Fraud prompts some to do donuts around insurance

Growing numbers of providers are choosing to run cash-only practices to subvert health insurance middlemen, and fraud and abuse concerns contribute to the attractiveness of this business model. For would-be criminals, the model can facilitate fraud; for providers worried about administrative and reputational costs of a fraud investigation, direct pay primary care removes the possibility of insurance entanglements.

In Florida, for example, medical clinics can dodge state licensure requirements and annual inspections by refusing to deal with insurers. That's because the statutory definition of a clinic is interpreted as a business that accepts third-party insurance reimbursement, the Associated Press reported.

Many of Florida's cash-only clinics are run by people without medical backgrounds who hire a token physician to sign prescriptions, the AP noted.

"This is often how pill mills operate," state Se. Eleanor Sobel (D) told the AP, referencing clinics and pharmacies that illicitly dispense prescription painkillers. Since the clinics aren't licensed, the state can't keep track of how many there are.

Rogue clinics are typically fly-by-night operations: They open, treat patients and quickly fold. Without clinic regulation, "it truly is the Wild West out here," Florida physician Kenneth Woliner told the AP.

Sobel sponsored a bill to require all Florida's medical clinics to undergo licensure, renewal and inspection, but the proposed legislation has little traction, the article reported.

Meanwhile, primary care practitioners who treat poor children and the disabled are increasingly put under a microscope by state and federal agencies responsible for preventing and detecting health insurance fraud, The Texas Tribune reported. Worried about the nuisance of prolonged and costly fraud and abuse investigations, some doctors are flocking to direct primary care as a form of financial self-defense for their practices.

Experts voiced concern that if the cash-only model catches on, insured patients may have trouble finding qualified providers to serve them, the article stated.  And eliminating insurance from primary care might exclude patients who can't afford to pay a requisite monthly fee, while healthy patients may wind up paying this for services they don't use, as FiercePracticeManagement reported.

For more: 
- here's the AP article
- read The Texas Tribune article