Posts Tagged ‘insurance claim’

Pain clinic defrauds Miami-Dade County with fake insurance claims

Tuesday, 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.

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

Tuesday, 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.

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

Monday, 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.

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

Friday, 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.

PIP fraud starts at young age when parents are involved

Friday, March 1st, 2013

It takes a very wrong kind of mom to put a child in an auto accident, just to make money from Personal Injury Protection (PIP) fraud. Yet that’s what happened. Ana Ovando of West Palm Beach subjected her five children – ages 3 to 17 – to faked crashes so that she could file phony PIP claims.

Now, Ovando is headed to federal prison for six-and-one-half years for mail fraud conspiracy and mail fraud. There’s no criminal penalty for being a reprehensible parent; if there were, she might not ever be released.

“These children were exposed to physical danger,” a federal prosecutor wrote to the judge in asking for a longer term than federal sentencing guidelines dictate.

“Ovando put them in a vehicle with the full knowledge that they would be in an automobile accident on a city street. Having the children present in the vehicle made the accident look more ‘real,’ and Ovando hoped that it would keep the insurance companies from suspecting fraud.”

To all the people who say that auto insurance companies have overstated the PIP fraud problem, we say look at Ovando. Prosecutors taped her calling home from jail, asking her children to lie to the court about her fraud, according to a Sun-Sentinel article. The same tapes revealed that her older children begged her not to include them in her crimes because they feared that the police would come after them.

Yes, the money to be made from PIP fraud can be a stronger motivator than a mother’s love. Janice Velez, who was convicted with Ovando, used her two children in one staged accident.

Ovando took her children to New York Medical and Rehab Center and Velez took her children to Karow Chiropractic Center. Both are in West Palm Beach. Massage therapists admitted in court that both mothers signed blank treatment sheets that the massage therapists later completed and submitted to the insurance company for reimbursement.

In that way, it was a typical PIP scheme: Each staged accident results in faked injuries that lead to fraudulent PIP claims. Velez was sentenced to two years in prison.

Both women were caught as a result of an investigation by the FBI, IRS, and Florida Department of Insurance Fraud. They were assisted by National Insurance Crime Bureau and the Greater Palm Beach Health Care Fraud Task Force.

We feel sorry for the children. While they were unwilling participants and therefore not charged or jailed, they were forced to live like criminals. Now they have lost their mothers. Where is the justice for them?

Hillsborough County detectives bust medical therapy clinic for PIP fraud

Friday, January 25th, 2013

The sheriff’s department detectives went undercover in August. When they emerged five months later, they had arrest warrants for employees of Heisha Medical & Therapy Center in Tampa on charges of personal injury protection (PIP) insurance fraud.

Among those arrested was Ana Belen Valdes of Tampa, a legal assistant to attorney Jose Dapena, who practices personal injury law and has offices in Tampa and Miami. Valdes was charged with soliciting motor vehicle tort claims. Dapena was not charged.

It takes months of painstaking work to catch the people who rip off Florida’s auto insurance system. Police and insurance companies work from suspicious insurance claims. Sometimes they get a tip about PIP fraud, as they did this time.

“Two of our undercover detectives came to the clinic and received, filled out all the paperwork, and received massages — received treatment as if they had been in an accident,” Hillsborough County Sheriff’s Office spokesperson Cristal Bermudez Nunez told Fox 13 News.

“At other times, maybe they received a 5-minute massage and still were signing paperwork saying it was an hour-and-a-half long,” Bermudez Nunez told ABC Action News.

On one visit, the detectives witnessed a staged crash, which is a faked auto accident that leads to a false police report and phony insurance claims for treatment. Usually, the participants enter the vehicles after they have collided and pretend they were passengers.

Detectives said that the crash organizer paid the participants between $500 and $1,500 to lie about the incident and injuries.

“If you get three jump-ins in a staged accident, or four, you’re talking $40,000 easy, just out of one vehicle,” Jorge Santa Maria, an investigator with Infinity Insurance, told Fox. “The amount of money is astronomical if you think about it. It’s going to be somewhere between half-million and million dollars per clinic that’s operating in this fraudulent way.”

Police arrested the office manager and several employees, along with the person who detectives say organized the staged accident. Several warrants were outstanding as of Jan. 16.

 

What’s pushing up your auto insurance premium? Check the hospital bill

Sunday, December 16th, 2012

Maybe it was bound to happen: Hospital, clinic and doctor charges for accident insurance claims are going up, up, up.  While the number of nationwide claims for personal injury protection and bodily injury are falling, the costs are rising, according to the Insurance Research Council.

That shouldn’t be happening. Motor vehicle deaths are at their lowest level since 1949, due in part to greater car safety.

But auto insurance premiums are going up everywhere, not just in Florida where PIP fraud is a leading cause. James Ruotolo, an insurance fraud technologist at the software company SAS, blames an increase in medical treatment costs. Caregivers are ordering more sophisticated tests and more treatments.

While better testing is leading to improved patient treatment, “there is little evidence to suggest that the dramatic rise in diagnostics is fully warranted,” he writes for the publication Insurance Technology.

“Not only do the costs of the diagnostic treatment itself increase the claim costs, the fact that several diagnostic tests were ordered serves to establish a position that an injury is more severe.”

Statistics show that the inflation for auto and work-related accidents is going up twice as fast as general medical inflation. Ruotolo says doctors, clinics and hospitals are looking for new places to make money, so they’re ordering more expensive tests and treatments.

Sometimes those tests and treatments are needed, but not always. After looking at a lot of big bills, some insurance companies are looking more closely at the charges. They suspect what’s now being called “soft fraud,” in which needless tests are conducted just for the revenue.

“This ‘soft fraud’ has occurred in Florida PIP claims for years,” says Richard Parrillo Sr., CEO of United Automobile Insurance Company.

“It is a major factor in the huge increase in auto insurance premiums. It’s unfortunate because it is Florida’s citizens that have to pay for all of this unnecessary treatment.”

Auto insurers are serious about fighting the problem. Their insurance fraud departments are working with government and private health insurance investigators to learn more about how to detect and fight overbilling.

It’s a start in the battle against a new kind of insurance fraud, but Ruotolo writes that auto insurers are far behind others in detecting what’s legitimate and what’s not. Until the insurers get a handle on the problem, they will be passing along the higher costs to drivers.

“It is not the insurers that are far behind in detecting the fraudulent treatment,” Parrillo says. “It is the courts that have failed to crack down on medical providers that are ordering and performing all these unnecessary services. These medical providers do it because they know they can get away with it.”

Insurance company pays fraudulent PIP claims, you foot the bill

Tuesday, November 20th, 2012

The office of Richard Parrillo Sr., president of United Auto Insurance Company (UAIC), recently received an email that tells a tale all too common in Florida. The names of the person facing the Personal Injury Protection (PIP) claim and the insurer — which is not our company — are not being disclosed to protect their privacy.

Mr. Parrillo:

I am a victim of a “play by play” PIP fraud. Against my plea to investigate before tendering the $10,000 [PIP benefit], the insurance company has decided to give them the money because, the company says, “even though it might be true,it’s too hard to collect sufficient support or prove that is a fake PIP claim.” I am liable for a possible $40,000, according to them. What to do?

Here’s how Mr. Parrillo might answer that letter:

We feel for you. Every day we see hundreds of PIP claims that we suspect are falsified. Our investigations have exposed people who faked accidents, injuries, medical evaluations and treatment. PIP fraud is a huge problem in Florida and you are one of its many victims.

What should you do? It’s hard to fight a system where the criminals know how to play the insurance game, where PIP attorneys wantonly abuse the justice system to line their pockets, and where the judges won’t follow the law or rules of evidence.

Don’t worry; you won’t have to pay the $40,000 out of your own pocket. But your insurance company will pay. And your insurance rates will go up, even though it’s not your fault. The new PIP reform law can help, but until we have enough investigators and a justice system that helps fight PIP fraud, it won’t be enough.

So, we’re going to help you by telling your story on our blog. Other people will read it. And maybe enough of them will tell Florida judges and legislators that enough is enough. Honest drivers are tired of footing the bill for people who rip off the PIP system. When that happens, then your insurance company won’t give in to criminals and you will be safer.

Auto accident fraud happens in ways you do not expect

Monday, November 19th, 2012

Personal Injury Protection (PIP) fraud cases are common in Florida. Sadly, sometimes the police hide what truly happened in an accident. Kudos to the honest cops and one of our adjusters for uncovering the truth and correcting an injustice.

Three police officers in Medly, a town in Miami-Dade County, have been fired for covering up who was to blame in an auto accident. A Medley police officer crashed his unmarked car into a mini-van that was turning left at an intersection. To a video of the accident, click here.

The van’s driver, Leovigildo Bravo Fraga, was charged with failing to yield right of way and drunk driving, according to the Miami Herald. However, Hialeah police called in to assist in the case discovered that Fraga, 49, was completely sober.

Later, our UAIC insurance adjuster “noticed that Medley police reports and scene photos did not jibe with the evidence: The Medley cop, not Fraga, was at fault in the accident,” the Herald reported. A video from the scene also showed Fraga was not to blame.

The Medley police department has fired three officers, saying they wrote false police reports and committed other misconduct. They have responded with a lawsuit against the city.

The greatest victim in all of this is the innocent driver, just as it is when PIP fraud is committed. The Medley police released Fraga, but charged him with causing the crash. Fraga’s car was towed; he paid $151 to retrieve it. Fraga told the Herald that his driver’s license has been suspended, his car is damaged, and no has paid him anything.

As often happens with PIP fraud, false insurance claims helped authorities discover the lies. The investigation found that the acting police chief broke Medley rules by filing the report directly with the department’s insurance company, not with the town’s legal department.

The UAIC adjuster noticed that Romero’s claim did not match the accident report and photos. When our company denied the claim, the Medley police chief’s office asked the Hialeah police to investigate.

Florida CFO Atwater says new law sets up fresh challenges in fight against PIP fraud

Friday, July 6th, 2012

Florida CFO Jeff Atwater, whose office enforces the personal injury protection (PIP) law that took effect on July 1, says that provisions to reduce fraud will take time to take effect. Drivers should see some benefit. Just how soon and what to degree will become known over time.

The new law prohibits payments for massage or acupuncture treatments and restricts the payout for non-emergency treatment of accident-related injuries to $2,500. That should make a dent in the rampant PIP fraud perpetrated by unscrupulous clinics.

The law also requires more details in accident reports, which could reduce the number of staged accidents that are designed to generate fake PIP claims.

Will the provisions of the PIP law work? “We will know the answer to that in the next 12 to 24 months,” Atwater told the Orlando Sentinel.

As part of the new law, Atwater is creating a group to fight PIP fraud that self-funds investigations.  The money could come from the insurance and medical companies, and Atwater said fundraising details are still being worked out. He wants the group to pay for and share technology or data rather than fund prosecutions.

“That’s a bit of a pressure issue,” he said. “You don’t buy justice.”

Auto insurance companies are waiting to see how much the new law and new group can accomplish. The new law has an Oct. 1 deadline by which auto insurers must cut premiums 10 percent or give reasons why that’s not possible.  On Jan. 1, 2014, insurers must cut 25 percent or explain to the state why not.

“I really believe that the expectation that a 10 percent reduction and to follow with a 25 percent reduction is achievable,” Atwater told the Sentinel. “And even if it falls slightly short of those benchmarks, the people of Florida deserve that relief.”