bowmansville man who has renovated several dozen East Side properties was spared jail Tuesday for trying to burn down a home he bought on Dartmouth Avenue. He told the judge that he is “not a violent person or a threat to society.”
Erie County Judge Sheila A. DiTullio sentenced Jeffrey Helenbrook, 46, of Genesee Street, to five years’ probation and ordered him to submit to random drug and alcohol testing and any professional counseling the county Probation Department feels he might need.
The judge also fined Helenbrook $270 on his March 10 guilty plea to a reduced felony charge of attempted arson and to reckless endangerment for the Nov. 14, 2005, fire that destroyed the vacant house at 346 Dartmouth, which he purchased for $17,500 in December 2000. However, the judge rejected an insurance company’s demands for restitution, noting Helenbrook was not prosecuted on insurance fraud charges.
Not sure why the prosecutor didn’t file fraud charges, especially since a claim was made by the defendant. This should serve as a lesson to insurers to encourage prosecutors to use fraud statutes, since many of them allow for or automatically require restitution.
Feds announce new anti-fraud measures
The Obama Administration brought out two heavyweights this afternoon to announce the latest new tactics in the federal government’s battle against healthcare fraud. Attorney General Eric Holder and HHS Secretary Kathleen Sebelius unveiled a series of long-needed actions to prevent, detect and investigate Medicare fraud.
The fact that Holder and Sebelius have placed their reputations on the line to stem fraud is encouraging. Past pronouncements about getting tough with Medicare fraud haven’t lived up to their initial promise. Let’s hope this one will be different. Among the initiatives announced today:
• Renewed coordination between DOJ and HHS.
• Better automation to help detect fraud.
• Expansion of strike forces to Houston and Detroit, and
• Enlisting the aid of consumers in helping to report fraud via a new website.
The fraud-fighting budget already has been boosted by $311 million in Obama’s upcoming budget, and the number of agents and prosecutors dedicated to strike forces in cities around the nation has been increased tenfold.
But still, most of these are common sense initiatives that should have been adopted long ago. One area missing, though, is coordination with the private sector. The federal government and private insurers sometime act like they each have their own set of crooks. There’s growing evidence that many fraudsters go both ways. They cut their teeth in one area, gain confidence and then look to new avenues to ply their trade.
Private insurers should take note of the announcements today and watch carefully in the months ahead to see whether Holder and Sebelius follow through on these initiatives. Because if they are successful and this crackdown is serious, guess where medical providers will turn to next to make up loss profits?
The announcement today produced much media attention. Here’s one of the more silly headlines from something called Talk Radio News Service. I can just hear the fraudsters chuckling.
Evade the rate, lose your car!
Twenty-eight motorists in Lawrence, Mass. had to find alternative transportation to work Monday morning, thanks to the city’s tough new policy against auto rate evaders. The city towed their cars away during the night for failing to properly register them. Most had registered their vehicles across the border in New Hampshire to escape the higher insurance rates in Massachusetts.
Rate evasion is a way of life in many areas with high insurance rates. In New York City, if you have a grandmother in North Carolina — and she’s willing to let you use her address to insure your car — you can save thousands of dollars.
Geographical rate evasion is fraud pure and simple. Insurance consumers in both states are harmed by rate evasion. In the higher-rate jurisdiction, the pool of insurance money is reduced, increasing everyone’s costs. In the lower-rate jurisdiction, the costs of the rate evader’s accidents are charged against that state, making it appear to be more costly for insurers, so when new rates are set, they are increased as well.
It’s a positive sign that law enforcement is getting tougher on rate evaders. More jurisdictions should follow the example set by Lawrence.
Insurance fraud as a gateway crime
Kevin Pushia, a 37-year-old pastor in Baltimore, was charged on Friday with buying six life insurance policies on a disabled man and then having him killed. Pushia, who freely confessed when confronted, stood to gain up to $1 million in insurance proceeds.
One aspect of this story that is troubling, aside from the obvious, is that this murder may have been prevented had an earlier fraud scheme been investigated more thoroughly.
Police think Pushia may have used the proceeds from a church fire to pay the hit man. While the fire claim may have been legitimate, though doubtful, anecdotal evidence suggests that with every successful scam fraudsters become more brazen.
Does one scam lead to the next? Seems so.
This trend appears to start when people get away with filing small bogus claims that are paid quickly and, though suspect, are not investigated thoroughly. Confidence builds and, perhaps aided by pressures of a troubled economy, people move on to bigger and bolder insurance scams.
We’ve seen it time and again with medical providers who upcode a bit here and there, and before long, get greedy (and sloppy) and become major fraud artists.
A fire investigator in Nevada last year told me most of the vehicle arsonists he interviews are surprised that an investigator shows up at their doorstep. Many have filed previous suspect claims, he surmises, and most of these claims have been paid quickly — no questions asked.
Such an observation begs the question: Are some insurers unwittingly encouraging more fraud by not investigating small, suspect claims?
Now, many insurers, especially the ones listed here, will investigate any claim deemed suspicious. They’ll spend $2,000 to investigate a $1,000 claim because they understand the value of creating deterrence and understand the next bad claim might be for $10,000 or $100,000 — and likely will be much more expensive to investigate.
The number of bad claims never filed because of aggressive action by insurers will never be known. It’s too late for Kevin Pushia’s victim. But for future victims — be they individuals, insurers or all of us who pay the higher costs of insurance fraud — let’s hope that more insurers adopt a zero-tolerance policy and send a strong signal that committing fraud nevers pays.
Feds to get tough on medical fraud?
Congressional bill drafters seem to be getting close to finishing a massive proposal on health care reform — a proposal that should be closely scrutinized by fraud-fighters everywhere for several reasons.
The proposal likely will include tough and innovative anti-fraud measures that will help to curb fraud committed against both public and private insurance, including property-casualty.
There’s hope that Congress will finally get serious about fraud in the Medicare and Medicaid programs. In a meeting this week on Capitol Hill, Congressional staffers admitted they’ve done a lousy job in protecting taxpayer money with these programs. While better anti-fraud efforts have been launched in recent years, the fleecing of these programs by crooked medical providers is a national disgrace.
This week a medical writer for the Las Vegas Sun, Marshall Allen, articulated this point very well:
The numbers don’t lie: The federal government does not put its money where its mouth is in terms of fighting Medicare fraud.
Everyone talks about the importance of policing Medicare fraud, but consider the following annual figures:
• Medicare billing totals more than $400 billion, and that’s mostly taxpayer money.
• Kim Brandt, who leads Medicare’s anti-fraud efforts, said some estimate the agency loses up to $80 billion to fraud, though she thinks that number sounds too high. (The truth is, no one is sure. All they know is that the more they look the more they find, Brandt said.)
• In 2008 Medicare recovered about $20.4 billion related to fraud.
• Medicare spends only about $120 million on fraud investigation.
If the problem is so large, and if every dollar spent on enforcement is multiplied exponentially in the form of recovered taxpayer money, why doesn’t Medicare spend more money to ferret out fraud?
One reason there aren’t more programs to fight fraud on the federal level is because lobbyists for medical interests have killed them. They fear anti-fraud efforts could end up costing honest providers. But killing them has ended up costing of all.
Allen cites an example of the paltry efforts in his article: Medicare spends about $20 million to support offices in three cities — Los Angeles, Miami and New York — all hotspots for fraud. Yet, among them, there are only 20 investigators.
There’s a growing realization that medical fraudsters are equal-opportunity crooks in that they ply their trade across both public and private insurance payers, and certainly between health plans and property/casualty insurance. That realty likely will set the stage for more public-private partnerships and greater levels of cooperation among the entire fraud-fighting community.
We’ll have to wait and see how health care reform and anti-fraud provisions take shape.
But one aspect is certain. If Congress is going to ask the American people to invest heavily in health care, there needs to be a sense that the money is not wasted. And they can start down that road by including comprehensive anti-fraud measures in their soon-to-be-announced package.
