Lawyers promote fraud bureau’s tip hotline

Rarely do you associate trial attorneys with anti-fraud efforts, but a law firm in Florida is doing just that with a new public service video warning consumers about door-to-door scammers looking to sign up auto accident victims.

“If you’ve been in an accident and a stranger knocks on your door to get you to sign up for a doctor or lawyer, they’re breaking the law. Some of these criminals even have the nerve to walk into your hospital room. They may even text you to get your case. They probably illegally obtained your police report…These people are not only annoying, they’re trying to steal from you. Don’t sign anything. Instead call the insurance fraud hotline. You could be entitled to a reward.”

The video then flashes the fraud hotline number of the Florida Division of Insurance Fraud.

Soliciting accident victims within 60 days of a crash is a crime in the state, thanks to a law enacted a few years ago that was pushed by fraud fighters in Florida and the Coalition.

Illegal soliciting still occurs, although much less frequently.

So what’s the motivation behind the Rubenstein Law firm in sponsoring this PSA? Are they trying to cut the crooked lawyers out of the action to gain more clients for themselves? Or perhaps they truly do care that solicitation scams hurt consumers.

Whatever their motivation, we commend the law firm for supporting anti-fraud efforts in the Sunshine State.

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

Humble and brazen health claims

$100,000 for ear wax removal? $46,000 to remove a bunion? Those are some of the outrageous charges cited this week by a judge who awarded Aetna $51.4 million from a Houston surgical hospital.

In a two-year period, Humble Surgical Hospital in Houston, Tex. billed the insurer more than $68 million. Humble billings these are not.

The five-bed surgical center, created by 10 doctors in 2010, charged patients in-network rates but billed the insurer at out-of-network rates. Some bills were as high as ten times what other hospitals charge.

Why did the insurer paid $41 million before challenging Humble’s bills? Aetna isn’t known for throwing money at medical providers, and it sponsors a good SIU team. (Full disclosure: Aetna provides health insurance for Coalition staff.)

Perhaps part of the problem is prompt-pay laws in many states that encourage insurers to “pay and chase” suspect claims. Some states grant delays in paying claims when fraud is suspected. Others do not.

The Humble claims spanned 2010 to 2012. Since then, new technologies such as predictive modeling have been developed to help insurers detect claim anomalies quicker and better. Another new development is the sharing of suspect claims information through the Healthcare Fraud Prevention Partnership.

As someone who pays a hefty monthly premium for health insurance, I hope Aetna and other health insurers use all the anti-fraud tools at their disposal to keep such brazen claims practices in check.

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

Grocery-store arson wrecks building, incinerates tenant

Jamal Abu Samak blew up a New Orleans grocery store, firing up an insurance arson that went tragically wrong and incinerated a tenant living upstairs.

Samak has lodged unappealing appeals for years in Hail Mary efforts to reduce his life sentence in federal prison.

A federal court denied Samak’s latest bid in January 2017 after years in jail. He launched the botched scam in 1991. Still, that decades-old case reveals the chilling potential of insurance arsons.

The arsonists often botch attempts to burn down homes or businesses for insurance paydays. Think napalm strike: Unstable gas fumes explode, or clumsily set fires simply race out of control. Nearby homes and businesses are gutted. Innocent people are maimed or burned alive.

The owners of the Community Grocery Store hired Samak and his sidekick Samuel Joseph Lee to torch the place. The owners raised their insurance on the store’s contents to $75,000 from $50,000 just two months before the fire.

Filled gasoline containers

Samak and Lee filled four grey plastic containers of gasoline on the fatal night. The containers were lethal munitions — each held fully five gallons of gas.

The pair entered through an unlocked side door. They emptied two containers inside the store, and the other two in an upstairs apartment.

Samak plotted to make Lee take the fall. They stashed the empty containers in the getaway car’s trunk, and Samak sent Lee back inside to turn off a store light. Lee knew something was wrong just as he stepped inside. Samak had followed him, tossed a lit match inside and slammed the door shut — trapping Lee inside.

The building exploded, throwing Lee back outside the store and blowing out the store windows. Still, he survived. Samak received third-degree burns over much of his body. Neighbors thought a bomb went off.

A man sleeping in an apartment above the store was incinerated. Tenants James Quincy Whitehead and Melanie Williams were blown down the stairs, yet barely escaped the flames by crawling through a small hole in the wall.

Fire starter’s appeal denied

Lee pleaded guilty early on and gladly cooperated with prosecutors to finger the man who betrayed him. Samak was handed life in federal prison.

Samak was rehabilitated, he claimed in his latest appeal for early freedom. The court disagreed, sending Samak back to finish his life term.

In another bungled insurance fire, Bob Leonard helped open a natural-gas line in an Indianapolis home. A timer rigged to a microwave triggered the unstable fumes. It was a $300,000 insurance plot. The house detonated. A thunderous explosion burned next-door neighbors Jennifer and Dion Longworth alive, collapsing their house.

Much of the neighborhood was leveled, traumatizing families up and down the tree-lined streets. Leonard received life without parole in federal prison — and a coveted spot in the Insurance Fraud Hall of Shame.

Ill-conceived Washington bill would harm fraud fight, consumers

A valued and effective anti-fraud tool that benefits consumers would be hobbled under a misguided bill in Washington State. It’s called the examination under oath, or EUO.

Insurers interview claimants, who are legally bound to answer questions truthfully. Thoughtful questioning by trained investigators can expose lies and mistruths by claimants trying to hide suspected scams. Telltale clues often can be uncovered only by EUOs. This is why they’re crucial to exposing often well-hidden crimes.

Many fraudsters don’t even bother showing up for an EUO, which helps insurers halt suspected claim payments and close out bad claims.

Under the Washington bill, the statute of limitations for using EUOs would begin when a suspected scam happens, instead of when an insurer discovers it. This strict time limit imposes arbitrary legal handcuffs, regardless of the actual crime-fighting need.

The bill’s stated goal is to protect consumers from supposed insurer fishing expeditions — though where’s the proof of fishing trips? We’ve seen no evidence.

“This would set up a system where insurers would be forced to pay suspect claims before they could adequately decide whether the claim is legitimate,” the Coalition wrote the chair of a subcommittee that’s vetting the measure.

Insurers use EUOs judiciously, only when clear red flags of possible fraud are uncovered first. Companies have neither the time nor budgets to conduct large volumes of EUOs on all claims.

The Washington bill thus would backfire. Insurers would be forced to pay suspicious claims because they wouldn’t have time to fully investigate for warning signals. More bogus claims means more crime and higher premiums for honest insurance consumers in Washington.

If an insurer is abusing the privilege of compelling claimants to appear at EUOs to answer questions, regulators and existing law have existing remedies to punish them. Curtailing this important tool across the board is not in the best interest of public policy.

The Coalition will publish a white paper on EUOs later this year. We will shed more light on how EUOs work, and why we need them to work effectively as anti-fraud tools.

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