With the rising cost of health care, many patients are on the hook for pricey medical bills after treatment. While most doctors and hospitals are charging the market rates for medical care, some more unscrupulous patients and healthcare providers are taking advantage of the high costs of health care to defraud the government and the insurance industry. A couple of recent cases have highlighted the temptation to make big money in insurance fraud.
A number of medical professionals were recently indicted in southern California in relation to a massive insurance fraud and bribery scheme. Five people have been arrested, two others have court summons, and another remains at large in what may be just the beginning of a larger health care fraud case.
According to the indictments, a number of doctors and chiropractors are accused of taking kickbacks for patient referrals. One radiologist in Los Angeles, Ronald Grusd, is accused of paying thousands in bribes to chiropractors in southern California for referring patients who had workers' compensation claims. The money was laundered through a shell company owned by Grusd.
Some of the bribes only involved payments of about $100 per patient, with $25 paid to the intermediaries, and the remainder going to the health care provider. However, with the high number of patients involved, some doctors were making $30,000 a month in tax-free bribes. With all the health care providers involved, the schemes brought in almost $25 million.
Authorities involved say that this type of healthcare insurance fraud is widespread, and can be difficult to detect. The individuals involved were charged with conspiracy to commit mail fraud; and honest services mail fraud. Each count of mail fraud may carry up to 20 years in jail, and fines of up to $250,000, or twice the amount of money defrauded.
In Indiana, 36 people were recently charged in an insurance fraud scheme involving staged car crashes. Car accidents can cause serious injuries; however, when people are involved in staged car accidents, they may be looking to cash in on fake injuries. Over a period of about 6 years, Michael Burris, Sr., along with his wife, two sons and dozens of others were involved in staging numerous automobile accidents for insurance money.
The scheme involved getting an insured automobile, and crashing the vehicle in a remote area. Then a number of people would get in the car and wait for emergency services to show up. The people purposely injured themselves, including getting punched in the face, being cut with razor blades, or using a wire brush to create abrasive injuries. They were coached on how to appear injured, rack up medical expenses, file false insurance claims, and respond to insurance adjusters and investigators. After getting their claim check, they would cash out the money.
Several agencies were involved in the investigation, including local police, the U.S. Postal Inspection Service, FBI, and U.S. Marshal Service. Each count of the alleged fraud carries the possible maximum penalty of 20 years in prison and a $250,000 fine.