California Mulls Law Against Rehab Insurance Fraud

A bill making its way through the California legislature is designed to stop unscrupulous rehab centers and patient brokers from improperly signing patients up for private insurance and then bilking the insurance companies for inflated costs.

The problem is that rehab centers, patient brokers, and questionable “charities” sign patients up for insurance and pay the initial premiums, only to enroll the patients in expensive programs that are often of poor quality. In many cases, the patents would otherwise have been eligible for federal programs or subsidies. The “charities” often stop paying premiums once the initial costs are billed, and the patients do not get the care they need, which can cause the cycle to start over again.

The bill would require third parties to tell state insurance regulators in advance that they plan to pay a patient’s premiums, and to certify that the patent is not eligible for Medicare, Medicaid or federal subsidies. Third parties would also have to pay premiums for a full year.

Source: Kaiser Health News. Click here for more information. Click here for the full text of the bill.