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.

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.

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.

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.

No-fault repeal could harm lower-income drivers

Quashing system could delay medical treatment for injuries

The no-fault PIP auto insurance system was created in the 1970s with noble intentions: Resolving crash claims in a timely manner, regardless of who’s at fault. The concept still works to a degree. But the unintended consequence has been the large growth of fraud schemes.

Few policymakers thought PIP would become a cash cow for scammers when the system was enacted in Florida, New York, Michigan and other states. But adaptive fraudsters quickly learned the loopholes to exploit the system to steal hundreds of millions of insurance dollars or more in false crash-related claims.

Florida, New York and Michigan have tried to reform PIP and strengthen the anti-fraud provisions in the last few years. Policymakers in those states believe no-fault still is viable. Yet there are rumblings in Florida about repealing PIP and installing a system similar to Colorado’s after that state repealed no-fault in 2004. Rampant no-fault fraud is the main factor driving calls for repeal in Florida, most recently by the editorial writers of the Palm Beach Post.

Who does repeal benefit and harm the most?

PIP clearly helps low-income drivers, especially those who cannot afford private health insurance. Their auto crash injuries are quickly taken care of under PIP. What would happen if PIP is repealed?

One of the intents of the Affordable Care Act is to expand the availability of health insurance to all — especially low-income Americans. Much of this would be achieved by expanding Medicaid eligibility, which lets states insure more poor residents.

But not every state expanded Medicaid, including Florida. Without expansion, no-fault repeal could leave the working poor — those not eligible for existing Medicaid coverage — with few options for affordable medical treatment. Yes, they would be compensated for their injuries if the other driver is at fault, but in situations where fault may be in question, the wait can be long, causing lapses in treating injuries.

The Coalition has no position on whether states should repeal PIP. But policymakers considering such a tumultuous change, especially in Florida, first should remember why their state enacted no-fault in the first place. Without no-fault, they also may have figure out how assist more lower-income residents.

If expanding Medicaid is the tradeoff for dumping no-fault, then perhaps those who advocate repeal ought to lobby the governor in Florida to expand Medicaid.

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

Will Republican surge affect anti-fraud efforts?

Fraud fighters must be well-mobilized no matter who’s in power

The impact of yesterday’s elections on anti-fraud efforts around the U.S. will become clearer once the results are analyzed in more detail.

Certainly the Republican sirocco that swept through the elections is shaking up an order that has opposed and supported state anti-fraud efforts.

For the most part, however, state anti-fraud legislation and budget funding are driven less by party lines and more by the priorities of the men and women who hold office.

Also look to powerful gate-keeping committees that decide which bills reach the floor. Complex insider agendas, alliances and political tradeoffs frequently affect bills far more than broad party affiliation. Politically powerful special-interest groups also can stall or push measures regardless of which party holds sway.

Still, the election results hint generally at things to come in several hot-button states.

Republicans gained control of the state House in Minnesota. That rattles a power structure that worked against fraud fighters this year. The chair of the House Commerce committee gives up his position. His committee gutted a promising bill that would’ve added civil penalties for fraudsters, tightened rules against bogus medical billing and treatments, and allowed dishonest medical providers to be booted from the insurance system.

This power shift may open the door for a fresh revisit of the bill.

Florida’s CFO was reelected. Jeff Atwater has taken strong anti-fraud stands in a state wracked by debilitating crash rings and medical fraud. Atwater’s continued presence could ensure a continued department-level priority on rolling up scams. Legislation to tighten the noose is murkier. Larger agendas involving reforming or even dumping the state’s no-fault auto system could surface. The future of fraud reforms could hinge on the outcome of those larger issues.

Oregon re-elected a governor who vetoed a bill making insurance fraud a crime a decade ago. That creates a political environment that looks ill-suited for passing a bill in 2015.

Kansas insurance commissioner Sandy Praeger is retiring. She was a stalwart supporter of anti-fraud efforts. Will her successor show the same commitment?

Closely watch Pennsylvania, Illinois, Massachusetts and Maryland. Those states elected governors of the opposite party. They’ll likely install new insurance commissioners. Their anti-fraud priorities will merit close scrutiny.

New York’s statehouse has consistently stalled much-needed legislation clamping down on staged-crash rings. Nothing in yesterday’s voting seems likely to change that. Only the governor’s active backing can break a logjam that has lasted for several years.

Bills expanding the ability of insurers and regulators to share case information may be the one issue that benefits from the Republican surge. Giving insurers more leeway could be something that corporate-friendly legislators and regulators would support.

Special-interest politics has been a larger factor throughout the years than Red vs. Blue.

The well-funded and politically mobilized trial bar was a big factor in derailing the Minnesota bill and a Michigan measure creating an automobile-fraud prevention authority — both this year. The trial bar also reared up against no-fault fraud reforms in Florida in 2011 and 2012.

The bottom-line takeaway: On balance, fighting fraud crosses party lines. Putting a big dent in crime is a universal goal. Democrats and Republicans have fought hard for anti-fraud bills, and helped thwart them. Fraud fighters must be well-mobilized regardless or who’s in power. They must be prepared to build strong cases that anti-fraud bills are pro-consumer. Just as important, they must build close relationships with committees, and with members of the broader legislature.

This is closer to the universal roadmap for influence and impact. For fraud fighters, the issue is less Red or Blue, and more Red, White and Blue.

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

More states taking on vehicle rate evaders

Drivers falsely registering in states with lower premiums

Dishonest drivers are ginning the auto-insurance system by illicitly registering their vehicles in states or counties with lower auto premiums. These cheaters may not drive or live there, but dishonestly setting up the address can save them a bundle on auto premiums.

This insurance scheme may cost honest consumers and the insurance system millions of dollars. And in some jurisdictions the drivers are committing insurance fraud.

Years ago the then-Philadelphia DA offered amnesty for dishonest drivers to step forward and properly register their vehicles in Philadelphia instead of their falsely claimed addresses in the Philly suburbs or southern New Jersey. A number of folks set their registration record straight — including an employee in the DA’s office.

More recently, North Carolina knew it had a problem with out-of-state drivers registering in the Tar Heel State. North Carolina now requires drivers to show proof of residence before they can register and insure their vehicle.

Several weeks ago the New Jersey Assembly passed a bill targeting drivers who lie about where they garage their vehicles. The state would gain more authority to go after these insurance cheaters if the bill becomes law.

New York has seen insurance investigators, consumer and community groups identify numerous suspicious vehicles parked in residential neighborhoods in Staten Island and Brooklyn. The vehicles oddly had license plates from Virginia, North Carolina, Pennsylvania and Iowa. Visiting friends or relatives don’t own these vehicles. They’re driven by New Yorkers who are cheating the insurance system.

An agent also may be helping New York drivers register vehicles in a state hundreds of miles away, confidential sources say. These drivers are cheating the system. They are raising the insurance risks and possibly auto premiums in the target state. They also are paying lower auto premiums without lowering the insurance risks in New York.

Neighborhood groups, anti-fraud groups and some legislators would like to make false vehicle registering a crime of insurance fraud in New York. A bill awaits action in Albany.

Most states have yet to make illegal registering a specific insurance crime. For the most part, we’ve also seen only sporadic enforcement. Still, more auto insurers and states are starting to realize that false vehicle registering can lead to other insurance crimes such as bogus vehicle injury or theft claims. Stopping rate evasion thus can help in the larger fraud fight.

States should step up and realize that rate evasion is an insurance fraud that needs targeting. It’s good for honest consumers and the insurance system.

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

 

Give health insurers a break from loss ratios

Move will help fight healthcare fraud — and help put downward pressure on premiums

A columnist for the Los Angeles Times recently skewered UnitedHealth for what he says was aiding and abetting a $43-million medical scam involving bogus weight-loss surgeries.

The health plan failed to scrutinize bad claims, the columnist says, until long after money was out the door.

Whether or not the harsh criticism is justified, we’ll leave to others to debate. But if UnitedHealth and others are not investing in expanded anti-fraud efforts, there’s likely a good reason:

Federal law discourages it.

One of the least publicized provisions of the Affordable Care Act is intended to make health insurance more affordable. Health reform governs the percentage of premiums health plans can dedicate to non-claims business expenses, such as marketing, salaries, administration, profit and yes — anti-fraud activities.

The so-called Medical Loss Ratio requires health plans to spend 80 to 85 percent of premiums they collect on claims.

In essence, anti-fraud expenses must be paid out of profit. That’s enough to discourage most health-insurance companies from growing their anti-fraud programs.

In some instances where insurer expenses are out of balance, paying suspect claims could boost profits — or at least not affect them. Now most health insurers wouldn’t intentionally pay suspect claims, but bad claims can be harder to detect when the anti-fraud efforts haven’t grown commensurate with the growth in policies and claims.

And thanks to Obamacare, policies and claims are growing. But anti-fraud efforts are not.

The Medical Loss Ratio is a good idea in theory. It prevents insurers from spending all the new-found premium money on frivolous expenses, such as corporate bonuses.

But good legislation also has unintended consequences — such as discouraging investment in fraud.

If fraud is allowed to increase — such as the $43 million that reportedly was spent on unnecessary and phantom stomach lap-band surgery — then upward pressure will continue on premiums, and everyone loses — except the fraudsters.

The time has come to rethink how the MLR is calculated.

About the authors: Dennis Jay is executive director of the Coalition Against Insurance Fraud. Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.

Medical marijuana as a strategy to reduce prescription drug deaths

New study contains strong evidence that painkiller alternatives can save lives and insurers money

After visiting a medical marijuana outlet in Colorado in May, I wrote about the possibility of medical marijuana replacing addictive opoids to help chronic pain sufferers.

A new study says that states that allow medical marijuana consistently had fewer overdoses than other states.

Medical marijuana states reported an overdose death rate of nearly 25 percent less than states without the laws, according to an analysis of data from the John Hopkins Bloomberg School and the Philadelphia Veterans Affairs Medical Center. The correlation between death rates and the availability of marijuana for medical purposes seems very strong.

Hopefully, this new evidence will spur Congress to allow researchers to test of efficacy of marijuana as pain medication. Good studies are lacking because of current law outlawing the possession of pot makes it nearly impossible for researchers to conducted this needed study.

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