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12 BCBS Plans File Suit Against California Clinics

12 BCBS Plans File Suit Against California Clinics...

By Kaiser Daily Health Policy Report

Twelve BlueCross BlueShield Association insurance plans filed a civil lawsuit on Thursday against nine surgery clinics in California, as well as 21 doctors and 13 owners, employers or administrators of the clinics, alleging their involvement in "an elaborate insurance scheme" involving thousands of patients from 47 states and more than $1 billion in fraudulent insurance claims, the New York Times reports (Pear, New York Times, 3/12). About 90 other insurance companies also were billed for unnecessary surgeries in the alleged scheme, the Los Angeles Times reports (Reza/Alonso-Zaldivar, Los Angeles Times, 3/12). According to BCBS executives and FBI officials, the surgery clinics paid recruiters between $2,000 and $4,000 to persuade employees with employer-sponsored health coverage to undergo unnecessary surgeries. The recruiters, who frequently were coworkers of people who underwent the unnecessary surgeries, would help employees arrange transportation to California, the New York Times reports. In exchange, patients received cash payments of $200 to $2,000 or discounts on cosmetic surgeries, including "tummy tucks," breast enhancement and surgery to correct sagging eyelids, BCBS officials said. Daniel Martino, FBI's acting chief of the health fraud unit, said the outpatient surgery clinics billed the insurers for more than $1.3 billion in fraudulent services, with $350 million in claims paid to date (New York Times, 3/12). BCBS plans are seeking $30 million in what they refer to as a "rent-a-patient" scheme, officials said on Friday. FBI is investigating similar claims at as many as 100 outpatient surgery clinics, Martino said (Hallam, Bloomberg/Washington Post, 3/12). The Department of Justice and the district attorney in Orange County, Calif., have filed criminal charges against several of the defendants. No patients were named in the lawsuit, according to the New York Times (New York Times, 3/12). Initial Suspicions Byron Hollis, anti-fraud director for BCBS, said the insurers began noticing suspicious claims in 1999, and the number increased sharply in 2001. In 2002, Hollis said several "rental patients" in Arizona went to authorities after being billed for procedures not covered by their insurance plans. BCBS began working with FBI and state and local authorities in 2003 (Los Angeles Times, 3/12). Martino said the BCBS plans and FBI first became suspicious of fraudulent claims when, for example, "50 people from Boston arrived in southern California in a three-week period and filed claims for colonoscopies performed every other day." Martino said the scheme apparently first developed among Vietnamese patients, then spread to California's Hispanic community and then to assembly line workers at companies nationwide, according to the New York Times. Investigation Details In the lawsuit, BCBS officials said they began to see "clusters of employees from the same workplace" going to California for the same surgeries. FBI and BCBS executives said many patients received three or more procedures at California clinics in one-week periods. The most common combination of procedures included a colonoscopy, an endoscopy and thoracoscopic sympathectomy, an "unusual" procedure to treat "sweaty palms" that involves collapsing a patient's lung and deactivating a nerve near the spine, the New York Times reports. BCBS officials said doctors fabricated symptoms and diagnoses to make the procedures seem "legitimate or semi-legitimate," according to Steven Skwara, fraud investigator at BlueCross BlueShield of Massachusetts. Orange County District Attorney Tony Rackauckas said, "At least 1,600 employers had employees who were involved in the fraud" at one clinic, and more than 5,000 patients had unnecessary surgeries. County prosecutors also allege that owners at one clinic attempted to conceal their identities and billed insurers for nearly $97 million in fraudulent claims (New York Times, 3/12). Jackie Fishman, a spokesperson for BCBS, said some patients did not undergo procedures, while others had partial or full procedures (Fisher, Raleigh News & Observer, 3/12). Pegeen Rhyne, an assistant U.S. attorney in Los Angeles who is coordinating the criminal investigation, said, "There are lots of targets. We are going after the most egregious we've identified and working from there" (Los Angeles Times, 3/12). "Reprinted with permission from kaisernetwork.org kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved. http://www.medicalnewstoday.com/medicalnews.php?newsid=21233

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