Medical Mills Help Drive Up Insurance Rates in New York, Questionable Claims for Excessive Treatment on the Rise

ALBANY, N.Y., Sept. 15 /PRNewswire-USNewswire/ -- Excessive billings by medical mills, fraudulent companies that provide few if any real health care services to the public, are a key factor in driving New York State's no-fault automobile insurance fraud crisis. New data shows the problem with medical mills' excessive treatment is growing, according to the New York Alliance Against Insurance Fraud (NYAAIF).

During the first six months of 2010, questionable liability insurance claims involving excessive medical treatment in New York surged 42 percent, up from 304 to 431, over the same period one year ago.

NYAAIF observed that many of these questionable liability claims referred by insurance companies to the National Insurance Crime Bureau (NICB) for investigation involved no-fault auto insurance claims submitted by medical mills.

These corrupt medical clinics submit fraudulent no-fault auto insurance claims for treatment that was either excessive or not necessary. In some instances, the treatments are never even performed, but bills for these bogus services are nonetheless sent to auto insurers.

The New York-based Insurance Information Institute reports that fraud in the New York no-fault system accounts for roughly 20 percent of every no-fault claim paid--or about $1,561 per claim. Spread across the state, that amounted to nearly $230 million in "fraud taxes" in 2009.

Medical mills are criminal enterprises consisting of dishonest medical professionals that often conspire with unscrupulous lawyers, hospital employees, and patients.

  There are several types of medical mill scams. The most common involve:
  --  Inflated Billing - The most common scam used by medical mills involves
      a health care provider purposely miscoding diagnoses and inflating
      bills to get more money from the insurer.
  --  Fraudulent Physician - In this type of crime, everything is fabricated
      ... from the doctor who fakes his or her credentials, to the bills, to
      the office itself. Since patients with bogus injuries are often
      recruited, these offices contain little or no medical supplies and
      actual treatment is rarely prescribed let alone performed.
  --  Double-Dipping Doctor - While this type of medical mill provides
      medical services, treatment methods are frequently excessive,
      redundant or unnecessary. Patients are occasionally overcharged for
      services or billed for services never rendered. Bogus claims for
      treatment are then submitted to insurers for payment.

Scams typically start with third-party middlemen recruiters, called runners, signing up insurance fraud perpetrators and befriending legitimate accident victims. These recruiters send individuals to medical mills with promises of big money payoffs.

These accident victims can subsequently become patients who exaggerate an actual injury or fake the injury in the first place, often claiming soft-tissue sprains and strains that are hard to disprove and do not appear on x-rays. These patients also will commonly fake slip-and-fall accidents and other injuries.

If you suspect fraud on the part of a health care provider contact your insurance company or anonymously report the suspected fraud to the New York Insurance Department fraud hotline 1-888-FRAUD NY.

The New York Alliance Against Insurance Fraud is a cooperative effort by insurance companies in New York to educate consumers about the costs of insurance fraud, the many forms it can take and what they can do to fight back. Visit for more information on NYAAIF and what you can do to fight insurance fraud.

Source: New York Alliance Against Insurance Fraud

CONTACT: Cassandra Anderson of the New York Alliance Against Insurance
Fraud, +1-518-432-3576, +1-518-312-3315

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