Share a pill and get a thrill

Women and pillsThe Centers for Disease Control and Prevention just released a study with some shocking findings: Many Americans routinely share their prescription drugs with family members and friends. Young women engage in this practice the most. More than a third say they either have given drugs to others or have accepted them when offered.

The most popular prescriptions were for allergies, but the second most-shared drug was painkillers.

Most sharing likely doesn’t amount to hardcore drug dealing. And it wouldn’t cross the threshold of fraud. But the sharing of medicine is certainly a concern from a health standpoint as well as a fraud perspective.

Some of these drugs are highly addictive and should be taken only under the close supervision of qualified physicians. Pill sharing can lead to abuse and addiction and add to the nation’s multi-billion-dollar drug diversion problem, much of which is financed via insurance fraud.

Public education could go a long way toward helping deter people from sharing drugs. This is one way the medical community and insurers could team up to sponsor public outreach for the sake of patients — as well as to address the costly diversion problem.

And what about requiring that every bottle of the most addictive and abused drugs carry a stern warning about the consequences of pill sharing? Something like: “Sharing this medicine with others is illegal and can result in fines and imprisonment.”

A prison guard’s second worst nightmare

I’m not familiar with the specifics of this case, but this is a much longer prison term than we’ve seen in many years for this type of fraud.

Ex-Prison Guard in Sacramento Sentenced To 7 Years

A former Folsom prison guard has been sentenced to seven years in prison for faking injuries to get money from the state.

It’s one of the most severe sentences ever for pension fraud in California.

June Lucena claimed she was too injured to work after falling 16 to 20 feet from a guard tower in 1999 and undergoing surgery on her shoulder and jaw.

But surveillance tape showed the 45-year-old piloting a jet ski and frolicking on a water slide.

A Sacramento County jury convicted Lucena on 14 counts of fraud for faking injuries to get workers’ compensation and state disability. Permanently disabled guards get tax-free pensions of half their pay for life.

Lucena’s attorney, Lance Daniel, called Friday’s sentence “outrageous,” and said he has filed notice to appeal.

Prison can be especially tough on ex-guards. This should serve as a strong deterrent to other prison employees in the state. Defrauding workers compensation isn’t worth the risk.

Whistleblower motive$

Cleveland TysonCall me naive, but I think most whistleblowers report fraud because their sense of right and wrong has been assaulted, not because they may be rewarded financially. A common thread runs through the big corporate whistleblower cases of the last few years: the people who filed these fraud lawsuits and endured the long and arduous false-claims process had seen an injustice and were compelled to right it. Often they tried to report it through internal channels but were spurned, which only strengthened their resolve.
That seems to be the case with Cleveland Tyson and his six-year lawsuit against his former employer, Amerigroup.

A resident of suburban Chicago, the 62-year-old former government affairs director has been awarded $56.25 million, according to news reports. He helped federal and state prosecutors bring a civil action against the managed-care insurer for fraud, alleging the company refused to cover unhealthy people, as it was paid to do by the state. While the company admitted no wrongdoing, it agreed this week to pay $225 million to settle the lawsuit.

Tyson, who was fired by the company in 2002, never even inquired about what his cut of the settlement might be, according to lawyers in the case. “He wanted people to know that what he was saying was true,” his attorney said.

The federal false-claims remedy is a useful tool for uncovering insider fraud of the most egregious sort. Every time a huge award is announced, corporate managers and their employees are reminded of the consequences of fraudulent behavior and the rewards of reporting it.

But the process is long, tedious and sometimes unpredictable.

It would be great if the states could design a simpler false-claims act to focus on smaller cases involving fraud against both government and private insurers. In many cases of medical fraud by clinics, for example, there’s evidence that clinic employees knew of the wrongdoing, but didn’t have a motive or the wherewithal to report the fraud.

Perhaps a cut of treble damages might spur them to act.

Along with such a law, how about a requirement that every clinic employee be required to sign a fraud disclosure notice that affirms a duty to report suspected fraud and guarantees whistleblower protection? Every employer should also be required to give workers contact information for reporting suspected fraud.

These steps might help keep everyone a little more honest.

And, if this idea works, the requirement could be expanded to other medical providers, lawyers, body shops, insurance agencies, insurers and other workplaces where fraud is committed.

Unfair policy rescissions hurt everyone

insuranceCrackedA dozen years ago, when fraud fighters were pushing for stronger anti-fraud laws and more power for insurers, lawmakers expressed a common concern that insurers might use the threat of fraud charges to force claimants to accept low-ball offers.

These many years and thousands of fraud cases later, the record of insurers is quite impressive. With a few exceptions, the 3,000 or so insurers in the U.S. have used their anti-fraud powers wisely, even while reporting more than 100,000 cases of suspected fraud each year.

This clean record has eased the concerns of legislators is recent years, resulting in the enactment of even more anti-fraud laws, such as civil immunity for reporting suspected fraud and sharing anti-fraud information among insurers.

Now come headlines about health insurers rescinding policies of people with serious illnesses. The goodwill built up over the years is fading fast, thanks to the eagerness of a few insurers to yank coverage from policyholders whose applications display the slightest inconsistencies.

Some of the stories are heart-wrenching. People with life-threatening diseases — and huge medical bills — are told their policies are nullified, and thus are forced into financial ruin. Over the last few weeks, the news about health-policy rescissions hasn’t been pretty:

• Anthem Blue Cross and Blue Shield of California was fined $10 million for unfairly rescinding policies.

• California enacted a law banning insurers from giving bonuses to employees for limiting or canceling coverage.

• Congress held hearings on the issue, threatening federal legislation to regulate policy rescission.

• Los Angeles filed a $1 billion-plus lawsuit against Blue Cross of California for illegally rescinding 850 policies.

What’s lost in all of this is that policy rescission is a legitimate response when people willfully submit false information on policy applications. The practice also serves to encourage people to be more honest. But when the practice is abused — as appears to be the case, at least in California — it hurts all insurers and all fraud fighters. It calls into question the credibility of the fraud-fighting community and gives credence to opponents who say anti-fraud efforts unfairly target the little guy.

Industry critics have been quick to capitalize on the unsavory insurer practices. Witness the video cleverly titled Insurance Company Rules, which was posted on YouTube and has been viewed almost 100,000 times.

As time passes and these headlines fade, we hope to tout the good record of insurers once again, and to ask legislators to give fraud fighters more weapons against this crime. In the meantime, it would help if more insurers came out and expressed their outrage at these unfortunate developments.

Hail has no fury . . .

A fierce hailstorm blows through your neighborhood, pelting houses and potentially causing damage, but your home survives nicely. What to do as 30 to 40 contractors come knocking, insisting you need a new roof and should replace your siding? Many of your neighbors are taking advantage of the situation.

Read how one woman handled this potential ethical dilemma. It gives us hope.

Let’s get creative in fraud sentencing

Fraud artist
A common refrain was heard throughout the fraud-fighting community when the coalition was formed 15 years ago: Few courts take fraud seriously, and fewer hand out strong-enough punishment.

But a sea change in attitudes has occurred since then. Many more prosecutors try fraud cases, and more judges hand out appropriate sentences. In Florida, you must serve at least two years for staging a car accident.

Increasingly, judges say they’re tired of seeing the same swindlers back in their courtrooms. These judges are handing out tougher sentences to send a strong signal that insurance fraud is a serious crime with serious consequences.

The coalition has tracked 600 criminal convictions over the last three years to gauge sentencing trends. A cursory look says courts are meting out more and longer jail time. When judges do impose probation, the terms appear to be tougher and the length of probation longer. Restitution also is automatic in many states.

Still, many cases leave us shaking our heads. We’ve seen people steal more than $1 million and never set foot inside a jail, while others receive two years for lying on an auto application.

We will get a firmer handle on sentencing trends when a formal research project is completed later this year or next. But in the meantime, there’s one trend the fraud-fighting community must grapple with. That’s the growing reluctance of many states and jurisdictions to house, feed and care for non-violent criminals.

The number of people supervised by the U.S. criminal justice system surpassed seven million in 2006, the highest ever. States spend tens of billions of dollars to house offenders, and monitor them when they leave. With many states facing severe revenue shortfalls, there’s pressure to avoid passing new felony laws that send people to prison.

In California, it’s a felony for a business to under-report payroll to reduce worker compensation premiums, but it’s only a misdemeanor to fail to buy any state-required comp coverage at all. Everybody agrees failure to buy should be a felony, but no one is pushing a bill because the legislature has no appetite (or budget) for jailing more non-violent felons.

The fraud-fighting community needs to get ahead of this developing trend and start brainstorming about creative sentencing that not only will be appropriate punishment but serve as a deterrent as well. The threat of prison should always hang over anyone convicted of fraud. Deferred prison sentences can be that threat.

But with real prison time less of an option in the future, more focus will be on restitution, probation and community service.

Doctors and lawyers could perform extensive pro-bono services ⎯ and in a very public way that warns other would-be crooks. Convicted swindlers also could speak out against fraud to civic, church and other citizen groups.

Community service also should include the anti-fraud community. Fraudsters should be required to fully divulge their tactics so fraud fighters can hone their skills.

Creativity also can go a long way. A college student accidentally dropped his laptop then lied that someone had stolen it. The student seemed remorseful, so the insurer didn’t pursue charges but did require him to write an apology to the company president. Nice touch.

This probably was appropriate, but I also would’ve required the student to publish the letter in his college newspaper. That would’ve alerted others that attempting to commit fraud is a lousy idea.