Criminal charges for insurance fraud included recruiting patients with substance use disorder to treatment centers in Florida, signing them up for false insurance policies
An investigation into illegal treatment and recovery scams involving addiction treatment centers in Florida has led to the indictment of two New England individuals by a Suffolk State-wide Grand Jury. The Attorney General announced that the defendants, Michael Hislop, 56, of Dorchester, and Timothy Hirsch, 38, formerly of Pelham, New Hampshire were charged with nine counts each of Larceny over $250, nine counts of filing a Filing a False Health Care Application or Claim, and four counts each of Conspiracy.
The defendants allegedly “preyed” on people dealing with various substance abuse issues by sending them to various treatment facilities in Florida as patients and then subsequently signing them up for false insurance policies upon without their knowledge in order to make a profit off the claims.
“People with substance use disorder deserve quality treatment options that are safe and effective,” said AG Healey. “As the opioid epidemic continues to plague our communities, we’re not going to let patients and their families be exploited and have their pain further compounded. These indictments are an important step toward holding accountable those who are taking advantage of this growing public health crisis.”
“This matter illustrates the commitment of all agencies to combat medical billing fraud which affects all citizens,” said Anthony M. DiPaolo, Executive Director of the Insurance Fraud Bureau. “The Insurance Fraud Bureau of Massachusetts places a high priority on fighting this type of insurance fraud. The collaboration in this matter is unprecedented.”
The scheme involved two Massachusetts health insurance companies who paid out approximately $730,000 in insurance claims
In an investigation that spanned four months, from March to June of 2016, the AG’s office was able to uncover the inner-workings of the defendants’ scheme. Based in Massachusetts and a well-known individual in the local recovery community, Mr. Hislop was essentially the “runner” in the operation. His job was to frequent the various various substance disorder meetings in the commonwealth in order to lure patients to these “addiction treatment facilities in Florida” for which he was paid a “commission.”
After identifying a potential patient, Mr. Hislop would then contact Mr. Hirsch, an insurance agent, to write up ” false and misleading insurance policies” on these patient’s behalf.
In order for a person to be able to obtain an insurance policy outside of the “open enrollment period”, said person must cite a “qualifying event,” such as moving to an out- of-state address. In order to place the policy, Mr. Hislop would provide Mr. Hirsch with a prior “out-of-state” address for the patient/applicant, which Mr. Hirsch would then use in his capacity as an insurance agent to “push the policies through.”
Once the policy was placed, Mr. Hislop then would pay for the patient’s plane ticket to Florida, and ensure that the monthly insurance premiums were paid. The treatment facilities in Florida would then bill the insurance companies for those specific treatments.
While Mr. Hislop was successful in sending many enticed Massachusetts residents down to Florida, most, unfortunately, did not receive the help they needed. The AG’s office further alleges that in many cases, the individuals were left without any care at all. In addition, Mr. Hislop often failed to pay the monthly insurance premiums for the individuals he placed the policies for, leading the insurance policy lapses and denial of coverage. As a result, patients in the treatment centers in Florida were either “kicked out of their facilities or rushed through treatment to a sober home.” The AG says while some individuals were able to complete their treatment in Florida and return to Massachusetts, in many cases, these individuals ended up either relapsing or stranded in Florida without a way home.
According to the AG’s Office, the victims who were enrolled in these policies stated that they had never seen the applications with their purported signature, that the address change was untrue, with many saying they were not even aware they were enrolled in these health insurance policies to begin with.
As a result of the Defendant’s insurance fraud scheme, the insurance companies involved – Minuteman Health and Harvard Pilgrim Health Care – stated that they had paid out a total of approximately $730,000 in insurance claims. In addition to the AG’s investigation, each insurer also had conducted separate investigations following an influx of claims from Florida treatment facilities for Massachusetts residents.
While this case focuses on Florida treatment centers, the AG’s office warns that many out-of-state centers in other states like Arizona and California provide little or no treatment to patients. The recruiters often use texts or social media to recruit patients and may offer to pay for airfare and health insurance to cover the costs of treatment. In other instances, the recruiters stopped paying insurance premiums, which has resulted in patients getting removed from treatment facilities and stranded without access to housing, health care, or the financial resources to return to Massachusetts.