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Insurance Fraud:
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.

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.

Additional Information


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.