'Medical mill' billing scams on the rise

Excessive billing and treatment by fraudulent 'medical mills' has jumped a whopping 42 percent in New York, resulting in increased insurance rates, according to the New York Alliance Against Insurance Fraud (NYAAIF).  

The fake clinics clinics typically submit phony claims for treatment that was either excessive, unnecessary or never performed. In the first half of 2010, questionable liability insurance claims involving excessive medical treatment in New York jumped 42 percent to 431, NYAAIF reports. That's up from 304 for the first half of 2009.

Many of those questionable liability claims involved no-fault auto insurance claims submitted by a so-called medical mill. Even if the mill doesn't perform any treatment, bogus claims are still submitted to auto insurers for payment.

Fraud in the New York no-fault insurance system accounts for nearly 20 percent of every no-fault claim paid--or $1,561 per claim, reports the Insurance Information Institute. Statewide, that totals $230 million.

The most common medical-mill scams involve inflated billing practices, fraudulent physicians lacking credentials and double-dipping doctors who provide redundant or unnecessary treatment.

Just last week seven medical providers were arrested for running a medical mill that allegedly submitted tens of thousands of dollars in phony claims to insurance carriers, announced the state's Attorney General.

"These individuals padded their pockets by billing insurance companies for unnecessary or nonexistent treatments, according to the complaint," said AG Andrew Cuomo. "Their scheme ran the gamut from doctors to the receptionist and it hurt the public, which is left to cover the costs through higher insurance rates," he said.

For more:
- read the NYAAIF press release
- read Attorney General Andrew Cuomo's statement
- read this 2008 article in New York's North Country Gazette