
Health Insurers Make It Easy for Scammers to Steal Millions - danso
https://www.propublica.org/article/health-insurers-make-it-easy-for-scammers-to-steal-millions-who-pays-you
======
reaperducer
Before I worked in healthcare, it all seemed so easy. The doctors were the
good guys, and the insurance and drug companies were the bad guys. Now I see
it differently.

Healthcare companies are massive bureaucracies because there are people at
every end trying to scam them. All that redundant paperwork is for a reason.

You wouldn't believe some of the things that people try to get away with.
Plastic surgeons billing tummy tucks as emergency C-sections. People
pretending they were the hospital so they can get the insurance company to
reimburse them for the IV "hangover cures" they got every morning while
partying in Vegas. People walking into office buildings and play-collapsing in
the lobby so they can get an ambulance ride to the hospital across town, then
once they arrive they run out of the hospital and down the street because all
they were really looking for is a free ride. People who have six or seven
dependent children from multiple partners on their insurance, then yell at us
because the partner they're living with didn't know about all those other
children from all those other spouses until they opened some piece of mail
from us.

I'm not saying that insurance companies are all good. IME, most are not. But
if people were just honest and decent, a large part of the healthcare system
dysfunction wouldn't exist.

~~~
gruez
>Healthcare companies are massive bureaucracies because there are people at
every end trying to scam them. All that redundant paperwork is for a reason.

And what about other countries with way lower healthcare expenditures (by % of
GDP)? Are people scamming the healthcare system an American problem?

~~~
rb808
NHS and other nationalized healthcare providers, doctors and nurses working in
hospitals get salaries, so they could scam some overtime but that's about it.
I think local primary physicians get paid per visit, but most are way
overworked anyway so kinda hard to fake extra visits.

~~~
DanBC
There's still fraud in the NHS.

People who suspect fraud can report it to the NHS Counter Fraud authority.

They have a fraud awareness toolkit here: [https://cfa.nhs.uk/fraud-
prevention/fraud-awareness-toolkit](https://cfa.nhs.uk/fraud-prevention/fraud-
awareness-toolkit)

------
clavalle
Tip of the iceberg.

I know a fellow that got a bill a drug testing company didn't mean to send
him. He was meant to check for a single restricted medication because of some
treatment regimen he was on. Instead, it checked for pretty much everything
and automatically rechecked both positive and negative results.

Long story short, a $50 test turned into a $2500 test, invisible to all but
the testing company and the insurance company.

The testing company told him to ignore the bill and, indeed, he wasn't charged
that amount. It piqued his curiosity and offended his sense of fairness and it
led him down a disturbing rabbit hole of uncovering some very bad behavior and
desperately trying to get folks to do notice what was happening and do
something about it.

Basically, this company seems to be in the business of bribing doctors through
ridiculously priced leases in their medical office that they pay for to house
their 'testing advisors'. We're talking on the order of $15K a month for a
broom closet. In return, doctors use the testing company's pre-filled
documents for requesting testing -- standing orders for the whole suite of
tests with re-checks rather than just what is needed.

By the time the insurance companies caught on they'd amassed a huge war chest
and were more than happy to tie up the courts fighting claims that they're
doing something wrong.

One reason I support universal healthcare even though, generally, I'm a free-
market proponent, is because it would make this kind of fraud a lot easier to
spot and the federal government has a lot more tools to bring to bear to stop
it.

~~~
seibelj
I agree that if we are to maintain this opaque system where customers
(patients) pay a flat rate for ludicrously overpriced insurance, and then have
no insight into prices nor ability to reduce them because they don’t pay for
the actual services, then universal healthcare is better.

However, universal healthcare is not a panacea as evidenced by many angry
patients waiting for procedures in Canada and the UK - although they are leaps
and bounds better off than many in the current USA system.

An alternative would be to have transparent pricing and open the market much
more to for-profit businesses. Notice how vasectomies and laser eye surgery, 2
procedures not typically covered by insurance, have become safer, cheaper, and
more effective over the past 20 years as they have been forced to advertise
directly to consumers and compete with other vendors. This is the opposite
trajectory of almost everything else in the healthcare system. I’m not saying
all procedures can become like this - obviously a heart attack is a heart
attack - but there are many other specialist procedures that are indeed
scheduled in advance that could benefit from a heavy dose of transparency and
competition.

As another example, I’ve been on the same medication for the past 8 years. I
get the same dose, and it’s never changing. Yet my provider makes me visit
every 3 months for a refill. They put me in a room and “check up” to make sure
the meds are "going well". Often this 30 minute scheduled meeting is less than
5 minutes because my doctor just hits a button on the computer to refill it.
Yet insurance pays 4 times a year for this unnecessary visit to a specialist
doctor. It doesn't cost me anything (other than deductible) so I'm most
annoyed about the time wasting, but I also know that the system is being
bilked for thousands of dollars.

Multiply that anecdote by a million other situations. I should just be able to
buy my meds without being forced to go through a doctor.

~~~
mrep
> As another example, I’ve been on the same medication for the 8 years. I get
> the same dose, and it’s never changing. Yet my provider makes me visit every
> 3 months for a refill.

Know the feeling, my girlfriend has to get pap smears every 1 or 2 years in
order to get birth control and she despises those checkups. Yeah, let's put
more barriers to women getting birth control... Fortunately, I only have to
deal with yearly eye exams to get contacts which are still super annoying but
the pap smears sound awful.

~~~
elliekelly
It's ridiculous that birth control even requires a prescription in the US but
it's not an issue you ever hear debated or discussed. The reason? If it were
OTC (and no longer covered by health insurance) it would be prohibitively
expensive for many of the young women who need it the most. So instead we end
up getting annual pap screening even though it's only necessary every 3-5
years. Quite a corner we've painted ourselves into with this whole health
insurance mess.

~~~
astura
Birth control can safely be prescribed without a pap test. A pap test is
merely a screening for cervical cancer. The fact that a medical provider would
require a pap for a birth control prescription when that's not medically
necessary is a problem. Overscreening for cervical cancer is also a big
problem. Once every year is an inappropriate screening interval for most
people.[1]

In some states pharmacists can prescribe birth control pills after a
consult.[1]

There's no reason why we can't require insurance to cover birth control pills
even if they are OTC. We can still have a pharmacist run it through insurance,
you just don't need a doctor's note.

[1] [https://www.cancer.org/cancer/cervical-cancer/prevention-
and...](https://www.cancer.org/cancer/cervical-cancer/prevention-and-early-
detection/cervical-cancer-screening-guidelines.html)

------
danso
FWIW, the Centers for Medicare & Medicaid Services makes the entire National
Provider Identifier database searchable [0] and downloadable (6M rows,
7.25GB)[1], in which you can find all of the story subject's many fraudulent
entries. Interestingly, even though CMS tracks and disseminates a file of
deactivated NPIs, several/many of this guy's entries are still "Active" [2]

[0] [https://npiregistry.cms.hhs.gov/](https://npiregistry.cms.hhs.gov/)

[1]
[http://download.cms.gov/nppes/NPI_Files.html](http://download.cms.gov/nppes/NPI_Files.html)

[2] [https://npiregistry.cms.hhs.gov/registry/search-results-
tabl...](https://npiregistry.cms.hhs.gov/registry/search-results-
table?organization_name=KINESIOLOGY+SPECIALISTS&addressType=ANY)

------
theonemind
I've never really liked the "the business screws up and _you_ pay for it"
narrative so common in articles like this. I don't remember my microeconomics
class too well, but the inefficiency affects the supply/demand curve, and I
believe that the business and the consumer both typically take a loss. Not
really so simple a story as "they just raise the price by the amount they lost
and take it from you easy-peasy" like the line makes it sound, like consumers
have just simply absorbed all cost/risk on the company's behalf.

At any rate, fraud like that should increase the inefficiency of the business,
and in a competitive market, companies handling fraud better should get an
edge, then we end up with a bunch of companies doing the optimal amount of
fraud policing. Of course, we have the real problem of not _having_ real
competition in the US health care market.

~~~
ip26
It seems pretty obvious the cornerstone of that narrative is a poorly
functioning market, lacking competition, price transparency, freedom of
choice, etc.

------
drtillberg
Maybe 40 years ago only MD doctors were qualified to perform medical
procedures and thus to have NPI's, but things change. Now states are all over
the place on what professional is qualified to provide what service. Most
states probably require some kind of registration, but I also wouldn't be
shocked to learn some ancillary physical therapy or acupuncture or
chiropractic service can be billed somewhere by someone who only has a PhD.
Not in Texas apparently, but somewhere.

The article was about a brazen 'slam dunk' fraud, but for the 99% of other
schemes that inflate a bill 5%, 10%, 15%, the blame is laid more correctly at
the feet of the AMA and it's CPT Codebook (the 99215 in the article) which at
once makes billing for things an awful chore and makes prosecuting less brazen
schemes a total headache.

Look up 99215, for example. First of all, the description is copyrighted IP
not freely available for use. Second, if you find it, it's a timed procedure
that _doesn 't_ have a specific time attached to it. Just proving 'you billed
for a long examination and didn't actually spend much time with the patient'
generally will _not_ suffice to prove fraud. Instead you need to delve into
medical notes, interviews and compare the lengths of other examinations, just
to demonstrate falsity for one occasion, one exam. This, and all the secrecy
attached to medical records, is a big reason why medical billing anomalies are
so unlikely to generate legal department responses.

------
joecool1029
A bit unrelated, but states make it easy to scam unemployment insurance too!

I've had a rando collecting unemployment benefits from my company's account
for a year now because my company's name is similar to a grimy company that
hires contractors and operates in a different industry. I've never had a
relationship with the claimant and don't even know who they are.

My theory is: The scammers search for businesses with similar names to whom
they contracted for and submit unemployment claims to whomever looks similar
on the state business registration website. The state doesn't check to see if
there was actually a record of employment and just puts the burden of proof on
the business. If the response by the business isn't timely or things get lost
in the mail, the state pays out whatever they claim.

At this time the risk appears small to the scammer as our fraud reports went
nowhere, the cost to my business is large as it screws our UI experience rates
up and has now lead to having to change/rebrand the business's name.

------
word-reader
The scammer ended up with $4M in his pocket, for providing personal training
services to 1000 people. Now, it sounds like he would also fraudulently bill
the insurance companies for exercise sessions that didn't happen. But let's
say only 800 people got personal training: that's $5000 per person. That's not
an absurd amount for personal training over a long period of time. And their
health was surely improved by the exercise.

Then someone with a personal vendetta against him got his business records
because of bad OPSEC. I'm sure a lot of other people involved (clients,
business associates) also knew it was a questionable operation, but they were
probably pretty happy to have health insurance actually pay for things that
improved their health for once. I don't feel like this type of fraud would
increase healthcare costs in the way many other actors in the system (who are
not about to go to prison) increase them.

If this guy had been ordained as a doctor and was just a little more careful
with the billing, he'd be hailed for _getting_ insurance companies to pay for
exercise treatment. "You say you have pain? I prescribe 'physical therapy'
where you work out with one of my assistants for an hour and I talk to you at
the end." Easy as that.

~~~
danso
It's kind of a stretch to say that this guy Williams was a hardworking health
provider who just wasn't lucky enough to have an approved degree and good
opsec. According to the story, his first felony conviction came from using his
son's autism to submit fake invoices to get gov't reimbursement (nevermind the
felony child abuse that landed him in prison).

And then there's the allegations that he highly exaggerated his services
(describing "typical fitness exercises" as treatment for "lumbago and
sciatica"). And then there's the several examples of clients who _did_ notice
and call out the egregious mis-billing:

> _Another client texted Williams with concerns that her United insurance plan
> had been billed for 18 workouts in December 2015. That couldn’t be accurate,
> the woman wrote. “I had to take December off due to my work schedule and
> family in town,” she wrote. “I understand that people need to be paid but
> this seems excessive.”_

~~~
word-reader
The guy is a grifter, no doubt. But the general tone of the article implies
that I should be concerned about some random sleazeball for raising my
healthcare costs, rather than the insurance companies themselves (who in this
case basically _administered_ the defrauding of their client, Southwest
Airlines, by not having proper vetting procedures), the MDs who undoubtedly
commit the vast majority of insurance fraud, or policymakers.

edit: First-line treatment for sciatica includes typical fitness stretches and
"lumbago" just means "back pain" which is treatable with typical fitness
exercises: [https://www.verywellhealth.com/back-pain-stretches-
exercises...](https://www.verywellhealth.com/back-pain-stretches-
exercises-2549756)

~~~
ip26
_implies that I should be concerned about some random sleazeball for raising
my healthcare costs, rather than the insurance companies themselves_

We must have read the title differently.

~~~
word-reader
Ah, true. But they had lots of family sources and court records for Williams,
and I suppose no spokesperson from the insurance companies wanted to talk, so
most of the article is just about him. I wish journalists would develop some
more sources inside insurance companies, PBMs, etc. How they operate
internally is just like a void that nobody wants to look in to, apparently.
Like how do they decide what they'll pay for? Or how do they decide who gets
to be part of their network? How long will they let a doctor send in
fraudulent claims? There are probably 1000 analysts or programmers inside UHC
alone who would happily help answer these.

------
galaxyLogic
The thing to take away from this: Doctors, Insurance companies and big and
small Pharma (small meaning pharmacies) are in cahoots with each other.
Doctors charge for unnecessary operations and insurance companies don't care
because they can pass on the costs to people who must have insurance.

But then why doesn't competition keep insurance companies more alert? Is it
because it is really oligopoly, a bit like either you use Spectrum or Verizon
there's really other choice?

~~~
tehlike
Mergers and Acqusitions. Once insurance providers get large, they tend to get
acquired.

Im sure there is more to "why", but this is one reason.

------
AFascistWorld
Hospitals in California now requires Chinese patients to pay upfront, and from
what I gather, you don't even need to ask the doctors and hospitals for them
to unknowingly sign you up various healthcare benefits.

Some birth tourists in fear of immigration policy changes need to specifically
stress and request to not being signed up.

------
NoblePublius
This guy doesn’t seem like a fraudster so much as an honest practitioner
trying to make his skills available to people. Did he injure anyone?

------
alexashka
A lot of this would be solved by knowing how much people make, what they spend
it on and where the money came from.

If you want democracy, let people vote on who is a scumbag, investigate those
people's financial history and if it's confirmed, ex-communicate them from
society.

That'd border on real democracy however, so I don't see it taking place
anytime soon :)

~~~
vageli
> A lot of this would be solved by knowing how much people make, what they
> spend it on and where the money came from.

> If you want democracy, let people vote on who is a scumbag, investigate
> those people's financial history and if it's confirmed, ex-communicate them
> from society.

I may be reading your point too narrowly but it sounds like you are advocating
for a judicial system.

~~~
alexashka
A judicial system is concerned with laws.

We'll always have scumbags who twist the law in ways to profit themselves.

This system is so broken we even have names for sub-categories of scumbags who
literally abuse the law - one of them is called patent trolls!

That's why we need democracy - to vote on ex-communicating scumbags that try
and do that. Law alone is not enough - I don't know why that's not immediately
obvious.

There's also the question of incentives - if you can't spend money you steal
without getting caught, you're far less likely to be a scumbag and steal in
the first place. These seem like incredibly obvious things.

