Fake Treatment


Fake medical bills are typically sent by someone who legitimately is a medical practitioner. This is because all medical bills are required to use a national ID specifying which medical practitioner is involved.

The classic case that most people envision is a rogue doctor who is desperate for cash and begins fudging bills to get more money from the insurance carrier. The doctor practices legitimate medicine but also submits for activity that never occurred. Many times the doctors rationalize this because they feel that they have been mistreated by insurance carriers in the past and they are “righting a wrong.”

While the rogue doctor scenario happens, what is much more damaging is a clinic set up by a criminal organization with the express purpose of defrauding insurance carriers. In this situation, the medical practitioner is only a minor player in the plot; he or she is brought in to sign the forms and provide credibility to the situation. Such a medical provider is happy to fill out forms and receive payment, but he or she is not the “brains” of the operation. Instead, a sophisticated crime ring has picked the location of the clinic (they want a location that is hard to film, and if filming is possible, there must be multiple entrances), the types of fraud to be committed, the staging of the accidents, the acquisition of pawns who are involved in the accidents for a cut of the money, which law firms to use if insurance companies begin snooping, and typically have even planned in advance which insurance carriers they will bill and which they will not. The reason they have all of the planning so well organized is this is not their first rodeo. In fact, they likely have done this multiple times already and simple close clinics and reopen under a different name from time to time as a precautionary measure.

How it goes down

There are multiple types of fake bills that arrive at an insurance company.

  1. Line items that never occurred: In this scenario, some medical procedures occur during the visit, but the medical clinic purposely pads the bill with other procedures that never occurred. They tack these on looking for a little more cash per each bill.
  2. Upcoded line items: In this scenario, the medical procedure occurred, but the clinic chooses to code for a more expensive version of the procedure. A typical example occurs with regards to the CPT codes for medical examination, where there are different levels depending on the thoroughness of the examination. The clinic may choose to bill for a more thorough, and expensive, procedure, even though only a cursory examination occurred.
  3. Visits on legitimate patients that never happened: In this scenario, the clinic has a legitimate patient who has received some medical treatment from the provider. However, the clinic chooses to submit bills for additional days of treatment that never occurred. Typically the clinic fakes bills that seem plausible given the condition of the patient.
  4. Visits from fake patients: In this scenario, the clinic and the patient are collaborating. The patient will receive a cut of the insurance money on treatment that never occurred. Often the patient purposely shows up for initial visits, in case the clinic is being filmed, but may not return for all of the subsequent “visits”, which are billed anyway.
  5. Fabricated patients: In this scenario, the clinic doesn’t even involve real patients. Instead medical bills are made out of thin air.

How we spot it

We have proprietary algorithms that are constantly sifting through your data. We have calibrated these algorithms to detect patterns in medical bills. Our algorithms are analyzing the data from the line item level, bill level, patient level, and accident level. We have created an impressive array of algorithms which identify bills that cannot make sense without further explanation. Our algorithms consider not only all activity on the patient, but: all activity on the accident, all activity performed by the clinic on other accidents submitted to you and participating insurance carriers, and all activity submitted by the particular medical practitioner even from different clinics. With all of this information, we are able to identify a billing pattern that may have made sense on an individual bill (and hence not noticed by your adjusters or bill reviewers) but does not seem plausible when considered in the totality. As soon as this becomes apparent, these claims are flagged and immediately given as leads to your SIU department.

Why are we different?

Our focus is to provide leads to SIU, not build a system that “pre-clears” claims. We have seen many algorithmic systems sold with the purpose of fast tracking claims. Whether you fast track a claim is your business; but we will analyze all claims as they go through your system and provide a lead to SIU when potential fraud is spotted. Furthermore, our algorithms are not fooled by people who have managed to stay out of databases related to past criminal activity, such as recent immigrant arrivals.

Examples in the news