PIP investigation results in 21 arrests in Miami

May 14th, 2013

 

It’s not a record that Miami-Dade wants, but the county is on track this year to pass Tampa-St. Petersburg as having the worst rate in Florida for auto insurance crime. The metropolitan area boosted its numbers on May 1 when authorities announced the arrest of 21 people on charges related to Personal Injury Protection (PIP) fraud.

Prosecutors say the group staged five car accidents, sent people who were not injured to four clinics, and filed PIP claims totaling $400,000 for medical services never provided. Among those arrested was Dr. Hugo D. Goldstraj, medical director of Clarke Medical Services in Miami. The other clinics involved were Emoge Medical Services in Doral, Magic Hands Medical Services in Coral Gables and New Life Rehab Services in Miami.

The alleged crimes were discovered through an undercover investigation dubbed “Operation No Med Services.” The arrests were announced at a press conference attended by Florida CFO Jeff Atwater, reports El Nuevo Herald.

“For many people, this is an invisible crime because no bodies, guns, knives and sometimes there is no witnesses,” Katherine Fernandez Rundle, State Attorney for Miami-Dade County said at the press conference. “But this fraud affects all of us, out of our pockets when paying for auto insurance.”

The Insurance Fraud Division of the Department of Finance of Florida directed the fraud investigation. Director Dan Anderson said most auto insurance fraud takes place in Miami-Dade.

“In the first 10 months of this fiscal year, we have made more than 500 arrests,” Anderson told El Nuevo Herald. “Of those, more than 200 cases are being prosecuted by the Office of Miami-Dade.”

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Pain clinic defrauds Miami-Dade County with fake insurance claims

May 7th, 2013

The bus drivers weren’t hurt in accidents, but you couldn’t tell that from the hundreds of insurance claims. The scam is over, halted by authorities who say they busted the scheme to defraud Miami-Dade County’s health insurance plan of tens of thousands of dollars.

The Miami-Dade public corruption bureau arrested six top executives of AZJ Medical Center in Miami and put out an arrest warrant for company president Elvis Garcia, who had left the building. The alleged perpetrators were charged with filing false insurance claims, grand theft, organized scheme to defraud, and patient-brokering.

This is standard stuff at the clinics that rip off insurance companies and drivers on Personal Injury Protection (PIP) claims. Organizers fabricate records of injuries and treatments and bill the insurer for the maximum amount. Sometimes, crews stage accidents to generate more claims.

At AZJ, operators recruited transit workers so the medical center could file phony claims with the insurance company administering the self-funded county plan. One bus driver generated billings for 135 visits and 758 treatments. But police say that the individual received only a handful of massages. Another worker signed blank medical forms that were turned into invoices.

One informant told investigators that she was paid more than $6,000 in cash to provide her name and insurance policy for fake claims and to recruit others to the scam. A clinic employee told police that he received $45 from the bosses each time he signed off on progress forms for patients he never treated.  Another employee signed off on forms for patients seen by a massage therapist who pretended to be an occupational therapist.

Those are common practices at clinics that engage in PIP fraud. Injuries and treatments are invented and become insurance bills. At the AZJ clinic, authorities first arrested seven transit workers on charges they were part of an insurance swindle. A year later, police had enough evidence to go after the ringleaders.

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Attorneys say that lawsuits, pace of PIP reform rollout will impact auto insurance savings

May 7th, 2013

We’ve been cautioning that the savings from the Personal Injury Protection (PIP) reform law will take time. Court challenges and the way the rules roll out mean that noticeable changes will take longer than we and insured drivers will like.

Two prominent Florida attorneys agree. Aaron Finesilver and Michael Longo of the Miami-based law firm Lydecker Diaz wrote in a guest editorial in the Daily Business Review that “The new PIP bill is not the type of legislation capable of providing overnight change.”

The lawyers, who handle PIP and bodily injury claims, correctly note: “The reduction of premiums will likely depend on several factors, including the outcome of lawsuits challenging the statutory amendments, the effect the new provisions have on reducing fraudulent or excessive claims, and the time it takes to implement the statutory changes.”

Finesilver and Long note that acupuncturists, chiropractors and licensed massage therapists have challenged several PIP provisions as unconstitutional and won an injunction in state court. The attorneys warn that “if any of the provisions designed to reduce PIP expenses are invalidated, consumers cannot expect to benefit from those anticipated savings.”

The attorneys also remind us that changes in the new law, which began as House Bill 119, to reduce premiums don’t take effect on existing policies until they renew. Thus, a driver who re-ups with his or her insurer in December will see no benefit until 2014 at the earliest.

They close their opinion article with these sage words: “At present, it is simply too early to draw conclusions on the effectiveness of House Bill 119 in reducing PIP premiums and rate filings throughout the state.”

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Regulators challenge Florida court injunction against PIP reform law

May 4th, 2013

The effort to institute Personal Injury Protection (PIP) reforms continues. The First District Court of Appeal in Tallahassee has agreed to hear arguments on whether an essential part of the new PIP law should stand.

The Florida Office of Insurance Regulation had appealed to the court after Judge Terry Lewis of the Second Circuit Court of Leon County had found unconstitutional sections of the law that could prohibit payment of PIP benefits or prohibiting payment of benefits for services provided by acupuncturists, chiropractors and massage therapists.

Based on specifics in the court order, the state insurance office questioned whether the trial court had jurisdiction in the matter. The state insurance office is expected to file initial briefs by May 6.

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‘Good faith’ is gone from PIP litigation in Florida

May 4th, 2013

To understand how plaintiff attorneys play the blame game in Personal Injury Protection (PIP) lawsuits, follow the money. Insurance companies do what they are supposed to do, and then they are sued for millions of dollars because they supposedly acted in bad faith.

“A pair of decisions out of the Fourth District Court of Appeal has revived the bad faith debate,” reports the Daily Business Review in an April 29 news article headlined, “Restoring the Good Faith in Florida’s ‘Bad Faith’ Insurance Litigation.”

The article describes a hypothetical case in which a policyholder is at fault in an auto accident. The insurance company tries to settle and the insured person is hit with big damages. What happens next? An attorney sues the insurance company, claiming it acted in bad faith. The insurance company loses the trial and pays millions of dollars more than the insurance policy required.

Asked about that scenario, UAIC chairman and CEO Richard Parrillo Sr. notes that his company recently paid out $12 million to cover a $5.2 million bad faith award and the associated legal costs.

“If I had more of these, we wouldn’t be sitting here,” he is quoted as saying in the article.

Plaintiff attorneys see it another way, saying that insurance companies make it expensive to litigate. That doesn’t make sense, given that Florida is one of the most pro-plaintiff states in the nation, according to the article, Florida allows first-party and third-party claims under common law and by statute.

To make matters worse, insurers are required to use “the same degree of care and diligence as a person of ordinary care and prudence should exercise in the management of his own business,” according to a state supreme court ruling. A jury, not a judge, decides whether the insurer acted negligently.

Efforts to reform the bad-faith rules are stuck in the courts and the state legislature. Bills in the House and Senate failed to pass in the latest session. That is bad news for every driver in Florida because the costs eventually are passed on.

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Sometimes, victim of PIP fraud is not just the insurance company, but the patient

April 23rd, 2013

A patient of Polo Medical Center in Delray Beach was more than a little surprised when she saw the number of Personal Injury Protection (PIP) insurance claims for her auto accident. She had gone to the chiropractic clinic for treatment and stopped two weeks later; however, her insurance company was billed for another 10 weeks of appointments.

When the patient notified her insurance company, it found that the clinic had billed $9,468, which is just under the $10,000 PIP limit. The clinic’s chiropractor, Barbara Ann Turkell-White, initially said the amount was a clerical error and made a partial refund. Further review found 24 false therapy notes.

The Florida Division of Insurance Fraud investigated and arrested Turkell-White in February on charges of insurance fraud and grand theft.

The lesson: You could be a victim of PIP fraud and not know it. Check your insurance claim statements for accuracy. Otherwise, a clinic could charge your insurer for services never provided and no one would be the wiser. However, you would be poorer because everyone pays for PIP fraud.

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Last member of ‘Operation Whiplash’ ring convicted of PIP fraud

April 22nd, 2013

We reported that Stephen M. Lovell of Windmere was among those arrested on federal charges of Personal Injury Protection (PIP) fraud. Now, we can tell you that he was convicted.

Lovell was found guilty of conspiracy to commit health care fraud and could go to federal prison for up to 20 years. He is scheduled to be sentenced June 10.

Lovell, a chiropractor, had claimed that was president and sole officer of Xtreme Care Rehabilitation Center Inc. in Cape Coral. In fact, he was acting as a front for the real owners so that they could avoid government regulation as a health clinic.

The clinic was a sham in other ways. Lovell and the 11 others, all of whom have pleaded guilty, recruited people to stage auto accidents and filed fraudulent PIP claims on their behalf. Once paid by insurance companies, the conspirators laundered the proceeds through corporate bank accounts.

A number of agencies played important roles in uncovering the fraud in what they code-named “Operation Whiplash.” They were the Cape Coral police department, Secret Service, IRS criminal investigation, city of Miami police, Hialeah police department, Florida Dept. of Financial Services and National Insurance Crime Bureau.

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The numbers are in, and they’re bad for PIP fraud in South Florida

March 22nd, 2013

Maybe the word “rampant” isn’t strong enough to describe Personal Injury Protection (PIP) fraud in South Florida. Maybe “unbridled” or “raging” best describes a situation that is completely out of control.

The National Insurance Crime Bureau says that Miami-Dade, Broward and Palm Beach counties accounted for almost half of all questionable insurance claims referred to investigators in 2012. The most common: PIP-related claims.

“Based upon this analysis, medical fraud in South Florida is still a significant problem facing NICB member companies,” says the report issued in late March 2013.

Here are the numbers:

• Miami-Dade had 3,530 questionable claims in 2012; that’s almost 10 a day. Broward had 929 questionable claims and Palm Beach 755.
• PIP was the most common kind of questionable claim, totaling almost half in South Florida.
• Not surprisingly, the overwhelming number of questionable claims involved personal cars, versus commercial vehicles or homes.

The top reasons for referring a questionable claim for investigation read like a list of postings on this website of what’s wrong with PIP in Florida. From highest to lowest, they are:

• Faked or exaggerated injury
• Medical provider
• Excessive treatment
• Billing for services not rendered
• Lack of cooperation from insured
• Staged or caused accident
• Prior injuries
• Inflated billing
• Organized group or ring activity
• Extensive loss history

PIP fraud costs drivers millions and millions of dollars in higher premiums. Florida insurance companies lose money, too, an average of $1.15 for each dollar in premium collected.

The solution? First, reform the courts and make sure judges follow the law. Fraudsters sue when they think they can win, not when they know they’ll lose or risk being exposed. We have an alarming number of PIP lawsuits in our court system today because the clinics know they have the judges on their side.

Second, more support for law enforcement. The statistics show that the problem is so widespread that hard-working investigators cannot keep up. The NICB provides assistance to police.

Last, PIP reforms passed by the legislature in the last session need time to work. Many of them took effect at the start of 2013 and can have an impact as the year goes on.

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Orlando clinic cheats PIP two ways with unlicensed medical treatments

March 13th, 2013

 

Here’s a clever way for chiropractic clinics to rip off patients and insurance companies out of Personal Injury Protection (PIP) money: Have a friend perform medical treatments.

Blessings Rehab Center in Orlando put Ibenick Paul on the payroll as a medical professional even though he didn’t have a license, police say. He treated patients from 2009 until he and others at the clinic were caught. During that time, Blessings Rehab illegally billed insurance companies more than $67,000 for PIP benefits.

Frederick Freeman, the clinic’s chiropractor, and office manager Diana Merice, who allegedly hired Paul, were arrested with Paul on charges of insurance fraud. It’s not clear what recourse the patients, who never received proper treatment, can do about the situation.

The scheme is done and, apparently, so is the clinic. When a WFTV news crew went to the clinic in late February, it found a vacant storefront.

 

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‘Ambulance-chasing’ attorneys run from spotlight

March 4th, 2013

If you’re wondering why personal injury lawyers are often called ambulance chasers, an open-and-shut civil suit among seven South Florida law firms provides an answer. Four firms that often represent people injured in accidents such as car crashes sued three competing firms, claiming that they illegally solicited clients.

The lawsuit alleged that the three firms used non-employees, known in the legal trade as “runners,” to direct injured people to those law firms. You see, it’s illegal for attorneys to chase an ambulance up the street, down the hill and over to a hospital in order to sign the banged-up occupant as a client. It’s also against the law for attorneys to pay other people to knock on the doors of patients’ rooms and homes to do the same.

However, some law firms bend or break the solicitation rules. Almost every personal injury attorney knows of at least one firm that’s engaged in the practice. It’s a dirty, little not-that secret which the Florida Bar does little about.

When the situation gets out of control, the offended firms do what they know best: go to court. After all, top attorneys at firms like these regularly make $400 or more an hour suing insurance companies like ours for Personal Injury Protection (PIP) claims. One PIP case can produce upwards of $50,000 in fees, even if the client collects only a few bucks.

That makes runners a source of irritation to the firms that are losing out on the sprint to sign clients. Along with some language about how integrity and the reputation of lawyers are being damaged, the lawsuit says that people working indirectly for the defendants put injured people in touch with their lawyers. For example, an employee of Broward Health Medical Center arranged a meeting between an injured patient and an attorney, according to the lawsuit.

The defendants responded with threats and indignation.

“The true headline, if any, ought to be that these attorneys have abused the judicial process and are maliciously prosecuting false and unsustainable legal claims to serve their own personal and political interests,” one attorney told the Daily Business Review.

The news article may have also prompted the two sides to figure out that publicity helped no one. According to the Broward County Clerk of Court, the lawsuit is done. No details were available, but you can guess that if seven law firms shut down a case in less than two months, they have decided it is better to settle their differences in private.

We’re not going to publicize the names of the law firms here. They neither need nor deserve the attention. But if you want look them up, here’s the case number: CACE13-00031.

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