Medicare strike force a high-value investment

Recent arrests point to benefits of focused force in action

Last week’s busts of 243 people suspected of collective mastodon Medicare ripoffs was good news.

The suspects pilfered $712 million of your taxpayer dollars with a cavalcade of phony claims for medical treatments and equipment such as power wheelchairs, the feds charged at a news conference in Washington.

The accused fraudsters were a disparate bunch, hailing from 17 hotspot areas beset with Medicare thievery. They were snagged by a strike force specially set up for such jobs.

The Affordable Care Act added $350 million to chase down Medicare and Medicaid thieves. The feds hired more prosecutors and expanded the strike force. Last week’s busts were just the latest high-visibility results in a long string of successes.

Yet vast amounts of Medicare-Medicaid fraud likely remain to be discovered and broken up. Arrests and convictions for eight-figure theft plots seem in endless supply. Just one suspect — Dr. Jacques Roy — allegedly tried to steal $375 million in dodgy home-healthcare claims in Texas. That case helped impel the feds to halt home-health payments in the Dallas and Houston areas for six months.

HHS says its anti-fraud investigations recovered nearly $8 for every $1 invested over the last three years. Such returns would be the envy of the for-profit sector. They also should remind us that the strike force — and Medicare-Medicaid fraud fighting in general — are high-value investments during a time of federal budget austerity.

If the national goal is more rational federal budget spending, it’s hard to imagine much better use of federal dollars. The fraud fight will be better served if the day comes when funding of strike-force efforts expands to where busts like last week’s become routine news instead of headline grabbers.

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

States marching ahead with new fraud laws in 2015

Grassroots letter-writing campaigns supported several bills

We’re almost at the halfway mark of 2015, with the summer months upon us. Most state legislatures have shuttered for the year, so this is a good time to evaluate the scorecard.

So far the tally looks pretty good. Several important anti-fraud laws have been booked, and several more are possible.

New Jersey provided a key victory. It’s now an insurance fraud for in-state drivers to deceptively register and insure their vehicles in states with lower premiums. Fraud fighters will seek to export this model to other states.

Minnesota gave the state commerce department power to lodge civil actions against fraudsters. The agency also now can kick fraudsters out of the insurance system — blocking crooks from receiving insurance payouts.  The Coalition urged both ideas a couple of years ago when the state started marching toward strengthening its anti-fraud efforts.

Kentucky limited the soliciting of crash victims for potentially worthless medical treatment. The new law fixes a court decision overturning the previous law as unconstitutional. Fraud fighters banded together to create the needed fix. Fraud rings are moving into Kentucky. They’re trying to lure often-traumatized crash victims for treatment at shady clinics that lodge inflated insurance billings for useless treatment.

Florida also confirmed that unlicensed clinics can’t make insurance claims — they’ll be charged with an insurance crime. This effort tightens clinic licensing standards.

Texas limits the use of auto crash reports by shady medical providers. The state already has made it a crime to solicit crash victims in person. Texas added teeth by restricting access to crash reports that recruiters use to identify target crash victims.

West Virginia added consumer protections against shady contractors. New Mexico and Iowa made it a crime to sell or use counterfeit airbags in vehicle repairs.

Grassroots letter-writing efforts by fraud fighters were a big factor in several states. The Coalition and IASIU jointly championed campaigns. Fraud fighters sent letters to their legislators in New Jersey, Kentucky, Minnesota and New York — urging “yes” votes on bills in their states.

More than two dozen letters were sent each in New Jersey, Kentucky and Minnesota, and a campaign record of more than 130 in New York. This likely is the first time any of these legislators has heard from constituents supporting an anti-fraud bill.

Needed no-fault fraud reforms Michigan are still in motion, while New York has crashed.

Michigan needs a state agency to add firepower against auto cons such as widespread crash rings. Yet a measure creating the agency is caught up by haggling about its larger parent bill. It’s a large package that tries to reduce spiraling medical costs of the state’s auto-insurance system.

New York once again stalled in fortifying its no-fault auto system. An auto rate evasion bill much like New Jersey’s has skidded to a halt. Also iced: clamping down on recruiting for crash rings, and using a phony credit card or bank account to pay for premiums.

We’re already looking at fraud bills to pursue for 2016 — both for Coalition work and the grassroots effort.  Let us know your thoughts.

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

Let’s armor instead of oppose electronic health records

Rising technology can better catch shysters who find gaps in the system

A recent column by syndicated conservative columnist Charles Krauthammer mourns the federal requiring of electronic health records. Doctors are leaving the profession because they can’t keep up with record-keeping requirements, he says.

“Virtually every doctor and doctors’ group I speak to cites the same litany, with particular bitterness about the EHR mandate,” writes Krauthammer .

Besides, the electronic data highway makes it easier to commit fraud by cutting and pasting false info into data fields, the columnist writes.

Reminds me of the same futile complaints when desktop computers started replacing typewriters back in the early 1980s. The strange new technology would ruin the efficient manual record-keeping of office staffers using their trusty IBM Selectrics, the cry went out in many circles.

Doctors also have complained about paperwork ever since large medical groups began buying up small practices and implementing streamlined software and tighter procedures to make their practices more efficient and protect against scamming.

There may be at least some grain of truth to the complaints. But hardly enough to stop the inevitable march of progress. The best doctors will adapt. The best crooks also will find gaps in the electronic networks; that’s what they do well.

High-gear technology such as predictive and predictive analysis increasingly also is arming fraud fighters with tools to better uproot the best-hidden crimes. Investigators are poised for a potential revolution in how they uncover medical and health-insurance schemes. This is especially true of long-abused Medicare, which is connected to the electronic-record highway like Siamese twins.

So instead of taking the Luddite path of decrying the electronic highway, let’s continue armoring the system against insurance shysters. We make progress by, well, making progress work for us.

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

Lawsuit threatening N.J. fraud fight tossed

Vigilance against such suits needed in any state

A federal judge tossed out a New Jersey doctor’s lawsuit that could’ve threatened the state’s fraud fight. It’s a call for vigilance despite the win.

Harshad Patel owns a diagnostic imaging firm — X-rays and the like. The state and insurers are investigating him for possible bogus claims. He fired back with a lawsuit. Patel alleged that insurer funding of the state Office of Insurance Fraud Prosecutor allows insurers too much insider influence over who the state investigates for suspected scamming.

Fraud fighters followed the case closely. A successful lawsuit could’ve jeopardized funding of state anti-fraud efforts. Like most states, New Jersey’s fraud bureau is funded by annual assessments of insurers. Funding, however, has zero influence over which cases the state investigates or prosecutes, the state and insurers steadily argue.

Patel filed his original complaint to try and sidetrack their investigation of potentially false treatment claims, insurers contended.

Fortunately, the judge dismissed Patel’s case — with prejudice. He had no legal standing to bring the suit, the judge ruled. Prejudice means Patel can never bring that kind of suit in New Jersey again.

The win ensures that New Jersey fraud fighters can safely return to busting the bad guys. For now.

Fraud fighters must stay vigilant. Patel lost on procedural grounds, leaving his “outsourcing” allegations untested in court. So that legal ball could easily remain in play, even if Patel is out of action. Another medical provider could try the same legal outsourcing gambit, and work around the issue of legal standing.

Several years ago there was a similar outsourcing suit in Massachusetts. We won there also. The Coalition wrote an amicus “friend-of-the-court” brief to support fraud fighters opposing the suit. Where else could a lawsuit rear up?

Fraud fighters should stay alert and watch for outsourcing suits in your backyards. All it takes is a willing claimant with a beef, and a special-interest group with deep pockets.

Insurer funding of state anti-fraud efforts is a time-honored approach that’s fair and works. Let’s keep the system away from ill-conceived lawsuits and instead working to catch fraudsters.

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

Dishonest drivers avoid auto premiums

Frustrated states make evasion an insurance crime

The Coalition surveyed state laws a couple of years ago to see how states deal with residents who falsely register and insure their vehicles in other states with lower auto premiums. Very few states consider this scheme an act of insurance fraud, we found.

North Carolina is an exception. Drivers must show proof of residence before they can buy auto insurance. North Carolina is trying to head off rate-evasion cons. Drivers in several states falsify North Carolina residence to obtain cheaper auto insurance than in their home states.

Rate evasion is a lose-lose for the victim state where the vehicles are garaged. Honest insurance consumers pay higher premiums to subsidize the smaller pool of drivers. Scofflaws also rob the state and local governments of registration fees or vehicle taxes.

Yet few prosecutors will go after dishonest drivers unless there’s a specific fraud law that makes convictions of violators more likely.

We may be seeing a surge of other frustrated states that have seen enough of dishonest drivers.

New Jersey is about to make life much harder for cheaters by strengthening its law targeting those who use out-of-state addresses to avoid higher New Jersey insurance. The governor signed the bill into law late last week.

New York is on tap tap with companion bills (S 4900/A 7237). The sponsors are well-placed legislators from both parties, suggesting a strong chance of success.

The Coalition is joining with insurer partners to push the legislation into law. Fraud fighters shortly will start a grassroots letter-writing campaign to show legislators in Albany why they should vote “Yes” for passage.

We strongly encourage New York fraud fighters to write their legislators. Let’s push for a surge of legislation that turns this scam into a dead-end street for cheaters.

Yet more states could see bills clamping down on premium evaders. It seems there’s a growing feeling that enough is enough. Let’s turn avoiding auto premiums into a dead-end street.

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

Guest blog: Staged crashes a common theme in N.C.

Insurance swindlers growing more sophisticated

North Carolina insurance commissioner Wayne Goodwin is the new chair of the NAIC’s antifraud task force. He replaces long-time chair Sandy Praeger, who retired as Kansas insurance commissioner at the end of 2014. 

We invited Commissioner Goodwin to be our guest blogger this week. He discusses emerging fraud trends his fraud bureau sees, and ongoing schemes he battles year in and year out.

We have the oldest insurance fraud bureau in the country. We are celebrating our 70th anniversary this year. We have a proud history, but we know that success in fighting fraud hinges on keeping in front of evolving criminal trends.

Fraudsters can cripple our economy unless we find a way to combat their unscrupulous acts. Far from being a victimless crime, every policyholder foots the bill for insurance fraud.

Technology is a common denominator in many of the fraud trends we are currently seeing. It’s amazing how sophisticated criminals have become. With the hardware and software currently on the market, criminals are becoming more and more sophisticated. With the advent of digital currency as a method of payment, I am sure we will see this become a factor in insurance fraud.

Cyber laundering is a new way to hide the proceeds of crime, and fighting money laundering in cyberspace is a daunting task for law enforcement agencies. There is little to no training available, and it is my hope the antifraud task force can draw attention to this issue and create training to combat this new criminal element.

Staged crashes have been a common scheme over the years, but more recently they’ve taken on a new twist. We are seeing more cases in which people stage actual car crashes rather than cases in which the accidents only occur on paper in insurance documents.

Furthermore, to take advantage of the medical payouts associated with staged crashes, some people include children into their schemes. When individuals resort to involving children in a car accident for money, there is a whole new level of concern.

We have to get ahead of the trends, and we can do that with proper training and equipment. I read that the Coalition has determined 95 percent of states are using some form of anti-fraud technology. With the reductions to state budgets, I was excited to hear this. States do take insurance fraud seriously.

The mission of the antifraud task force is to serve the public interest by assisting the state insurance regulatory officials, individually and collectively.  We are promoting the public interest through the detection, monitoring and appropriate referral for investigation of insurance crime, both by and against consumers.

I want those who commit insurance fraud to know that we are united in our efforts, and will do all that we can to stop them. I look forward to our relationship with the Coalition and can’t wait to get started.

Two auto-insurance trends bear watching

Public outreach can deter “crash-and-buy” schemes and auto giveups

The first trend is news from Maryland that “crash-and-buy” schemes are growing in the state. More people are opting to go without auto coverage, then buy a policy after an accident and file a false claim.

No one knows the frequency of “crash-and-buy” scams, but they probably happen more than we think. These crimes aren’t even prosecuted criminally in many states. Insurers sometimes discover the fraud before the claim is paid, so no money is lost. There’s also little chance of getting the money back when the insurer pays out a dishonest injury or collision claim, so honest policyholders take the hit in higher premiums.

Maryland is going after these scammers with tough civil fines. And to help deter the crime, the state has posted a video on what can happen to cheaters who get caught. Aggressive public outreach helps deter ordinary people from committing scams like “crash and buy,” research suggests.

The other trend is the growing length of car loans. Six-year loans are now the norm, and seven and eight-year loans are becoming popular, a recent report says. With the boom of new-car sales, tens of thousands of car owners likely will be underwater with their car loans four or five years from now.

With loan balances greater than the value of their cars, many drivers will have a powerful incentive to dump their vehicle. Torch it in a vacant lot, sink it in a canal or hide it in a garage somewhere. Take your pick, but insurers will buy a lot of these cars back a few years from now.

This crime also can be deterred through aggressive public outreach. If owners know the severity of this crime and the stiff consequences, they may think twice before unloading their unwanted vehicles on their insurers — and fellow policyholders.

We should start now to create this ounce of prevention.

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

States already inking fraud laws onto books

Partnering, grassroots letters spell success

Spring has barely started yet fraud fighters already have earned a solid slate of new state fraud laws.

Signature wins in Kentucky, New Jersey and New Mexico are on the books, with more fraud laws expected. Fraud fighters are making a clear difference in educating state lawmakers to strengthen insurance fraud laws.

Kentucky was high on our agenda after a federal court struck down the state’s anti-solicitation law. We helped launch push in early 2015 to pass a strong new law that would pass court muster.

A bill was drafted before the legislature opened. That fast start let fraud fighters open the year with a full head of steam. The governor signed the bill Monday.

It’s an insurance crime for medical mills to try and recruit crash victims for useless, inflated and potentially unsafe “medical” treatment within 30 days of the incident. It’s also illegal to encourage crash victims to file phony claims.

Crash rings are moving into Kentucky from Florida to escape ramped-up crackdowns in the Sunshine State. Stiff penalties are important to making fraudsters wish they’d stayed in Florida.

Key to passage was a joint grassroots — should we say bluegrass-roots — letter-writing campaign by the Coalition and Kentucky chapter of IASIU. The effort generated letters from fraud fighters urging their legislators to vote for the bill. That probably was the first time Kentucky legislators had heard from constituents about an anti-fraud bill.

In New Jersey, lawmakers voted to make it an insurance crime for Garden State drivers to lie about where they garage and drive their vehicles to lower their premiums. This success took several years of effort.

We now are pushing for the governor to sign the bill into law. This crime is pervasive in New Jersey. The governor’s  signature will send a strong deterrent message to drivers around the state.

Next comes New Mexico, which last week made it a specific crime to using counterfeit airbags in auto repairs. New Mexico became the seventh state to ink such a law.

Spearheading the push was a partnership between the Coalition and Honda America.

Consumer lives are in jeopardy when dishonest body shops install cheap and unsafe knockoff bags. The airbags likely won’t deploy properly in a crash, leaving drivers and passengers gravely exposed to death or serious injury.

Kentucky, New Jersey and New Mexico have gained more tools to take scammers off the streets, and deter many others.

It’s also clear that partnering is better at passing fraud laws than going it alone. The power of partnering shows that together we can place stronger anti-fraud laws onto the books, and boot more scammers off the streets.

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

Let’s yank licenses of crooked docs

State license is a privilege, not a right

The Coalition has a longstanding position that medical providers who earn most of their income from insurance should have their state license yanked or suspended for committing insurance fraud. That’s a key provision of our model insurance fraud law.

A license is a privilege the state bestows, and not a right.

Why should states act so decisively? Because medical boards rarely act on their own. We surveyed medical boards several years ago and very few actively punished providers who commit insurance fraud. Some only discipline providers for violating their medicine practice, and that insurance fraud isn’t constitute such a violation.

There are enough honest docs practicing ethically that we can afford to get rid of crooks.

Medicare can now impose stiff sanctions. Docs who bilk Medicare can be kicked out of the system. They still can practice but can’t receive Medicare reimbursements. Many cheaters who specialize in fleecing Medicare thus are put out of business.

Minnesota is debating a similar move: Medical providers convicted of insurance fraud can be denied payments by the state’s auto-insurance system under a bill being considered in the statehouse.

The cheaters still can keep their medical license. They’re just out of the no-fault business. And like Medicare swindlers, the no-fault fraud specialists face potential ruin if their main source of income is shut off.

New York started booting dishonest medical providers from the state’s no-fault system several years ago. The state is showing success; more than 18 providers have been removed.

The Coalition holds up New York as a model that other no-fault states should emulate.

Crooked medical providers risk their patients’ health and wellbeing, and steal brazenly from insurers. They shouldn’t be tolerated. No-fault states should follow New York’s lead and weed out crooked docs.

The Coalition strongly believes that dishonest providers who abuse their state license to commit insurance fraud should face strict license review to determine if their license should be suspended or permanently revoked.

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

Do workers comp “reforms” encourage more cheating?

Report says growing number of injured workers are forced into poverty

There’s never a good reason or excuse for committing insurance fraud. Yet when people perceive that a system is unfair, they’re more likely to justify their own cheating or tolerate others who defraud. Every year more Americans feel they must cheat or cut corners to succeed in life, studies show.

comp claim form imageThus it’s troubling to read NPR’s investigation of recent reforms in state workers compensation systems. The last few years, many states have slashed benefits and made it harder for injured workers to get adequate treatment, according to the report.

Injured workers increasingly must rely on food stamps and Social Security disability to survive, the report says. Legitimately hurt workers also must fight for years to get needed benefits and treatment.

Insurers and the business community need to realize that cutting back comp benefits to this degree encourages more employees to rationalize fraud because they believe the system unfairly tilts against their legitimate needs for medical treatment and wage compensation.

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