This is part of the reason that health insurance costs have been rising so quickly.
Twelve Blue Cross and Blue Shield plans, working with the F.B.I., said Friday that they had broken up an elaborate insurance scheme in which thousands of patients from 47 states were sent to California to undergo unnecessary surgical and diagnostic procedures, for which doctors filed more than $1 billion of fraudulent insurance claims.
Insurance executives and law enforcement officials said that surgery clinics in Southern California typically paid recruiters $2,000 to $4,000 for each patient who received a medical procedure. The patients, they said, received rewards in the form of cash or discounts on cosmetic surgery.
Daniel M. Martino, acting chief of the health fraud unit at the Federal Bureau of Investigation, said the payments to patients ranged from $200 to $2,000 each.
Mr. Martino said the outpatient surgery clinics had billed more than $1.3 billion for services provided as part of the scheme, while insurers and employers had lost $350 million in claims paid to date.
The Blue Cross and Blue Shield plans filed a civil lawsuit on Thursday against nine surgery clinics, 21 doctors and 13 people described as owners, employees or administrators of the clinics. The Justice Department and the district attorney in Orange County, Calif., have filed criminal charges against some of the defendants.
Folks from 47 states travelled to California to get unnecessary procedures so that everyone involved could profit from health insurance payments.
In the lawsuit, the Blue Cross plans said that the recruiters located patients, persuaded them to have the procedures, verified that they had insurance coverage and helped arrange transportation to California.
The F.B.I. and the Blue Cross executives said that many patients who traveled to California received three or more procedures in a week. The most common combination was a colonoscopy, to examine the lower part of the gastrointestinal tract; an endoscopy, to examine the upper part of the digestive system; and an unusual procedure to treat "sweaty palms."
Mr. Martino said the last procedure, known as a thoracoscopic sympathectomy, posed potential risks to the patient because it involved collapsing a lung and deactivating a nerve near the spine.
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The civil-suit complaint includes abundant detail drawn from insurance claims. In a typical case, an Arizona couple had three identical procedures at a clinic in Buena Park, near Anaheim, Calif. On Saturday, March 22, 2003, the husband and wife had endoscopies. They had colonoscopies the next day. On March 29, both had surgery for sweaty palms.
As compensation, some patients got cash and others received discounts on cosmetic procedures including a "tummy tuck," breast enhancement and surgery to correct the sagging or drooping of eyelids, according to the insurers.
Since a colonoscopy does everything an endoscopy does and then some, having both is clearly duplication of effort. And only a very tiny percentage of the population has an actual medical need to have their hyperhidrosis (overly sweaty palms) treated. Paying folks off in plastic surgery discounts...that just gets the typical lower-income person participating in this scam to waste more of their limited funds.
The insurers said that doctors had fabricated symptoms and diagnoses for patients, but performed the surgical procedures. Thus, the medical records looked "legitimate or semi-legitimate," Mr. Skwara said.
No patients were named as defendants. But Paul F. Brown, vice president of the Blue Cross and Blue Shield Association, a trade group that helped coordinate the investigation, said: "The vast number of patients knew exactly what they were doing. They did this to get money. They did not need the procedures."
The Orange County district attorney, Tony Rackauckas, said, "Health care fraud victimizes each of us because it raises everyone's health insurance rates."
"At least 1,600 employers had employees who were involved in the fraud" at one clinic, Mr. Rackauckas said. More than 5,000 patients had unnecessary surgeries, he added.
County prosecutors said that owners of the clinic in Buena Park had billed insurers for almost $97 million and tried to hide their identities by creating shell corporations with different addresses and different tax identification numbers.
Mr. Martino said the scheme had apparently first developed among Vietnamese patients, who learned of the clinics at nail salons and from newspaper advertisements. It spread to "the Hispanic community in California" and to assembly-line workers at companies around the country, he said.
I wonder how many more of these scams are going on in the nation right now. I wonder how many employees griping about the rising cost of their health insurance are helping to drive it up by participating in this fraud.
Disgusting.
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Posted by: insurance | June 07, 2005 at 01:11