Tag Archives: PIP fraud

Two More Join Class Action Suit Alleging Excessive Billing in PIP Claims at Florida Hospitals

In September, we reported on our FL-PIP Guide about two women injured in unrelated car accidents filing suit against a holding company that operates several hospitals in Florida. Marisela Herrera and Luz Sanchez alleged that HCA Holdings grossly overcharged for their emergency room radiological services.

Now two more Florida residents have joined the lawsuit in an amended class action that alleges Memorial Hospital Jacksonville, North Florida Regional Medical Center of Gainesville, JFK Medical Center, and parent company HCA have violated Florida’s Deceptive and Unfair Practices Act, according to a GlobeNewswire story.

Nicholas Acosta and Penny Wollmen, the new plaintiffs, also claim they were excessively billed and charged unreasonable fees for emergency radiological services covered in part by the plaintiffs’ Florida Personal Injury Protection (PIP) insurance. Florida’s PIP statute mandates that insurers pay 80 percent of all reasonable expenses.

However, Acosta was charged $6,965 for a CT scan of his spine and $6,277 for a CT scan of his brain after he was treated in the ER of Memorial Hospital in October 2013 following a car accident. After Wollmen’s accident in February 2014, she was billed $6,853 for the CT scan of her cervical spine, $6,140 for the CT scan of her brain, and $1,454 for a thoracic spine X-ray by North Florida Regional Medical Center.

Because of the allegedly inflated expenses, the complaint claims that each of the plaintiff’s $10,000 PIP coverage was prematurely depleted and that they were billed thousands of dollars for radiological services not paid for by their PIP insurers.

As a result, plaintiff Wollmen, for example, has been paying out-of-pocket expenses for additional chiropractic treatment that normally would have been at least partially covered by her PIP insurance if it had not been used up by hospital bills.

The complaint also charges breach of contract. All four plaintiffs technically entered into a “Condition of Admission” contract that stipulates patients must pay their accounts at the rates stated in the hospital’s price list.  None of the plaintiffs were given a price list at the time of their medical treatment.

The amended class action lawsuit was filed October 15, 2014, in U.S. District Court Middle District of Florida, Tampa Division.

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Filed under Insurance Fraud

One of Florida’s Most Wanted for Insurance Fraud is Arrested in Maryland

James William Lloyd, Jr., who was part of an organized insurance fraud ring that carried out multiple staged vehicle accidents on Florida’s east coast, was recently arrested in Maryland. Before his arrest, the 42-year old held the dubious distinction of being on Florida’s “Top 10 Most Wanted for the Division of Insurance Fraud.”

According to a recent news story in the Naples Daily News, Lloyd’s elaborate scheme involved having crash participants report the accidents to their insurance companies and then attend treatment sessions at a local medical clinic. An employee at that clinic, who knew Lloyd, would then help process fraudulent bills for phony treatments. Investigators found that participants would pass along the phony bills for reimbursement by their insurance companies—collecting the insurance money, giving Lloyd a cut and pocketing the rest.

Maryland authorities wanted Lloyd in connection to a separate theft ring case and discovered that he was also wanted for crimes in Florida.

According to Maj. Glenn Hughes of the Florida Department of Financial Services, Lloyd often scoped out bars, clubs and restaurants to find participants. Targets were often out of work or down on their luck and needed some extra cash. “He promised if they participated in one of these staged crashes, which are usually very minor, they’d make some money.”

Hughes believes that although some legislative changes have made a dent in insurance fraud in recent years, they do not eliminate fraud. One such law on personal injury protection (“PIP”), which went into effect in 2013, gives a shorter time limit and a smaller coverage limit for those in crashes.

However, “Staged crashes aren’t identifiable to the insurance carriers,” Hughes said. “They look like any other crash really, they’ll have a police report, they’ll have billings from a chiropractic or physicians clinic, so from an insurance company standpoint they’re very hard to detect.”

“It’s a problem that’s not going away,” he said.

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Filed under Insurance Fraud

Operation Sledgehammer Finds Three Chiropractors Guilty of PIP Fraud

A federal jury has convicted one West Palm Beach chiropractor and two Miami chiropractors for their roles in a massive staged automobile accident scheme, following a seven-week trial in U.S. District Court for the Southern District of Florida.

Using the U.S. mail in a scheme involving Personal Injury Protection (PIP) payments, defendants were found guilty of defrauding insurance companies through mail fraud and money laundering.

Kenneth Karow, 54, of West Palm Beach, Hermann J. Diehl, 44, of Miami, and Hal Mark Kreitman, 50, of Miami Beach were all convicted on multiple counts. Karow was sentenced to 11 years in prison, Diehl to nine years, and Kreitman to eight years for the fraud scheme that ran from October 2006 through December 2012.

The fraud was perpetuated in several ways across 21 chiropractic clinics, according to a release issued by the U.S. Attorneys’ Office for the Southern District of Florida. Key elements of the scheme are outlined below.

  1. Licensed chiropractors were recruited to serve as the “named owners” of chiropractic clinics, in circumvention of Florida licensing requirements, with others actually in financial control of the business.
  2. Recruiters were used to attract real or fake auto accident victims who were fraudulently treated at the chiropractic clinics for injuries.
  3. False chiropractic treatment claims where then billed to insurance carriers.
  4. No co-pays or deductibles were collected from the “patients,” and this fact was not disclosed to the insurance companies.
  5. The money received from this scheme was then used to pay recruiters and participants and to enrich members of the conspiracy.

The prosecution is the latest in a series of charges that have been part of a four year investigation into the massive conspiracy. The joint federal and state investigation, known as Operation Sledgehammer, has resulted in charges against 93 defendants for their roles in the organization. Of these 93 defendants, 57 have been charged by the U.S. Attorney’s Office, resulting in court-ordered restitution of more than $11 million to defrauded insurance companies.

Click on the link to read the full release.

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Filed under Fla. Stat. 627.736 (2012), Insurance Fraud

East Naples Woman Tries to Defraud Insurance Company over Spilled Coffee

An East Naples woman was arrested for phony medical and car wash bills after claiming Dunkin’ Donuts employees did not secure the lid on her coffee, causing it to spill on herself and in her car.

According to the Florida Division of Insurance Fraud, Jennifer Faye Sanders now faces charges of creating a false insurance claim and scheming to defraud.

A story on WINK News reported that Sanders submitted to Nationwide Insurance medical receipts totaling $200 for a doctor visit to treat her burns and an invoice with charges of $170 for the cleaning of her car. However, investigators discovered that Sanders had allegedly altered information on the medical receipt and took letterhead from the car wash establishment to create her own estimate of charges.

Nationwide Insurance referred Sanders’ claim to the Division of Insurance Fraud which arrested her. When she met with detectives, Sanders claimed that she didn’t mean to do anything wrong when she made the documents.

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Filed under Insurance Fraud

Operation Sledgehammer Arrests another Staged Accident Recruit

Ricardo Pargas, 49, of West Palm Beach was arrested on Wednesday, September 24, 2014 for his participation in a staged auto crash ring, according to the Sun-Sentinel.

Acting on information from Allstate Insurance and the FBI, the Florida Division of Insurance Fraud discovered that Pargas and his wife had participated in a staged car crash while acting on directions from the fraud scheme’s ringleader, Alien Moya, 30, also of West Palm Beach. The couple, recruited by Moya, was paid $2,000 each for their part in the crash. As of this time it appears that Pargas’ wife has not been charged.

The crash at issue occurred on January 11, 2010 in West Palm Beach. Pargas and his wife were driving in a 2005 Ford pickup truck when they were intentionally rear-ended by a 1998 Chevrolet pickup driven by another participant in the scheme. A sheriff’s deputy responding to the scene reported that there were no injuries and that both drivers drove away.

Two days later, however, Pargas was being treated for injuries from the crash at Karow Chiropractic Center in West Palm Beach. The treatment center billed the insurance company $34,065, of which the company paid $19,386.25.

When interviewed by federal agents at his home on April 12, 2012, Pargas admitted to having been recruited by Moya to take part in the scheme. Pargas and his wife were instructed by Moya to undergo treatment at the Karow Chiropractic Center following the crash. They each visited the clinic twice a week, where they reportedly received massages and other treatments. Investigators pieced together their case against Pargas over two years, and he was booked into Palm Beach County Jail on Wednesday on a staged accident fraud charge.

Karow Chiropractic Center’s owner was convicted in April 2014 of conspiracy to commit mail fraud in connection with the staged crash.

Moya was arrested earlier this year by the FBI on separate federal charges of theft of an interstate shipment and selling stolen property after he and an accomplice were caught stealing the contents of a Walmart truck that they were hired to drive to a distribution center. At the time of the trucking theft in early February, Moya was out on bond while awaiting sentencing for his role in the Operation Sledgehammer staged accident fraud, according to an earlier Sun Sentinel article.

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Filed under Insurance Fraud

Special Investigation Units Learn the Latest Techniques to Stay Ahead of Fraudsters

The cost of fraud, which has an annual price tag of about $80 billion a year, is substantial to insurers as well as the general public. Special investigation units (SIU) put in place by insurers manage a multitude of ever-changing instances of suspected fraud.

The International Association of Special Investigation Units (IASIU) recently held a seminar and expo on insurance fraud to educate investigators about the latest trends and how to stop fraud by using the hottest tools available. Highlights of the conference were covered by Property Casualty 360° in a recent article.

Investigators, many of whom are former military and law enforcement professionals, learned about these newest scams and what they should look for in identifying them, places to find fraudsters, and how to conduct a thorough investigation.

Highlights in the seminar revealed:

  • Voice print” technology that tracks phone calls made by scammers: This technology can make a voice print, similar to a fingerprint, using biometrics to identify callers. Accents and other disguises to the voice will not defeat this technology.
  • A new database of voice prints: NICE Contact Center Fraud Prevention is creating a database of those voice prints to help insurers track and identify fraudsters who repeatedly file false claims.
  • Social media tools: These go beyond the traditional Google or Bing searches. Anyone using social media leaves a road map for investigators, allowing them to connect the dots between a scammer and his or her friends and associates without ever leaving their desks.
  • Information gleaned from staged car fires: A burned-out vehicle has a story to tell if you know how to read the clues. By learning about the properties of fire, ignition sources, burn patterns, what to look for at a burn scene, what types of evidence can be found, the mistakes that fraudsters frequently make, and reading air velocity and direction, investigators can gather the necessary data to rule out or make a case for fraud.

Although fraudsters often stay ahead of the game by introducing new ways to swindle insurers, investigators are now better equipped to handle what comes their way thanks to innovative technologies and techniques.

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Filed under Insurance Fraud

Adjusters Unsure about Questionable Claims Delve into Accident Data

In an earlier FL-PIP Blog post titled “Accident Reconstructionists assist Insurance Adjusters in Uncovering Staged Accidents,” we reported how insurance companies may hire accident reconstructionists to analyze car crash data from police reports, photographs, incident descriptions, and repair records to help determine whether car accident claims are real or if crashes were staged.

A recent article in Property Casualty 360° took a look at common scenarios where accident reconstructionists provide input to insurance adjusters. A summary appears below.

Car Accident Scenario #1

The driver of a vehicle said another car hit him from behind when he was slowing for traffic. The other car did not stop to exchange information.

The claims adjuster, who photographed the damage, was suspicious because he thought the damage looked old, the vehicle had recently been added to the policy, and the claimant received a check a few months earlier on a different vehicle but with a similar story.

The data that the accident reconstructionist researched for the different model years and their variants found that the top of the bumper of these vehicles was always at or below 22 inches. It was also determined that the damage showed no signs of paint transfer. Using this information, the accident reconstructionist was able to definitively conclude that the damage seen on the vehicle did not match the driver’s testimony. The claims adjuster denied the claim in full.

Car Accident Scenario #2

Minor contact between the rear of a Chevrolet Malibu and the front of a Hyundai Elantra was reported with the scuff on the Elantra noted to be consistent with a sliding motion. Further investigation was called in uncovering that the Malibu was in a previous crash severe enough to be sold with a salvage title. No other details, including repair records, were available. The driver of the Malibu claimed that in addition to a small dented area on the right rear corner of the rear bumper cover, there was damage to the Malibu’s trunk area, more prominent on the left side of the vehicle.

The accident reconstructionist had test data run on an Elantra from the same model from a 3-mile-per-hour corner impact test and was able to determine that the damage for the Elantra involved in the incident is consistent with a collision at less than 4.2-miles-per-hour. A Conservation of Momentum analysis was then performed and found that an impact resulting in a Delta-V (the change in velocity of the vehicle from its pre-impact, initial velocity, to its post-impact velocity) of 4.2 miles per hour for the Hyundai Elantra would result in a Delta-V of 3.5 miles per hour for the Chevrolet Malibu.

Test data was obtained from the Insurance Institute for Highway Safety (IIHS) for the Chevrolet Malibu and it was determined that the claim was for more severe damage than was sustained and that the damage was partially in an area that was too far away from the actual point of contact.

It was found that not all of the claimed damages to the Malibu could be attributed to contact from the Elantra, and the insurance company subsequently denied all costs associated with the underlying damages.

Every case is unique, and claims with injuries will be treated differently.

Click on the link to read the full article, “Is that auto accident staged? Here’s how to tell.”

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