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Insurance Fraud – Spotting Insurance Scams
By Louis Zhang

The majority of people who commit insurance fraud don’t think they’re hurting anybody directly. In fact, they think they’re hurting major corporations who have enough money that they don’t care anyway. This is not the case. In the United States, insurance scams cost an estimated $875 per person annually. It adds up to approx. $80 billion per year, and with the rapid growth of technology, it’s getting harder and harder to catch.

There are different types of insurance fraud.

One of the leading forms of insurance fraud is in our health care system. Health care fraud results in over $30 billion per year in the United States. There are two kinds of health insurance fraud: member fraud and provider fraud. An example of member fraud is when you deceive your insurance company by purposely not declaring something, where an example of provider fraud is if you were to bill for a service that was never rendered.

One fast-gorwing form of insurance fraud is automobile insurance fraud. Staged rear-end car accidents are a common form of this type of fraud. This is when a scam driver will stop suddenly in front of a car deliberately so they other car rear-ends them. Another popular scam is when there’s already an accident, you add damage purposely in the hopes to collect more money. Often times, this works, which is why it’s important to take photographs of the damage.

Another form of insurance fraud is when the beneficiary tries to collect the benefits while the insured is still alive. This is called life insurance fraud. The best thing you can do in this scenario is to know your insurance broker. When you go in to pay your premium on the insurance, don’t pay in cash. make sure you understand your policy, and if you don’t, bring it to someone who does.

And last but not least, I want to talk about fire insurance fraud. This form of fraud is very common because it’s hard to prove. If you lose your house to a fire, who’s stopping you from declaring stuff you didn’t have in the first place? There is no real way to prevent this kind of fraud. This will haunt you in your taxes and that’s about it. The best thing you can do is report it if you hear of anyone making false claims.

As I mentioned previously, the best thing you can do if you’re a victim of fraud or if you hear of any sort of fraud taking place, is to report it. You can report fraud to the National Fraud Information Center at 1-800-876-7060. I hope this article has opened everyone’s eyes a little bit to how this serious crime is affecting each and every one of us.

Go to Insurance Fraud for information about different types of insurance fraud and scams – automobile, home, life and health insurance fraud and how to spot and report them.

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The Hidden Cost of Insurance Fraud
By Martin Maylor

In about one fifth of all known cases of health care fraud, consumers are the perpetrators, according to the insurance association. All but a fraction of the rest involve providers.
“I don’t take consumer fraud lightly,” says Greg Anderson, director of corporate finance investigations for Blue Cross-Blue Shield of Michigan. “We have 4.5 million customers and if each one is doing $1 in fraud, that’s $4.5 million. That’s worth paying attention to.” But provider fraud is where the bigger dollars are by far.

That’s not surprising, says the Anti-Fraud Coalition’s Mahon. “A consumer has a health plan, car insurance, a vision plan, maybe dental, but a provider has the whole patient population, the whole range of tests and treatments and the ability to bill a very wide array of third-party payers. Even in a managed care setting, if I’m a provider, I’m participating in a dozen or two plans, plus all the fee-for-service plans,” he points out.

In the indemnity world, provider fraud falls into one of two categories, whether it’s the work of a single doctor, an organized gang or a hospital or clinic: billing for services not rendered – tests not given, surgery not done, care not provided – and upcoding. A physician may spend just a moment with an office patient but bill for a full evaluation, for instance, or bill for foot surgery when he did little more than trim the toenails of a nursing home patient. “These account for 100 percent of the provider fraud in fee-for-service plans,” says Anderson.

But 85 percent of patients with employer-based coverage now are enrolled in some kind of managed care plan. Under plans that are not fully capitated, most of the same variations of provider fraud still apply. New methods also are emerging. Kirk J. Nahra, general counsel for the National Health Care Anti-Fraud Association, noted in a 1997 article in Benefits Law Journal that fraud continues to flourish the old-fashioned way. That’s because “fee-for-service transactions continue to figure significantly in virtually any managed care system,” he wrote. With some HMOs diminishing the role of – or doing away with – gatekeepers, such transactions are not about to disappear.

When providers share the financial risk, however, they have an incentive to provide less care – and that can be a subtle problem to detect. This might range from simple inadequate treatment to the “automatic” referral of sicker – and thus more costly patients to specialists outside the capitated network, perhaps in exchange for kickbacks. It might also include such subtle acts as the establishment of inconvenient service locations or appointment hours for managed care patients, “designed to suppress patient traffic,” Nahra wrote.

Initially, fraud squads will detect these kinds of abuses through statistical analysis, he predicts. But he cautions that legal proof won’t be easy. In a case where a provider has systematically provided low levels of services to capitated patients, for instance, prosecutors will have to show that providing reduced care is a “scheme to defraud.”

Insurers told the HIAA that they’d uncovered a wide range of managed care provider fraud. Ripoffs ranged from the embezzlement of capitation funds to falsifying new enrollee registrations, falsely elevating encounter rates in an effort to increase future capitated payments, illegally balance-billing patients and overcharging for copayments. Doctors also undercharge for copays in an attempt to lure more patients, either to collect more capitated payments or to use the insurance information to submit false claims.

In still another managed care scheme, the gatekeeper or PCP accepts kickbacks in exchange for referring almost exclusively – and more often than is genuinely necessary – to particular specialists, says Greg Anderson, director of investigations for Michigan Blue CrossBlue Shield. Although some plans reward doctors for keeping referrals to a minimum, physicians who accept kickbacks can more than make up for any incentives they might forfeit. And, says Anderson, “Kickbacks are really hard to prove.”

Some investigators also suspect that private capitated plans are being charged for excessive lab services and testing by some hospital emergency departments, which can bill them separately. Another variation: routinely admitting patients at 11:55 p.m. instead of 12:05 a.m., to collect for an extra day’s stay.

Higher Insurance Rates

The Canadian Coalition Against Insurance Fraud defines insurance fraud as any act or omission with a view to illegally obtaining an insurance benefit — in other words, any action where a claimant walks away with money that he or she is not entitled to. Insurance fraud includes a full range of fraudulent acts. Examples include: completely fabricated claims, inflation or padding of genuine claims, false statements on insurance applications, and internal fraud.

Fraudulent claims represent approximately 10 to 15% of claims paid out. General insurance fraud amounts to approximately $1.3 billion per year in Canada. Honest policyholders through increased premiums pay this cost. When the toll on other societal resources is factored in, insurance fraud costs an additional $1 billion per year. Police must investigate crimes in which the details have been altered, making the investigation more costly and time-consuming, or which, in fact, never occurred; firefighters risk their lives and expend valuable resources to extinguish arson fires; fire marshals investigate the cause of the fire; health service providers treat patients injured in arson fires or staged accidents, or who fake injury to make claims.

Higher Costs For Your Health Insurance

Americans pay about $ 1 trillion in health care costs per year. According to the United States General Accounting Office, 10 percent of what we spend on health care is fraudulently billed in services not rendered, overcharges, duplicate charges and other health fraud schemes. That means that $100 billion per year is fraudulently billed!

How much health care can be delivered for $100 billion?

$100 billion would give every man, woman and child in the United States and Canada a complete health examination and physical

$100 billion would pay for 20 million days in an intensive care unit at a hospital.

$100 billion would pay for 40 million CT scans.

Some common frauds of concern to insurers;

Employer Fraud

There are two types of employer fraud in workers compensation: that which is claims related and that which involves policy premiums. This is an area where others outside of the claims function, premium auditors, for example need to be vigilant for suspicious activity.

Employer claims fraud occurs when an employer knowingly misrepresents the truth in order to avoid, deny or obtain compensation on behalf of it’s employees; or knowingly lies about entitlement to benefits to discourage or encourage an employee from pursuing a claim. Employer premium fraud occurs knowingly lies in order to obtain a workers compensation insurance policy at less than the proper rate; e.g. :

Misrepresenting the risk of exposure for a given insured by; under-reporting payroll, mis-classifying payroll, reporting an injury under insured company “A” when in fact the injured employee was an employee of uninsured “B”, lying about the company ownership to avoid high experience modification.
Some Red Flags:

The injured worker is a new hire

The applicant took unexplained excessive time off prior to the claimed accidentinjury

The alleged injury occurs prior to or just after a strike, layoff, plant closure, job termination, notice of company relocation etc….

Lawyer Fraud

Such fraud arises when lawyers knowingly participate int the misrepresentation of the truth in order to either secure or deny compensation for their clients and or themselves. E.g:

Knowingly assisting a client in pursuing a false claim

Soliciting a person to file a claim

Knowingly pursuing collection of a lien the lawyer knows to be fraudulent

Related criminal acts that feed fraud, such as accepting consideration from or paying consideration to doctors, vendors or others for referral of clients or settlement of cases.
Red Flags:

The majority of claims in which a law frm is involved are of a highly questionable nature

A letter of representation is received, but the applicant denies representation or meeting with the lawyer.

In what is referred to as solicitation fraud, several employees from the same employer have reported similar injuries and are represented by the same law firm.

Adjuster Examiner Fraud

This occurs when a claims person purposely misrepresents the truth in order to either deny or support a claim; or offers or accepts any form of consideration for the referral or settlement of a claim. When the fraud involves compensation in the form of “kick-backs” as a reward for being given a contract or business, these frauds are particularly difficult to detect since the compensation is paid directly to the employee and does not go through the company books. Sometime’s it happens that an employee has an undisclosed interest in a transaction that results in harm to the company because the price of the contract is not in the best interests of the company. E.g..:

Accepting a gift such as a television or a trip from a vendor in exchange for implied promise of referrals.

Knowingly referring cases to a vendor when the services of that vendor are not required in exchange for consideration.

Altering the evidence in a claim in order to support denial or approval.
Red Flags

Inconsistent application of cost containment measures or agreement to pay above the fee

schedule.

Sloppy observance of procedure for referrals to outside vendors or increase in the use of a specific vendor.

Personal relationships with an outside contractor

Disclaimer; This publication by Marwen Consulting Group Inc., has been provided as a service to our customers and is meant for informational purposes only. Although this information has been researched exhaustively, the author assumes no responsibility for its accuracy, errors or omissions herein. Readers should use their own judgement or consult a legal consultant for specific advice. The following represents materials compiled from various sources; public resource, Insurance Institutes, claims forums, international news forums as well as information from our own files and sources.

Martin Maylor

Marwen Consulting Group Inc., a global fraud investigation agency headquartered out of St.Albert, Alberta, Canada. For a list of our services, please feel free to visit our website; http://www.marwen.ca or contact one of our experienced consultants.

For information on any of the literature completed by Mr Martin Maylor; “The Effective Management Of Surveillance Services” or to inquire about educational seminars please contact Martin directly at m.maylor@marwen.ca

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9 Biggest Mistakes Health Care Providers Make That Result in Surprise Visits From Fraud Investigator
By Daniel J Osborne

It’s no secret for today’s health care provider that investigators from regulatory boards, insurance companies and law enforcement agencies are on the prowl looking for providers who are not following the laws & rules – with a major focus on health care fraud!

And, these investigators, especially law enforcers, are particularly interested in finding health care providers engaged in health care fraud and establishing the evidence to prosecute providers who 1) billed for services not rendered; 2) billed for services that misrepresent the nature of the services provided; 3) billed for substandard and/or unnecessary services; and/or 4) billed for services that misrepresent the actual service provider.

Law enforcement agencies, even the Fed’s, have limited resources that prohibit them from investigating every provider on whom they receive information alleging health care fraud.

How do fraud investigators maximize their resources, and enhance probabilities for successful health care fraud prosecutions?

They search for easy targets! They don’t have to search far! What is an easy target you ask?

Here are 9 big ones:

1. Providers who fail to deal effectively with employee or patient complaints resulting in the complaints being made to investigators to get problems resolved. Prosecutors have ready-made story-tellers to testify, if need be, as to the provider’s fraudulent activity.

2. Providers who fail to recognize that ALL providers billing insurers for services rendered are under some form of investigation. The key for providers is what happens as a result of initial investigations to determine whether submitted-claims should be paid – if so, are they paid or are they being referred to SIU, regulators and/or law enforcers for further investigation.

3. Providers who have a significantly high volume of patients in one particular payment category, i.e., Medicare, Major Medical, Personal Injury, Workers’ Compensation, etc. Claims-handlers see voluminous clinical and billing records from providers where either documentation or coding deficiencies, deficiencies that may otherwise have gone unnoticed, stand out – resulting in referrals for further investigation and other actions.

4. Providers who have ongoing relationships with either practice-consultants or vendors. If either these consultants/vendors or their clients become the target of a fraud investigation, such an investigation may result in providers relying on those consultant/vendor services to be dragged into an investigation. Investigators want to know, and rightly so, whether providers working with targeted consultants/ vendors were engaged in related misconduct, or have information that would further ongoing investigations. A good example of this is what happened to many providers who worked with a major MD/DC practice consultant who was successfully prosecuted.

5. Providers who aggressively market their health care services to the public – especially free services, which are not only seen by their targeted audiences but also by investigators. These efforts cause providers to become well-known (i.e., notorious) to investigators who are motivated to look a bit closer at the clinical & billing records of these very visible and high-profile providers to see if there is something that can be used to prosecute.

6. Providers who fail to completely, accurately and in a timely-manner document health care services rendered to patients. The crime scene for investigations of health care fraud is the clinical and billing records of providers. All providers have heard the saying, “If it’s not documented then it didn’t happen.” Investigators have heard it too, and they follow this concept to a ‘T’. Investigators love to find patterns, clinical files that have no notes, computer-generated notes that report similar information for all visits and patients, notes that do not support the services billed, and notes that are minimal in content – It is harder for providers to defend their actions in such instances.

7. Providers who fail to follow the payors’ rules, especially when contracts are involved – where providers have agreed to follow specific terms for participation. Investigators search diligently for providers who failed to follow written-agreements. This is a strong piece of evidence for prosecutors to show juries. In such case, the contract contains the providers’ signatures, agreeing to specific terms, and is used to show providers (purposefully) violated these terms.

8. Providers who fail to appropriately use billing codes (ICD-9, CPT, HCPCS) when seeking reimbursement for services rendered. Follow-the-$$$$$ is a key for investigators, and in health care fraud investigations, this process begins with the identification of inappropriate billing practices that result in payments to which providers are not entitled.

9. Providers who fail to provide appropriate oversight of their practice-activity to ensure it is consistent with the laws & rules. This is a huge mistake in today’s aggressive enforcement climate, considering that for nearly a decade now, the government has strongly encouraged providers to employ compliance programs to police themselves. The absence of oversight may be used to demonstrate that the provider engaged in unlawful activity, displaying willful ignorance and acting in reckless disregard of the laws & rules. Documented oversight systems may effectively stop further investigations. Such providers are target-hardened!

At a recent seminar, a doctor asked whether law enforcers would actually go after doctors who were trying to do the right thing. The answer is – Absolutely! Trying to do the right thing and doing the right thing are two very different things. Law enforcers, armed with probable-cause that illegal activity has occurred, do not care that providers were trying to do the right thing. Remember, the investigator’s sole purpose for being at the provider’s practice is to collect evidence that demonstrates the provider failed to do the right thing.

Law enforcers invest a lot of time and resources investigating providers prior and subsequent to surprise visits.

The investigator’s ultimate reward – A successful prosecution!

Daniel J. Osborne, M.S., is a renowned expert on health care fraud issues and recognized authority on health care compliance. He can be contacted at Chiropractic Compliance Consultants, Inc., 18065 238th Street,Tonganoxie, Kansas 66086, 913-369-9000, http://www.cccpfc.com

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Five Physicians Plead Guilty to Health-Care Fraud – An Important Lesson For Physicians
By Shirin Harrell

The United States Attorney in Boston recently announced the settlement of a health-care-fraud case involving five urologists and TAP Pharmaceutical Products, Inc., a major American pharmaceutical manufacturer. The government alleged that the urologists received illegal inducements from TAP to prescribe the drug Lupron in the 1990’s. The physicians pleaded guilty to health-care fraud, and TAP agreed to pay $875 million to settle allegations of fraudulent drug pricing and marketing of Lupron.

TAP markets Lupron for the treatment of advanced prostate cancer. The U.S. Attorney initiated an investigation into TAP’s pricing and marketing of Lupron in 1997, after a urologist employed by an HMO reported to law-enforcement authorities that he was offered an educational grant to reverse a decision he had made on behalf of the HMO to exclude coverage for Lupron.

To induce physicians to prescribe Lupron instead of a cheaper alternative, TAP gave physicians free samples of the drug, worth as much as $40,000, as a form of volume discount. The average cost of a monthly dose of Lupron was $400 to $600. Because Lupron must be injected under the supervision of a physician, Medicare, which normally does not reimburse for medication, reimbursed physicians 80% of their administration cost. The remaining 20% was reimbursed by the patient as a co-pay. TAP fully intended and expected the physicians to prescribe the free Lupron to their patients and then bill the patients and their insurers the average wholesale price of the drug. That is precisely what the physicians did.

As a further incentive to encourage physicians to prescribe Lupron, TAP offered them free consulting services, free trips to golf and ski resorts, and money disguised as “educational grants,” that the physicians used to pay for cocktail parties, office Christmas parties, medical equipment, and travel expenses. The Government described these items as kickbacks and bribes used to influence the physicians to prescribe Lupron.

The TAP case is likely to have a significant impact on the marketing practices of not only pharmaceutical companies, but on all health-care vendors. For physicians, the message should be loud and clear.

First, physicians need to carefully examine some of the perks they are used to receiving from health care product and service vendors. The Federal government cited as illegal inducements many of the marketing practices typically utilized by pharmaceutical companies and other health care vendors, including: free products, free consulting services, trips to golf and ski resorts and money purportedly for “educational grants” but used for other purposes. Thus, physicians who accept free services, free products, or money from vendors risk criminal charges and civil liability.

It is a felony under the Medicare-Medicaid Anti-kickback statute (42 U.S.C. 1320a-7b) to receive or solicit payment in exchange for ordering an item, such as a prescription drug, reimbursable by Medicare or Medicaid. This statute was expanded to apply to all federal health care programs under the Health Care Portability and Accountability Act (HIPAA).

In terms of civil liability, physicians who knowingly submit false claims for reimbursement by the federal government can incur civil penalties of up to $10,000 per claim, plus treble damages, under the Federal False Claims Act (31 U.S.C. 3729-3732). At $10,000 per claim, civil monetary penalties often reach millions of dollars. For example, TAP’s $875 million penalty included over $559 million to settle its federal civil False Claims Act liability in the Lupron case.

Second, physicians need to realize that the Government is paying close attention to their interactions with manufacturers and vendors of health care products and services. The TAP case highlights the government ’s increased vigilance in investigating and prosecuting violations of the fraud and abuse statutes. In a six-month period (April through September 2001), the Government recouped more that $1.22 billion through both Civil Monetary Penalty Law and False Claims Act civil settlements.

Physicians should stay tuned to further developments in this area.

Shirin E. Harrell represents individuals injured by the negligence of physicians, hospitals and other health care provider. She founded the law firm of HARRELL & NOWAK Lawyers in New Orleans, Lawyers in Louisiana.

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Health Care Fraud – The Costly Deception?
By Daniel J Osborne

For years significant resources have reportedly been directed towards combating health care fraud by insurers, regulators, law enforcers and legislators. Yet, despite these reported efforts, it would appear, based on the annual estimates, the problem continues to grow and flourish.

Could this indicate that health care fraud is at epidemic proportions and can’t be stopped as our health care system is infested with health care providers who will stop at nothing to make a buck? I think not.

My experience, over two decades of working with insurers, law enforcers, regulators and health care providers, suggests that most health care providers are honest, ethical and strive to do the right thing!

Additionally, my experience has provided me with the opportunity to see the fraud problem from both sides, that of enforcement and the provider. When viewed from both perspectives, it is readily apparent that our health care fraud problem is caused by a number of factors, including:

1. Inadequate education for health care providers relative to coding and payer standards.

2. Deviant providers.

3. Inadequate training for claims handlers and claims investigators on coding and provider standards.

4. Inept claims handling and claims investigations by insurers prior to paying claims.

5. Lack of communication from insurer to provider on what is required.

6. Paucity of reliable training for law enforcers regarding the investigation of health care fraud – from identification to prosecution.

7. Tag-a-long investigators looking for organizational stats resulting in the inefficient use of law enforcement resources.

8. Lack of interest or commitment by prosecutors – big cases big problems, little cases little problems.

9. Lack of accountability for all segments of the health care delivery system – provider, payer, regulator and enforcer.

Insurers, the main reporter and victim of the fraud, indicate that all policyholders pay for the fraud in the form of higher premiums. According to the National Insurance Crime Bureau, the average American household will pay $200 more every year in premiums to pay for the fraud.

Insurers are very aggressive in reporting how costly the problem is, revealing estimates of double-digit percentages of claims submitted that are fraudulent, and billions of dollars lost each year due to fraud. These reports and estimates weigh heavily in the minds of state insurance regulators when they allow insurers to raise premiums.

Basically, what insurers and others refer to when they reveal their estimates on the frequency and costs of health care provider fraud is the billing for services not rendered, billing for services that are substandard and/or unnecessary, billing for services that misrepresent the nature of the service provided, billing for services that misrepresent the actual service provider…

The sweeping nature of the attention health care providers are getting, even those not engaged in fraudulent activity, by insurers in post-payment audits is unprecedented, and may take away from the ability of our health care providers to do what they do best – make people better! It is unfortunate that today, health care providers may spend more time documenting and defending their services to a multitude of sources, to include insurers, regulators and law enforcers, then they do providing health care services to patients.

Health care fraud is a crime that should be dealt with swiftly, responsibly and severely! But, health care fraud should not be used as a vehicle for one to prosper at another’s expense. Insurers are in the business of making money, and they are doing just that, making money – making a lot of money! This money comes from premiums collected on the sale of policies to consumers seeking protection from future (unknown) losses.

Many insurers are in a position to limit their potential health care claims exposure as they possess the ability to tell insureds’ what doctor they can see, what treatment services they can get, and how much will be paid for the services.

Further, insurers may capriciously limit payment on health care claims denying health care services reported by health care providers, asserting the services were illegitimate, claiming the services were fraudulent. Many insurers conduct claims-evaluations, reportedly for the purpose of determining if the health care services rendered by the provider were usual, customary and/or reasonable (UCR). Consider that by definition, “fraud is the knowing and willful deception or misrepresentation of the facts with intent to receive an unauthorized payment.”

Wouldn’t such an evaluation be considered a fraud evaluation? It is purportedly done for the purpose of determining if the health care provider misrepresented the nature of the services provided and reported, i.e. fraud.

Unfortunately, the UCR evaluation seems to have little to do with actual fraud fighting, but everything to do with cost containment and the bottom line for insurers. These evaluations typically do not identify that the health care provider did not provide the reported services, but instead report subjective opinions of consultant providers who usually do not even see the patient. In many cases, insurers may successfully reduce the health care provider’s billings using UCR evaluations – not because the evaluations were accurate, but because the health care provider did not have the knowledge or necessary resources to fight back.

The effectiveness of these evaluations as a means to combat fraud is questionable, and may be non-existent.

Check with your state insurance regulators and health care boards to determine if insurers refer their UCR evaluations to them for fraud investigations, and, if so, ask them how many. Ask your local law enforcers how many cases they investigate or prosecute that were based on UCR evaluations.

Further, ask your insurer what percentages of their estimated losses due to health care fraud include UCR evaluations. And, ask your insurer why, with their duty and ability to examine all claims, are they unable to do a better job in not paying fraudulent claims.

Interestingly, since the late 1980’s, health care providers have had a standard coding system. This system, known as Current Procedural Terminology (CPT), is used by providers to report and bill for health care services rendered to patients.

CPT was promulgated by the American Medical Association (AMA) so that all health care providers, regardless of discipline, could accurately report their services and be compensated for services rendered.

Although CPT has been around for decades, there are no standards of education and training required of health care providers for the proper use of the codes, or insurers for what the codes mean. This may lead to a systematic problem in our health care system, as an unnecessary adversarial system is created between our health care providers and health care payers based on an ‘attack and defense’ of billing codes and treatment records.

Both are looking at the codes, viz., one for the purpose of reporting services to seek compensation, and the other for determining what they will pay.

It should be evident, from the annual reports, if they are accurate, that our health care fraud problem will not be solved solely by amassing a large amount of resources to attack the problem, creating consortiums to share information and research the problem, or with the introduction of additional laws or regulations from politicians stumping for re-election. The investigation of health care fraud for the purpose of prosecuting the offenders is needed. But, also needed is a mandatory educational process for our providers, insurers and investigators on combating health care fraud.

The health care fraud problem is too complex to be battled by the few. Health care fraud is a problem that demands a greater participation by the principals of our health care system, so as to increase the likelihood that our successes in combating this costly problem will be enhanced, identifiable and verifiable.

Health care fraud is a problem – just read the news, but it is a problem that can and must be successfully addressed. This will only happen once our fraud-fighting team is completely accountable and includes the active participation of health care providers.

There is no stronger voice against health care fraud then that of honest and ethical health care providers – who, by the way are also insurance and health care consumers and part of the premium paying public. Most health care providers do not engage in fraud and would like to see those who do be stopped and put out of business. However, the current fraud fighting arena has health care providers – even the honest and law-abiding ones, pitted against insurers and others.

Health care providers who are not engaged in fraudulent activity must endure aggressive and invasive encounters with insurers to get paid for legitimate services provided. This process has a counterproductive effect on our overall success in combating health care fraud.

Health care providers who are not engaged in fraudulent activity may possess information and knowledge that would be useful in assisting health care fraud fighters. These providers could potentially assist at the street-level on the identification of health care providers engaged in fraud.

Furthermore, health care providers who are not engaged in fraudulent activity may assist fraud fighters with establishing the evidence to support prosecutions of the fraud. However, with the current adversarial system, health care providers who are not engaged in fraudulent activity may have neither the opportunity nor desire to assist fraud fighters as they are fighting payers for their mere financial existence.

Maybe it is time the various health care disciplines and health care provider associations formed an alliance to be the provider’s action arm to work closely with law enforcers in attacking insurance and health care fraud, just as the insurance industry purports to do. And, just maybe, with such an alliance, we would actually see a drop in the annual estimates of the costs attributed to health care fraud – currently they range, depending on the source, from $20 to $160 Billion.

Daniel J. Osborne, M.S., is a renowed expert on health care fraud issues and recognized authority on health care compliance. He can be contacted at Chripractic Compliance Consultants, Inc., 18065 238th Street,Tonganoxie, Kansas 66086, 913-369-9000, http://www.cccpfc.com

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Chiropractic Fraud – Perception Vs Reality
By Daniel J Osborne

Is health care fraud more prevalent in claims submitted by chiropractors than those submitted by members of other health care disciplines? When looking at the various news-sources, chiropractors are not found to make up either the lion-share of health care fraud charges or convictions reported.

Unfortunately, instances of fraud & abuse are present in ALL health care disciplines – Chiropractic, Medicine, Physical Therapy, etc. There is no single discipline that can lay claim to a proportionately higher rate of fraudulent conduct than any other health care discipline. However, despite this fact, there is an ongoing feeding-frenzy of insurers investigating chiropractic claims. These investigations go beyond simply evaluating either the merits or medical necessity of claims to determine if they should be paid.

Insurers are conducting ‘post-payment’ audits of claims paid in years past – focusing on purported documentation deficiencies in an effort to open the door for carriers to demand the money back! Chiropractors have found themselves faced with large refund demands from insurers. Why?

Is it because the services were not performed? No, the insurer verifies the performance of the services through talking with the patient. Is it because the chiropractor did not document having performed the service? No, the services in question are customarily documented as having been performed. Post-payment audits arise because the insurer has retroactively concluded, perhaps based upon some sense of entitlement, that the services were not documented sufficiently – i.e., to their satisfaction!

Insurers demanding refunds from providers for payments made – armed with allegations that providers failed to adequately document the services that were billed – file complaints with licensing & regulatory boards of the providers. If such complaints are made the real test will be in proving the documentation and standards were not met. The standards for documentation, as well as all other practice activity, for health care providers is established and defined by state health care licensing & regulatory boards. The boards, NOT the insurance companies, or managed care organizations, provide administrative oversight of the activity of licensees with sanctions for those who violate the laws and rules.

Allstate Insurance has established a clear-cut policy of suing chiropractors, alleging fraud and issuing press releases with the fanfare of a New Year’s Day parade. News sources, including chiropractic periodicals, do little or nothing to either investigate or evaluate the factual bases of these suits prior to joining in lock-step to print the release giving Allstate the press it so desires.

The news media and public-at-large tend to believe that if Allstate sues a health care provider, alleging fraud, the provider must have engaged in fraudulent activities. It must mean that Allstate believes both they and their insured – were somehow defrauded by the provider’s actions or conduct. It must also mean that Allstate relied upon the provider’s misrepresentations when paying claims?

Well, that certainly was not the case according to the September 2007 decision rendered by the United States 5th Circuit Court of Appeals in the case of Allstate Insurance Co. et al. v. Receivables Finance Company, LLC et al. The Opinion handed down by the Court was that Allstate is a major player in the casualty business – thus when Allstate routinely reviews a health care bill submitted by a chiropractor, performs some form of utilization review on the provider’s bill and ends up paying a significantly reduced sum based on the explanation that Allstate believed that a significant portion of the bill was either medically unnecessary or not properly documented and thus not subject to payment – Allstate cannot later come back and sue the same provider claiming that it was defrauded by some scam perpetrated by that same provider.

Nor was it the case, based on my personal knowledge, having worked with Accident & Injury Chiropractic (”A&I”), a named defendant in the case. In 1998, following the execution of search warrants by federal authorities, I assisted A&I on implementing a Health Care Compliance program, a program designed to detect and correct any improper, false or fraudulent action by the company and/or its health care providers- primarily chiropractors. Following A&I’s implementation of their compliance program, the federal investigation was formally closed.

The Compliance program that A&I implemented included an intensive internal auditing, monitoring and reporting system to facilitate the identification and correction of any form(s) of misconduct. The Compliance program was well-publicized to insurers and others, who were invited to report their concerns relative to alleged improper conduct and/or activities of the clinics, as well as those chiropractors associated, to A&I’s Compliance Board to have those concerns appropriately addressed.

Allstate was well aware of A&I’s Compliance program implementation, but never, to my knowledge, reported any concerns Allstate had, Allstate alleged in its highly publicized lawsuit, to the Compliance Board. It is significant to note that, while other insurers in positions similar to that of Allstate, did report concerns and such concerns were sufficiently addressed and corrected to the insurers’ satisfaction.

Although an integral part of the creation and implementation of A&I’s Compliance program, the only contact I had with Allstate was after it had filed its lawsuit. This contact consisted of speaking with a paralegal of Allstate’s attorney. The paralegal indicated she understood that I had assisted A&I with its Compliance program and Allstate’s attorney would like to talk with me. On no occasion did I ever speak with Allstate’s attorney. The only reason that I did not talk with Allstate’s attorney is that Allstate’s attorney refused to serve me with domesticated process as an out-of-state witness.

This brings us to Allstate’s suit filed in Federal Court in Dallas, Texas in March 2008, viz, Allstate et al. v. Michael K. Plambeck, D.C., Chiropractic Strategies et al. In this suit, Allstate alleges that Plambeck, who owns and operates Chiropractic Strategies Group (”CSG”), orchestrated a multi-state scam involving doctors, lawyers and telemarketers cleverly designed to solicit auto accident victims for free chiropractic evaluations – asserting that these free screenings were some form of subterfuge to enable CSG doctors to “inform” the patients they had severe injuries and to encourage the patients to sign up for legal representation by attorneys in order to prosecute claims for insurance recoveries and/or to participate in lawsuits against Allstate Insurance.

In a March 6, 2008 press release, Allstate reported that the lawsuit against Plambeck was filed following an extensive investigation by their Special Investigative Unit. Edward Moran, Allstate assistant Vice President in charge of the Special Investigation Unit, was quoted as stating, “Insurance fraud is a billion dollar business that costs the average consumer $300 in higher insurance premiums every year… Allstate is aggressively pursuing the fight against insurance fraud to protect consumers and help keep insurance costs down”.

This must have been an extensive investigation by Allstate’s special investigators! For more than 10 years Allstate has known of the manner in which Dr. Plambeck conducted and operated his chiropractic clinics, as described in its press release!

As a Special Agent for the National Insurance Crime Bureau (NICB) I, as well as other investigative agencies – including Allstate, was familiar more than a decade ago with the specific type of alleged acts of misconduct described. In fact, Allstate’s Complaint identified activity back to 1996.

Nothing new was found in the information provided in the (2008) release – except that the average costs passed on to insurance consumers by insurance companies has now risen to $300.00. This is up from figures of $100 to $200 cited in previous years.

Talk about righteous indignation, the major casualty insurance companies regularly complains in the media that those high costs they pass on to the public are the result of health care fraud on the part of chiropractors and other health care professionals. However, carriers rarely, if ever, mention that they operate out of luxurious office complexes and pay multi-million dollar salaries to their executives.

For example, the CEO of Allstate, in his first year on the job, received an annual compensation package worth over $10.7 million, while the departing CEO, received $18.8 million annually and $25.4 million in retirement benefits. Don’t think for a minute that those costs are not passed on to consumers in the form of rate increases!

Allstate’s press release on Plambeck contained a ‘Call to Action,’ asking persons who have knowledge of, or have been victimized by, the scheme alleged in a lawsuit filed against the chiropractic industry to report this information to the NICB. Why should this information be reported to NICB?

Is the NICB, a quasi-governmental law enforcement agency, assisting Allstate with civil litigation against Plambeck? Does NICB have a concurrent extensive decade-long criminal investigation of Plambeck’s activities?

NICB is a not-for-profit corporation under Section 501(c) (4) of the Internal Revenue Code as a social welfare organization – to combat fraud and theft for the benefit of customers and the public through information analysis, forecasting, criminal investigation support, training, and public awareness.

I suspect that NICB will do what Allstate says. Allstate is one of its biggest customers and funding source! This would include helping them on civil cases because that is what they did in the case referenced above. In A&I’s discovery-filings against Allstate, A&I accessed information from Allstate that included NICB claims and financial checks conducted on me!

Is the filing of a lawsuit based on information known for over a decade, and the parallel effort to sway public opinion to its point of view, the most appropriate way to aggressively pursue the fight against insurance fraud?

According to a March 7, 2008 article in the Dallas Morning News – Bill Mellander, spokesman for Allstate’s Special Investigative Unit, reports Allstate’s adjusters are trained to identify common fraud indicators, such as similarities in dollar amounts or wording in paperwork. When such indicators appear in a health care claim Allstate’s concerns are forwarded to Allstate’s special investigative units who then look for wider trends that may point to health care fraud and abuse – perhaps perpetrated through some form of a scam. And, per Mellander, that’s exactly what happened with respect to Allstate’s investigation of Plambeck et al. and its taking this action in an attempt to recover dollars from fraudulent claims purportedly paid by Allstate.

I suspect Allstate adjusters are trained to do more than just identify fraudulent trends and forward such concerns to Allstate’s SIU investigators as reported by Mr. Mellander. They have also been trained on how to evaluate claims submitted to determine if they should be paid utilizing sophisticated insurance industry software programs, such as Colossus, or local peer review doctors who are paid by the insurance industry to review and reduce provider claims by significant sums.

These trained adjusters probably interviewed the patients being treated at Plambeck’s clinics to determine the following: (1) circumstances of the accident; (2) whether they were hurt; (3) what were their complaints of injury; (4) did they seek medical attention; and (5) are they still being treated.

Why were there no patients identified as co-defendants in Allstate’s lawsuit alleging fraud and a collusive scheme in either the A&I or Plambeck cases? In order for such a “scheme” to exist, there must have been some form of patient claim submitted for payment that Allstate deemed to be fraudulent. If that is the case, are not the “patients” who submit the so-called fraudulent claim responsible for their own conduct? Wouldn’t such a scheme, as alleged by Allstate, only be successful if you had willing-accident victims to participate? Not according to Allstate’s actions.

Is paying claims and later filing a federal lawsuit seeking $10 million in an attempt to recover dollars paid on the claims by alleging fraud for activity known for over a decade the way to protect consumers and help keep insurance costs down?

In the Spring 2008 edition of Fraud Focus published by The Coalition Against Insurance Fraud, where it is reported that Plambeck allegedly cost Allstate so much money that the insurer is trying to “gut his operation” with a $10-million federal lawsuit. It is interesting to note that Mr. Moran, an Allstate Vice President, and NICB’s CEO are both on the Board of Directors for the Coalition Against Insurance Fraud.

If Plambeck et al. named in Allstate’s lawsuit are in fact engaged in fraudulent activity, then they should be dealt with appropriately and held accountable by the appropriate authorities – but not by an insurer, functioning as a de facto Attorney General, that wants to “gut them” in the public eye – through media releases and press conferences!

Allstate pays NICB large sums of money to facilitate criminal prosecutions of just the type of activity it alleged in its 2008 press release. The NICB, in a 2006 Special Edition of NICB Upclose, states, “Just what the doctor ordered… NICB now has more than 25 Medical Fraud Task Force Units throughout the United States that are creating a big return on investment for NICB members”. Interestingly, NICB reports having task force units in all the states identified in Allstate et al. v. Plambeck et al.

Could this desire to gut chiropractic businesses also be the reason for their lawsuits against so many other chiropractors? It definitely appeared to be the case with a chiropractor on the east coast who operated a number of multidiscipline practices. I assisted this provider with his Compliance program. This provider’s business was in fact “gutted” and forced into bankruptcy trying to pay legal fees to defend the lawsuit of the “Good-Hands” people.

Are Allstate’s protestations that it innocently relied on Plambeck’s representations, and was defrauded thereby, plausible? Does the fact that Allstate has been investigating Plambeck for more than a decade militate against Allstate’s claim that it “relied” on Plambeck’s representations to its detriment?

This issue of reliance is the lynchpin of a fraud claim. If one is convinced that another party is a fraud, and proceeds to transact business with that party, may the aggrieved party subsequently cry, “Fraud”?

May Allstate, the “good hands people,” also claim to be the “clean hands people”?

Health care fraud may be a billion dollar business as Mr. Moran states – but the insurance industry is definitely a TRILLION dollar business!

It is disingenuous for Allstate to report its fight against insurance fraud is to protect consumers and help keep insurance costs down.

In a August 18, 2005 press release on yet another federal lawsuit filed against chiropractic, this one in Massachusetts against First Spine and Rehab, Allstate reported that since 2001 Allstate has received more than $55 million in court judgments, where Mr. Moran states, “These judgments against criminals range from individuals to sophisticated organized crime syndicates.” Interestingly, Allstate’s press releases dating back to 2004 found on their web-site reveals that all but one of the releases relevant to its lawsuits against health care providers involved chiropractors.

It should be noted that The American Association of Justice ranks Allstate Insurance as the worst insurer for consumers, showing a pattern of greed, refusal to pay legitimate claims, and rewarding employees for claim denials with a strategy of “deny, delay, and defend”.

In my more than twenty years of working with health care fraud-fighters – including insurers, regulators, law enforcers and health care providers, the one constant I have found relating to chiropractic fraud is that those in the position to make the biggest difference choose to invest the least amount possible in learning how to identify, how to investigate, how to prosecute, and STOP HEALTH CARE FRAUD!

However, these same entities/individuals are likely to COMPLAIN the loudest about how bad the problem is!

This niche targeting of chiropractors by insurers for post-payment audits and civil lawsuits does nothing to really reduce HEALTHCARE FRAUD but are diversion tactics to make everyone think that something is being done.

Daniel J. Osborne, M.S., is a renowed expert on health care fraud issues and recognized authority on health care compliance. He can be contacted at Chiropractic Compliance Consultants, Inc., 18065 238th Street,Tonganoxie, Kansas 66086, 913-369-9000, http://www.cccpfc.com

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Chiropractic Fraud – Could Perception Be Reality?
By Daniel J Osborne

Perception: Large numbers of consumers and investigators alike believe that fraudulent activity in the Chiropractic profession is pervasive, and, unfortunately, may use a broad-brush to paint all chiropractors as deviant actors.

Why is the foregoing impression so prevalent today?

Is this perception the result of historical context, viz., that the foundational premise of Chiropractic was the Chiropractic-subluxation, a condition neither objectively identifiable nor proven to exist?

The subluxation may have something to do with the prevailing perception of Chiropractic. However, based on more than twenty years of experience investigating chiropractic fraud and assisting chiropractors with compliance, I suspect the following activity by some chiropractors may form the actual basis of such a perception:

-Do you want what I have?: Employ practice activity advocated by practice building consultants who boast of having large bank-accounts, expensive cars, pricey clothing, luxurious vacations… and the keys to practice success. Large numbers of chiropractors are recruited directly from chiropractic colleges.

-Recipe for Wealth: Employ practice activity, often at the instruction of practice building consultants, to increase practice revenues without establishing the compliance of said activity with applicable laws & rules, including, but not limited to: marketing campaigns to recruit new patients; generation of referrals from attorneys and MDs; convert/retain patients; treatment protocols for all; administer new or re-packaged health care services; provider services rendered by unlicensed staff; use computer-generated noting systems; billing codes to enhance reimbursement; and collection mechanisms to maximize income.

-Explode your practice: Create multidiscipline and/or specialty practices, operating in conjunction with existing chiropractic practices, to avoid limited chiropractic coverage and access more health care dollars – including those payable by federal health care programs.

-We are conveniently located: Operate multiple clinics where scripts and protocols are the norm – instruct clinic doctor and staff on what to do, how to do it, what to bill…

-We provide a good service: Provide the same services at similar intervals for all patients regardless of individual needs. Services involve little actual hands-on treatment by a chiropractor who uses new “state-of-the-art” treatment equipment or has unlicensed staff administer the bulk of patient care.

-We treat the cause not the symptom: Report the treatment of the cause of health care ailments and abnormalities with adjustment of the spine to allow the body’s innate intelligence to heal, not masking the symptoms with medication or surgery.

-Benefit design: Provide services not based on established, individual patient needs but on philosophical beliefs – everyone needs chiropractic care, no actual health care complaint required (found if needed for insurance purposes), chiropractic adjustments result in optimal health, same adjustment on all patients (upper cervical, full-spine) and modalities help the adjustment last.

-Wallet Biopsy: Identify available insurance or a willingness to commit to payments on potential patients, even those who are asymptomatic – if an existing revenue stream is found potential patients are told they have medical conditions requiring chiropractic treatment.

-Do you believe: Saying and doing almost anything to generate income from those who indicate they “believe” in chiropractic – purporting to treat acne, allergies, anxiety, bed wetting, cancer, colic, depression…

-You could be hurt and not know it: Provide checkups, under the guise of public service, to identify health conditions that need treatment. Often such checkups, administered on asymptomatic individuals, include use of testing devices not clinically or scientifically recognized for purposes of generating reports that purportedly show medical conditions and a need for treatment outlined in scripted presentations.

-Winner, winner, free chicken dinner: Free or donated services promised in aggressive marketing campaigns – mailers, telemarketing, screenings, dinner talks, etc. – designed to get as many people in the clinic as possible for patient conversion regardless of actual medical need.

-Let’s make a deal: Charge insured patients more for services than cash patients receiving similar services. Agreements with insured patients to accept what insurance pays and forego collection of deductibles, co-pays and non-covered services. Varying deals with cash patients regarding what they will pay.

-See you in Court: Use the court system to file lawsuits to challenge payor reimbursement decisions and practices for purposes of eroding resistance to questionable activity – making it the norm and acceptable.

-You are picking on us: Profess to be a victim when held to account for improper practice activity – even when such activity is known by reasonable thinking persons to be inconsistent with the laws & rules governing health care.

Reality: The Chiropractic profession, for the most part, has grown far beyond the limitations espoused by its founder, and is seen today as a bona-fide health care discipline that offers valuable health care services to patients.

Reality: Not all chiropractors engage in fraud. Not all attorneys are shysters. Not all insurers refuse to pay legitimate claims. Not all investigators are out to get chiropractors!

Reality: There is a Chiropractic fraud problem present in every geographic area of the United States, with deviant chiropractors propagating their schemes with impunity and contempt.

Reality: The crime-scene for investigations of health care provider fraud, regardless of the providers’ discipline, is the provider’s clinical and billing records. And, if you know what you are looking for when evaluating chiropractic records, you can identify the fraud. Investigators view the following as ‘red-flags’:

- Promised free/discounted services to induce patients to clinic
- Extensive exams, tests and treatment on subjective complaints of injury or on asymptomatic patients
- Use testing devices that are not recognized clinically or scientifically to convince patients they have a condition and need treatment
- Scripts & protocols – same services on similar schedule, even when better
- Services for conditions not found in presenting complaints
- Services based on available insurance or for legal reasons – not actual need
- Provider services administered to patients by non-providers
- Patients direct treatment or treat themselves
- Excessive amounts billed for services
- Goal is to bill certain amounts per visit
- Billing codes reported based on what results in the best reimbursement, not on actual conditions or what was done
- ‘Quick-codes’ automatically bill for all services insurance covers, regardless of need or if actually provided
- Conditions reported only when required to get paid (Subluxations – Medicare)
- Clinical notes appear same on all patients, prepared to support payment – not health care rendered,
- Clinical notes prepared only when requested by payers – more extensive for liability carriers

Reality: Large numbers of chiropractors see what others see and try to fight for change and accountability, often fighting from an island and dodging bullets of attack from their peers and payors.

Reality: Many otherwise honest and ethical chiropractors succumb to the temptation of fraudulent activity as they see deviant chiropractors getting rich off insurance payments without ill-effects (e.g., consumers turning away, claims denied, government audits, and fraud investigations).

Reality: The Chiropractic fraud problem must be addressed by Chiropractic educators, Chiropractic leaders, consumers, legislators, insurers, regulators and law enforcers if effective measures are to be taken – especially those problems that are already well-known and visible.

Reality: Observe this inexorable recipe that could result in an unimaginable disaster for the Chiropractic profession:

- More access to health care dollars by chiropractors
- Neither substantial- nor quantitative-steps to address widely-known fraud problems
- Failure to take steps to prevent bad-actors from ruining reimbursement advancements for those health care professionals who follow the laws & rules while delivering quality care to patients, is a recipe for disaster that could result in the fraud reaching unimaginable levels.

According to James Edwards, D.C., past Chairman of the American Chiropractic Association, (”News Flash: Obama Victory Could Result in Full-Scope Chiropractic,” Dynamic Chiropractic, 1/15/09), the election of President Obama, as well as the fact that Democrats control both houses of Congress, most of whom are pushing for “universal health care,” the Chiropractic profession has its best chance to achieve the long-desired goal of a full-scope of practice on a national level (with full-reimbursement access).

Further, Dr. Edwards reports that should a full-scope of practice become a reality, the Chiropractic profession should thank ACA leadership for their courage to file a lawsuit against a national health insurer, an insurer that administered federal health care programs, as well as the countless contributors to the ACA’s Legal Action fund who made the lawsuit possible.

Could greater governmental-control over our individual-choices and freedoms, combined with Universal health care, provide any long-lasting positive results? The last time the Democrats had such leverage we got the Health Insurance Portability and Accountability Act.

Could giving chiropractors full-physician status, as well as full-access to reimbursement for services they perform, be an answer to the chiropractic fraud problem?

Could treating chiropractors as other physicians are treated result in a significant drop in the nonsense in which some chiropractors engage? Would treating chiropractors as other physicians preclude having those chiropractors engage in practice-activity that is either objectionable or fraudulent? What impact, if any, did such treatment have on the Osteopathic profession?

Daniel J. Osborne, M.S., is a renowned expert on health care fraud issues and recognized authority on health care compliance. He can be contacted at Chiropractic Compliance Consultants, Inc., 18065 238th Street, Tonganoxie, Kansas 66086, 913-369-9000, http://www.cccpfc.com

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Investigating Chiropractic Fraud
By Daniel J Osborne

Health care fraud comes in many forms and unfortunately is not limited to any one health care discipline. Chiropractic is not immune from their members engaging in fraudulent activity that violates the laws and rules governing health care. With more than twenty years of experience, including investigating chiropractic fraud and assisting chiropractors on employing compliance programs, I offer the following bullets to refresh and/or develop fraud-fighters (providers, insurers, regulators & law enforcers) insight on chiropractic fraud.

Chiropractic Fraud, A growth industry…

Ignorance: Lack of knowledge and/or understanding of the laws and rules that govern health care.
Benchmark appropriateness of practice conduct based on what (they) perceive everyone else is doing.

Seminars: Increase income has very little to do with improving patient care. May provide information inconsistent with health care laws and rules. Trust but verify not followed here. Ads in chiropractic periodicals can assist on identifying current and developing chiropractic fraud trends.

Practice Builders: Instruct on methods and means to increase practice revenues and patient retention.
Aggressive marketing; increase services – especially tests. How to use the “CA” to build the practice; and may instruct on how to circumvent limitations on chiropractic.

Multiple Clinics: (Facilitator) Assists on opening clinics, instructs on what to do, how to bill, etc.
(Operator) Own/operate multiple clinics; scripts and protocols are the norm; high turnover rate
Both recruit extensively from Chiropractic Schools.

Vendors: (Manufacturers) Peddle devices with no specific code; provide a number of codes to get paid
(Billing Companies) may offer little or no oversight; may facilitate improper billings. (Testing) Increase revenues and patient retention; objectify the subjective; Mobile Labs – kickbacks.

Chiropractic Fraud, Types of Fraud

Marketing: Goal is to get as many people in the clinic as possible for conversion regardless of actual medical need; Telemarketing, mailers, screenings, dinner talks, scripted presentations, etc; promise “free services” to induce into clinic; Identify available insurance, or willingness to commit to payments – find condition – convert – treat – bill.

Services: Not rendered; not medically necessary; not recognized clinically and/or scientifically; substandard; Patients get same services on similar schedule – even when better (phases of care, ROF); Services based on available insurance or for legal reasons – not need (intake forms); Services for conditions not found in presenting complaints (aggressive marketing)

EXAMS: Free exams; Patterns; No exam performed; Extensive on subjective injuries; Does not address presenting complaints; Pre-determined (scripts, phases of care); Inadequate referrals

TESTS: Extension of exam, technical/professional; Free testing; Patterns; Extensive on subjective injuries (objectify); No relationship to patient complaints; Results not used in care and treatment; Use devices not recognized

TREATMENT: Free treatment (massage); Patterns; No relationship to presenting complaints; Provider services by non-providers; One-on-one services; Patients direct treatment, treat themselves; Medicare – CMT only; Non-covered provider (managed care); Multi-discipline practices (treating same)

SUPPLIES/REPORTS: Supplement/adjunct to treatment; Patterns; Supports, braces, TENS, etc.; Provide – Rent – Sell; No relationship to patient complaints; Administered at clinic as well as at home
Supplies/materials; Special reports; Educational services/supplies

Documentation: If it is not documented then it did not happen; Inadequate documentation to establish need, support rendered, who provided; Non-health care documents in the file; multiple patient files for same patient; Notes prepared to support payment – not health care rendered; prepared only when requested by payers; Notes more extensive for liability carriers, reports appear the same on all patients; Scheduling books, sign-in sheets, wand, computer generated notes, travel cards, forms, checklists, etc.

Coding: Follow the money! ICD-9, CPT-4, CMS-1500 (instructions); Goal is to bill certain amounts per patient visit; Quick codes – automatically bill; Report all services insurance covers (regardless of need); Use codes based on what paid – not what done; External billing companies

EXAM RED FLAGS: Free services; no ICD and CPT link; Patterns; Comprehensive and/or daily exams billed; No initial exam or re-exams billed; Modifier -25; Consultations; Extended visit codes; Multi-discipline practice (MD, DC exams, PT evals)

TEST RED FLAGS: Free services; ICD and CPT link; Patterns; Extensive on subjective
X-ray reading codes; Tests on visit after exam; substandard testing devices; Mobile Labs, Multi-discipline practice (DC x-rays billed under MD)

TREATMENT RED FLAGS: Free services; ICD and CPT link; Patterns; Subluxations only on Medicare; Time-based; Modifiers; No CMT billed (Manual Therapy); Place of service; Multi-discipline practices

SUPPLIES/REPORTS RED FLAGS: Free services; ICD and CPT link; Patterns; Excessive charges; TENS, Supplies; Educational supplies/services; Special Reports/Analysis; Multi-discipline practice

Collection Fraud: Insured’s pay more for similar services than cash patients; Accept what insurance pays; forgo collection of deductibles, co-pays, etc.; Medicare beneficiaries often induced and may pay more for care (CMT) than other patients; Seek compensation for non-covered services reported as if covered (in name of covered provider); Attorney reductions, TOS, Financial hardships, pre-pay; External billing companies typically do not involve themselves with cash patients; Forms, checklists, EOB’s, payer contracts, carrier manuals, practice acts

Health Care Fraud

Services not rendered: Billed exam following promised free exam; Daily exams; Services not documented; Services of one provider under another provider; CPT codes not reflective of what performed; Quick-codes; Multi-discipline practices; mobile labs; manufacturers; multiple clinics

Substandard/unnecessary services: Free exams and services (inducements); Treat conditions not identified in presenting complaints; Same services/similar schedule; Protocols/phases of care; Incomplete/inaccurate documentation; Not responsible what not paid by insurance; Provider services by non-providers; by patients; Multi-discipline practices; mobile labs; manufacturers; multiple clinics

Misrepresent nature of service provided: Exams (Comprehensive – Pattern – Daily); Diagnostic testing not used in care and treatment; Codes based on what paid, not what done; Upcoding, unbundling; Provider services by non-providers; One-on-one services not one-on-one; Improper use of modifiers; Medicare; Multi-discipline practices, mobile labs, manufacturers, multiple clinics

Misrepresent actual service provider: Provider services by non-providers; Services self-administered by patients; Services by one provider but billed under other (covered) provider; Multi-discipline practices; mobile labs; multiple clinics.

Daniel J. Osborne, M.S., is a renowned expert on health care fraud issues and recognized authority on health care compliance. He can be contacted at Chiropractic Compliance Consultants, Inc., 18065 238th Street,Tonganoxie, Kansas 66086, 913-369-9000, http://www.cccpfc.com

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http://EzineArticles.com/?Investigating-Chiropractic-Fraud&id=1357835

Hospice Medicare Fraud – Health Care Providers Bilking the Patients’ Medicare
By Fabiola Castillo

Believe it or not hospices are the one place where you would least likely think that health care providers would bilk the patients and their family members.

Do you have faith in health care professionals? Have you ever thought that the physician or nurse providing health care to you would take an unfair advantage of your situation? What about workers in a hospice?

Not only does fraud occur in a hospice, but it also happens in HMO’s, clinics, nursing homes, and hospitals. Everybody seems to be getting their fair slice of the pie.

In a hospice, many patients and their family members are not cognizant of the fraud taking place. The employees at the facility can be in a state of denial of all the crooked ways going on. If they choose to ignore the mistreatment of the patients, they are just as guilty of abuse as those who commit Medicare fraud.

Examples of Hospice Medicare Fraud

Management at a hospice dictates the total amount of care for in-home health care of patients facing imminent death. They have the power to minimize staff providing such care so that the patient gets a substandard level of care for their condition. This tactic is done to coerce the family to put the patient in a hospice where the cost of health care will skyrocket over home care.

Hospices are notorious for using less than qualified employees to administer care to their patients. Licensed Practical Nurses (LPN’s) perform the same jobs that Registered Nurses (RN’s) should be performing. An RN supervises an LPN just about anywhere across the nation. If there is not enough supervision, the level of care to the patient is less than average. If the hospice chooses to reduce the number of RN’s on their staff in order to save some money, it is the patient who suffers.

The hospice really wants to service the patient under their roof so that they can bill Medicare, Medicaid, or private insurance at a higher rate for nonstop care, which they are not providing. Many people are not aware of all of the rules and regulations governing Medicaid and Medicare, and it is simple for crooked health care providers to send out private bills to the family members who are falsely informed that a particular procedure or drug was only partly covered or not covered at all. Then they will subsequently bill the federal government and the state. Even if they were paid in full, the average Joe will not fully comprehend the billing or what services were performed.

How to Determine if Hospice Fraud is Occurring

Federal law determines the requirements of the level of care that a patients gets. Read up on all the patients’ rights for both hospice and in-home care. Do not allow a substandard level of care determine when your loved one should be moved into a more expensive facility if it is obvious that you are being coerced into making this decision. This should be a red flag for you.

Make sure that your family member is comfortable and receiving adequate pain medication and that the staff is responsive to your family member’s needs. Do not be afraid to voice out your opinion to the RN or person in charge when demanding a higher level of care for your relative. If you feel that your relative is not getting proper care, report your concerns to the state board that licenses and monitors hospices and medical facilities.

There are lots of consumer fraud schemes out there. It is up to you, the patient, to educate yourself to recognize what is and is not legitimate. Hopefully our advice will help you minimize becoming a victim to the crime of Medicare, Medicaid or insurance fraud.

Fabiola Castillo is an online marketer for the website NinjaCOPS SuperStore. This virtual store specializes in personal defense products where you can buy the best pepper spray, kubatons keychains, hidden video spy surveillance cameras, nunchaku training videos, civilian Tasers, expandable steel batons, and many other home security products.

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Socialized Health Care in America – Danger Ahead
By Cleve Tidwell

American health-care crisis… political watchwords used in countless situations in Washington to strike fear into the souls of man. The current healthcare system is in need of reform. Unfortunately, our left thinking friends seek a strategy for reform that cripples, rather than stimulates, the situation of the American healthcare system. By proposing a single-payer system shown over and over again as a threat to the well-being of American families, a potential obstruction to quality care, and stifling of American individualism against an ever-encroaching Federal government, the Democratic Party has succumbed to the conclusions that Europe made 40 years ago. The people of Europe were ahead with a more socialized medical system, and these countries are coming to grips with the astronomical failures of socialized medicine in their own lands.

Even as early as 1964, an aspiring Western politician named Ronald Wilson Reagan spoke out against "socialized medicine", by any other names, including, "public options" and "single-payer systems", as detrimental to American freedoms.

Included in the Democratic push for governmental intrusion into healthcare is Michael Bennet, our freshman senator. His speech given on the Senate floor mimicked Democratic sentiments on reform, citing the local example of Grand Junction’s healthcare program as visualization for a Federal system. The Western Slope community’s shift towards a centralized medical system was a local decision made by its citizens, not by Federal mandate. What makes our country great is the delegation of power from the Federal government to state and local authorities to maximize individual liberties. This difference allowed the citizens of Grand Junction to alter their system, successfully.

Ironically, the very successes cited by Senator Bennet come as a direct result of less Federal power, as opposed to an increase in Federal controls. Population in Mesa County hovers around 120,000. A similar system would probably not see success rates when mandated by bureaucrats in Washington D. C. Senator Bennet’s insistence that follow-up care does reduce overall long-term costs may be true, but the choice should remain in the hands of a free market where hospitals and insurance companies help determine how to merge this into business costs.

Senator Bennet raised concerns about whether American families will be able to keep their private healthcare if they wish to do so following the introduction of the public option. The public option will create incredible barriers to private care access. For instance, businesses offering insurance to their employees, given increased tax burdens and rising inflation, will be compelled to drastically reduce, or sever completely, insurance to workers, causing an increasing use of the "free" public system. According to Ed Feulner, President of the Heritage Foundation, as many as 119 million Americans will be left with the public option as the only option. Claiming the individual choice to retain private care is inconsistent with the outcome of the single-payer system, and will result in less freedom for families to make important decisions about their healthcare plans.

Socialized medicine, once limited to political organizations, has now filtered over into groups like the American Medical Association, who have expressed concern over President Obama’s plan for healthcare. I commend these doctors, who continue to stand against political sweet-talk and promote the valuable services they offer our nation. Their efforts reflect the American Medical Associations empathy for patients’ rights.

My life experiences have taken me to countries where socialized medicine is the norm. However, I must point out that government run health is not effective. Examples from Canada include people that can afford American Health Care cross the border to get immediate care due to thelong wait in Canada if people in countries with socialized medicine are in need of surgery or special care they are told that in orderto see doctors they will have to wait for weeks and sometimes months. In Japan the care is slow and they are one of the most advanced countries in the world, but they have a single pay system that is not working. The government of Japan is now talking about an increase in the single pay system since the funds are not there to support the program. This is another problem with a government run program. The governments cut services to reduce the cost of running the program, have fewer doctors and raise fees as needed. The people of the country lose all choices and are totally at the mercy of the government.

I watched in Honduras as a friend’s daughter of 25 had stomach problems and went to the doctor. Because she was not wealthy and could notget ahead in the line she stood in line for two days, yes two days. Once there she was told she needed an x-ray. It was scheduled for weeks later. She died a few days later. This is not a rare case.

In Canada the death rate for cancer is much higher than the US due to one drug not being made available in Canada since it is too expensive. Therefore, unless people go to the US to obtain it their cancer is not stopped.

Another area in which Democrats and Republicans should easily be able to find common ground is in fighting healthcare fraud.

If you think this is just tinkering around the edges of healthcare reform, you’re wrong. Sen. Tom Coburn (R-Okla.), a doctor, believes that fully one-third of all health spending is wasted on defensive medicine, red tape and outright fraud. In a system that will spend $2.5 trillion this year, that means that more than $800 billion will go to unnecessary, unproductive and fully preventable spending. I believe that America desperately needs a real change in health care that will never happen if we can’t get beyond this endless debate over government-run healthcare.

 A good start are the suggested principles stated by Past House Speaker Newt Gingrich.

The fact is, command-and-control from Washington doesn’t work. Competition, choice and individual control will produce the health system Americans want.

To truly bring down costs and expand coverage we must build a bipartisan agreement focused on four things:

1. Improving individual health by incentivizing prevention, wellness and early health.
2. Giving doctors and hospitals incentives to deliver high-quality care through fair and proper payments.
3. Reforming public programs like Medicare and Medicaid to root out fraud, cut waste and reward quality.
4. Empowering individuals with the information and financial resources they need to be better, more-informed consumers.

The Center for Health Transformation has developed an approach that will improve individual health, lower costs and deliver the best possible care. Tell your representative that any health reform bill must have these basic principles. Please Google Center for Health Transformation.

America can’t afford to let health care move to government control. Americans lives will change beyond anyone’s expectations and the downward spiral of the past America way of live will begin.

I urge you to contact your senators and representatives in Congress and say no to government run health care. 

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