“Out-of-network” scams hitting insurers and consumer wallets

Legislators must step up and outlaw this sleazy practice

Leave it to creative docs and hospital administrators to drum up new and devious schemes to sink their fingers in your wallet.

out of network imageThe latest scam cropping up across the U.S. is leaving patients and their insurers aghast at outrageous medical bills. The scheme involves the use of “out-of-network” medical providers who basically can charge whatever they damn well please. They aren’t constrained by negotiated fees between in-network providers and insurers.

The scam works like this: You go in for a treatment or surgery — or maybe go to the emergency room after an accident or heart attack. You’re asked to sign the usual paperwork. Most people don’t read or understand much of the fine print that says you’re responsible for all charges — even those by out-of-network providers.

You get the treatment, get well, pay your deductible and bam! You get a bill for thousands or tens of thousands from some doctor you didn’t even know had worked on you.

That doctor might’ve been brought in by your doctor as a “consultant” to watch your operation or review your records.

The New York Times blew the cover on this scam last year. The news outlet found in-network docs who were hiring high-priced physician-consultants out of network and taking kickbacks from them. Since then, similar stories have been appearing across the country.

Legislation has been introduced in Florida to outlaw the practice and bring out-of-network fees more in line with in-network charges. The sponsors of SB516/HB681 likely have a uphill battle because the medical lobby in the state is powerful. But let’s hope the bill sponsors succeed and other states follow their lead to protect consumers from this sleazy practice.

In the meantime, be sure to carefully read all medical paperwork and question the use of out-of-network providers brought in supposedly on your behalf. It could save you a ton of money.

Let’s get creative with fraud sentences

Make Major League star speak out against insurance cons

Much of the public knows that former Major League Baseball star Ted Lilly recently was charged with insurance fraud.

He crunched his $200,000 RV in a collision, incurring $4,600 in damages.

Lilly was uninsured for the damage and quickly bought a policy. Then he lied to his insurer that the crash happened after the purchase so the damage would be covered.

Lilly played for several teams and reportedly earned $80 million-100 million dollars in his career. It’s incredulous that a wealthy and famous athlete would try to get away with this scam.

He could’ve spent several years in jail, yet reached a plea deal with the San Luis Obispo district attorney’s office that avoided hard time. Part of the deal included 250 hours of community service.

And that’s the rub. I found no news stories that described what kind of community service he’d perform. Does it include speaking to organizations and groups about insurance fraud and why it’s a dead-end street? I raised that question with the San Luis Obispo DAs office.

Community service was open-ended, the office said. So there’s no clear definition of what Lilly was supposed to perform.

I’m fine if he has to coach youth baseball teams. Those boys and girls would learn a lot from a former ballplayer of his caliber. And he also should speak to school or community groups about why insurance fraud is wrong and how it messed up his life.

Innovative sentences like this can have greater impact than jailtime in many cases. Having convicted fraudsters talk eye-to-eye about their crime goes farther than all the stats and anti-fraud quotes in news stories.

So let’s make fraudsters like Ted Lilly spend quality time working to make consumers — young and adult — four-square against this crime.

Thus we can turn Lilly’s regretful act into a positive. It can a springboard for a wider dialogue on creative sentences for insurance crimes.

About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.

Fraud statistics and other lies

Exaggerating the numbers does a disservice to our cause

liesEstimates of insurance fraud usually make me cringe because most are guesstimates at best. They’re based on little if any good science.

Wild-eyed estimates can backfire unless you can back them up. Just ask North Carolina Governor Pat McCrory. This week he said 40 percent of state workers-comp claims involve fraud and abuse.

40 percent!

Eyebrows across the land were raised and soon the critics came out en masse.

Part of the problem here, of course, is that it’s nearly impossible to disprove McCrory’s statement because of the “…and abuse” part.

Fraud is fraud, but abuse often is in the eye of the beholder. It’s a slippery concept. What is abuse to some may just be thorough treatment to others. Are three chiro treatments too few and five too many? Opinions differ greatly.

This is not to excuse workers who malinger after a real injury.But such estimates shift the focus from preventing fraud, and questions the credibility of those who toss around unsubstantiated estimates. This should be a lesson to the entire fraud-fighting community — including the Coalition.

About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.

Cross-state sales could open scams

Regional pacts better suited to protect consumers from con artists

The idea of allowing consumers to buy health coverage from any insurer in any state has been floated in Congress for several years. It would be an alternative to a consumer’s state or regional exchange. Someone in the Northeast thus could buy coverage from an insurer in the Southwest.

It’s a bad idea that persists. Any proposals should be voted down.

The idea would open the door for rampant fraud and undermine consumer protections. How would the system be regulated?

Let’s say a scammer in State A peddles fake health coverage to consumers in State B. Would the insurance department in State A have the resources or will to remedy those victims — non-residents who may live hundreds of miles away? That state has enough challenges just protecting its own residents.

Luckily the idea remains in the concept stage in Congress. But now it’s surfacing in state legislatures.

The Affordable Care Act lets states create regional exchanges that offer coverage to consumers within the compact. These are partnerships among like-minded states. They’re designed for closely knitted oversight that protects consumers in all states of the region.

But a well-intended New Hampshire lawmaker has introduced a bill allowing residents to buy health insurance from any other state. It would jeopardize the health and wellbeing of New Hampshire residents.

A scammer in another state could sell phony coverage to New Hampshire residents, and skirt New Hampshire’s licensing and oversight.

Who ensures out-of-state health entities are properly licensed and vetted for sale in the state? Or better, who creates and enforces regulations to prevent predators from selling across state lines?

We applaud New Hampshire’s insurance department for opposing the measure at a recent legislative hearing.

Hundreds of new state legislators took office last fall. Many barely grasp state insurance-fraud laws — and especially how they protect consumers.

These cross-border insurance proposals may seem good for the lawmaker’s state residents … at first glance. But they open the door wide for scammers. It’s the school of unintended consequences at work.

The anti-fraud community needs to educate legislators about being vigilant against fraud. That’s an important part of the Coalition’s mission. We’ll steadfastly work to make sure legislative proposals minimize unintended consequences and maximize protection of consumers throughout the nation.

About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.

Eight worst cons reveal fraud’s true costs

People remember true-life crime stories better than stats

right

 

A driver rockets his $1-million Bugatti into a salty lagoon … Two kids perish in a home arson fire their own mother set … A cancer doctor pumps healthy patients with toxic chemotherapy in a $125-million insurance plot.

These masters of disaster are among the eight worst insurance criminals of 2014. The extreme schemers were chosen by the Coalition. Their names and crimes were released today as the newest members of the Insurance Fraud Hall of Shame. 

The No-Class of 2014 reveals the year’s most brazen, bungling or vicious convicted insurance swindlers. All commanders in thief were convicted or had other legal closure last year.

One of America’s largest financial crimes, insurance fraud steals at least $80 billion annually. The Hall of Shame serves a useful anti-crime purpose. Sharing true-life crimes is a form of story-telling. Science shows that people retain more details and understand stories far better than raw data alone.

So it’s nice to say fraud is an $80-billion annual crime — the Coalition’s conservative estimate.

But people sit up when they hear how Andy House blasted that rare Bugatti Veyron into the lagoon for a $1-million insurance score. It’s also worth a chuckle or two. Same with punk rocker Christopher Inserra’s wild fist-pumping on stage while telling his comp insurer the arm was hurt and useless.

Then get more serious and learn how how Angela Garcia left her infant girls to die in a house fire she set for insurance money.

Or see how Suzanne Basso tortured her retarded husband Buddy Musso for weeks to steal a life-insurance payout, and you’ll never view insurance fraud the same way again.

Putting a human face on insurance crime moves fraud from a stat to a crime against all of us. That’s why we can all rally to fight insurance fraud simply by staying honest, being alert to scams and reporting crimes in action. Together, we can turn the corner on this crime.

About the author: Jim Quiggle is director of communications for the Coalition Against Insurance Fraud.

Adding insult to (alleged) disability injury

Fraud estimates become a casualty of ideological wars

Kentucky Senator Rand Paul created a bit of controversy this week when he suggested that half of Social Security disability recipients don’t deserve their money. He essentially said the program’s fraud rate is 50 percent.

Liberals and disability-rights advocates immediately jumped on Paul’s remarks They contended that Republicans in Congress plan to slash funding for the disability program because fraud is rampant. Lefties contend fraud is rare, accounting for less than one percent.

The “less than one percent” estimate is attributed to a comment on a TV talk show last year by a former Social Security commissioner. Our research has found no scientific basis for this estimate.

Wild-eyed fraud estimates are routine in our business, allowing people to believe what they want to believe. Nobody knows for sure how much fraud the Social Security disability program is saddled with because it’s never been researched properly.

I suspect neither side wants to know the truth because it likely would shoot down their ideological talking points.

But Rand Paul and his colleagues have the wherewithal to shed light on the true fraud level. Fund an objective and robust closed-claim study to determine accurate estimates. The study would be tedious and expensive, but would give policymakers vital information they need before making changes in an important program.

About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.

Stymying opioid abuse driving users to heroin

Policymakers must dry up drug sources and heal addicts

A new metric is helping measure progress in America’s efforts to blunt abuse of painkillers and other addictive prescription drugs.

Heroin users.

Ongoing law-enforcement efforts to shut down pill mills are putting a dent in availability. And restrictions imposed on doctors are discouraging more from pushing pills.

One of the most-abused painkillers — OxyContin — also was reformulated to resist abuse. It’s harder to crush or snort. Abuse of the once hyper-addictive pill has dropped dramatically, says a study in the New England Journal of Medicine.

Prescription overdose deaths plummeted 23 percent in Florida between 2010 and 2012, notes a CNN story this week.

Insurers also benefit, because their payouts finance billions of dollars worth of opioid prescriptions a year.

All good, except the lockdown of opioids is driving addicts to heroin. Overdoses are spiking, which is canceling out many of the gains in clamping down on prescription abuse.

Squeezing drug sources — whether doctors, pill mills or heroin dealers — is a worthy though incomplete strategy. If one drug dries up, another will take its place as long as addictive demand remains intact.

Vermont is going after prescription opiate demand. The state has opened five regional drug treatment centers around the state. After addicts “graduate” from a center, they’re treated by doctors and therapists in the addicts’ community.

The centers are overwhelmed by addicts seeking a way out. Convincing local doctors to treat addicts also is difficult. Still, Vermont’s model bears a close look as it evolves.

Policymakers are trying many creative solutions around the U.S. Quashing this scourge requires us to keep looking two ways at once: block the drug sources, and stymie the addictive urge.

About the author: Jim Quiggle is director of communications for the Coalition Against Insurance Fraud.

Time for pursue fraud-busting resolve for 2015

Stronger laws, better funding will move fraud fight to next level

New YearsIt’s that time again. Millions peer ahead to the new year with great expectations. That includes the anti-fraud community.

So here are several of the Coalition’s resolutions for 2015:

• We will diligently strengthen the anti-fraud effort. Getting lagging states with weak fraud laws to enact strong new ones is a big emphasis.

• We will keep up the drum beat so fraud stays a high-profile news item around the U.S. This will alert consumers to protect against being duped by shady operators, and deter fence-sitters from committing this crime.

And some resolutions we’d like others to make:

New York legislators: We finally will strengthen the state’s no-fault auto laws to lower the expensive “fraud tax” honest drivers pay in higher premiums.

New Jersey legislators: We will pass laws that chase down drivers who illicitly use out-of-state addresses to avoid paying higher New Jersey auto premiums. We also will expand the state’s immunity law to allow more sharing of case information among anti-fraud groups.

Michigan legislators: We will fulfill the aspirations of the anti-fraud community by creating an auto-fraud authority to help combat widespread no-fault scamming in the state.

Minnesota legislators: We will pass leftover anti-fraud measures that were removed from the larger fraud bill enacted in 2014.

U.S. Congress: We will properly fund the Healthcare Fraud Prevention Partnership so it can uncover health schemes that target both private and public health insurers.

The new year will be rife with promise and opportunities to move the fraud fight to the next level. Rest assured that Coalition will be front and center, helping transform that raw promise into great progress.

Happy fraud-busting New Year!

About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.

Latest wave of painkiller addiction may be worst

Silver bullet is development of less-addictive med

“History shows both that it’s possible to overprescribe and misuse powerful narcotics, and that it’s possible to undertreat pain and addiction to them. Balancing the competing needs and risks is a continuing struggle.”

drug imageWhile a bit of simplification, this quote by health economist Austin Frakt nicely sums up the challenge the U.S. faces in curbing mass addiction to prescription painkillers. On one side are pain sufferers and drugmakers. On the other side are insurers, regulators and law enforcement. In the middle are tens of thousands of addicts, black marketeers, fraudsters, and the physicians and pharmacists who enable this crime wave.

Frakt provides a historical snapshot of opioid addiction in a recent column in the New York Times. [link] There have been three major waves of addiction in the US. since opium became the drug of choice in the 1900s. Each time a major public-policy initiative served as a catalyst to end the epidemic.

It likely will take more than a single initiative to end the current wave, considering Americans consume:

• 99 percent of the world’s hydrocodone, the opioid in Vicodin;
• 80 percent of the world’s oxycodone (OxyContin and Percocet); and
• 65 percent of hydromorphone (Dilaudid), Frakt writes.

These three painkillers are killing more Americans than any other drug.

The current wave of drug addiction was spurred in part by naive doctors in the 1980s who touted drugmaker propaganda that these drugs were harmless.

Yet there’s some hope, after thousands of deaths and a price tag in the billions. State drug-monitoring systems and better education of patients and doctors are helping ease drug diversion, as are tougher laws and better treatment and rehab.

Reducing drugmakers’ influence on physicians and policymakers also will help. The magic bullet, though, would be development of an effective non-addictive painkiller.

About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.

Michigan needs an auto-fraud authority

Push as stand-alone bill to tackle widespread staged-crash rings

Over a year ago I wrote that there’s no such thing as a “no-brainer” when it comes to passing legislation. Issues are harder to move forward when observers think they’re a “no-brainer.” I wrote that blog with Michigan in mind.

Michigan is one of the two most populous states without an infrastructure to tackle insurance fraud. There’s no fraud bureau, fraud authority or dedicated prosecutors. There’s no state agency to investigate and prosecute suspected frauds.

Several years ago the Coalition worked with anti-fraud partners to help craft a bill creating a fraud authority to target widespread auto-fraud schemes in Michigan. Staged-crash rings were among the offenders needing stifling.

The authority would have a statewide board funded by an assessment on auto insurers. The funds would be distributed as grants to law enforcement statewide, local prosecutors and others to chase down auto scammers. Michigan’s legislation was modeled after the Pennsylvania Insurance Fraud Authority, which is a successful statewide anti-fraud effort.

In advocating legislation for a fraud authority, legislators had difficulty understanding that auto insurance fraud is a statewide concern instead of a local issue. Then the state police pushed back, fearing they might lose funding for their own auto-theft authority. Those concerns eventually were resolved.

The fraud authority was a stand-alone bill. But that changed a couple of years ago when the governor, many legislators, opinion leaders and insurers decided Michigan’s entire no-fault auto insurance system needed an overhaul. So the fraud authority was rolled into the current comprehensive no-fault reform package. That has tied up efforts to pass an auto-fraud authority.

Several versions of large scale no-fault reform have fizzled, and the auto fraud authority went down with the doomed bills each time.

Michigan’s statehouse is about to close for the year, with a new legislature and leadership coming in 2015.

It’s time to rethink the issue. The auto-fraud authority should stay free of large reform bills, which often collapse from their own weight and complexity. The agency should be introduced as a stand-alone bill. It has wide support, and stands a far better chance of passing that way. Michigan drivers and fraud fighters deserve nothing less.

About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.