An insurance mill is a conspiracy in which unnecessary care is provided in order to create large insurance claims. The key players are (a) providers who hope to profit from their expensive services; (b) attorneys who hope to profit from insurance settlements, which often are a multiple of the health-care expense; and (c) patients who may or may not have full knowledge of the conspiracy. Some mills use “runners” to recruit accident victims, but some mills even fabricate their own accidents.
The goal of the mill is to maximize medical expenses. This enables participating providers to profit from unnecessary services and may enable attorneys who represent injured clients to get higher settlements (and therefore higher fees for cases taken on a contingency basis). Large mills can involve hundreds of participants and steal many millions of dollars. In 2003, an example came to light after the FBI set up, a bogus law office that attracted scores of scammers who set up staged accidents.
Here are some scenarios that should arouse suspicion that a personal injury mill is involved.
- People who have been in minor accidents are advised by a runner, an attorney, or a practitioner that they may have been injured more seriously than they think.
- Participants are advised that the care they receive won’t cost anything because an insurance company will pay for it.
- Insurance claimants are advised that they can make money by doing what is recommended and that failure to participate could adversely affect their legal case.
- The diagnostic evaluation process is set up by a lawyer who refers to multiple practitioners. Typical rings include practitioners of orthopedics, chiropractic, general medicine, neurology, and physical therapy.
- The providers offer nonessential transportation and bill your insurance company.
- Multiple professional appointments take place at the same facility or on the same day. There is no real consultation in which one doctor advises another; and the original physician is never seen again. In many cases, the physical examinations are cursory. These characteristics suggest that everyone gets these services regardless of whether they are clinically needed.
- Many patients get the same treatment on a similar schedule. This suggests that everyone gets the same services regardless of whether they are clinically needed.
- Multiple diagnostic tests are recommended with little or no explanation. Often they are conducted in the treating physician’s office with little or no advance notice and no discussion of the results afterward. The tests may be administered by “visiting” physicians or technicians and/or conducted in a minivan that comes to the office. The tests commonly used by personal injury mills include nerve-conduction tests or surface electromyography to look for “nerve damage; spinal ultrasound to look for soft-tissue injury; and inclinometry to look for restriction of joint motion.
- Participants are told that they have suffered significant injury even though they have few or no symptoms. One tactic is to say that the accident has caused a disc to bulge even though the disc is not causing the patient’s symptoms. (Any stress placed on the spine—including changing one’s position from lying to standing—creates a load that results in many discs bulging slightly, which is a normal occurrence. Bulges are not clinically significant unless they are associated protrusion or rupture that produces symptoms.)
- The treatment stays the same—with multiple modalities —whether or not you are feeling better.
- Insurance claims are not handled in a standard manner. Practitioners are willing to forego the deductible or copayment, and payment reports are coded and go to the attorney rather than the patient.
Why You Should Care
The millions of dollars stolen each year by personal injury mills result in higher insurance premiums and higher taxes. But the loss does not end there. False reports of medical diagnoses or loss of functionality can cause trouble for patients who later apply for a job, apply for insurance, or actually become disabled and apply for disability. In addition, knowledgeable participants can be prosecuted for fraud. For this reason, you should be alert to the signs described in this article and should examine bills and insurance payment reports to see what services have supposedly been provided. If you encounter signs of a personal injury mill, ask the fraud division of your insurance company, your state attorney general, and the FBI to investigate. If Medicare or Medicaid are involved, also notify the Office of the Inspector General.
Testimony of “Dr. A” at a hearing on Gaming the Health Care System: Trends in Health Care Fraud before the Senate Special Committee on Aging, March 21, 1995.
Attorney Brennan is a shareholder in Marshall Dennehey Warner Coleman and Goggin and chairs the firm’s Special Investigation Lititgation Practice Group. He specializes in insurance fraud investigation and litigation for insurance carriers and institutional clients. Dr. Bender, a former chairman of the New Jersey Board of Chiropractic Examiners, sees private patients and provides consultations and expert testimony related to utilization review, chiropractic malpractice, and insurance fraud.