Large US Medical Insurance Fraud Gang Smashed

[Timbuk2]

Armenians face US health care scam charges
Auntie



US officials have charged 73 people over what is thought to be the largest ever attempt to defraud the country's medical insurance system.

Prosecutors say a network of Armenian gangsters and their associates set up fake clinics using stolen identities to make false claims for treatment.

Investigators said more than $35m (£22m) was paid out.

A US Attorney said the scheme's scope and sophistication put the traditional mafia to shame.

The group, most of whom are of Armenian origin, are accused of setting up some 118 clinics across the US, most of which existed only on paper or were "nothing more than shams, shells, and storefronts", said US Attorney Preet Bharar.

They allegedly stole the identities of real doctors and beneficiaries of Medicare - the US federal insurance programme for the elderly - and "submitted bill after bill for treatment that no doctor ever performed and that no patient ever received," he added.

In addition, the gang were accused of carrying out "a raft of rackets, extortion, credit card fraud, identity theft, immigration fraud, and even the distribution of contraband cigarettes and stolen Viagra".

Investigations began after the personal details of 2,900 Medicare patients in New York were reported stolen, the Associated Press news agency reports.

Much of the paperwork involved also raised suspicion by showing inconsistences such as doctors specialising in dermatology giving heart examinations and ear, nose and throat specialists performing pregnancy ultrasounds, said AP.

Most of the accused were arrested during raids in New York City and Los Angeles on Wednesday morning, but there also were arrests in New Mexico, Georgia and Ohio. The 73 people charged are accused of racketeering and related offences.

Officials say some of the proceeds from the operation were couriered back to Armenia in cash.

The alleged leader of the gang, Armen Kazarian, is now in jail in Los Angeles. He was described by officials as equivalent to a mafia godfather.

"When it comes to making money illegally, this Armenian-American group puts the traditional mafia to shame," said Mr Bharar.

"The reach of this organisation stretches clear across the country and well beyond our shores.

"So in terms of profitability, geographic scope, and sheer ambition, this emerging international organised crime syndicate would be the envy of any traditional mafia family," he said.

73 people

That's some massive operation by the authorities to bring this bunch of fuckwits down.

[Dreadnaught]

When you get something of this scale, how do you suppose they first noticed something was up with these clinics?

[EyeKhan]

How many more like it operate every day?

[']['ear]

How many more like it operate every day?

Probably not too many. It would be hard to run well without detection.

[Loki]

I've seen numbers suggesting that something like 25% of all Medicaid spending (in NYC) is fraudulent. I've also seen some pretty strong anecdotal evidence of it as well.

[Veldan Rath]

I've seen numbers suggesting that something like 25% of all Medicaid spending (in NYC) is fraudulent. I've also seen some pretty strong anecdotal evidence of it as well.

In the disability insurance bis...we were advised that up to 10% of all claims were fraudulent...

When I heard that, I looked at my claim load and was thinking...so on any given day 10-14 claims are bullshit?...which means 10-14 doctor's offices are bullshitting me?

[Timbuk2]

Better get out that fine tooth comb Veldan ....

[GGT]

Fine toothed comb, indeed. There is, and always has been, insurance fraud. When I worked for Blue Cross/Blue Shield of Indiana, I was amazed that there were entire floors and multiple groups dedicated to finding fraud. Then it took months and several groups to collect enough data to convey to prosecutorial staff. Then it was a long drawn out waiting process, but it was really a schemed game. Attorneys from group A would make offers to attorney group B. It was just another negotiating scheme to them. They never stopped to think about the human people behind the litigation. BCBS used to have a corporate mantra, that all of this was a "service" that corporations had paid for, and we were to serve our benefactors. Never mind ethics, let alone providing health care to real people. We were just middle-men service providers, and cost saving was the bottom line. We used to get a bonus for the amount of denials we gave. It still haunts me. This was on the cusp of pre-admission screening, and I even helped a major hospital design a pre-admission screening process in order to get the most reimbursement from insurance companies. It's been a long time now, gosh almost 20 years, but I still feel dirty. Not the kind of dirty you can wash off in the bath. More like the kind of dirty when a family member grabs you in the hallway, and asks what they're supposed to do with grammy, when there aren't many options. Who will pay, why doesn't her decades of insurance premiums count, what counts as payment anyway? Who's her advocate, who's our liaison, are we all supposed to go bankrupt caring for grammy? She wouldn't want this, we don't want this, what are we supposed to do now?

Our system sucks, big time.

[Timbuk2]

I doubt that the checks and measures in place in the US are any less effective than those in place elsewhere in the West.

There will always be a fight against fraud.

Working for a global bank, this is drilled into us constantly. Every member of staff has to attend occasional mandatory courses and regulatory updates on fraud, along with money-laundering and anti-terrrrrrzm. The bank is fined by the UK regulatory body if we do not have effective measures against such things.

I would think the US's financial regulatory bodies have similar rules.