Chiropractors in $2.3 Million PIP Insurance Fraud Scheme will Face RICO Charges

A federal judge ruled that the chiropractors who were allegedly behind a $2.3 million ploy to defraud an insurance company must face charges for violating the Racketeer Influenced and Corrupt Organizations Act (RICO) and Florida’s Deceptive and Unfair Trade Practices.

In July 2012, GEICO Insurance Company filed a lawsuit against two Orlando-based clinics—KJ Chiropractic Center LLC and Wellness Pain & Rehab Inc.—in addition to their two founders and a number of co-conspirators, known as “runners.” These runners helped perpetrate the suspected scam by exploiting willing third-party participants who faked accidents and injuries.

According to an article in Courthouse News Service, U.S. District Judge Charlene Edwards Honeywell said in her order that the fraudulent PIP claims resulted in more than $2.3 million in unwarranted insurance benefits and emerged from:

  • Staged accidents;
  • Real accidents in which claimants received treatment at clinics even though they were not truly injured; and
  • Real accidents in which claimants incurred some injuries, but received treatments that were pre-programmed, unnecessary, excessive and unlawful.

GEICO charged that the defendants advanced their unlawful plot by paying “anyone who referred accident victims to the clinics, offering cash directly to patients who agreed to accept unnecessary chiropractic treatment.” The insurance company also claimed the clinics provided treatment that was not in the best interest of patients because its sole intent was to maximize profits, the article said.

The U.S. District Court for Florida’s Middle District, Orlando Division, adopted Judge David Baker’s full recommendations made in October 2013 to deny the defendants’ motion to dismiss a second amended complaint on all but one count.

Judge Honeywell Edwards said she felt that GEICO adequately supported its argument with “factual allegations to state plausible claims for relief. As such, the court agrees with the Magistrate Judge that GEICO’s claims are sufficiently pled.”

The case is GEICO v. KJ Chiropractic Center LLC et. al., U.S. District Court for the Middle District of Florida, Case No. 6:12-CV-1138-ORL-36-DAB. Click on the link to read the complaint.

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Filed under Case Law, Insurance Fraud

U.S. Publishes Doctor-Level Data on $77 Billion in Medicare Billings

The Centers for Medicare and Medicaid Services recently released a treasure trove of 2012 Medicare payment data on 880,000 health care providers nationwide.

Intended to increase healthcare transparency, the data represents Medicare Part B claims totaling $77 billion in medical billings. Doctor visits, laboratory tests, and other treatments provided outside of a hospital setting are included in the database.

Payment history for 6,000 services and procedures is now available at the level of individual health care providers, including the identification of doctor names. Dollar amounts disclosed include Medicare reimbursements, as well as patient payments in the form of deductibles or co-insurance. Procedures on fewer than 10 Medicare recipients conducted by a single provider are excluded.

The U.S. Government Accountability Office (GAO) reports that 49 million elderly and disabled Americans received more than $555 billion in Medicare services during 2012. Fraud is an acknowledged element of the Medicare program, and the GAO estimates at least $44 billion in annual Medicare disbursements are made improperly.

Ophthalmologists and radiation oncologists are medical specialties that stand out as receiving high payment levels, relative to total national Medicare spending, according to the Wall Street Journal.

Dr. Salomon Melgen, a Florida ophthalmologist, received the highest level of 2012 Medicare reimbursement in the country, according to the Tribune Newspapers. Melgen’s billing practices and political connections have been the subject of a grand jury investigation.

Another Florida doctor, Ocala-based cardiologist Asad Qamar, took second place nationally with $22.9 million in 2012 Medicare payments, also as reported by the Tribune Newspapers.

A federal injunction, granted at the urging of the American Medical Association, has kept this data private since 1979. The Wall Street Journal published an investigative series on physician reimbursements in 2011, and in the following year its parent Dow Jones & Co. took legal action seeking database access. The injunction was ultimately overturned by a Florida judge.

Click on the link to access the CMS physician dataset.

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Filed under Independent Medical Examinations (IME), Insurance Fraud

Jacksonville Chiropractor Arrested for Fraudulent Billing Scheme

Chiropractor Steven Rhodes faces a maximum of five years in prison after being arrested for a fraudulent billing scheme targeting multiple insurance companies.

Jeff Atwater, Florida’s Chief Financial Officer, announced the arrest earlier this week.

Ocean View Health, Inc., a Jacksonville Beach medical clinic owned by Rhodes, was used to generate fraudulent or inflated invoices. Allegations include charges for treatments never provided to clients, the submission of inflated numbers of treatments when medical treatment was provided, and the use of unlicensed staff in performing medical services.

“This kind of fraudulent activity places honest, hard-working Floridians at risk not only financially, but also physically,” said CFO Atwater. “I am proud of our investigative team for uncovering this scam and holding this fraudster accountable for his misdeeds.”

Insurance carriers affected by the scam include Kemper, State Farm, Nationwide, Esurance, Progressive, United Health, and Blue Cross Blue Shield.

Rhodes was booked into the Duval County Jail and released on bail.

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Filed under Insurance Fraud

Florida Speed Limits May Rise to 75 MPH

Posted speed limits on I-95 and other Florida interstate highways could increase from 65 to 75, if legislation introduced in the Florida legislature by Florida Senator Jeff Clemens (D-Lake Worth) passes.

Senate Bill 392 would allow the Department of Transportation to raise the maximum allowable speed limit on certain highways like Interstate 95 that are part of the National System of Interstate and Defense Highways and have at least four lanes.

There are critics on both sides of the proposed speed limit changes.

Senator Clemens claims that drivers are already traveling at speeds in excess of the posted speed limits, and does not anticipate any increase in the number of accidents. Others fear that any increase in speed limits will result in increased accidents.

Speeding is the third leading contributing factor in traffic crashes, according to the National Highway Traffic Safety Administration.

The Insurance Institute for Highway Safety reports that the likelihood of being severely injured or killed in a crash increases with vehicle speeds.

The www.FLPIPGuide.com reported in a December 27post that Florida Ranks #6 in Worst Drivers Nationally. As mentioned in that article, auto insurance premiums tend to increase as safe driving habits decline in a state. Florida ranks among the top 10 most expensive states for car insurance, at #10, according to a 2012 article in the Palm Beach Post.

SB 392 is scheduled for at least one more vote in the Florida Senate before moving on to the House. If passed, the law would take effect on July 1, 2014.

Click on the link to read the proposed bill on Florida speed limits.

Click on the link to read a fact sheet on speed and safety published by the National Safety Council.

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Filed under Fla. Stat. 627.736 (2008)

Questionable PIP Claims Decline in Florida, Reports NICB

Tighter legislation, enhanced public awareness, and coordinated law enforcement efforts appear to be having a positive effect on PIP fraud in Florida, according to a recent report by the National Insurance Crime Bureau (NICB).

The new study published by the organization showed Florida’s personal injury protection (PIP) questionable claims (QCs) have dropped 7.6 percent from 2012 to 2013. More striking, however, was the extraordinary decline from 2010 through 2013, when Florida’s staged accident QCs decreased 61.82 percent during that time period.

Compare those statistics to 2009, when Florida not only topped the nation in PIP QCs reported to the NICB, but also had twice as many as the second-highest state, New York. From 2008 through 2010, the total number of QCs in Florida increased by 34 percent.

When NICB delved further into these results, it found that about 62 percent of total PIP costs and about 43 percent of PIP treatment costs came from soft tissue treatments. Massage treatments accounted for 22 percent of those treatments, and massage therapists had the largest increase in charges per patient at 51 percent from 2005 through 2010, after factoring in for medical inflation.

“We are encouraged by the decline in questionable claims that we’ve seen recently, but by no means are we declaring victory in Florida,” said NICB President and CEO Joe Wehrle.  “Florida remains a hotbed for fraudulent activity and we can’t afford to ease up for a moment in our fight against those who would abuse the system and burden Florida consumers.”

In September 2011, the Hillsborough County Commission was one of the first legislative bodies to enact a county ordinance to license PIP clinics and deter suspicious vehicle collisions in the county. Although an injunction against the law remains in effect, it hasn’t stopped other legislation. In February 2012, Miami-Dade County passed a similar ordinance requiring registration of PIP clinics, and the Florida legislature passed House Bill 119 in May 2012.

This two-part legislation institutes stronger penalties for medical providers who commit PIP fraud, including a five-year license suspension and a ten-year restriction from PIP reimbursement. It also imposes a 14-day post-accident window for accident victims to seek medical treatment and reduces specified PIP benefits and treatments. A lawsuit and injunction ensued, but eventually, the law was put into effect in late October 2013.

Although NICB does not receive all QC data in Florida, the data used to produce this report came from the same sources used in previous Florida QC reports. “Combining these legislative and regulatory efforts with a robust public awareness campaign and aggressive law enforcement response, the modest improvement in 2013 PIP QC data does suggest the initial stages of a positive downward trend,” NICB confirmed.

Click on the link to read the NICB Data Analytics ForeCAST Report regarding Florida Personal Injury Protection (PIP).

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Filed under Fla. Stat. 627.736 (2008), Insurance Fraud

Cash-Only Medical Clinics Target of Florida Senate Legislative Proposal

Drastic changes in how cash-only medical clinics operate in Florida may be on the way. State Sen. Eleanor Sobel, D-Hollywood has proposed legislation (SB746) that would subject cash-only clinics to the same regulations and licensing that traditional clinics undergo, consequently closing a loophole that enables some of these clinics to illegally dispense drugs such as steroids and human growth hormones. Cash-only clinics don’t accept Medicare or other insurance coverage.

According to an Insurance Journal story on March 26, the proposed bill aims to bring transparency to cash-only clinics and hold them accountable. The measure would require these clinics to be licensed and inspected by the state Agency for Health Care Administration (AHCA). Legislation would also make possible the application of pertinent criminal liability and penalties to all clinics that allow doctors with suspended or revoked licenses to practice.

The bill is especially directed at storefront clinics that open with the help of a crooked doctor, dispense drugs illegally, and then shut their doors before law enforcement can prosecute, the article reported. Under current law, a person opening a cash clinic can fill out an application and pay a $100 exemption fee which does not expire nor require renewal.

The AHCA says that it uses the same database as the public to verify the license of medical professionals and will extend the verification process to doctors heading cash-only clinics if the bill becomes law.

Sen. Sobel also noted that many suspected clinics thrive in South Florida and often operate as anti-aging facilities, such as Biogenesis of America. In 2013, Major League Baseball charged that clinic purportedly supplied performance-enhancing drugs to some of its players, but the lawsuit was dropped last month.

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Filed under Insurance Fraud

Insurance Coverage Questions Put the Brakes on Miami Rideshare Programs

Plans to introduce Uber and other rideshare programs utilizing technology-based apps in Miami are on hold for now, according to a recent article in the Miami Herald.

Two key members of the Miami-Dade Board of County Commissioner’s transportation and aviation committee blocked a ride-sharing proposal that would have then gone before the full committee for a vote.

Popular rideshare services, like Uber X, Lyft and Sidecar, have seen accelerated growth in major U.S. cities. Using technology that the taxi industry finds highly disruptive, people with regular driver’s licenses can use their personal vehicles to transport riders for a fee. These drivers register for dispatch services. Accepted drivers are then able to connect to customers and collect fares via credit cards by using smartphone apps.

Critics, however, have accused these providers of working outside the constraints set for taxi and other commercial transit services, for questionable business practices, and for having inadequate insurance coverage for drivers and their vehicles.

San Francisco-based Uber recently announced that it has new insurance to cover the gap “during the time that ridesharing drivers are not providing transportation services for hire, but have the Uber app open and are available to receive a trip request,” according to an article in Insurance Journal.

Uber appears to be the first company, the article notes, to have a policy that extends insurance of ridesharing drivers to cover the potential insurance gap. This liability coverage kicks in only if a driver’s personal insurance fails to cover an incident and provides up to $50,000/individual/incident for bodily injury; $100,000 total/incident for bodily injury; and $25,000/incident for property damage.

A tragic accident over New Year’s Eve in which an Uber driver struck and killed a 6-year old girl when he was logged on to Uber’s app brought national attention to the nascent rideshare industry. Uber has been hit with a wrongful death lawsuit as a result, according to a March 14 Verge article.

Chicago’s City Council has also stepped up efforts to further investigate the insurance gap of the three companies operating in the city and recently subpoenaed their insurance records. The Council is still working to get the necessary evidence of still-undisclosed policies, according to a March 14 article in the Chicago Tribune.

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Filed under Fla. Stat. 627.736 (2008)