Wednesday, August 19, 2009

Let it Rain on Health Care Fraud

As the debate over health care in the United States (and in other countries) continues, it often helps to remember that it is hardly a new debate.

Francis Ford Coppola's The Rainmaker was released in 1997. It was a film adaptation of a 1995 book by John Grisham -- which was probably one of fewer than five books that has ever drawn tears from this author.

In the film, Rudy Baylor (Matt Damon) is a graduate just out of law school when he encounters the legal profession in all of its ugliness. In a market overloaded with lawyers, Baylor ends up in the cutthroat employ of "Bruiser" Stone (Mickey Rourke), a strong-arm lawyer with a taste for chasing ambulances and expertise in "stolen evidence".

When Stone is forced to leave the country before he has to face down a grand jury over some seeming connections to organized crime, Baylor is forced to take on the case of Donny Ray Black (Johnny Whitworth), a leukemia patient who is being denied treatment by a health insurance company that sold his mother, Dot (Mary Kay Place) a cheap insurance policy.

Attempting to weasle their way out of paying for a live-saving bone marrow transplant, the company is prepared to simply let Donnie die while they attempt to dismiss his case with the cooperation of a dishonest circuit judge. But when the presiding judge passes away from a heart attack, he's replaced by Justice Tyrone Kipler (Danny Glover), a former activist lawyer.

The company and their lawyer, Leo Drummond (John Voight), are in for some bad news: they're going to trial.

Despite the inexperience of Baylor, it's going to prove costly for them.

In the course of the trial, the testimony of Jackie Lemancyzk (Virgina Madsen) makes it evident that denying all claims in the hopes that the policy holder won't pursue legal action was integral to Great Benefit's scheme in which the cheap health insurance policies were sold door-to-door.

To make the scheme even more infuriating, the company attempted to dismiss bone marrow transplants as "experimental procedures", even as they were planning to invest in bone marrow clinics because they had become a standard procedure for treating leukemia.

In the film, Great Benefit has activated more than 90,000 of the policies sold to the Blacks, yet paid out on barely more than 1,000 of 11,000 claims.

Denying people the benefits they have paid good money -- maybe not a lot of money, but good money -- for has proven to be very profitable for the company.

The scheme presented in The Rainmaker could be viewed as the oft-hidden underside of health insurance fraud -- insurance fraud by insurance companies, who double-deal behind the scenes in order to profit from medical procedures they don't want to pay for.

The arguments made by Drummond in the case -- that forcing health insurance companies to actually pay out the benefits they collect for would cause insurance rates to become unaffordable, and eventually put the health insurance industry in government control.

The similarity to arguments being used against President Barack Obama's health care reform plan should probably be seen as less than coincidental.

In the end, the consequences for the company prove to be catastrophic for them. For their victims, it has -- and will -- prove to be much, much worse.

In the film, Drummond and numerous Great Benefit executives claim they were merely denying claims so they would have time to investigate possible fraudulent claims -- which is ironic when one considers that their denial of benefits are, themselves, fraudulent.

The kinds of schemes portrayed in The Rainmaker represent nothing more than white collar crime under a dishonest guise of legality. These cases shouldn't merely be a matter for civil courts -- they should be a matter for criminal law. Insurance companies using any such scheme should be prosecuted to the fullest extent to the law, up to and including for manslaughter if their victims -- patients being denied benefits they've paid for -- die.

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