Doctors Advised on Insurance Fraud

June 27 -- Is your doctor bilking insurers and using you as the bait?

Yes, says a government investigation that spotlights a new breed of health care consultant who is advising physicians on how to profit by cheating the health insurance system.

The investigation, unveiled at a Senate Finance Committee hearing today, revealed that a number of consultants are instructing doctors how to charge insurance companies and federally funded health plans like Medicare and Medicaid for services that they didn't provide to patients.

Consumers Hurt in the End

Health care frauds are already occurring on a huge scale. According to the Coalition Against Insurance Fraud, insurance fraud cost the entire health care industry around $54 billion in 1997. And last year, around $12 billion in improper payments were made for Medicare claims alone, according to the Department of Health and Human Services' Office of Inspector General.

Insurance fraud hurts consumers because higher costs often get passed down to the insured in the form of higher payments. Fraud is especially a concern in federally funded programs for the poor and elderly because it drains funds from those programs.

"Every day in the paper we read about whether or not there will be sufficient funds to cover the needs of seniors, and fraud threatens that," says Ben Peck, legislative representative for the Public Citizen's Health Research Group's congress watch.

Running the Scam

The workings of the consultant-doctor fraud was detailed at today's Senate hearing by investigators from the General Accounting Office who attended workshops run by the consultants.

One of the more disturbing practices the consultants recommended in the workshops included turning down Medicare and Medicaid patients in favor of patients insured with higher-paying and more efficient private insurance plans, according to the study.

An excerpt from one of the workshops quoted a consultant as saying, "Medicaid, they're a low payer and a slow payer — 2.4 a month. Hurts your practice immensely."