Insurance Fraud and Diversion
"Insurance fraud is the main financier and enabler of drug diversion. Even so, few health insurers understand the pivotal role insurance fraud plays in a diversion epidemic that costs insurers up to $72.5 billion a year.
" Swindlers and drug abusers obtain the bulk of their illicit prescription narcotics through fraudulent insurance claims for bogus prescriptions, treating phantom injuries and other illegal deceptions;
" Drug diversion drains health insurers of up to $72.5 billion a year, including up to $24.9 billion annually for private insurers. The losses include insurance schemes, plus the larger hidden costs of treating patients who develop serious medical problems from abusing the addictive narcotics they obtained through the swindles;
" Insurers are potentially vulnerable to enormous liability lawsuits for failing to reasonably prevent fraud schemes that kill and injure people addicted by diversion schemes. Drug manufacturers and pharmacists already face such lawsuits."
The Mahon Consulting Group LLC for the Coalition Against Insurance Fraud, "Prescription for Peril: How Insurance Fraud Finances Theft and Abuse of Addictive Prescription Drugs," (Washington, DC: December, 2007), p. 4.