SIU Today Summer 2021 - 22

DME FRAUD: CHARACTERISTICS AND
INVESTIGATIVE STRATEGY
A modern DME fraud case contains some of the characteristics
present in the Harper and Hill indictments. Total absence of medical
necessity for the DME is a near universal component. So is an illegal
relationship between a prescribing physician and a DME supplier,
either because the relationship is premised upon bribes or because
the physician owns a stake in the DME company, thereby creating an
improper self-referral.
However, the shrewd perpetrators of DME fraud play other angles
too, and they can disguise their actions well. It is not uncommon to
see very professional and content dense DME order and customer
information checklist forms which lend the appearance of propriety,
especially when an overwhelmed claims representative looks at
them. Yet additional scrutiny at the claims stage and in litigation
has revealed numerous instances of the absence of any physician
documenting the necessity of the DME or even ordering it as part
of a treatment plan. More than a few supposed DME patients, upon
examining supposed customer checklists during depositions, disavow
that the customer signature on the form is theirs. DME bills might
describe a high-end, several thousand dollar back brace, when in fact
the patient actually received the sort of neoprene and Velcro brace
that one might purchase at any pharmacy without a prescription for
less than $100. Billing for as many as a dozen complimentary braces
when a patient receives just one, or sometimes none at all, is a routine
occurrence in this type of fraud.
The truly shrewd perpetrators of these schemes will elect, as a matter
of strategy, to not bill Medicare or Medicaid at all, even though they
may serve low income and senior patient populations. Many states
regrettably do not prosecute health care fraud with the same zeal
and frequency as the Department of Justice. Steering clear of federal
reimbursement from Medicare and Medicaid while engaging in fraud
in such states is an effective strategy for avoiding federal investigative
scrutiny. After all, private insurers can decline payment, but they
cannot send anyone to prison.
CONCLUSION
Durable medical equipment fraud has metastasized back into
prominence in the injury claim context because it can be lucrative for
those who commit it. The means and methods change as the insurance
industry catches on to them, but the one constant that will serve every
insurer well in the fight is vigilance. Special investigations units should
commit to regular training with experienced professionals who can
help them identify and defend against the current trends. It may seem
a questionable use of training and investigative resources to spend so
much time combatting bills of a few thousand dollars which might
constitute a relatively small fraction of total medical specials in an
injury claim. But this is exactly the attitude these fraud perpetrators
are hoping for.
Eric W. Moch, a partner in the Chicago office of HeplerBroom, LLC, focuses his
practice on organized medical fraud and insurance fraud, including organized
activity and staged losses, as well as first- and third-party coverage and bad faith
defense. Mr. Moch counsels and represents national insurers, businesses, not-forprofit
organizations and individuals in a variety of matters and litigated disputes.
His insurance fraud practice entails the defense of insurers and their insureds against
fraudulent claims at trial and the pursuit of civil recoveries for insurance carriers
resulting in recoveries against medical fraud perpetrators. He has extensive civil
litigation experience in Illinois state and federal courts, including more than fifty jury
verdicts, victorious oral arguments before the Illinois Supreme Court and Seventh
Circuit U.S. Court of Appeals and several published appeals. He is a former national
board member of the National Society of Professional Insurance Investigators and is
the former President of the Illinois chapter. Mr. Moch has also held several positions
in the insurance industry, including as a founding member of a Special Investigations
Unit for an international insurer, a role in which he investigated alleged fraudulent
claims across a wide range of insurance lines. Mr. Moch can be reached at (312)
205-7712 and at eric.moch@heplerbroom.com
Nominations for IASIU Awards
The highly prestigious IASIU Awards are given on an annual
basis to individuals who have displayed outstanding investigative
services to their individual organizations, as well as to the industry
as a whole. Factors considered in the selection of the winners
include the impact of the investigation to the individual's special
investigation unit, their company and the insurance industry.
Also considered are the positive effects the investigation has on
the outside community, as well as the exceptional qualities of the
investigation.
There are seven award categories, which include:
* Investigator of the Year
* Analyst of the Year
* Anti-Fraud Insurance Professional of the Year
22 SIU TODAY | SUMMER 2021
* Public Service
* Outstanding Service
* Multi-Jurisdictional Investigative Excellence Award
* Chapter of the Year
Nominations are received from various sources including peers,
supervisors and other sources within the SIU community. An
individual, as well as their organization, should consider the
nomination to be a significant honor, representing the hard work
of the individual and the support of their respective company in
the continual fight against insurance fraud.
To learn more about the Awards criteria and to nominate a
deserving IASIU member, visit https://www.iasiu.org/page/
AwardsCriteria. Nominations are due July 1, 2021.
https://www.iasiu.org/page/AwardsCriteria https://www.iasiu.org/page/AwardsCriteria

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