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What The ACA & DOJ Forgot When it Comes to Healthcare Fraud California Insurance Frauds Prevention Act (California Insurance Code 1871.7) Didn’t

What The ACA & DOJ Forgot When it Comes to Healthcare Fraud California Insurance Frauds Prevention Act (California Insurance Code 1871.7) Didn’t

Updated March 6, 2017

Updated: June 25, 2015   Supreme Court saves Obamacare (or Affordable Care Act ACA) and regardless if you are for or against the decision one problem that’s not addressed is the high cost of private health insurance.  This is not a criticism of the Act it just means the healthcare discussion doesn’t end with the ACA it’s just the beginning of the discussion.  Keep reading to learn more about healthcare and why each state should lobby for the California Insurance Frauds Prevention Act (California Insurance Code 1871.7) to help address the continuing high costs of private health insurance.

June 10, 2015

Understanding Healthcare Killing My Career 6 10 2015Healthcare is a business.  Those that do not recognize that fact are doing themselves a disservice as doctors, hospitals, pharmaceutical/medical devices companies and the insurance providers (government or private) view healthcare as a business. And with any business the disease of fraud is crippling healthcare and costing patients, consumers, employees and taxpayers on the low end billions and on the high end human lives.  This site often exposes physician fraud, medical device fraud, and hospital fraud as they’re all interlinked as is the final element of this vicious cycle private health insurance fraud.

June 23, 2015 CMS must do more to stop Medicare Part D fraud, OIG saysModern Healthcare

One of the reports (PDF) released Tuesday shows that more than 1,400 pharmacies had questionable billings for opioid drugs, and a number of cities had higher than average billings for certain medications last year. The second report (PDF) calls on the CMS to implement more of the OIG’s recommendations for fighting fraud and abuse in Part D.

“In many instances action has been taken to implement our recommendations and strengthen Part D program integrity,” according to one of the OIG reports. “However, more work needs to be done to protect the program from fraud, waste and abuse.”

June 19, 2015

The Department of Justice announced a Medicare fraud scheme totaling $712 million where the FBI busted 243 individuals (of which 46 doctors and nurses were arrested).  That is impressive but what would have been more impressive is if the DOJ prevented such crimes; but, as this site often points out if the DOJ fixed the problems before they happened they’d be out $712 million.  As the OIG points out, little is done to prevent fraud. Taxpayers (who were harmed by the fraud) have no say in where that money goes.  And more importantly, if the taxpayers foot the bill for $712 million from the government that number is likely doubled, tripled or quadrupled for what we’ve paid out in the form or private health insurance fraud.  If you’ve ever wondered why your premiums keep going up there’s your answer.

Private health insurance companies write off fraud loss at the expense of their customers. We hear of whistleblower cases all the time where the DOJ intervenes, collects millions to billions and the private health insurance companies would rather write off the fraud that they over paid for (again 2-4x’s) than litigate big pharma/device companies.  The Affordable Care Act (ACA or Obamacare) has made healthcare more affordable and created The Sunshine Act which transparently shows how much physicians were paid by pharma and med device companies.  One major oversite of The ACA is that it allows the other arm of healthcare fraud, private health insurance, off the accountability hook.    When have you ever overpaid for something to the multiple of 2-4 x’s and thought to yourself it’s too much trouble to get money back? It’s like buying something for $100 but paying $400 and letting the vendor keep the overage.  Mighty nice of us, isn’t it?

(h) Health insurance fraud is a particular problem for health
insurance policyholders. Although there are no precise figures, it is
believed that fraudulent activities account for billions of dollars
annually in added health care costs nationally. Health care fraud
causes losses in premium dollars and increases health care costs

Mark Bertolini, CEO of Aetna, the nation’s third largest private health insurance provider made $30.7 million in 2013 up 131 percent from 2012.  The DOJ has already done the heavy lifting on healthcare fraud in that there are civil and criminal charges against pharma/device companies and all private health insurance companies have to do ask for money back for what they were also fraudulently charged/overcharged (again, at taxpayer/ expense) but those legal fees would cut into CEO bonuses like Mr. Bertolini’s. Or the $125 million shared between the top 11 private healthcare insurers:

Aetna, Centene, Cigna, Health Net, Humana, Molina, Triple-S Management Corp., UnitedHealth Group, Universal American, Wellcare, and WellPoint

Source: Liberal America

Source: Liberal America  (Numbers from 2014, Bertolini of Aetna it appears has a salary decrease from 2013 but that will require a little further digging)

Behind closed doors

Behind closed doors Private Insurance Companies decide it’s ok that Pharma/Med Device defrauded their consumer base as long as they were paid millions in annual compensation.

The CEOs of Private Health Insurance Companies are committing fraud by not going after fraud they know (verified by the DOJ)  exists and they’ve been getting away with it for years.

The provision to force accountability from Private Health Insurance Companies needed from The ACA may come from a little known (or used) statute known as California Insurance Frauds Prevention Act (California Insurance Code 1871.7)

California’s Insurance Frauds Prevention Act, Ins. Code §§ 1871 et seq. (IFPA), is an unusual false claims statute.  It allows “interested persons” (aka whistleblowers or relators) to file false claims lawsuits based on the submission of false claims not to the government, but instead to an insurance company.  IFPA also allows the local district attorney or the Insurance Commissioner for the State of California to intervene in and control the lawsuit.  A civil lawsuit for insurance fraud, therefore, can be prosecuted without the allegedly victimized insurance company even being a party.  The statute authorizes onerous civil penalties ($5,000 and $10,000 per fraudulent claim) and an additional assessment of up to three times the amount of each claim for compensation.  Providers targeted by an IFPA action can quickly see their potential exposure rise to massive levels if many claims are in dispute.

This statue isn’t exclusive to healthcare it’s for any type of fraud that involves insurance, like for instance the Uber whistleblower who uploaded fake insurance documents to expose Uber’s fraudulent activity.  It’s imperative that we try and prevent the escalation of crimes opposed to letting them get too far down the yellow brick road which is littered with child death, corruption and CEOs counting their millions, at all too high of a cost to patients, consumers, employees and taxpayers alike. 


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