Wis. Company Uncovers Health Insurance Scam Involving Military

A Philippines-based company and its president allegedly scammed a Department of Defense health insurance program out of more than $900,000, according to an indictment unsealed Wednesday.

Thomas Arthur Lutz and the company he headed, Health Visions Corp., were charged in the 75-count indictment with defrauding TRICARE, the health care plan that covers more than 9 million active duty and retired services members and their families.

The scheme was uncovered by Madison-based Wisconsin Physicians Service, a contractor that processes and pays claims for the program, U.S. Attorney Erik C. Peterson said.

Health Visions would inflate the bills of other providers by 100 percent or more before sending them in for reimbursement, the indictment said. The company also allegedly submitted fraudulent claims for patients’ hospitalization and other services they did not receive.

In all, the company and Lutz submitted more than 400 fraudulent claims totaling more than $1 million between 1998 and 2004, the indictment says.

The indictment says the scheme also included the creation of a sham insurance program and an agreement with another provider to receive kickbacks in exchange for referring TRICARE patients.

A federal grand jury returned the indictment last year but it was unsealed after Lutz was arrested in the Philippines and made his initial court appearance in Guam.

Lutz, a 39-year-old U.S. citizen, and the company are charged with 32 counts of mail fraud, 41 counts of filing a false claim and one count of conspiracy. Prosecutors are also seeking to recover $910,000 in the final count.