Guilty Without Charge

The other day I wrote about the fear in the workers' compensation industry to blow the whistle on wrong doers.

Many readers acknowledged that fact and I got several telephone calls and comments/emails that there is a culture of retaliation in workers' compensation against do-gooders.

And everyone thinks that they will be singled out, believing that the problem is only in the state or jurisdiction in which they participate.

It's not. What happens in one state is rampant, and unfortunately, standard, practice in probably every state. I think I've had enough phone calls on the topic from different people in completely different jurisdictions to confidently state that.

Bowzer knows it when he sniffs it...

One trick that happens to be in vogue across state lines is the use of third party networks to obfuscate the true medical treatment bill, as I mentioned Wednesday.

Here's how it works:

A medical provider renders services to an injured worker and submits his or her bill to the medical provider network.

The MPN has a contract with XYZ claims department to manage the medical billing and is paid on a percentage of "cost savings" basis.

The MPN then manipulates the original medical billing, recoding and otherwise changing the bill to inflate it and then "discount" it.

I was told of one specific incident where a neurologist had received authorization from the claims examiner for a $10,000 procedure, but then the MPN interceded. The neurologist performed the procedure and submitted his bill to the MPN, and got paid a bit less because the MPN negotiated the fee down.

The MPN then recoded and manipulated the bill up to reflect $24,000 in services, and submitted the reformatted, new, billing to the carrier, which then paid the bill without question.

The allegation is that the MPN not only falsely represents what the charges were, but falsely represents what the actual savings are, and gets away with it by kicking back a "fee" to someone with a white collar high in the chain of command at the claims department.

Somehow the neurologist got a hold of the billings and documentation to support this - but won't divulge it to reveal identities because he gets too much business from the MPN and carrier.

If this scenario is happening on one state, it's happening in every state where there are MPNs, and in fact my bet is this kind of activity happens in nearly any case where cost controls are delegated to private enterprise.

So why doesn't someone do something about this? How can such illegal behavior continue on for so long without law enforcement interception?

This behavior was identified long ago - in 1961 President Dwight Eisenhower warned the American public of the dangers of the military-industrial complex: the policy and monetary relationships which exist between legislators, national armed forces, and the arms industry that supports them. The temptation to take advantage of the back door obfuscation for ill gotten profit is too great, particularly if the company is reporting to public investors.

I recall growing up news about all the big defense contractors getting wrapped up in investigations, hearings, fines and penalties, and monetary damages, as dirty relationships were uncovered. Nobody ever admits wrongdoing, but everybody pays a little more money to make the story go away.

In the case of workers' compensation, we don't have any big investigations going on that I'm aware of, and if there were then they are probably best kept secret at this time lest interference occur.

But it's not the fact that these shameful actions are occurring, or aren't stopped, which causes me consternation.

Its the fact that the fear of reprisal is so great that even those with the strongest of ethics, morals and sense of right-doing won't come forth with their information and identify people and companies.

Sure, we can all wait for law enforcement to jump in, but by then it's too late, if at all. The harm to the public has been done. The profiteers have had sufficient time to launder their gains and hide the evidence.

And ultimately the behavior is reinforced with what amounts to slaps on the wrists.

The industry is good at distracting us, and the public, from this white collar crime: there are fraud enforcement divisions that get their funding from the insurance industry, there are fraud think tank organizations that get their funding from the insurance industry, and press releases of injured worker fraud get lots of airplay despite the fact that the dollar amounts involved are de minimis in comparison to all other forms of fraud.

Nothing is more effective in curbing bad behavior than the court of public opinion - but until identification and documentation is provided then we're all, each and every one of us, just as guilty of condoning fraud as the criminals committing it are.