Do you bill insurance companies for the treatment of patients injured in auto accidents?
Did you know you are a fraud?
Inventing Fraud For Profit
In the 1990’s, global consulting giant McKinsey & Company revolutionized the way auto insurance companies handled bodily injury claims by showing them how they could use their Claims Operations as profit generators.
McKinsey identified that of the tens of thousands of bodily injury claims being made daily across the country as the result of auto accidents, the largest majority could be classified as “Minor Accident Soft Tissue Injury” (MIST) claims. Because these claims involve relatively minor property damage and mostly subjective injuries, McKinsey advised that insurers could dramatically drive down the costs of these claims simply by handling them all as fraudulent.
Over the past two decades, the entire insurance industry has adopted varying versions of McKinsey’s “fraud funnel” to reduce claims payments by billions of dollars every year. The idea is simple: Invent a new definition of fraud which enables the accusation to be made in virtually any claim. This was accomplished with the invention of “fraud indicators”.
There are now hundreds and hundreds of “fraud indicators” which insurers apply to every kind of claim in order to feed the fraud funnel. Most relevant and alarming to chiropractors, though, should be the fact that treatment with a chiropractor is a fraud indicator in any bodily injury claim.
Other “indicators of fraud” include:
- that a claimant is represented by an attorney
- that a claimant’s injuries are subjective
- that the insured had a pre-existing injury or health problem
- that the insured’s car was new; and that the insured’s car was old
The presence of any two indicators in a claim pushes it into the fraud funnel.
The fraud funnel has excreted billions of dollars into the pockets of insurers over the past 20 years. Its biggest moneymaker though, has been using accusations of fraud to undermine the credibility of chiropractors, who are the doctors most often providing treatment to auto accident patients across the country.
This idea is obviously no new thing (recall the AMA’s Committee on Quackery). The major auto insurers, however, have turned attacking chiropractors into huge profits.
Beginning on the east coast in the early 2000’s and spreading slowly west since, major auto insurers have been filing massive fraud lawsuits alleging RICO conspiracies and worse against chiropractic practices in major metropolitan areas.
The initial targets were the fly-by-night clinics and mills clearly propped up to milk the tort system rather than provide quality, needed care. But there are only so many of these bad actors available to sue.
Fraud lawsuits are about generating headlines and creating a perception of rampant fraud occurring in bodily injury claims in the major cities. The net value of these headlines to the insurance industry is measured in the tens of billions of dollars, which has only created an insatiable appetite for more. But left with only good doctors to accuse of “fraud” insurers needed more than just their invented “indicators” to support the pretense.
Thus was born the accusation of fraud based on “predetermined treatment.”
Consider just the last 10 auto accident patients you treated. How many of them received an adjustment? An examination? Massage? Therapeutic exercises? Ultrasound or electrical muscle stimulation? How many had a diagnosis of neck or back pain? Could you say that the treatment of 80% or more of just these 10 patients included most of these treatments and diagnoses? Now consider all of the patients you have treated over the past 7 years. Would the percentages be that much different? If your practice is like most which regularly treat patients injured in automobile crashes, the treatments you have provided and diagnoses you have made over time will have been consistently similar for all patients.
Over the past several years, as they have ranged farther and wider for chiropractors to attack, insurers have invented “predetermined treatment” as the basis for accusations of fraud. The claim is that treatment looks reasonable and necessary in individual claims, which is why it was paid when the bills for treatment were submitted. But after many years of receiving bills and records from a particular chiropractor, some enterprising SIU adjuster looking over many files at once identifies a “pattern” revealing that most patients receive similar diagnoses and treatments in similar durations. This “newly discovered pattern” demonstrates that the doctor was not rendering care based on the individualized needs of patients, but rather on a “predetermined treatment protocol” designed to maximize billing and defraud the insurance company.
To defend yourself against a lawsuit alleging “predetermined treatment” of hundreds of past patients, you will incur hundreds of thousands of dollars in legal and expert fees attempting to justify the treatment you provided for each patient. While the case is pending, the insurer will withhold payment on every bill you submit. If you want to avoid the crippling expense and severe emotional trauma of years of litigation, the insurer will settle for pennies on the dollar of what they claim as damages, but you will have to agree never to bill that insurance company again, and never support the injuries of a patient making a claim against that insurer.
Either way, your practice, not to mention your relationships with your spouse, kids, friends, co-workers and employees, will be decimated.
But the result is meaningless for the insurance company. Their goal is achieved with the headline they get merely by suing you.
There are 3 steps that can be taken to protect yourself from the fraud funnel.
1. Make your records more detailed. Tell the story of your treatment and its reasoning. You can only truly protect yourself by creating detailed records which prevent anyone from undermining the credibility of your care.
2. Understand that insurance adjusters will never see you as anything other than an indicator of fraud. Do not make the mistake of providing them access to your office or your business records or any other documents to which they are not immediately entitled by the terms of your patient’s authorization. You cannot convince them to like you. To them, you are nothing more than a ledger entry.
3. Never offer a statement to an insurer without counsel. The insurer’s only purposes are to get information which they can use to characterize you as a fraud and/or deny payment for your services. They will employ questioning you are not prepared for and may respond to inaccurately. You cannot walk back a statement made under oath once made, so protect yourself with seasoned counsel who understands the purpose of every inquiry.
Don’t Let Yourself Be the Next Headline
Every doctor I have represented around the country who has been falsely accused of fraud has said the same thing to me: “I never thought this could happen to me.” They all believed their honest professionalism protected them. It does not, nor will yours protect you. Know that your mere existence makes you a target and take the steps necessary to protect yourself.
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 How and why doctors get singled out for such retrospective reconsideration is a much broader subject.