Thursday, June 24, 2004                                                         Contact:Lucas Hamilton

Morrison Issues Cease and Desist Orders on Multi-State Fake Health Plans Joins State Health Officials In Effort to Stop Fake Health Plans

  • (HELENA) - State Auditor John Morrison joined today by John Jones, Executive Director of Managed Care at Deaconess Billings Clinic and Kay Wagner, Director of Patient Financial Services for St. Vincent Healthcare, announced a cease and desist order which has been issued on 14 people and business entities and their agents who are allegedly selling fake health plans in Montana.
      
      "We will not permit fake health insurance and discount cards to steal money from Montana businesses and employees," said State Auditor and Insurance Commissioner John Morrison. "By misrepresenting these plans as 'health insurance' these scams take advantage of a vulnerable segment of our population, the uninsured and the families and businesses struggling with high insurance premiums."
      
      Morrison, Jones and Wagner also emphasized that hospitals and other health care providers are hurt when medical services go unpaid. "It is particularly troubling to have these so-called insurance companies tell people that our hospital is in the network," said Kay Wagner, Director of Patient Financial Services for St. Vincent Healthcare. "this makes these plans seem legitimate to a consumer while clearly misrepresenting St. Vincent Healthcare." "At a time, when we are all putting major resources into providing health care and insurance for those who need it, it is very troubling to see scam artists moving into health care to take advantage of that situation," said John Jones, Executive Director of Managed Care at Deaconess Billings. "We strongly support the
      Commissioner of Insurance and other enforcement agencies, in going after the
      scam artists."
      
      
      The respondents allegedly advertised various health insurance plans offering medical coverage, dental coverage and co-pay prescription cards. The plans are marketed as "group insurance coverage" via various media outlets, unsolicited facsimiles and "cold call" telephone calls. The plans are typically promoted as low-cost health insurance and marketed to small businesses who want to provide some health coverage to employees, people who are uninsured, and those who are self-employed. In fact, the programs do not provide the coverage promised and consumers are stuck with unpaid medical bills.
      
      In a recent study conducted by the General Accounting Office (GAO) it was found that 144 fake health insurers sold more than 200,000 bogus policies between 2000 and 2002 resulting in $252 million in unpaid claims. In the same time period it is estimated that the number of fake insurers has doubled.
      
      "These plans are deceptive to the consumer," said Morrison. "They appear to be something they are not, and can have victims at all levels. First is the person paying the scam artist. Next their family members who think they are covered by a bogus policy. Finally the hospitals and doctors who get no payment when they try to collect from the alleged health plan."
      
      Early detection and aggressive oversight are keys to successfully addressing this important issue. To avoid being a victim of a health insurance scam:
      
      1. Verify, before you buy. Contact the Montana State Insurance Department to verify that the plan and agent are licensed in Montana. You can call the Montana State Insurance Department at 1-800-332-6148.
      2. Be Alert. If is seems too good to be true, then it is.
      3. Act fast. Typically phony health plans will not pay medical bills or will only pay small ones. If you find that your health insurance is not paying you medical bills in a timely fashion, call the Montana State Insurance Department. You need to call fast and report what is happening to you. Remember, it is better to be safe than sorry.
      
      For any questions regarding insurance please call the Montana State Auditor's Office at 1-800-332-6148.
      
  • Continental Health, Med One, American Med Care, Health One, Preferred Providers (NAPP), Liberty Discount Benefits, Medical Savings Program, Karen Leehin, Penny Lee, Rhonda K. Rabie, Wes Long, Steven Whatley, Anthony J. Pozzolo, Bruce Weitzberg, and their agents and representatives.