Insurance fraud uncovered in Utah substance-abuse clinics

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Investigator uncovers troubling insurance fraud problem in the state

Insurance fraud has become a major problem in Utah, with substance-abuse treatment centers finding financial success through fraudulent billings. Randy Mauer, an investigator for Cambia Health Solutions, spoke with state lawmakers concerning the issue, suggesting that these treatment clinics are bringing in tens of millions of dollars due to their fraudulent practices. The issue may be quite severe, which could have serious implications for the state’s health insurance market.

Fraud seems to be targeting insurers owned by Cambia Health Solutions

Investigations into the issue found that, in some cases, owners of treatment facilities had intimate relationships with their patients, while others were drinking alcohol and abusing other substances with those seeking treatment. Some patients had been living with clinic employees while the clinic itself collected insurance payments for substance-abuse treatment. Much of this fraud targeted Regence Blue Cross Blue Shield and BridgeSpan, both of which are owned by Cambia Health Solutions.

Insurance fraud may have a major impact on the state’s health care market

insurance fraudThis insurance fraud is having a major impact on insurers. Fraud is one of the leading causes for financial losses in the insurance industry and it is particularly prevalent in the health care space. Mauer’s investigation found that many rehabilitation clinics had recruited acquaintances of employees, as well as recently release inmates from state prisons. In these cases, patients were signed up for health insurance coverage. Once this coverage became active and treatment was approved, the clinics would begin treatment, promising to cover premiums and deductibles for their patients. The problem, however, is that no treatment was provided, and many patients had moved from treatment center to treatment center simply to continue abusing substances.

Fraud may lead to higher premiums

Insurance fraud can make coverage for all consumers and businesses significantly more expensive. Insurers often raise premiums when they experience financial losses and, for some, higher premiums may mean that they can no longer pay for their insurance policies. State lawmakers may have to take action on the issue, ensuring that fraud is effectively mitigated in order to cut down on insurance costs.

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