In this type of fraud‚ false or misleading information is provided to a health insurance company in an attempt to have them pay unauthorized benefits to the policy holder‚ another party‚ or the entity providing services. The offense can be committed by the insured individual or the provider of health services.
An individual subscriber can commit health insurance fraud by:
- allowing someone else to use his or her identity and insurance information to obtain health care services
- using benefits to pay for prescriptions that were not prescribed by his or
her doctor
Health care providers can commit fraudulent acts by:
- billing for services‚ procedures and/or supplies that were never rendered
- charging for more expensive services than those actually provided
- performing unnecessary services for the purpose of financial gain
- misrepresenting non–covered treatments as a medical necessity
- falsifying a patient’s diagnosis to justify tests‚ surgeries‚ or other procedures
- billing each step of a single procedure as if it were a separate procedure
- charging a patient more than the co–pay agreed to under the insurer’s terms
- paying “kickbacks” for referral of motor vehicle accident victims for treatment
EXAMPLES
Here are a few typical scenarios to illustrate some of the different ways health insurance fraud can be committed:
Chris was the only one in his family with health insurance, but he let his brother and cousin use his card to receive health care benefits.
A nurse in Dr. Smith’s office became addicted to painkillers and with access to patient records she called in forged prescriptions to a local pharmacist and posed as a family member of the patient when she picked up the drugs.
Devon was addicted to painkillers, stole and forged prescription forms from his doctor’s office, passed them at a local pharmacy, and used his health care insurance to pay for the drugs.
Dr. Talbot billed his patients’ health insurance for both the services he actually provided and for services that were not provided. He falsified his patients’ medical records to reflect office visits and treatments that never occurred.
Dr. O’Neill received the results of medical testing performed by a diagnostic firm for her interpretation of the results. She billed the patients’ health insurance as though she performed both the testing and interpretation
of the tests.
Dr. Salazar was employed by a medical center where low-income and indigent patients were recruited to undergo unnecessary exams. While Dr. Salazar saw few patients, medical records were falsified by a physician’s assistant to support the billing of insurance programs for procedures that were never performed.
ACTUAL CASES
In 2008‚ 38.5% of arrests for health insurance fraud in Pennsylvania were the result of false billing by medical providers and 61.5% were caused by subscriber theft of benefits or use of forged prescriptions for drugs. The following cases show how this crime is committed – and prosecuted – in real life.
PRISON TIME IS BITTER PILL TO SWALLOW
Caught in a multi-level prescription-fraud operation, seven Allegheny County defendants were convicted for their roles...
Wednesday, January 2, 2008
Caught in a multi-level prescription-fraud operation, seven Allegheny County defendants were convicted for their roles in an Oxycontin and Oxycodone scam involving six insurance providers: Highmark, the Department of Public Welfare, Caremark, Paid Prescriptions, Express Script and Merc Medco.
In one way or another, each of the defendants had a hand in the scam, either printing fraudulent prescriptions or trading their prescription information in exchange for the drugs. One defendant even stole insurance cards from his mother and sister to provide payment for the pills. What a family man!
The scam involved the filling of in excess of $70,000 worth of fraudulent prescriptions. Each of the participants was convicted and sentenced to incarceration and hefty restitution, as well as court-ordered drug rehabilitation.
CHIROPRACTOR RELIEVES TENSION BY LINING HIS WALLET
A chiropractor in Lackawanna County didn’t think his patients would notice or bring attention to the “small” details, that he was billing them for procedures that never actually happened.
Wednesday, January 2, 2008
Fortunately for him, none of the patients came forward with information.
A chiropractor in Lackawanna County didn’t think his patients would notice or bring attention to the “small” details, that he was billing them for procedures that never actually happened. Fortunately for him, none the patients came forward with information.
Too bad the Office Manager for his practice did.
After the Office Manager notified police about her employer’s illegal business dealings, an investigation revealed that 78 patients were billed for procedures the chiropractor never administered. A search warrant and review of all business records found the chiropractor had defrauded four insurance companies – Blue Cross, Erie , Nationwide and Highmark – to receive over $440,000 in illegal payments. When caught, he was awaiting another $85,000 in reimbursements.
To make matters worse for our twisted chiropractor, he was also found to be one of the highest billers in the state of Pennsylvania in what is known as the “Impossible Day” in insurance company lingo. The “Impossible Day” occurs when practices submit billing for more procedure hours in one specific day that could ever possibly occur. He bilked insurance companies for hundreds of days like this.
He was arrested on November 16, 2007. Sentences are now pending.
EAST STROUDSBURG NEUROLOGIST TARGETED
IN INSURANCE FRAUD PROBE
The Northeast Pennsylvania Insurance Fraud Task Force executed a search warrant relating to 75 counts of insurance fraud.
Wednesday, September 17, 2008
Investigators seized hundreds of pages of documents related to an insurance fraud case at a medical office on Route 447.
Officers with the Northeast Pennsylvania Insurance Fraud Task Force executed a search warrant today at the neurology office of Dr. Matt M. Vegari, according to Myles Walsh, administrator of the task force.
Patients continued to come and go at the office in Smithfield Township as investigators searched between about 11 a.m. and 3 p.m. and copied records related to 75 counts of insurance fraud. Officers with Monroe County Probation Office and the Monroe County District Attorney's Office assisted with the search.
Walsh said the charges stem from allegations that the doctor charged insurance companies for services not rendered to 75 patients dating back to July 2004.
Vegari is expected to turn himself in to police this afternoon and be formally charged before a district magistrate.
Vegari attended medical school at Shiraz University in Iran. He did his residency at Thomas Jefferson University Hospital in Philadelphia in 1985.
A check of the Pa. Department of State's Web site today showed Vegari is legally licensed to practice medicine in Pennsylvania and that no disciplinary actions were on record for his license.
His practice is Northeast Neurology and Neurophysiology at 232 Independence Road.
CONSEQUENCES
The National Healthcare Anti–Fraud Association estimates that more than $68 billion a year is lost to fraud. In addition‚ most health insurance includes a lifetime maximum of benefits‚ and health insurance fraud practices such as overbilling for the type of services received robs consumers of these benefits.
This is why health insurance fraud is such a serious crime. As with all other types of insurance fraud‚ Pennsylvania considers it a felony. Violators can spend up to seven years in prison and spend up to $15‚000 in fines. There are also many other associated expenses such as court costs and legal fees. Plus‚ those found guilty of insurance fraud have the stigmas and limitations of being a convicted felon to carry with them for life.
PREVENTION
Individuals who subscribe to health insurance can avoid facing situations where there’s an opportunity for you to commit fraud and at the same time be observant for instances of any providers’ fraudulent acts.
First‚ understand your policy and what it covers‚ such as amounts of your co–pay and other details. Understand that this policy is specific about who it covers as well – never attempt to use it to get medical services for someone who is not authorized to receive them.
Each time you are billed for a visit‚ check your statement to ensure that the type and number of services provided are correct – and that each has been rendered. Make sure that details such as the date of service are accurate and the proper copayment amount was charged or collected.
Learning all you can about health insurance fraud will help you avoid costly and life–changing situations. And in all aspects of your dealings with health insurance‚ make sure the information you provide is truthful and accurate.
To help all Pennsylvanians better understand health and other types of insurance fraud‚ the Pennsylvania Insurance Fraud Prevention Authority (IFPA) has embarked on an informative and aggressive statewide public education and prevention campaign.
Click here to learn more about the IFPA Prevention Campaign.