Tuesday, April 6, 2010

Tennessee whistleblower in illegal health insurance scam: "People would call in crying, but we were instructed to tell them that their claims were `in process' and to call back in 30 days"

The Nashville Tennesseean has an extraordinary story today about a company and a number of individuals that our office issued a cease and desist order against back in January.

From the story, by G. Chambers Williams III:

When Lisa Hernandez went to work for health-insurance administrator Smart Data Solutions as a customer-service representative, she thought her job would be to help sick people get their medical bills paid.


But on just her second day, she knew something was horribly amiss.

Hernandez said she had to answer an unending barrage of phone calls from anguished policyholders questioning why no payments had been made on their health claims — some of which had been pending for as long as "four or five years."

"People would call in crying, but we were instructed to tell them that their claims were 'in process' and to call back in 30 days," Hernandez said. "We were told to flat-out lie to people just to get them off the phone."

For most, the medical bills were never paid, she said, adding that "there were boxes of unpaid claims sitting on the floor everywhere — they didn't even have any file cabinets."
The company and its affiliates are under investigation in a number of states, including Washington. Our office believes that dozens of state residents unwittingly bought illegal health insurance products from this network.
More from the Tennessean story:
A companion company, the American Trade Association, marketed the policies, and SDS was the purported benefits administrator; together, the two firms — controlled by Springfield businessman Bart S. Posey — collected as much as $14 million over the past year and a half alone from customers in all 50 states and the District of Columbia, according to the Tennessee Department of Commerce and Insurance.
Stay tuned.

Health insurance reform in Washington state: New data from HHS

The U.S. Department of Health and Human Services this morning posted this detailed summary of some of the effects of the new federal health care law, from effects on senior citizens to small business to doctors.

From the agency:
  • 811,000 residents who do not currently have insurance and 359,000 residents who have nongroup insurance could get affordable coverage through the health insurance exchange.
  • 457,000 residents could qualify for premium tax credits to help them purchase health coverage.
  • 897,000 seniors would receive free preventive services.
  • 159,000 seniors would have their brand-name drug costs in the Medicare Part D “doughnut hole” halved.
  • and 92,500 small businesses could be helped by a small business tax credit to make premiums more affordable.
The page has a lot more specifics...

Insurance news: Fewer WA employers offer health coverage, scam alert issued by feds, ND joins lawsuit against health-reform law

Skagit Valley Herald: Fewer WA employers offer medical care (55 percent, down 2 percent from previous year)

NY Times editorial: Health reform law "eliminates a corporate tax advantage on retiree drug benefits that amounts to double-dipping"

Auburn Reporter: Kreidler: Work on health care reform is already under way

ABC News: Scam alert issued on new health care law

L.A. Times: New health care law is full of unknowns

Bismarck Tribune: N.D. joins lawsuit over health care bill

Three plead guilty in insurance fraud case

A Tacoma couple and a neighbor have pleaded guilty to fraud-related charges for their involvement in false insurance claims totaling thousands of dollars.

Anthony Mezias, 37, has pleaded guilty to 1st degree theft, a class B felony. His wife Melissa Mezias, 34, pleaded guilty to "attempted false claims or proof" in an insurance claim, which is a gross misdemeanor.

Sentencing of the two is scheduled for July 12th. In the meantime, the couple must repay $8,800 to State Farm. Investigation work on the case was done by State Farm and by the state insurance commissioner's Special Investigations Unit.

Four years ago, the couple reported that their home was burglarized while they were on a clam-digging trip. Among the items listed in their $50,000 homeowners' insurance claim: a $5,000 plasma TV and $3,000 Persian rug. They said they bought the TV from a Seattle man.

During the investigation, State Farm insurance investigators discovered that the Mezias' neighbor, Brian Emmett, 41, had reported a burglary at his home in Tacoma earlier in 2006. He bought several replacement items, copied the receipts, returned the items to the stores, then submitted the receipts to State Farm anyway. He also submitted a falsified invoice for sports cards he claimed were stolen. All told, investigators found, Emmett filed $11,785 in false claims.

Emmett has pleaded guilty to one count of false claims or proof, a class C felony. He has also agreed to pay back State Farm and to testify against the Mezias', who claimed that he had sold them the $3,000 Persian rug. He says he did not sell them a $3,000 rug.

Note: this post has been updated. The Seattle man was originally charged with one count of false claims or proof, but the charge was dismissed after he testified against the Mezias'.

New info: How the new health law affects you

We've posted new web pages detailing what the federal health reform law means, both within the next few months and as full implementation takes place over the next several years.

Here's the main page, with a breakdown of provisions taking effect within 90 days, 6 months, this year, in 2011, 2014, and later. And the information also broken down by effects on:
  • -working families
  • -seniors
  • -children
  • -young adults
  • -small businesses
  • -hospitals and health-care providers
  • -and state government
And here's our breakdown of Frequently Asked Questions -- which we'll keep adding to -- which has a lot of very specific information on who's affected and how.