Insurance Fraud

Insurance payers in Grand Prairie, Arlington, Fort Worth, Dallas, Mansfield, De Soto, Cedar Hill, Duncanville, Irving, Cockrell Hill, and other places in Dallas County and Tarrant County do not like insurance fraud.
The Los Angeles Times published an article on May 20, 2011, dealing with insurance fraud in the state of California. The article is written by Marc Lifsher and the title to the article is, Quest Diagnostics Settles Medi-Cal Whistle-Blower Suit.
The article tells us that Quest Diagnostics, Inc., the biggest provider of medical lab services in California, has agreed to pay $241 million to settle a whistle-blower’s lawsuit that accused it of overcharging the state Medi-Cal program. The lawsuit also alleged that the Madison, N.J., company paid illegal kickbacks to doctors, hospitals, and clinics that sent patients their way.
The settlement was the largest in the history of California’s False Claims Act, which allows private citizens to sue on behalf of the state if they have evidence that a government contractor has defrauded a state agency.
Chris Riedel and his company, Hunter Laboratories of Campbell, California, the whistleblower, alleged that the unfair business practices of Quest and other labs was pushing them out of the market. The California attorney general subsequently intervened in the case and conducted a three year investigation.
As would be expected, Quest acknowledged the settlement in a statement it released, but denied any wrongdoing. “Our laboratory testing services for Medi-Cal were priced appropriately, and we deny all allegations in the complaint,” said Michael E. Prevoznik, Quest’s senior vice president and general counsel. What he should have said is, “We got caught cheating in a big way and rather than get stung for a whole lot more money and risk losing out contract with California and other states, we are going to pay this money in hopes of making more in the future.”
Quest said it settled “to put the lawsuit behind us.”
Here is an interesting note – The lawsuit was one of five pending cases against medical laboratory firms, the attorney general’s office said.
“Medi-Cal providers and others who seek to cheat the state through false claims and illegal kickbacks should know that my office is watching and will prosecute,” said California Attorney General Kamala Harris. A little sarcasm is appropriate here in that it was not her office that caught the offenders, rather it was a competitor of Quest who was losing money due to Quest’s illegal actions.
On a positive note for the Attorney General, their involvement with all the resources a government agency can bring to bear, is probably what forced a settlement.
For those who were not aware, Medi-Cal is a joint state-federal government program that provides medical care for the poor and disabled.
In Texas there are strict laws for enforcement of Insurance fraud. There are civil remedies and also criminal remedies. The civil enforcement available to insurance companies is found in the Texas Insurance Code, Sections 701.001 thru 701.154. The criminal actions that may be taken against someone committing insurance fraud is found in the Texas Penal Code, Section 35.01 thru 35.04. The range of offense for insurance fraud will depend on the amount of harm but can be as small as a Class C misdemeanor to as severe as a First Degree Felony which is punishable up life in prison.
As further information, the Texas Penal Code, Section 35A.01 and 35A.02 deal with Medicaid Fraud. Violation of these statutes can also be as low as a Class C misdemeanor to as severe as a First Degree Felony.