Recovering the Money Lost to Health Care Fraud is an Important Issue

Posted on February 13, 2011 by Jeff Blackwell

Last November, I wrote about the U.S. Justice Department's recovery of $3 Billion in fiscal year 2010 that had been originally lost to our government due to fraud.  When you look at the government's recoveries, you soon see that much of the fraudulent activity against our government involves the health care system.

This morning, The Birmingham News had an interesting article concerning the penalties assessed for health care fraud over the last four years, just in North Alabama.  It appears that over the last four years, the U.S. Attorney's office in North Alabama has recovered $48 Million dollars in penalties.  This recovery is estimated to be only a small portion of the illegal fraud in our health care system locally.

Fraud and abuse in our health care system threaten the delivery of basic health services.  Last week, Alabama's Medicaid Agency Director painted a grim picture of the agency due to budget issues.  On a Federal level, we've all heard the near constant debate on Medicare's projected budgets. 

During these difficult economic times when so many people are dealing with personal budget problems, it is good to see that our U.S. Attorney in North Alabama has taken an active role in pursuing some of the fraud in our system.  These cases can be initiated by our U.S. Attorney or by private citizens under the False Claims Act.  If we want to curb the cost of health care, the best place to start is with those who abuse the system by defrauding the government.

 

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Fraudulent Health Plans: 10 Warning Signs

Posted on November 23, 2009 by Jeff Blackwell

In a previous post, Beware of Fraudulent Health Plans, I mentioned a prior client who had been left with thousands of dollars in unpaid medical bills after his health plan wrongly refused to cover his cancer treatment.

With the current debate in Congress over health coverage, this is an issue that may change greatly.  However, at present, many people are searching for affordable coverage. Here is a good list from The Coalition Against Insurance Fraud of 10 warning signs that offered health insurance may be a fraud:

1. The coverage costs 25 percent or more below the norm, yet promises generous benefits and a large provider network.

2. The plan readily accepts people with serious illnesses and other medical conditions that other plans normally reject.

3. The insurance has few or no underwriting guidelines – the agent or rep appears almost too eager to sign you up.

4. You’re approached by an insurance agent, phone call or direct mail. Honest group plans are sold this way, but so are dishonest ones. Unless the plan is sponsored by your employer, verify that plans solicited by outsiders are licensed and legitimate.

5. The plan isn’t licensed in your state, and the agent (falsely) assures you the federal ERISA law exempts the plan from state licensing.

6. The plan seems like insurance, but the agent or rep avoids calling “insurance,” and instead uses evasive terms such as “benefits.”

7. The agent or rep doesn’t have clear answers to your questions, seems ill-informed, or avoids sharing information.

8. You’ve never heard of that health insurance company — and nobody else has, either.

9. You have to join an “association” or “union” to obtain the health coverage. But you get no voting rights, receive no bylaws or other material, and aren’t involved in the group’s activities.

10. Your hospital keeps calling you to complain that your health plan isn’t paying your medical bills. Often the plan’s reps keep making flimsy excuses, or stop returning phone calls altogether.

We've all heard the warning about things that sound "too good to be true." When it comes to health insurance, ignoring that warning can lead to devastating health and financial consequences.

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Beware of Fraudulent Health Plans

Posted on November 1, 2009 by Jeff Blackwell

This morning as I read the Sunday Huntsville Times before getting ready for church, I came across an article that reminded me of a prior case.  I could not download the article from The Times website.  However, a quick Google search of the listed author gave me the online access I needed. In Maura Lerner's Star Tribune article, "Health Coverage Plan Was No Insurance at All", she detailed the sad story of a retiree left with over $50,000 in unpaid medical bills when his "health plan" would not pay for his medical care.

Most of us work for traditional employers who provide health insurance through well known companies or plans. However, many people, especially the self-employed and unemployed, cannot gain affordable access to standard plans. This leads them to seek alternative coverage.

For me, this article brought back the memory of a self-employed gentleman who sought affordable insurance coverage for himself and his wife.  In his search, he saw an ad from a local insurance broker. The ad said to call for affordable health insurance. He did. The broker supplied him with a "health plan" sponsored by an "employee group" or union out of California. To obtain the coverage, he was required to join this union. He did so. After faithfully paying his premiums for a long period of time, he became ill with cancer. His bills exceeded $100,000 and the plan would not pay.

Later, I interviewed one of his physicians who related that he had actually called the plan administrator about his unpaid bill and was simply informed that he had not been paid because the plan had not expected their participant to get sick.

Faced with these huge medical bills, he sought legal counsel. Several attorneys declined to help him because of the potential implications of ERISA, a Federal law which governs legitimate employer and union benefit plans.  As most attorneys will tell you, ERISA places significant limitations on the potential recovery in these cases.  However, ERISA does not apply to all health coverage and I knew it did not apply to his case.

Eventually, after lengthy litigation, we were able to resolve successfully this case.

Any person considering health insurance through some form of non-traditional coverage should by very careful in exploring their options. The financial impact of unpaid medical bills is far too devastating for the consumer to take this choice lightly.

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