Miami Chiropractor Charged With COVID Relief Fraud, Health Care Fraud And Money Laundering

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Filed under Fraud, Healthcare

10 Charged in $1 Billion Medical Insurance Fraud

Ten people have been indicted in a complex scheme to allegedly defraud private insurance companies of more than $1 billion for medical testing. The Justice Department unsealed the indictments Monday in Jacksonville, Florida. Eight of the defendants are from Florida. The others are from Atlanta and Chicago. The charges include conspiracy to commit health care fraud and money laundering.

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Filed under Fraud, Healthcare

How COVID-19 Might Change The Insurance Market

COVID-19 will change our world in many ways, some good and some bad. The same holds true for the insurance marketplace. From property policies, workers compensation, business interruption and general liability, the following considerations should be noted.

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Filed under Uncategorized

Florida Dive Shop Alleges Insurer Breach of Contract, Bad Faith in BI Denial Suit

A dive shop in South Florida is one of the first businesses in the state to file suit against its insurer for the denial of a business interruption claim initiated because of the current coronavirus pandemic.

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Filed under Uncategorized

Understanding Florida Letters of Protection (LOP)

Many times after people are involved in automobile accidents and they do not have health insurance, medical providers will agree to continue to treat them with the anticipation that should the patient recover any money from a lawsuit settlement or judgment, the provider will be paid from those proceeds. This type of agreement is called a Letter of Protection, sometimes called a LOP.  A letter of protection is a letter that is sent by an attorney on behalf of a client to a medical provider. The letter is an agreement between the patient/client and the medical provider. In this agreement, the medical provider will agree to provide medical treatment to the patient in lieu of receiving payment for services until proceeds from a settlement or a jury award are received. Should the patients not receive a favorable recovery, the patient may remain liable to pay for the medical services rendered. The LOP operates as a contract between the patient and the medical provider, which operates as a lien on any injury settlement.

LOP’s are typically utilized in Florida as a result of the fact that Florida PIP insurance pays 80% of the accident-related medical bills, which leaves 20% of the medical bill outstanding. Without a LOP, a medical provider may require upfront payment or refuse to provide treatment without additional assurances that it will be paid. In addition, LOP’s may be deemed necessary in cases where the medical bills exceed $10,000 and the patient lacks health insurance or other sources of available payment.

However, these LOP’s prevent a jury from accurately evaluating bodily injury claims. For example, when a person has health insurance, the amount charged by the medical providers are typically highly regulated and controlled. When a patient treats under a LOP, these regulations and controls do not exist. As a result, plaintiffs in litigation often incur larger bills in an effort to drive up the overall value of the economic damages in their case. In turn, medical providers operating under LOP’s often charge vastly different amounts than they typically would in the treatment of patients with health insurance, which the bills are being submitted through the patient’s health insurance coverage.

After recovery in personal injury suits, the plaintiff’s attorney may further negotiate the amounts payable to the medical providers. As a result, the plaintiff’s counsel utilizes these high medical charges as “evidence” of damages in their case whereby both the plaintiff’s counsel and medical providers are fully aware that the amounts billed will be drastically reduced and paid following any recovery. As a result, the court is provided with inaccurate information for which the jury to determine actual damages. Often these plaintiff attorneys and medical providers have ongoing business relationships. Each is making referrals to the other with the anticipation of payment for services ultimately occurring at the end of any claim or case. Uncovering information concerning this ongoing business relationship between the attorneys and the medical providers has proven difficult in recent years.

In Worley v. Central Florida Young Men’s Christian, Etc. (2015)163 So. 3d 1240, the Florida Fifth District Court of Appeals addresses the issue of whether during legal proceedings, the plaintiff was required to produce information pertaining to the relationship between the patients treating physicians and her attorney. The court held that a referral of a client by an attorney to a healthcare provider is protected by attorney-client privilege. In April 2017, the Florida Supreme Court reviewed this Fifth District Court of Appeals decision and found that whether the attorney-client privilege protects a party from being required to disclose that his or her attorney referred the party to a physician for treatment implicates confidential communication between the attorney and the client and is therefore protected. This issue is sure to receive additional judicial scrutiny in the future.

To understand how letters of protection are utilized it is also important to understand how the collateral source rule works in Florida. Following a jury verdict, a trial court must reduce jury awards for medical damages by the amount that is being paid for the benefit of the claimant, or which are otherwise available to the claimant from all collateral sources. Meaning that if the plaintiff’s medical expenses incurred following an injury were covered by other available insurance, the damage award should be reduced by the amount paid by the collateral source. This rule was created in an attempt to reduce insurance costs and prevent windfall judgments. Although the set-off must occur, the payments from the collateral source benefit are not admissible at trial. It is thought that allowing such evidence would confuse the jury as to liability and damages.

Typically, contractual discounts fit within the statutory definition of collateral sources.[1] Therefore, where a medical provider bills for services at one amount but negotiates with an insurer for the payment of a decreased amount, the negotiated decreased amount is the amount used for the set-off. In Gobel, the hospital charged $574,554.31. However, due to pre-existing fee schedules between the medical provider and what the health insurer paid, and the hospital accepted less, $145,970.76. This difference between what was billed and the amount accepted shows how the amount charged is not always related to the amount of medical provider expects to receive payment or will accept in full payment for the medical services

In Florida, the Collateral Source Rule forbids negligent parties from paying less in damages simply because a third party has already compensated the injured person. As such, under the collateral source rule, health insurance payments and other sources of compensation do not affect the defendant’s liability. Generally, courts do not admit evidence of any plaintiff’s health insurance to allow the plaintiff to recover the full extent of the plaintiff’s damages.

Florida Statute 768.76(2) (a) defines Collateral Sources as “payments made to the claimant.” Therefore, letters of protection, which merely deferred payment until after settlement/judgment, the amount negotiated in a letter of protection is not considered a collateral source and are therefore not subject to collateral source reductions post-judgment.

Understanding letters of protection and how they are utilized many times in litigation will help understand how the “business” of personal injury litigation occurs. This will allow for a better understanding of how medical charges can be manipulated and utilized at trial in an attempt to increase settlements and judgments by plaintiff attorneys.

[1] Joerg v. State Farm, 176 So. 3d 1247, 1249 (Fla. 2015) citing Gobel v Froham, 901 So. 2d 830, 833 (Fla. 2001)

 

Filed under Personal Injury Protection (PIP)

Rise In Searches For ‘How To Set Fire’ As Economy Crashes

Internet search queries for “how to set fire” are spiking amid the downturn from the coronavirus pandemic, which experts say is a sign that some people may be planning to commit insurance fraud. Search term data compiled by Google shows that the number of users looking for information on how to start a fire grew by 125% in the last week of March.

Insurance companies are highly attuned to the potential for fraud, but risk experts believe it’s too soon to tell. There was a similar kind of anticipation around 2007 to 2009, “that we were going to see just ungodly amounts of insurance fraud triggered by an economic downturn,” said Frank Scafidi of the National Insurance Crime Bureau, but this never occurred to the scale some projected. They saw an increase in arson activity related to cars, however, where a vehicle would be reported stolen to an insurance company when the owner had a hand in the car’s disappearance.

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Filed under Fraud, Property (Homeowners)

Free CLM Webinar: Don’t Let COVID-19 Infect You with Insurance Fraud

There is no quarantine on fraud. Scammers and con artists don’t respect laws, individuals, or pandemics. While others are seeking to protect themselves and their families, these fraudsters are already out creating schemes and scams to profit from the COVID-19 crisis. Learn about those scams, how SIUs need to be ready and acting to fight COVID-19 fraud, and the lessons we all can learn from past experiences such as the 2008 financial crisis impact on fraud. The best way to “be prepared” is to “be aware”.

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Filed under Fraud

Auto Insurers Returning $8 Billion in Premiums In Coronavirus Relief Effort

Top auto insurers are offering auto insurance premium discounts as people are driving less during the coronavirus pandemic. State Farm and Nationwide joined the ranks of other insurers such as Geico, Progressive, Allstate, Liberty Mutual, USAA, Farmers, Travelers, and American Family, who had already started to provide relief last week.  According to the Insurance Information Institute (III), these and other auto insurers have announced refunds, discounts, dividends and credits totaling $8.1 billion. III estimates the total will reach $10.5 billion as more auto insurers announce their offers.

Click here for a listing of insurers and a summary of their discounts and other offerings to date.

Filed under Personal Injury Protection (PIP)

Jacksonville Woman Pleads Guilty to Disaster Fraud

Bernita Willette Carswell of Jacksonville pleaded guilty to one count of disaster assistance fraud. Carswell claimed her primary residence was damaged during Hurricane Irma, causing her to stay in a nearby rental property. The Federal Emergency Management Agency paid Carswell $15,024.80 in rental assistance, although she never actually left her home. She faces up to 30 years in prison, as well as paying restitution.

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Filed under Fraud, Property (Homeowners)

NICB Launched Online COVID-19 Resource Center Due to Surge in Insurance Fraud Schemes

The National Insurance Crime Bureau (NICB) has created a new page on its website called the “NICB COVID-19 Resource Center.” The page provides the latest information on emerging fraud schemes due to an influx of insurance fraud cases tied to the COVID-19 outbreak.

The Coalition Against Insurance Fraud (CAIF) recently sent out a statement regarding a surge of fake coronavirus health coverage schemes. It warned that robocalls, text messages, and email phishing attacks could fake insurance deals to consumers, asking them to pay for health or travel insurance premiums without delivering coverage.

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Filed under Fraud, Healthcare