FBI Raids Three Southern California Clinics in Alleged $300 Million Health Care Scam
The Federal Bureau of Investigation raided three outpatient clinics in Southern California as part of a 15-month investigation into a health care scheme in which patients are recruited for medically unnecessary and overpriced procedures so their insurers can be billed for the costs, the Wall Street Journal reports. Insurers and employers have paid an estimated $300 million to $500 million for such claims in recent years, according to insurers. The scheme typically targets large self-insured employers with "relatively generous benefits" or traditional indemnity health plans that allow patients to seek care outside their provider networks, the Journal reports. Recruiters, who are sometimes co-workers, visit factory floors or assembly lines nationwide to find patients willing to undergo medically unnecessary procedures, such as endoscopy and sweat-gland removal, in exchange for airfare, hotel accommodations and cash. The scam has involved thousands of patients and has affected most large insurers, including UnitedHealth Group, Cigna and Blue Cross and Blue Shield plans nationwide. The investigation has focused on dozens of outpatient surgery clinics and more than 100 health care providers, mostly located in Southern California, where state law allows clinics to open, move and change names and tax identification codes easily, according to the Journal. "Prompt pay" laws requiring insurers to pay claims in 30 to 45 days in most states exacerbate the problem because health insurers are pressured to reimburse for services without first investigating their validity, insurers say. Investigators say several different rings are involved in the same scam, and they suspect the groups are loosely connected or have branched out from several original operations. "It is hard to believe that they all happened upon the same idea at the same time," Bill Mahon, president of the National Health Care Anti-Fraud Association, said (Fuhrmans, Wall Street Journal, 3/19).
ABCNews' "Primetime" Thursday reported on the FBI's investigation of the medical insurance scam. The segment includes comments from FBI agents Grant Ashley and Tim Delaney; Mahon; Dr. David Peura, vice president of the American Gastroenterological Association; and Darryl Withrow, vice president of dental manufacturer Glidewell Laboratories ("Primetime," ABCNews, 3/18). The complete transcript is available online.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.