Taking a “whack” at insurance fraud

Have you ever played the carnival game “Whack-A-Mole”? As the pesky little creatures pop-up from holes on the game board, the players holding a mallet in hand get points for how many moles they whack on the head before time runs out.

If you’ve played the game, maybe you were trying to escape work, but there really is a good comparison here. Fighting insurance fraud is amazingly similar to playing a game of “Whack-A-Mole.”

When a state insurance department, local law enforcement or insurers “whack” down a fraud ring or fraudulent service provider, the unsavory “creature” often soon pops back up from another hole. And the fraud game begins again.

We repeatedly see this with unethical medical providers simply changing a clinic name to secure a new tax ID number and popping up as a “different” entity. Meanwhile, nothing has changed “down in the hole” where the fraud occurs. Dishonest body shops do the same. Even disbarred lawyers “pop up” as “paralegals” in their former law firms.

On a larger scale when Florida began a more-serious crackdown on PIP automobile fraud, especially in South Florida, many medical clinics simply packed up and began popping up in and around Louisville, Kentucky. Why? Was it Kentucky’s great business opportunities? A rising population tide? Better weather? NO … a simple look at the “game board” holds the answer. Kentucky is the next state north of Florida with PIP auto coverage. The fraud game just picked up and moved to the next “hole” on the game board.

Any experienced fraud fighter has seen this game in action. Whether within a state, even a city or across the nation, fraudsters don’t give up. They often simply disappear and move on to “pop” out of a new “hole.”

So, what do we do? Giving up is certainly not in our DNA, or in our ethics. First, we must be aware of this issue, then do a better job of sharing more information — through sources like the Coalition, NICB and IASIU — of fraudulent activity so others are alert to watch out before the fraudsters “pop-up” somewhere else.

Next, insurer investigators need to notify their claims, SIU and both inhouse and panel counsel with the same information. Being informed, they can better watch for, and track, the spread of fraudulent activities and players.

Finally, we need to partner wherever possible with local, state and federal prosecutors. They have the power to “pull the plug” on the fraud game, and put the little varmints in a special hole covered with bars where they can’t pop out for a long time to come.

About the author: Matthew J. Smith serves as general counsel and associate director of government affairs for the Coalition Against Insurance Fraud.

Association health plans open door to premium theft

Last time the Trump Administration forayed into health insurance, it created an ill-advised executive order allowing sales across state lines. The administration went further this week by announcing an order to allow association health plans (AHPs).

Both ideas likely will do little to expand coverage or lower premiums, most experts say. The proposals also could open the door to the worst type of insurance fraud.

Trump’s latest order would allow creation of health plans that bypass state regulation and important safeguards on solvency standards. We’ve gone down this road before, and the scenery isn’t pretty.

Trusting consumers bought thousands of such lower-priced policies15 years ago. People wanted to save money or get coverage that wasn’t available from standard health plans. Many plans were legitimately offered through trade and professional associations.

Thousands of consumers didn’t get health claims paid, though, when some plans went belly up. Other plans were outright frauds. They often paid small claims to pacify policyholders in the beginning. then refused to pay larger claims. The con artists collected millions of premium dollars and fled. Consumers by the thousands were defrauded. Many were left in financial ruin, stuck with large medical bills they had to pay from their own pockets. One couple had a child with brain cancer, only to discover they’d bought into a fake health plan.

That’s one reason the Coalition adopted a position opposing AHPs back in 2003.

If association health plans catch on this time around, state regulators and others will have their hands full helping consumers steer clear of the inevitable fraudulent ones.

In the meantime, some con artists who got caught in the last round of bogus health schemes are just getting out of prison. They may revert to selling more fake health plans. So the administration’s timing couldn’t be worse. AHPs are one health reform consumers can do without.

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

Dying Medicare scammer handed 75 years

Debates over fairness of jailing offenders typically traverse highly emotional concerns such as over-packing prisons with African-American men and nonviolent drug users.

How about terminally ill mothers of kids?

A federal judge’s recent decision turned a $13-million Medicare crook into a sympathetic figure.

Marie Neba deserves prison. But 75 years worth?

The Houston woman looted Medicare of $13 million. Neba co-owned a home healthcare firm. She recruited healthy seniors — lying they were frail, homebound and needed her firm’s expensive care.

Neba blew our taxpayer money on a pasha’s lifestyle. She was caught and rightfully convicted. Neba should’ve been quietly shuttled to federal prison for at least several years. Yet another cheater swept up by an protracted federal smackdown of Medicare criminals.

Instead, Judge Melinda Harmon inexplicably handed Neba 75 years.

The next-largest Medicare sentence is 50 years, for Lawrence Duran’s $205-million looting of mental-health services in the Miami area. Dr. Farid Fata got 45 years. He inflicted massive doses of painful and disfiguring chemo on healthy patients in the Detroit area.

Neba’s also dying. She has breast cancer that has spread to her lungs and bones. And she’s the mother of twin seven-year-olds.

Harmon struggled to justify 75 years. “I am not a heartless person. I think I am not. I hope I am not …” she told Neba at sentencing. “It’s just the way the system works, the way the law works.”

Justice should be fair, and tough when needed. It’s when sentencing appears robotic and punitive for its own sake that we erode the fairness and public trust that distinguish America from banana republics.

Neba is appealing. It’ll be vigorous debate about judicial discretion and strict adherence to sentencing guidelines. Her appeal deserves a very close look.

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

Celeb skin doc bills nose jobs as insured medical repairs

Patients found Dr. David Morrow’s offer an easy sell — he’d pretty them up with free or discounted cosmetic surgery.

Insurers would pay most of the tab, the celebrity skin doc told patients at his clinic in Rancho Mirage, Calif. Except health insurance generally doesn’t pay for plastic surgery. Beautifying the body is more an elective personal pleasure than than true medical need.

So Morrow blithely invented medical diagnoses he knew insurers would pay — falsely billing $50 million for trumped-up surgeries. He billed nose jobs as fixing deviated septums. Tummy tucks magically became hernia repairs or abdominal reconstructions. Breast lifts were surgeries for “tuberous breast deformities.”

Morrow forged test results, medical notes and surgical records to back up his fantasy world. He even covered up the text of records for a patient’s “abdominoplasty” (tummy tuck) — hand-writing “umbilical & ventral hernias” on top of the original wording.

Insurance made doc wealthy

Compliant patients herded to Morrow. He fashioned himself as a high-profile, high-end skin doctor. “One of the top cosmetic surgeons in the world for skin and facial rejuvenation,” Morrow lauded himself on the now-shuttered website for his defunct Morrow Institute.

Pinterest postings are also an online temple to status, wealth and opulent living off of stolen insurance wealth. Morrow had his own line of beauty cosmetics, and claimed the world’s first laser face lift. The couple founded a Jewish day school, and donated handsomely to the symphony and other cultural causes.

Morrow also pressured some patients to get surgeries they didn’t want in exchange for “free” cosmetic upgrades. Patients believed Morrow played by the rules, giving them honest surgery and lodging honest insurance billings.

Far from it. On top of camouflaging cosmetic operations, Morrow also stole patient names, medical information and signatures to secretly charge insurers for surgeries he never bothered performing.

Tried to steal $50 million

The insurance spigot opened wide. Morrow charged patients’ insurers more than $50 million all told.

Morrow billed up to $150,750 for a single surgery. He ransacked insurers for as much as $700,000 if he did several procedures on a patient. The hefty payouts cascaded into his bank account — $24 million worth before he was caught. Morrow and his wife Linda owned a $9.5-million mansion and fleet of cars.

Morrow also botched some surgeries, disfiguring patients and inflicting ongoing discomfort.

Some insurers refused to pay up. So if the patient was a public employee, Morrow demanded the government agency pay him directly. He went after the California Highway Patrol, Desert Sands Unified School District, Palm Springs Unified School District and City of Palm Springs.

Handed 20 years, bolted for freedom

Investigators and prosecutors did their job well. The evidence of insurance scheming and tax evasion was so strong that Morrow pleaded guilty to federal charges. So did Linda, who was executive director of his operation.

They faced dozens of years in jail. Morrow was scheduled for sentencing first. Everyone showed up at the court for a hearing except the Morrows. They’d carefully plotted an elaborate escape.

The couple secretly sold their mansion and car fleet, wired millions of dollars to secret bank accounts, then disappeared. They’re still on the run, and the feds are hunting. Any potential for leniency evaporated. The court handed Morrow 20 years in federal prison in absentia. Linda awaits sentencing.

In Morrow’s high-rolling world of cosmetic scalpel work, the celebrity skin doctor proved that insurance fraud and bodily beauty both are only skin deep.