Business of Life

Vast Insurance Fraud

It's often easy to people to pile on insurance companies.  Today though there's every reason to cheer a law suit brought by 12 Blue Cross and Blue Shield health insurance plans who are suing a group of health clinics and doctors who paid thousands of people across the U.S. to undergo unnecessary surgery so they could defraud the insurers out of tens of millions of dollars.  Vast Insurance Fraud involves nine surgery clinics, seven medical management companies and 34 individuals.

The scope of the alleged fraud is vast. The insurers claim the clinics paid recruiters to enlist patients in 47 states, then transported the people to California where they underwent unnecessary and sometimes dangerous outpatient procedures.
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The investigators said that from August 2002 to April 2003, the defendants recruited more than 5,000 patients nationwide to undergo unnecessary procedures at one clinic and billed almost $97 million to insurers.  The clinics also coached the patients how to lie to investigators if they were questioned, the suit claims. Patients were offered credits toward future cosmetic surgery procedures in lieu of cash, the lawsuit alleges. ...
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Officials said the scope of the scheme is even larger than alleged in the lawsuit. The FBI has determined that $1.3 billion has been billed as a result of the alleged fraud for a loss of $345 million. The FBI has 21 field offices investigating the case and has already disrupted six operations and indicted three people and one corporation, according to Dan Martino of the FBI.