Author Archives: Fernando L. Roig, Esq.

Drones Used to Detect Insurance Fraud

On August 4, 2015, WFLA News Channel 8 showcased private investigator Paul Colbert’s methods of hunting down workers compensation fraud suspects through the use of the most cutting-edge technology of our time, remote robotic cameras and drones.

According to WFLA, Colbert has witnessed first hand how beneficial this technology has proven to be. These built-in “hidden cameras” have the ability to detect motion, follow targets and even zoom in without the touch of a button. Colbert showed live video clip feeds of “disabled” workers throwing footballs, doing yard work, walking around without assistance and even lifting heavy loads after claiming they were far too “disabled” to attempt such things. According to Colbert, these false claims are sheer examples of incidents that these machines are aimed at eradicating. Every year workers compensation fraud costs each of us $1,000 to promote as a deterrent to such fraudulent acts per industry statistics.

Colbert understands that his surveillance approach can seem very unconventional, but believes this breakthrough technology can have the capacity to save companies thousands of dollars on fake or exaggerated workers compensation injury claims.

Please click here for the full story.

www.roiglawyers.com

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Filed under Insurance Fraud

Details Emerge on Unlicensed Clinics Behind $243K in PIP Fraud

The FLPIPGuide previously reported that Dr. Lherisson Domond, 82, was arrested earlier this year for acting as the straw owner of Unity Pain and Injury Center in Orlando. The Florida Division of Insurance Fraud (DIF) recently revealed that Domond also fronted as the straw owner of Blesscare Chiro Center, also in Orlando.

Blesscare, an unlicensed clinic, was operated by Fortunard Dieuveillant Fonrose, 42. Medical billings totaling in excess of $86,000 were generated between May 2012 and November 2014 under Fonrose’s management, according to DIF reports.

Domond was behind the unlicensed Tamarac clinic of J.J. Health & Wellness also, according to DIF. Jonas Fils, 52, and Obinson Louis, 37, were reportedly the real owners of the clinic, which illegally billed almost $72,000 from May to September of 2013.

Keeping with the pattern of interconnections, Louis also operated the unlicensed Oakland Park clinic of Innovative Medical Rehab Center.

Overall, seven individuals were arrested for the fraudulent operation of the four unlicensed medical clinics.

The clinics were behind personal injury protection (PIP) fraud schemes responsible for more than $243,000 in illegal billings. DIF investigations are on-going, and additional arrests are expected.

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Filed under Insurance Fraud

Sales of Fraudulent Life Insurance Policies Leads to Pompano Beach Arrest

A Pompano Beach woman who sold fraudulent life insurance policies to elderly military veterans and their families has been arrested and charged with insurance fraud, according to an April 1 announcement by Florida’s Chief Financial Officer, Jeff Atwater.

Patrice Sands sold the policies to members of Make-A-Wish Veterans, Inc., a Miami company providing assistance to veterans. According to investigators, Sands sold the policies, collected premiums, and deposited those premiums into a bank account tied to her business, Universal Research Group Insurance Agency. She never actually procured the policies, however.

When her husband died, one 84-year-old victim attempted to collect the death benefits due her under the policy she had purchased from Sands. No benefits were received, however, and Sands told the widow that the insurance company had “gone under.” Sands then sought return of the life insurance certificate and allegedly destroyed it. A check written by Sands to refund the woman’s premiums bounced due to insufficient funds.

If convicted, Sands faces up to 25 years in prison and the suspension of her insurance agent license.

Since July 2014, the Division of Insurance Fraud has arrested 59 insurance agents, bail bond agents, and public adjusters for fraud that has totaled almost $4.5 million dollars.

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Filed under Insurance Fraud

Four Arrested in Medicaid Fraud Scam Targeting Orlando Homeless

The Florida Attorney General’s Office announced on March 20, 2015 that four people have been arrested for Medicaid fraud. Homeless people were allegedly recruited to pose as patients in the Orlando fraud scheme, frequently in exchange for gas cards and temporary housing.

The defendants in the case are identified as follows:

  • Christina Benson, arrested in Georgia
  • Demetrious Davis, arrested in Florida
  • Harold Harrison, arrested in North Carolina
  • Dr. Sabiha Khan, arrested in Florida

Each individual faces at least one count of Medicaid Provider Fraud and one count of Organized Scheme to Defraud.

According to the investigation, Christina Benson, owner of Tranquility Healthcare Solutions in Orlando, billed Medicaid up to $3.2 million for psychosocial rehabilitation services that were neither warranted nor provided in a period of just 18 months. The announcement cited fraudulent payments of $215,000.

The company claimed to have worked with a local doctor, Sabiha Khan, as a treating provider, but many recipients said they had never met her. Additionally, untrained personnel—including some with criminal records—were allegedly used to deliver some services.

Click on the link for the Florida Attorney General announcement.

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Filed under Insurance Fraud

1st DCA Upholds Allstate Use of Medical Fee Schedules

In an opinion filed March 18, 2015, Florida’s First District Court of Appeal held that language in an Allstate Insurance Co. policy gave sufficient notice to an assignee of its election to use Medicare fee schedules to limit benefit reimbursements under a PIP policy. Stand-Up MRI of Tallahassee, an assignee of 14 named insureds, sued Allstate in county court, contending that Allstate’s alleged failure to give adequate notice was contrary to the Florida Supreme Court’s decision in Geico v. Virtual Imaging. The trial court agreed with Stand-Up MRI and certified a question of great public importance to the Appellate Court.

In Virtual Imaging, as here, an MRI provider had supplied services and then disputed the insurer’s authority to limit reimbursements under Medicare fee schedules. Pursuant to the Florida PIP statute, automobile insurers are required to provide PIP coverage for 80 percent of all “reasonable expenses” for medically necessary services.

The dispute here centers on whether Allstate’s policy language provided adequate notice of its election to limit reimbursements via the Medicare fee schedules or if, as Stand-Up MRI contends, the policy fails because it is ambiguous. Allstate points to the following language in the policy as having satisfied the Virtual Imaging notice requirement:

In accordance with the Florida Motor Vehicle No-Fault Law, [Allstate] will pay to or on behalf of the injured person the following benefits. . . .

Medical Expenses

Eighty percent of reasonable expenses for medically necessary … services. …

Any amounts payable under this coverage shall be subject to any and all limitations, authorized by section 627.736, or any other provisions of the Florida Motor Vehicle No-Fault Law, as enacted, amended or otherwise continued in the law, including, but not limited to, all fee schedules.

The appellate court agreed with Allstate, concluding that the policy gives sufficient notice of its election to limit reimbursements by use of the fee schedules. In making its decision, the court pointed to language in the policy stating that reimbursements “shall” be subject to the limitations of §627.736, including “all fee schedules.”

Section 627.736(5)(a) 2 refers to Medicare fee schedule-based limitations and provides that insurers “may limit reimbursement to 80 percent of the … schedule of maximum charges.” Thus, concluded the court, the notice requirement was satisfied by Allstate’s language limiting “any amounts payable” to the fee schedule-based limitations found in the statute.

Furthermore, the court also distinguished the language in Allstate’s policy from that found deficient in Virtual Imaging. There, the Florida Supreme Court concluded that Geico’s policy failed to “indicate in any way” that it intended to limit its reimbursement amounts using the fee schedules. Here, Allstate’s policy expressly limits reimbursements by “all fee schedules” in the statute, satisfying the Virtual Imaging notice requirement.

Stand-Up MRI also contended that Allstate’s use of the phrase “subject to . . . all fee schedules” fails to provide sufficient notice that reimbursements will always be limited by the fee schedules, arguing that “subject to” means only that Allstate had the option to limit reimbursements per the Medicare fee schedule , not that it would so limit reimbursements. The court, however, found no such ambiguity, stating that the language of the policy makes reimbursements subordinate to the fee schedule in “rather unmistakable terms.”

In sum, the court concluded that Allstate’s policy language gave legally sufficient notice to its insureds of its election to use the Medicare fee schedules as required by Virtual Imaging. The trial court’s decision was reversed and the case remanded for further proceedings.

The cases cited are listed below for reference.

Allstate Fire and Casualty Ins. v. Stand-Up MRI of Tallahassee, Case No. 1D14-1213, et al., 1st DCA Fla. (March 18, 2015).

Geico Gen. Ins. Co. v. Virtual Imaging Servs. Inc., 141 So. 3d 147 (Fla. 2013).

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Filed under Fla. Stat. 627.736 (2012), The Statutory "Fee Schedules"

Miami Health Care Fraud Scheme Results in 14 Arrests

A $13.9 million fraud scheme involving a network of medical clinics resulted in the arrest of 14 Miami-Dade County residents on March 11, according to the U.S. Attorney’s Office for the Southern District of Florida.

As readers of the FLPIPGuide.com know, our coverage of medical clinics typically relates to PIP fraud. In this case, however, the named medical clinics allegedly intended to defraud health care insurers and employer-sponsored plans.

The following individuals were charged with health care fraud and conspiracy to commit health care fraud in the case of United States v. Reyna/do Castillo, et al.:

  • Reynaldo Castillo, 46, Hialeah
  • Hendris Castillo Morales, 33, Miami
  • Lisbet Castillo, 23, Hialeah
  • Maite Garcia, 40, Hialeah
  • Osvaldo Marin Medina, 48, Hialeah
  • Alejandro Biart, 40, Miami
  • Alejandro Jesus Cura, 47, Miami
  • Dania Chavez, 43, Miami
  • Ezequiel Severo Casas, 28, Hialeah
  • Humberto Martinez Rodriguez, 43, Hialeah
  • Jose Gerardo Gonzalez, 23, Miami
  • Julio Suarez, 47, Miami
  • Nelson Ramos, 56, Miami
  • Reinaldo Cinta Gonzalez, 46, Miami
  • Rudy N. Dominguez, 25, Hialeah
  • Diulys Martinez, 39, Miami

As many as 30 medical clinics based in Miami, Hialeah, Hialeah Lakes, and Doral, Fla. were owned or controlled by Reynaldo Castillo, Hendris Castillo Morales, Lisbet Castillo Batista, and Maite Garcia, according to the indictment.

Physician names and licensing information obtained through medical staffing companies was allegedly misappropriated to conceal the actual clinic ownership. Additionally, some of the individuals charged were paid fees in exchange for the use of their names as fronts for corporate ownership, bank accounts, and check cashing privileges.

Insurance companies Cigna, Blue Cross Blue Shield (BCBS), and United Health Care (UHC) were affected by the scam. Several self-insured employers whose insurance plans were managed by the three carriers were also the target of fraud, including:

  • Miami-Dade Public Schools
  • City of Miami
  • Pepsi Co.
  • BJ’s Wholesale Club
  • Macy’s
  • Nextera Energy
  • Radioshack
  • Sodexo

False and fraudulent claims totaling $125.7 million were submitted to the insurance carriers and employer plans, of which $13.85 million was paid. Many of the claims were for treatments that were not ordered by a physician or services that were never delivered.

The indictment also alleges that Reynaldo Castillo, Lisbet Castillo Batista, and Hendris Castillo incorporated an investment company to receive proceeds from the clinics and used those proceeds to purchase real estate properties. Those properties are subject to criminal forfeiture.

In a companion case, United States v. Ernesto Castillo, Osvaldo Marin Medina, Alejandro Biart, Ernesto Castillo, 43, of Hialeah, and Danny Jacomino Bordon, 50, of Miami were charged with health care fraud for causing Amazing Medical Services, Inc., Serenity Rehabilitation Center, Inc., and World of Rehabilitation Therapy, Inc. to submit false claims to Cigna totaling approximately $5.1 million, which resulted in payments to the three companies of approximately $1.1 million.

Jose Gerardo Gonzalez, Reynaldo Castillo, Ezequiel Severo Casas, and Danny Jacomino Bordon remain at large.

Click on the link to read the news release issued by the U.S. Attorney’s Office for the Southern District of Florida.

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Filed under Insurance Fraud

Auto Insurers Warn that Driverless Cars May Affect Profitability

While driverless cars could be hitting the roads in as little as five years from now, many auto insurers are worried about the far-reaching implications this autonomous technology could have on their industry’s bottom line. According to the Insurance Information Institute (III), the industry brought in $107.4 billion in passenger-car auto insurance premiums in 2013, the latest year for which figures are available.

In a March 3rd Wall Street Journal article, “The Driverless Car, Officially, Is a Risk,” it was reported that three insurance suppliers as well as an auto parts manufacturer have already cautioned investors in their most recent annual reports that the dawn of the self-driving vehicle and its technology may greatly affect their business model in the future.

Companies usually regard their annual report’s risk-factor disclosures as a place to point out potential difficulties and disruptions and to protect against their liability—not as a prediction of what’s to come. But the fact that driverless cars have been mentioned in several annual reports is telling.

According to the WSJ article, Cincinnati Financial Corp., which produces about a quarter of its premiums from commercial and consumer auto policies, warned its forecasts could be flawed due to “Disruption of the insurance market caused by technology innovations such as driverless cars that could decrease consumer demand for insurance products.”

In addition, Mercury General Corp. said that “the advent of driverless cars and usage-based insurance could materially alter the way that automobile insurance is marketed, priced, and underwritten.” The company provides most of its auto coverage in California.

Industry analysts believe a variety of consequences could result by taking the driver out of the equation:

  • Insurers may sell fewer individual policies
  • Insurers may have to cover fewer accidents
  • Technologically-advanced cars may cost more to repair
  • Some of the expense from consumer auto insurance may shift to commercial liability policies as more automakers and software firms face litigation for accidents
  • Larger policyholders could have more bargaining power than many small ones, potentially putting more pressure on premium revenue

The Insurance Information Institute also addressed this topic on its website. According to the III’s recently-updated report, driverless cars are viewed by the organization as one natural outgrowth from a multitude of advances in safety technology.

Numerous developers of driverless cars are concerned that regulatory matters and costs could delay their launches to market, but in any event, these technologies are still moving forward.

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Filed under Fla. Stat. 627.736 (2012)