A good example of a sacred business relationship is the one between a patient and their doctor. When that trust is breached, it has a ripple effect throughout the healthcare system.
Consider the case in California where 32 healthcare professionals, lawyers and marketers have been convicted of taking part in a workers’ compensation fraud scheme that subjected patients to unnecessary, and sometimes painful, procedures.
For years, injured workers in California thought they were calling a hotline to help them navigate the state workers’ compensation system. Rather than getting the help they needed, callers were set up with a group of corrupt doctors, attorneys, and patient brokers who lined their own pockets at the expense of injured workers. (That is appalling to say the least.)
The San Diego-based fraud ring cheated the workers’ compensation system and private insurance out of more than $200 million. (Think about that for a moment. That’s a lot of money.)
The network preyed predominantly on seasonal, migrant workers who travel back and forth between California and Mexico. (They took advantage of really vulnerable people.) The fraudsters knew that their victims’ work in heavy labor industries, such as agriculture, put them at high risk for injuries.
The fraud scheme was masterminded by two men, who set up various patient recruiting and scheduling companies in Central America and Mexico to direct patients to medical service providers. One operated several patient recruitment entities, including one called Centro Legal.
Through billboards, flyers, advertisements, and business cards, the company recruited workers to seek workers’ compensation benefits. When an injured worker called the number on the billboard or card, a scheduling company took over to maximize profits from the worker.
Once the worker was directed to a corrupt doctor, that “gatekeeper” physician repeatedly referred that patient for tests and medical equipment, mostly that was not necessary: a patient with a knee injury might be referred for urine tests, DNA tests, sleep studies, unnecessary medical equipment, and numerous MRIs on body parts in addition to the injured knee (He wouldn’t have had time for work, even if he felt better.) This happened over and over again with hundreds of patients.
The scam included quotas for referrals in return for kickback money, and healthcare providers billed workers’ compensation at exorbitant rates — including nearly $6,000 for a single hot/cold pack for pain. (That’s ridiculous.)
The fraudsters met surreptitiously, often in parking lots, to exchange hidden cash, including hiding money in a children’s magazine and a baby shower gift back, traded on parking lots and in coffee houses. (Pretty low rent for doctors and lawyers.)
To date, 32 people and companies in the scheme have pleaded guilty and five have been convicted by a jury, receiving prison sentences as high as 10 years. More than $1.2 billion in suspect billings have been frozen.
As a result of this workers’ compensation fraud case and similar ones, California passed a state law that went into effect in 2017 that requires the state’s workers’ compensation system to suspend bills submitted by medical providers who are charged with fraud or abuse.
Today’s “Fraud of the Day” is based on an article, “Workers’ Compensation Fraud: Fraudsters Took Advantage of Injured Workers,” posted on FBI.gov on July 2, 2019.
Injured workers in California thought they were calling a hotline to help them navigate the workers’ compensation system. What they got instead was more pain. Rather than getting the help they needed, callers were set up with a group of corrupt doctors, attorneys, and patient brokers who lined their own pockets at the expense of injured workers.
For years, dozens of marketers, doctors, lawyers, and medical service providers conspired to buy and sell patients—and their individual body parts—like commodities for insurance and workers’ compensation purposes. The San Diego-based fraud ring cheated the California workers’ compensation system and private insurance out of more than $200 million. They also subjected patients to unnecessary, and sometimes painful, medical procedures and corrupted the doctor-patient relationship.
