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Business insurance fraud happens just as frequently as regular insurance fraud, but it costs the insurance industry millions of dollars more. Fraud doesn’t just hit the insurance industry; it can come back to you in the form of higher premiums. The Latino community is particularly vulnerable to business insurance fraud as unscrupulous people will play on a lack of fluency in business standards and language to make what should be an obviously shady deal appears the norm. There are more and more free state and federal education programs on entrepreneurship and small business management aimed at the Hispanic community to help provide them with management experience and education in what is necessary to run a business. The term seguros comerciales (business insurance) is beginning to take on a whole new meaning. Part of this is provided as a means to help combat business insurance fraud like what is described below.
A large percentage of business insurance fraud originates in the health care industry with the pill mills. Pill mills make their money in two ways. The first is that they charge the patients an office fee to come in and get a prescription. The second is that they then bill the insurance companies for the full office visit. While that is exactly how a reputable clinic or doctor’s office runs their business, a pill mill pushes people through, sometimes with one doctor claiming to see over a 100 patients a day. They aren’t seeing patients; they are just using their license to provide the prescriptions. Problems arise not just from the massive billing they do that is in violation of health and standard procedures, but that the patients themselves are not getting any treatment, just medication. Dr. Jorge Martinez of Ohio billed for $60 million dollars, and received $12 million in insurance payments, before his pill mill was discovered and shut down.
It’s one thing for a Doctor to perform unnecessary surgery in order to bill insurance companies, but Tam Phu Pham of California managed to go one step further. The operator of a local medical clinic, he paid perfectly fine people to consent to have minor surgeries done so he could bill insurance companies to the tune of $96 million. The easy money represented by collecting on outpatient surgery made this one of the largest, and first of its kind, business insurance frauds that capitalized on the willingness of people to get involved in the scam rather than the operator scamming both patient and insurance company.
The Business of Fraud
Unfortunately not all businesses champion integrity like Confia Insurance Agency: James Lee Graff took millions from innocent people who thought he ran a business selling and managing health insurance policies. He signed them up, gave them a fake policy and then collected their monthly payments. Only the premiums went into his pocket and not into an insurance account. The frauds weren’t discovered until his patients started to need healthcare and were told they had no coverage. In all, James Graff almost got away with $40 million. There are many auto shops and roofers who will capitalize on people who have received insurance settlements by promising repairs but using substandard parts and materials to make a profit. The deception is rarely caught until the next accident or storm cause more problems.
As the operational administrator for an website advertising organization, D.H. works as a guest author to compliment the business industry from the U.S. He is based out of CA, and is soaking up life in addition to his godly bride plus their 3 rug rats. Danny boy asks visitors to visit his Google Plus land soon.