Paybacks for Kickbacks

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hand holding American dollar currency isolated on blurred blackground injured woman with broken hand and green cast on arm, insurance health concept.

Some fraudsters seek to get rich by filing false claims with insurance companies, thinking they are only hurting a big corporation, rather than stealing from individuals. What they may not realize is that health insurance fraud causes premiums to go up and benefits to go down for everyone. Billions of dollars are lost in the United States each year to health care fraud, according to the National Health Care Anti-Fraud Association. (Imagine how much care a few billion dollars would buy.)

California prosecutors made that case in January when they charged two men with defrauding the state’s workers’ compensation program of $20 million.

Multiple felony charges of insurance fraud, money laundering, and unlawful referrals were placed against a 59-year-old Westminster man who operated five workers’ compensation clinics in Southern California, and a 57-year-old Beverly Hills man who is the owner of a compounding pharmacy.

Investigators say the pharmacy owner paid more than $2 million in kickbacks to the owner of the clinics to order unnecessary screenings and prescriptions. The pharmacy owner then billed the state for more than $20 million in fraudulent workers’ compensation claims between 2014 and 2017.

The owner of the clinics, who was not licensed to practice medicine, is also accused of failing to report more than $5 million in workers’ wages, causing him to owe the state $1.6 million in taxes, penalties, and interest. (Which he’ll almost certainly have to repay.)

“These co-conspirators allegedly ordered screenings and prescriptions for patients in order to enrich themselves, as part of a kickback referral scheme,” said California Insurance Commissioner Ricardo Lara. “By investigating health care fraud, my department is helping keep insurance costs down for all California consumers and businesses.”

Today’s Fraud of the Day comes from the article, “CA: Two Arrested in $20 Million Health Care Insurance Fraud and Kickback Scheme,” published Jan. 30, 2020 in workerscompensation.com.

Los Angeles, CA (WorkersCompensation.com) – Bradley Dean Groscost, 59, of Westminster, and Felix Koltsov, 57, of Beverly Hills, self-surrendered last week to the Orange County Central Justice Center after being charged with multiple felony counts of insurance fraud, money laundering, and unlawful referrals for allegedly conspiring to bill insurers in excess of $20 million as part of a kickback referral scheme.

“These co-conspirators allegedly ordered screenings and prescriptions for patients in order to enrich themselves, as part of a kickback referral scheme,” said Insurance Commissioner Ricardo Lara. “By investigating health care fraud, my department is helping keep insurance costs down for all California consumers and businesses.”

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.