Unchaining fraud from dentistry

Abuses of kids raise issues of corporate dental clinic ownership

Four years ago this space carried a sad story about a national dental chain whose dentists abused kids with unneeded and painful treatments to enrich themselves at the expense of federal taxpayers.

The Justice Department sued the chain’s owners and threatened to ban the chain’s 61 clinics from billing federal health programs. Earlier this month, the feds made good on the threat and issued a five-year ban against the chain owned by CSHM and its corporate successor, Forba Holdings. The chain owns pediatric clinics in 23 states under various “Smiles” names — All Smiles, Small Smiles, Healthy Smiles and Kool Smiles. They mostly target low-income communities and rake in big bucks from billing Medicaid.

One dilemma of such a ban is that it will leave some communities — and kids — without a source of dental care. So to ease the transition, the ban won’t go into effect until September.

Two questions remain from this case. The first deals with the lag time from when this case first broke when a local TV station in Washington, D.C. aired an investigative report after a child died from dental treatment in one of the chain’s facilities. That was in March of 2008 — more than six years ago. The wheels of justice often roll slowly, but six years is far too long when kids’ health and taxpayer dollars are at stake.

The second issue deals with corporate ownership of medical facilities. A pattern has emerged where chains wittingly or unwillingly create a culture for fraud to thrive. Targeting vulnerable people who are less likely to complain combined with lack of oversight by many state Medicaid programs and state dental boards is a recipe for fraud.

Evidence suggests that corporate owners demand such high productivity out of their clinics that unnecessary treatments become the norm. Focusing mostly on the bottom line also encourages clinics to hire marginally competent workers.

Ownership of medical facilities by non-medical people is outlawed in several states. Unless government can provide better oversight, perhaps more states should consider such a prohibition.

Note: Thanks for Dr. Stephen Barrett and Dental Watch for the excellent coverage of this and other scams involving dentistry.

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

Unneeded spinal surgeries in California beg a few answers

How it could go on for so long — and how it could’ve been prevented

This con likely is one for the record books — a half-billion in fraudulent claims, kickbacks, bribery, money laundering and political intrigue.

The case involving Pacific Hospital in Long Beach, Calif. will take months and maybe years to unwind. Former hospital owner Michael Drobot devised a scheme where more than $500 million in unnecessary surgeries were performed, mostly on workers-comp claimants. He offered kickbacks to doctors to recommend the surgery and the hospital.

He also allegedly bribed state senator Ron Calderon $100,000 to keep a law on the books that allowed the hospital to overbill insurers. The FBI has charged Calderon with taking the bribe. His brother Tom, a former state assemblyman, is charged with money laundering and conspiracy in helping to receive and hide the bribes.

Calderon took a leave of absence this week. That upsets the political landscape in California because his departure now denies Democrats a super majority in the legislature.

Drobot now has pleaded guilty and is cooperating with investigators, so more details soon will surface. This is the largest such insurance scheme in California history, prosecutors say.

Questions involving the impact on victims — the injured workers and their employers — unfortunately, may never be answered:

• How many of these spinal surgeries were necessary?

• How many patients were injured further by needless surgeries?

• How much more in workers comp premiums do businesses have to pay because of huge scam like these?

• How many new businesses were never created because the high cost of worker comp in California got even higher thanks to such scams?

This insurance scandal begs for a deep dive to understand how it could’ve happened, why it went on for so long (1997 to 2013) and how it could’ve been prevented — or at least detected much earlier. I hope fraud fighters, legislators and the medical community have an opportunity to discover the truth. The exercise would be a good case study that prevents honest businesses and workers from being so flagrantly abused in the future.

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

More Obamacare cons may loom in March

Approach of signup deadline could spur ID-theft cons

Beware the Ides of March, Shakespeare famously penned. Millions of Americans today should beware the Obamacare scams of March.

The deadline for signing up for health coverage under the Affordable Care Act is March 31. The runup to that moment symbolically begins when the calendar rolls into March 1.

Consumers should be on high alert for lowdown cons exploiting the oncoming deadline. It’s a tailor-made hook for swindlers to barrage people with swindles designed to steal consumer identities. Enrollment is picking up steam — signup has passed the 4-million mark. That suggests more Americans gradually are becoming aware of the potentially helpful health-insurance options that health reform is offering them.

This is just the kind of awareness scammers want to take advantage of.

Imagine you’re watching TV in your living room when the phone rings. A stranger says he’s from the federal government. The signup deadline is fast approaching, he warns. You could go to jail unless you register with the feds NOW to receive your federally required Obamacare health card. Even if you protest that you’ve already bought health coverage through an exchange, the smooth talker insists that federal law still requires you to register.

It’s easy, the stranger purrs. Just share your credit card and bank-account info plus your Social Security number. You’re registered with the government, as “required” by health reform. You might even be told to sign up via a bogus state “exchange” or federal “health reform” website. If you take the bait, the con artist has stolen all the info needed to steal your identity, clear out your bank accounts and wreck your credit.

However absurd and divorced from reality such come-ons may be, a well-trained pitch artist can give the ploys great authority and scare value. Scammers propositioned possibly millions of consumers with similar scare tactics during the months leading up to the launch of last October’s open-enrollment period. Bogus exchange websites also popped up.

More Americans are aware of such ploys after flurries of blogs, social-media posts and news stories warned people about scams for months as October 1 approached. But people often have short memories. And the smoothly offered threats by professional hucksters can easily break down your defenses. So be especially alert for shady Obamacare pitches throughout March, and beyond.

Know the warnings and general health-reform information your exchange sends out:

  • Back off if you’re approached by pushy pitchmen who claim they’re from the feds, demand you register, and ask for your financial info.
  • Know what real navigator credentials look like.
  • Don’t allow a supposed navigator to sign you up for a specific health plan, or to charge fees and health premiums.
  • Know what your state exchange website looks like, and how it operates.
  • Visit www.healthcare.gov to find your exchange website and learn more about health reform.

For many Americans, March is the runup to warm spring days ahead. For potential victims, March heralds the approach of icy-cold Obamacare swindles. A little knowledge will chase the cheaters away.

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

One way ACA may aid p/c insurers

New entity to validate efficacy of medical procedures may reduce costs

Why do property/casualty insurers sometimes pay for questionable medical procedures that Medicare and health plans routinely deny?

In part, auto, workers comp and liability carriers are subject to state laws that require them to reimburse medical providers for sketchy procedures. And in other cases, insurers don’t have enough evidence that such procedures are more for enriching doctors, clinics, hospitals and labs than for the health of the patient.

But thanks to the Affordable Care Act (ACA), insurers may have more evidence to deny costly and unnecessary treatment in the future.

The ACA helps fund an entity called the Patient-Centered Outcomes Research Institute (PCORI), whose mission is to find out what really works and what doesn’t in healthcare. With access to electronic medical records, PCORI will be able to analyze mountains of data and pinpoint ineffective procedures that do not lead to the best health outcomes.

As a Washington Post editorial Sunday asks, “Should you get surgery for your back pain or stick with physical therapy? When is heart surgery preferable to drug treatment? And which drugs should you take?”

Unneeded treatment, tests and drugs cost the healthcare system billions of dollars each year. PCORI has potential to bend the cost curve and reduce medical costs — for government, health plans and, yes, even property/casualty insurers. Carriers should follow PCORI’s work closely and see how it can potentially reduce loss costs, lower fraud and help keep property/casualty insurance affordable.

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

Will Medical expansion expand acts of fraud?

. . . and will state anti-fraud efforts keep up with growing opportunity to commit fraud?

While the launch of the Affordable Care Act has been rocky, one potential bright spot is the number of people signing up for Medicaid expansion. This is the new program aimed at the working poor — people who make too much money to qualify for existing Medicaid benefits, but too little to afford coverage in the private market. More than 21 million Americans fall into this category.

In Kentucky, for example, eight of 10 healthcare enrollees qualify for this program so far.

It’s anybody’s guess how many people will sign up for expanded Medicaid, but it’s likely to be millions over the next few years. And for crooked Medicaid providers, that’s millions of new opportunities to commit fraud.

Medicaid continues to have significant exposure to fraud in many states. Crooked medical providers reap billions of dollars each year from a variety of scams. The schemer could be a nurse in Georgia billing Medicaid to treat dead people, or a dietician also in Georgia stealing IDs of children or a cardiologist in New Jersey lying to patients that they have serious heart disease. And these are cases just from the last few days.

Medicaid is especially vulnerable to scams. Good laws, adequate resources and the determination to resist fraud are lacking in many states.

Medicaid recipients are especially susceptible. They tend to know less about how insurance works, are less likely to question a doctor’s diagnosis and may be more willing to overlook cheating by Medicaid providers. Crooks take advantage by offering recipients a few dollars to hand over their Medicaid policy numbers. Other medical providers have bribed parents to let them “treat” their kids.

The money the federal government sends to states to expand Medicare provides few new fraud-fighting dollars.

Before their rolls swell, Medicaid programs should gear up for what’s likely to be alarge rise in suspect claims. More enrollees equals more claims — and more opportunities for savvy fraudsters to ply their trade under the radar of fraud fighters.

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

Too many expensive spinal fusions yet too few results

Excessive surgeries fueled by perverse incentives of fee for service

If you need more evidence that our healthcare system encourages over-treatment and fraud, look no further than the front page of Monday’s Washington Post.

With the help of medical experts, Post reporters analyzed 125,000 medical records of people who went through spinal fusion surgery. About half of the expensive operations were’nt necessary, the analysis concluded.

The article also profiled patients whose conditions didn’t improve or even worsened after their surgeries. All the while their physicians and the makers and marketers of fusion hardware enriched themselves.

Comparisons with how often this surgery is performed in other countries provides more evidence:

“The rate of spinal fusions in the United States is about 150 per 100,000 people, according to federal data. In Australia, it is about one-third of that; in Sweden, it is about 40 per 100,000; and in Britain it is lower still.”

And there’s no evidence that health outcomes are better in the U.S. despite the greater frequency of this surgery.

Whether it’s spinal fusion or chiropractors providing hot and cold packs, over-treatment will persist as long as our health system relies on the perverse incentives of fee-for-service.

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

Need for more physicians could add to fraud problem

Healthcare reform could ease restrictions on foreign physicians

The New York Times ran an interesting piece last week on the many obstacles foreign doctors face in getting credentials to practice in the U.S. Many trained medical professionals who come to the U.S. take lower-level jobs, even as taxi drivers, for years while trying to enter the medical field here.

With the prospects of several million more people entering the healthcare system come January 1, the U.S. may face a physician shortage. Thus there likely will be calls to make it easier for immigrant docs to enter the U.S. and set up shop.

Unnecessary obstacles for qualified medical professionals should be eased, but let’s not make it too easy. Medical schools in many countries are substandard to U.S. requirements. The U.S. has enough problems with quality care already.

And as most fraud fighters know too well, the U.S. has become a magnet for crooked docs all over the world. For many years, word has spread that the streets of America are paved with gold. Just get a visa, open a clinic and start sending invoices to private and public insurers. Then watch the money roll in. Even if you get caught, the penalties are likely much less than in your home country.

Now I’ve seen no evidence that foreign-born docs are any more or less ethically challenged than their home-grown counterparts. But doctors from a handful of foreign countries seem to be disproportionately represented in our reports on fraud arrests and convictions. Michigan doctor Farid Fata, who’s accused of needlessly prescribing painful chemo treatments, is just the latest example.

Honest, ethical and qualified medical professionals should be free to practice wherever they want, no matter where they were born. But let’s set up a better screening process to make sure we’re not opening up the floodgates for more fraudsters.

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

Uncaring “Obamacare” scams alive

Pitchmen try to steal consumer identities

nullLast week’s forward-reaching FraudBlog opened visitors’ eyes to the myriad challenges that exchanges will have in protecting consumers and businesses from scammers once enrollment under health reform begins in October.

Actually, identity-theft scams already are alive and well right now. A wave of identity-theft scams are trying to exploit confusion over health reform to rob people’s bank accounts and credit cards.

People are receiving cold calls or knocks on their door from strangers. The thieves typically peddle a load of baloney much like this:

“Hi, I’m from the federal government. You’re among the first lucky people to receive your Obamacare health reform card early. Federal law requires you to sign up. All we need are your bank routing and account numbers, and your Social Security and credit card numbers.”

Swindlers have told some consumers they’ll go to jail unless they sign up now. One brazen cheater even tried to sell insurance against “death panels.”

Pretty cynical ploys. And some thieves target seniors, who tend to be home more often, and frequently have tidy nest eggs to loot.

Consumers in states around the U.S. are receiving these illicit pitches. The cons are pretty transparent, but trusting people have given out their financials. This left the con artists free steal from their bank accounts and abuse their credit cards — all in the name of nonexistent “Obamacare” health insurance.

Folks, take heed: The feds aren’t sending agents door to door or cold calling at present. Nor is there a federal law called “Obamacare.”

Nobody will legally contact you for signup until the October open enrollment. Health reform takes effect in January.

Take convenient and firm steps to thwart cheaters: Just hang up the phone or close the door. Don’t engage these strangers. Many are trained pitchmen who will try to sweet talk you into letting down your guard. Also contact the Federal Trade Commission, the federal agency that investigates swindles like these.

Navigating the brave new world of health reform will be challenging enough. Let’s make it one step easier by stiff-arming these identity thieves out of business.

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

Gains in curbing healthcare fraud in jeopardy

DOJ says budget cuts will curtail anti-fraud efforts

blogEighty-nine accused fraud defendants in eight cities were on the receiving end of a national sweep by the U.S. Department of Justice this week. It’s the sixth large-scale crackdown on healthcare fraud conducted since the feds created fraud strike forces a few years ago. This one involved suspected false Medicare claims totaling more than $223 million.

The latest action piles on more arrests to the nearly 1,500 DOJ has logged in recent years. It’s an impressive campaign, especially considering the lackluster effort by the government in prior years. The arrest and conviction totals mirror the success DOJ has achieved in recovering billions of dollars through civil actions.

Together, the two initiatives are saving taxpayers great sums of money, and are taking some of the worst crooks out of circulation.These fraudsters also steal from private insurers. So health plans, property/casualty carriers and their policyholders are benefiting as well.

But the real benefit of a proactive, high-profile anti-fraud campaign is its deterrence value. Yes, 1,500 arrests have been made, but how many more medical providers also are thinking twice about committing fraud? How many organized criminals decide to go elsewhere to ply their trade? No one knows, but it’s likely substantial. Never underestimate the value of having an effective cop on the beat.

Unfortunately, some of these gains may be jeopardized by the inane sequester. DOJ has to cut $1.6 billion from its 2014 budget, and the axe could fall heavily on anti-fraud efforts. The biggest asset of the strike force initiatives is the strong momentum that has taken years to create. Once lost, it could take years to build that momentum again.

I don’t have faith that Congress will fix the federal budget problems anytime soon, but I do hope DOJ find ways to minimize the damage to a program that’s greatly benefiting taxpayers and the fraud-fighting community.

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

Snowing the patients; blinded by riches

Hospital owner accused of encouraging needless surgeries

blogA new phrase has entered the lexicon of insurance fraud — “snowing the patient.” It emerged from a case involving a Chicago hospital that’s accused of some of the most ghoulish fraud scams in memory. Federal prosecutors allege that doctors drugged patients until only the whites of their eyes were visible — thus the “snowing” reference. Then the doctors cut open their throats so they could breathe, prosecutors allege. The tracheotomies are highly priced medical procedures on Medicare’s fee schedule.

Five of 28 patients who underwent this treatment reportedly died within two weeks.

The CEO of Sacred Heart Hospital and five physicians have been charged in a wide-ranging kickback and fraud scheme. The 100-page federal indictment is filled with allegations of unnecessary surgeries that endangered patients and bought millions of the dollars to the hospital’s coffers.

If true, this case will undoubtedly go down as one of the cruelest fraud schemes ever. Maybe the patients were snowed, but hospital administrators and doctors under their direction are the ones blinded by the financial gain of fraud.

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