Fraud Called 'The Dark Side' Of Insurance

IRIS TAYLOR, Times-Dispatch Staff Writer
Richmond Times Dispatch (Virginia)
March 19, 2006
Posted March 23, 2006

Have you cheated your insurance company lately? If you said yes, you're not alone.

Thomas G. Snead Jr., retired chairman and chief executive of WellPoint Inc.'s Southeast region, said consumers, crooks and industry professionals bilk more than $80 billion annually from the American insurance industry. Among the perpetrators: doctors, chiropractors, hospitals, other practitioners, health-care brokers and businesspeople.

It's the dark side of insurance, Snead said. People want "money for nothing and checks for free. I don't believe there is any line of insurance that is immune to fraud."

Speaking alongside several other professionals last week at Virginia Commonwealth University, Snead warned that fraud is "one of the biggest problems in insurance. If we can eliminate insurance fraud, we can cover every man, woman and child in the United States."

What's the cost?

Representatives from insurance, legal and law-enforcement organizations spoke at the seminar, "Fraud: Fighting the Dark Side of Insurance." The State Corporation Commission was a sponsor.

What's the harm in padding claims? Billing for unperformed or unnecessary procedures? Faking fender-benders or whiplash? Making big bucks working while collecting disability? Making the rounds of doctors all over town to get enough pain pills to satisfy an addiction?

"It costs us billions of dollars each year," but everybody pays, Snead said. It inflates business costs and causes insurance companies to raise premiums and tighten underwriting processes.

Even the insurance industry is culpable, he said. "I believe the industry has contributed to its own vulnerability." It trusts that everyone will play by the rules, and it turns around claims so fast that verification lapses leave the industry open to fraud and abuses. The Hurricane Katrina aftermath is an example.

What can be done?  What's the solution?

* Eliminate the gray areas that enable health practitioners and other professionals to defraud the system.

* Make fraud convictions easier to obtain.

* Change the mind-set of people who think they are entitled to a return on their insurance premium investment.

* Educate consumers and professionals about the magnitude and intricacies of insurance fraud and their stake in lowering it.

What can consumers do?

* Review medical bills carefully. Make sure services were actually performed.

* Beware of "free" medical treatment. A "free" chiropractic consultation, for example, isn't free if you wind up getting unnecessary treatments three times a week, billed to an insurer.

* Watch those referrals. It may be to a clinic partially owned by the medical practitioner who referred them. Ask if the treatment is necessary and if the practitioner has an ownership interest in the clinic.

* Avoid getting "talked into" an injury. Ambulance chasers, the slang for unscrupulous attorneys quick to reach an accident scene, may talk you into filing a lawsuit whether or not you suffered injury.

* Protect your insurance information. If someone with your insurance information files a medical claim under your name, an insurance company has no way of knowing you weren't the insured person, said spokesman Scott Golden of Anthem Blue Cross and Blue Shield in Richmond.

Howard Goldblatt, director of government affairs for the Coalition Against Insurance Fraud in Washington, said Virginia needs an insurance-fraud law.

"We believe a specific definition of insurance fraud helps in the investigation and prosecution of criminals and helps people understand what is, and is not, a crime."

Capt. Robert L. Tavenner of the Virginia State Police insurance-fraud unit in Richmond, said, "We tried [but failed] to get an insurance-fraud statute through the General Assembly this year. We are not lacking the tools to prosecute people. We are looking to educate the public."

Insurance fraud is a statewide problem, he said. The number of fraud referrals from insurance companies rose from about 200 five or six years ago to 1,638 last year.

Copyright 2006 Richmond Newspapers, Inc.

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