By Amy Silverman
By Olivia LaVecchia
By Monica Alonzo and Stephen Lemons
By Chris Parker
By Michael Lacey
By Weston Phippen
California's prompt-pay laws appear to be in part accountable for the quick distribution of Blue Cross' insurance-claim checks to the Arizona rent-a-patients.
Those laws force insurance companies to reimburse approved claims within 30 working days to PPO policyholders, and 45 days to those under HMOs. Enacted in 47 states during the late 1990s, the new laws were intended to force insurers to pay providers in a more timely fashion.
But many in the insurance industry say the prompt-pay legislation has given health-care scam artists an unintentional boost.
California doesn't allow insurers extra time to investigate suspected fraudulent claims. So, even if Blue Cross had suspected that this rent-a-patient scheme was afoot in Orange County, the company may have paid up anyway.
But the challenges presented by the prompt-pay laws don't explain why exorbitant, frequent claims from the Southern California clinics failed to raise red flags inside Blue Cross.
For instance, what plausible reason would any Arizona patient have to keep returning to California outpatient clinics for procedures that, legitimate or not, could have been done locally?
And why wasn't someone at Blue Cross/Blue Shield at least curious about a patient such as Julio Hernandez, who had a half-dozen medical procedures performed on him in California last year?
Blue Cross/Blue Shield's Jackie Fishman says she doesn't have the answer to either of those two questions. Instead, she points to the 600-plus suspected fraud cases that the association did refer last year to law enforcement.
Statistics provided by the insurer suggest that about half of those referrals led to criminal indictments, with about 180 convictions. It's uncertain, however, what percentage of those cases stemmed from outpatient surgery clinics.
"I'm not excusing or defending anyone for paying out excessive claims, but as a practical matter, it does happen," says Bill Mahon, president of the National Health Care Anti-Fraud Association, a nonprofit consortium of law enforcement and private health insurers based in Washington, D.C.
"Each member of our association processes literally millions of claims every year -- millions. One of the inherent flaws in all of this is that the health-care insurance system is not first and foremost a fraud-detection system, but a benefits-distribution system."
Of the California rent-a-patient scam, Mahon says, "If I were one of those Arizona people, I think I'd be less afraid that the insurance company is going to catch you than that the bad guys will send someone over from L.A. and do a number on you for cashing the check."
Charles Merten, an attorney from Portland, Oregon, notes that "improperly paid claims really don't matter to Blue Cross because they're just so big."
"If they mistakenly pay a bunch of money in claims, somebody else takes the hit, not them. They just go running to a Department of Insurance and get their rates hiked. They operate sort of like the government, with mountains of computer programs, amazing amounts of money, but with sloppy gatekeeping and lack of accountability."
In 2001, Merten filed a lawsuit in Multnomah County Circuit Court on behalf of a man who had been a fraud investigator for Regence Blue Cross/Blue Shield of Oregon. The still-pending suit contends the man was fired after he informed supervisors that the company was grossly overpaying physicians' claims, which allegedly resulted in higher premiums.
Blue Cross has rejected the allegations as those of a disgruntled ex-employee.
Oskar Mora lifts up his shirt and displays two dime-size circular scars several inches apart under each armpit.
"That's where they cut out my sweat glands," says Mora, another Cuban refugee who's in his early 30s. "They really screw me up with this."
Mora -- who's been working at Onyx as a laborer for about six months -- says he feels a severe loss of strength in his hands, a well-documented side effect of the sweating surgery.
Since his March 8 surgery at Unity, Mora also says he's been sweating profusely in other parts of his body, including his legs and torso.
"Qui told me out there to say I had problems breathing, so I thought I was gonna get the nose [septoplasty]," says Mora, the soft-spoken father of a 3-year-old son. "Then he changed it before I went in. Now, I say, I sweating too much. Please help me.'"
Most insurance companies cover sweat-gland surgeries to help with a disorder called hyperhidrosis, or excessive sweating. Many doctors perform a procedure in which they clip or remove part of the nerve near the top of the spine that controls palm sweat.
Side effects of the surgery often include so-called "compensatory sweating," which is precisely what Mora and three other Arizona rent-a-patients describe in separate interviews with New Times.
Mora hasn't received his requested medical records from Unity yet, so it's uncertain which doctor performed his sweat-gland surgery.
"We have excellent success with our treatment of hyperhidrosis, and consider it a viable and important surgery," says Dickman, a highly respected surgeon. "But we generally don't go that route unless a person first has tried non-surgical treatments, and unless we've spent a lot of time going over the procedure with the patient.