More common ground needed on reporting, acting on suspected scams


I just returned from the NAIC’s summer meeting. It included the antifraud task force meeting, attended mostly by directors of state insurance fraud bureaus. I also met with insurer SIU directors before the NAIC event.

I felt as if I’d entered a time warp. Discussions at both meetings reminded me of a breakout session I chaired at a Coalition summit more than a decade ago on the status of insurance fraud fighting. SIU directors and fraud bureau directors both attended.

The main discussion by insurers then was about the “black hole” of information sharing. Insurers said they send cases to fraud bureaus for investigation, and never hear a word back. The fraud bureaus contend insurers send them weak cases, or ones not well-vetted.

That’s what I heard last week as well. Insurers seemed at a loss about what happens to their cases they refer to fraud bureaus. And, several fraud bureaus grumbled about the lack of good referrals from insurers.

Insurers and fraud bureaus clearly need better dialogue so everyone fully understands each other’s needs.

One fraud bureau chief talked about how a few insurers in his state haven’t reported a suspected scam in years, even though reporting is mandatory. Are those insurers doing such a good job that nobody’s trying to scam them anymore? Doubt that.

Insurance-fraud laws broadly define the crime, though there’s no definition of suspected insurance fraud. Each insurer could have its own definition, which determines which and how many cases it sends to the fraud bureau.

Most insurers don’t report all suspected frauds. We understand that. Besides, fraud bureaus don’t have the staff to handle every case. But for an insurer to say it has no suspected frauds to report does a disservice to the larger fraud-fighting community and our common cause.

Fraud bureau directors and SIU leaders need to come together, develop a greater understanding and find more common ground so they can work jointly to combat fraud in the most efficient and effective ways possible.

We urge both sides to reach out to the other to make that happen.

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


Taming the workers-comp monster in California


If you need more proof the workers-comp system in California is a mess, look no further than the report this week that indicted and convicted medical providers filed more than $600 million in liens against workers-comp claims.

The lien system in the state continues to be fertile ground for fraud. Designed as a safety net to ensure injured workers get treated, it’s now a slush fund for crooked medical providers and lawyers.

Fraud and abuse are rife in Southern California, where medical rings are targeting just-retired workers, says one insurance exec who wrote us this week. Runners hang out at Social Security offices and other venues frequented by retirees. They entice the retirees to file claims by offering free medical care and a windfall to supplement retirement income. The retirees are brought to lawyers’ offices, signed up and then shuttled off to medical offices for “treatment.”

The number of worker “injuries” occurring on the last day of the job is rising, this exec says.

Legislation to help weed some of these abusive providers out of the system is cruising through the California legislature. The bill would ban providers who’ve been kicked out of Medicare and Medicaid for over-billing. The bill sponsor says there’s evidence that crooked docs banned from government health plans have turned to workers comp to ply their trade.

The sponsor also says his legislation will target lawyers who sign up comp clients, but never actually interview them, then file claims for them in distant cities and ultimately settle the cases for their fees — often without the workers’ knowledge.

The legislation is a good idea, but much more needs to be done. Workers compensation in California is a huge, complex multi-faceted program. There are no easy answers on how insurers, employers, policymakers and others can hit that sweet spot of minimizing fraud while making sure injured workers get the treatment they deserve. But finding a better way than the lien system might be a good start.

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

Fraud fighters must get in legislative game

Two truths will govern our success in getting strong state fraud laws onto the books: We must prepare our 2017 legislative agenda now; waiting until December or January is too late. Fraud fighters also can play a pivotal role in getting fraud bills on the front burner in many states.

We’re in an election year, with less than 90 days until we vote for a new president and Congress. We’ll also vote for quite a few state legislators, and a handful of governors.

We tend to be Washington-centric, thinking that who we put into the White House and Congress will affect us the most.

Actually, most of us are directly affected more by what happens in our state capitals than in Washington. Fraud fighters thus should be alert to creating opportunities in our own backyards.

The Coalition is using the summer to plan the states where there’s the  strongest need for new fraud laws — and a solid chance we can get bills enacted into law.

The Coalition’s government affairs committee meets this week to discuss the best hotspot states. Later this month, I’ll be on a conference call with state IASIU chapters. We’ll discuss the grassroots role that fraud fighters can play in writing their legislators in key target states next year.

The best way to convince insurers to make anti-fraud bills a priority in a given state is to make a business case why statehouse efforts are in everyone’s best interests.

Let me know if you think your state is a prime candidate for strong fraud bills in 2017. Partnerships among fraud fighters and other allies give us the best chance of success.

Together, we can make a difference.

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

Limiting Medicare billing may weed out cheaters

What to make of the federal government extending its moratorium on allowing new medical providers to bill Medicare and Medicaid in six states?

Does CMS still need to get a handle on pre-screening providers before allowing them to bill?

Or is fraud is so rampant in those areas that CMS must weed out existing bad actors before allowing new providers to enter?

Probably both.

Shutting down enrollment is a drastic move that can hurt honest providers. It also can limit patient access to needed care. But it’s a necessary step for the federal government to  effectively manage fraud in its programs.

The areas affected by the extension include home-healthcare and medical transport — two that are rife with fraud.

Congress gave CMS the power to shut down enrollments a few years ago, but CMS hesitated at first. Nudged by Congress, CMS started restricting enrollments in limited areas where fraud was most out of control.

The enrollments seem to be a qualified success, but it will take a few years to fully know if provider fraud has started moving downward.

In the meantime, CMS is taking a smart approach to using its power to restrict enrollments. Moratoria are targeted. The latest extensions, for example, impose home-health enrollment limits in Florida on just three of the worst counties. Plus, CMS now allows exceptions to the moratoria if providers pass heightened screening.

Taking action before crooked providers can bill is the best answer to the old “pay-and-chase” model. It should also deter many would-be cheaters, especially organized fraud rings looking to soak federal programs.

Doc makes fortune from worthless mental-illness drugs

Mental illness made Dr. Fernando Mendez-Villamil rich and taxpayers that much poorer.

The Miami psychiatrist spooned out epidemic levels of antipsychotic drugs to seniors in Medicare and lower-income people in Medicaid.

Mendez-Villamil became a national icon of overprescribing. He peddled nearly 97,000 scripts for powerful anti-psychotic drugs to Medicaid patients between 2007 and 2009. That was more than any doctor for mental-health meds in Florida.

Years of plying people with unneeded drugs finally landed Mendez-Villamil in prison. He was one more swindler in a national epidemic of painkillers and other opioids that doctors and pharmacies are handing to addicts. Many overdose or die.

Insurance money pays for billions of dollars worth of the prescriptions. Insurance fraud thus is a major financier of opioid addiction in America today.

A U.S. Senate probe singled out Mendez-Villamil for profligate insurance over-billing. He was bounced from Medicaid in 2010 “without cause.” That was a fast-track sanction. It spoke to Medicaid’s concern about his peddling so many lower-income people with potent drugs they didn’t need.

Mendez-Villamil next soaked Medicare, doling out another 47,000 taxpayer-funded scripts to seniors in just two years. His busy practice justified the pills, he asserted to regulators with little success. Fed up, Florida’s medical board reprimanded and fined him.

Along the way, Mendez-Villamil amped up his scamming. He took bribes and kickbacks to doll out bogus diagnoses of crippling psychiatric illness so thousands of people could falsely qualify for Social Security disability, Medicare and Medicaid. Fake mental illness diagnoses also falsely exempted many people from testing to become U.S. citizens.

Anti-psychotic excess

Medicare, Medicaid and other federal programs lost more than $60 million in false and inflated claims.

Mendez-Villamil owned a $1-million mansion in Coral Gables. The place brimmed with expensive art — the feds impounded 221 paintings, prints, sculptures and other artworks when they raided his home.

He was handed more than 12 years in federal prison and must repay at least $50 million that he stole from taxpayers.

The conviction came seven lingering years after his prescribing habits came to the attention of the U.S. Senate. Some observers believe prosecutors and regulators took far too long to shut down Mendez-Villamil for good.

“I know what I did was wrong, I was dishonest,” Mendez-Villamil admitted to the federal court before sentencing. “That’s not the way I was raised. … I apologize for my behavior. I feel guilty. I’m sorry for the damage I have done.”

A strong rebuke came from the U.S. Senate, which singled out Mendez-Villamil for dangerous excess in hawking unneeded pills at taxpayer expense.

U.S. Sen. Charles Grassley (R-Iowa) led the headline-getting Senate probe in 2009.

“When I started looking at top prescribers a few years ago, there was a frustration that state and federal authorities were slow to look at the problem,” Grassley told ProPublica after Mendez-Villamil’s conviction in July 2016. “That has to change. Patients are served badly by doctors who commit fraud.”