Healthy, Wealthy and Fraudulent

Sometimes you have to be sick to become a millionaire. Relying on little more than their own fertile imaginations, Mordo and Jacqueline Danyali of Hollywood conjured up three bogus companies. Using the names of real and fictitious doctors, the couple allegedly proceeded over a period of more than two years to file 1,500 fraudulent health claims with more than 100 insurance companies. The police caught up with them in March. By then, according to the federal case against them, the Danyalis had already netted $1.4 million.

Everyone can get into the fraud game. Doctors and lawyers often work in tandem to alter medical records, fake injury reports and file claims for services never rendered. At hospitals, billing clerks discreetly boost the prices of low-ticket items, charging, say, $4.15 for an aspirin that costs 11 cents. "A lot of the billing frauds seem insignificant," says Ed Lueckenhoff, chief of the FBI's health-care-fraud unit. "But if you multiply that times thousands, it adds up to a lot of money. And this is a systematic scheme that is taking place with thousands of patients and thousands of procedures."

While fraudulent claims are a top priority in the FBI's white-collar-crime division, the White House has yet to target such scams to lower the cost of national health. Perhaps it should. According to the National Health Care Anti-Fraud Association, bogus claims account for between 3% and 10% of the nation's $900 billion health bill. A crackdown on fraud could help defray the tab on Clinton's health-care proposal, which he previewed last week in a speech in Tulsa, Oklahoma. Broad on themes and thin on details, the plan aims to provide adequate coverage to all Americans, including the 37 million ) currently uninsured, by generating savings within the country's unwieldy health system rather than by imposing new taxes.

Many health experts who find the ambitious scheme too good to be true wonder why the First Lady's task force is overlooking the potential windfall that would result from a crackdown on fraud. The Administration insists that fraud will eventually be targeted. "It really is going to be a priority," says a White House health spokesman. The government, he says, may impose "new criminal statutes to combat fraud."

Even if the Clintonites find a way to plug most of the holes that invite fraud, doctors -- and patients -- are certain to devise new ways to cheat the system. Three years ago, consumers accounted for only 10% of all medical fraud cases, with savvy providers, doctors and other health-care professionals filing the snake's share of claims. Today consumers are behind one-third of all claims.

A typical case is described by Bill Kizorek, whose Illinois-based company InPhoto Surveillance, offers video-detective services to insurers from coast to coast. Recently the company was called on by Chicago's Firemen's Annuity and Benefit Fund to investigate the disability claim of a fire fighter. "He said he could not work," says Kizorek. "But we videotaped him inside a health club climbing a wall that mountain climbers practice on."