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W,F&A: Bizarre big fraud in southern California

Totally wacky frauds often pop up in health care, and unnecessary surgery at the recently sold Redding Medical Center was the downfall of Tenet. But I can’t remember a case of healthy people voluntarily undergoing surgery for a bribe, as happened in one facility in Southern California. The surgery clinic’s operators were charged today with bilking more than $97m from insurance companies. Apparently over 5,000 people from all over the country were recruited, took the bribes (which were only between $300 and $1,000), had some surgery and then their insurers were billed through a series of shell companies. Apparently the state laws that demand that claims are paid within 45 days meant that many insurers who didn’t have pre-authorization just paid up when they got the bill.

Funnily enough, I had surgery in early April (also in California) and my insurer which also didn’t require pre-authorization, demanded information from me and from several of my providers several times before it would process the claims. After getting the insurer everything it needed, (including a form it told me it needed but had not yet sent me or asked for!) it started processing the claims last week — that’s nearly 120 days later. Given this fraud, perhaps they had a point?

Hatip to California Healthline for this one.

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