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How to Spot a Personal Injury Mill
Stephen Barrett, M.D.
Charles Bender, D.C.
Frank P. Brennan, Esq.
An insurance mill is a conspiracy in which unnecessary care
is provided in order to create large insurance claims. The key
players are (a) providers who hope to profit from their expensive
services; (b) attorneys who hope to profit from insurance settlements,
which often are a multiple of the health-care expense; and (c)
patients who may or may not have full knowledge of the conspiracy.
Some mills use "runners" to recruit accident victims,
but some mills even fabricate their own accidents.
The goal of the mill is to maximize medical expenses. This
enables participating providers to profit from unnecessary services
and may enable attorneys who represent injured clients to get
higher settlements (and therefore higher fees for cases taken
on a contingency basis). Large mills can involve hundreds of participants
and steal many millions of dollars. In 2003, an example came to light after the FBI set up, a bogus law office that attracted scores of scammers who set up staged accidents.
Here are some scenarios that should arouse suspicion that a
personal injury mill is involved.
- People who have been in minor accidents are advised by a
runner, an attorney, or a practitioner that they may have been
injured more seriously than they think.
- Participants are advised that the care they receive won't
cost anything because an insurance company will pay for it.
- Insurance claimants are advised that they can make money
by doing what is recommended and that failure to participate
could adversely affect their legal case.
- The diagnostic evaluation process is set up by a lawyer who
refers to multiple practitioners. Typical rings include practitioners
of orthopedics, chiropractic, general medicine, neurology, and
- The providers offer nonessential transportation and bill
your insurance company.
- Multiple professional appointments take place at the same
facility or on the same day. There is no real consultation in
which one doctor advises another; and the original physician
is never seen again. In many cases, the physical examinations
are cursory. These characteristics suggest that everyone gets
these services regardless of whether they are clinically needed.
- Many patients get the same treatment on a similar schedule.
This suggests that everyone gets the same services regardless
of whether they are clinically needed.
- Multiple diagnostic tests are recommended with little or
no explanation. Often they are conducted in the treating physician's
office with little or no advance notice and no discussion of
the results afterward. The tests may be administered by "visiting"
physicians or technicians and/or conducted in a minivan that
comes to the office. The tests commonly used by personal injury
mills include nerve-conduction tests or surface electromyography
to look for "nerve damage; spinal ultrasound to look for
soft-tissue injury; and inclinometry to look for restriction
of joint motion.
- Participants are told that they have suffered significant
injury even though they have few or no symptoms. One tactic is
to say that the accident has caused a disc to bulge even though
the disc is not causing the patient's symptoms. (Any stress placed
on the spine—including changing one's position from lying
to standing—creates a load that results in many discs bulging
slightly, which is a normal occurrence. Bulges are not clinically
significant unless they are associated protrusion or rupture
that produces symptoms.)
- The treatment stays the same—with multiple modalities
—whether or not you are feeling better.
- Insurance claims are not handled in a standard manner. Practitioners
are willing to forego the deductible or copayment, and payment
reports are coded and go to the attorney rather than the patient.
Why You Should Care
The millions of dollars stolen each year by personal injury
mills result in higher insurance premiums and higher taxes. But
the loss does not end there. False reports of medical diagnoses
or loss of functionality can cause trouble for patients who later
apply for a job, apply for insurance, or actually become disabled
and apply for disability. In addition, knowledgeable participants
can be prosecuted for fraud. For this reason, you should be alert
to the signs described in this article and should examine bills
and insurance payment reports to see what services have supposedly
been provided. If you encounter signs of a personal injury mill,
ask the fraud division of your insurance company, your state attorney
general, and the FBI to investigate. If Medicare or Medicaid are
involved, also notify the Office of the Inspector General.
Attorney Brennan is a shareholder in Marshall
Dennehey Warner Coleman and Goggin and chairs the firm's Special
Investigation Lititgation Practice Group. He specializes in insurance
fraud investigation and litigation for insurance carriers and
institutional clients. Dr. Bender, a former chairman of the New
Jersey Board of Chiropractic Examiners, sees private patients
and provides consultations and expert testimony related to utilization
review, chiropractic malpractice, and insurance fraud.
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This article was revised on September 1, 2003.