Imposter Ex-Surgeon Defrauds Independent Review Organizations Impacting Thousands of Claims Nationwide

November 6th, 2018

King v. CompPartners. Spyros Panos. Mega-mergers. 2018 has proven to be a monumental year with unprecedented litigation and events profoundly jolting the foundation of the Utilization Review market.  These epic events, each holding different significance and impact, have irreversibly changed the landscape and evolution of Independent Review Organizations and Utilization Review Organizations nationwide.

No event was more pivotal than the April 2018 arrest of the former New York based orthopedic surgeon Spyros Panos. Panos was previously convicted in 2013 when he pled guilty of healthcare fraud, surrendered his medical license, and served a 54-month sentence in federal prison.

It is reported that while the ex-surgeon was awaiting his 2013 sentence, Panos launched a new criminal scheme. Forming Excel O LLC just six months before his sentencing hearing, Panos initiated his plan to defraud Independent Review Organizations and insurance carriers nationwide.

Since 2013, Panos allegedly collected over $876,000 by reviewing medical and workers’ compensation claims on behalf of independent review organizations across the nation.  On April 10th Panos was arrested again in New York, according to public records, on charges of wire fraud, health-care fraud and aggravated identity theft.[i] Bloomberg has reported thousands of claims may be impacted nationwide including medical claims in New York, Connecticut, California and Iowa.[ii]

How Did a Convicted Felon Pull Off This Fraud?  

It is reported that Panos illegally obtained and assumed the identity of a fellow, actively practicing, licensed orthopedic surgeon. Purporting the stolen credential information, Panos sought to serve as a contract reviewer to six established national review organizations. It has not yet been reported how many companies nationwide Panos applied to be a physician reviewer.

Panos not only defrauded the review organizations he illegally contracted with but also the approximate 2,500 patients across the country that are reported in data presented in a recent Bloomberg article. Insurance carriers that indirectly and unwittingly used his service include UnitedHealthcare, Anthem Inc., Health Care Service Corp., and The Hartford. The impact of the fraud spans multiple states and markets, including the group health and workers’ compensation sector.

What Is The Function of IROs/UROs in Healthcare?

This arrest has led many consumers and injured employees to question the role of IROs in the continuum of their healthcare and the oversite of these organizations. Independent review organizations (IROs) and utilization review organizations (UROs) act as a legislatively mandated third-party medical review resource by providing objective, unbiased medical determinations for group health and workers’ compensation insurance claims and appeals.

Based only on medical evidence, jurisdiction and regulatory guidelines, and plan coverage, IROs deliver conflict-free decisions on medical necessity. Independent reviews are a critical component in insurance claims to ensure patients receive appropriate care.  These unbiased reviews safeguard against potentially unnecessary or invasive procedures that could prove harmful and of no benefit the patient. These reviews also function to protect against claims not covered by the plan/policy.

If a plan member or employee challenges a determination issued regarding care, claimants have a right to appeal with their insurance plan to initiate an independent medical review. When it comes to initiating appeals and requesting independent medical reviews, the laws surrounding patient rights often vary by state and benefit system.

The architecture of IRO/URO business models vary across the marketplace but most directly recruit, credential, and train a physician network of actively practicing providers. It is important to note, panelist physicians are not full-time employees but serve as an independent contractors for these entities and undergo a rigorous vetting and credentialing process before placement on the organization’s panel. It is each IROs perspective to credential in-house or outsource this process to a third party.

The arrest and pending sentencing of Spyros Panos has propelled the role of IROs and their reliability into question under the national spotlight. The crime is very clear: an unlicensed ex-surgeon misappropriated another physician’s identity and fraudulently performed peer/utilization review services. Six established and qualified review organizations were indisputably defrauded by Panos. Many have called into question legislative bodies, the partner insurance carriers who contract directly the entities, and the credentialing protocols and oversite measures of IROs.

The credentialing and re-credentialing process of physician reviewers is cumbersome and extremely costly for organizations. IROs assume the responsibility and continuous cost of developing rigorous internal credentialing policies and procedures. In addition to establishing sound best practices, many organizations invest into acquiring and maintaining independent accreditations, including URAC, NCQA, and HITRUST. IROs incur immense, but necessary expense for these accreditations, to certify all internal processes are secure and IROs successfully procure physicians that are best in class in their respective fields.

Why Does IROs/UROs Procedure for Credentialing Matter to Consumers and Insurance Carriers?

Unfortunately, not all review organizations are created equal.  Many organizations in the market do not obtain accreditation and/or prescribe to implementing comprehensive credentialing protocols and find the cost of credentialing a large network or upholding accreditations prohibitive. Further, the accreditation guidelines represent the minimum standard set forth as a providence to be built upon by a maturing organization. Ultimately, the difference in the integrity of each program is often reflected in the bottom line: the price of reviews being offered to the market.

It is a common practice of health plans or benefit groups of all sizes to “shop the market” for the lowest review price. Review organizations who do not maintain the overhead for comprehensive credentialing programs or accreditations are able to offer the lowest unit price, creating a market that demands a commoditized bargain rate.

To mitigate against poor quality reviews and the risk of continued reviewer fraud, consumer and insurance carriers must have confidence in their IRO vendors. This confidence must be established by holding IROs and review organizations to the highest standards. Insurance carriers must make it their upmost priority to partner with companies of integrity and proven programs with an emphasis on quality and not the lowest “bidder.”

Questions Insurance Carriers/Health Plans Should Ask Their IRO/URO Partner(s):

  • What accreditations/certifications does the review organization hold?
  • What percentage of physicians are accepted into their program?
  • Does the IRO/URO own or outsource the process of credentialing?
  • What additional best practices does the IRO/URO employ outside the standard?


IRO Best Practices Differentiators

The truth is, meeting the basic industry standards and limited requirements of accreditations is not wholly sufficient. IROs must employ best practices that go above and beyond checking the box and meeting the bare minimum. To ensure reviewers included on their review panel are the highest quality candidates and will produce quality accurate reviews, review organizations must be diligent in every component of the vetting and verification process.  Review organizations must be progressive and proactive in establishing their credentialing best practices and protocols to mitigate against the risk of reviewer fraud.

  • Does the IRO/URO thoroughly research each reviewer candidate, including internet databases?
  • Does the IRO/URO meet with the physician candidate a sufficient amount of time to establish report and sense of reliability?
  • Does the IRO/URO interview the physician in person or via video conference?
  • Does the IRO/URO contact the physician directly at his place of business?


The Nexus Difference

Innovative best practices to proactively manage physician credentialing is where Nexus sets itself apart. Nexus is a national clinical review organization that processes tens of thousands of reviews annually for group health and workers’ comp programs nationwide. Since inception in 2009, Nexus has continually been on the forefront of the evolution and advancement of the independent review industry and a progressive leader in developing robust credentialing best practices.

Minimum requirements for most standard programs:

  • Board Certified
  • Actively practicing with a minimum of 8 hours/week
  • 5 years post-residency experience
  • Active and unrestricted state license
  • Primary source verification
  • Timely re-credentialing

Nexus has escalated the importance of the credentialing process and incorporates new practices into our credentialing protocols regularly. We continually evaluate every component of our credentialing processes and continually advance new practices. For example, Nexus requires all physician candidates to submit various ancillary documents to fully establish their identity and substantiate active clinical practice. This is not industry standard but another layer of assurance that we are validating each physician accurately.

What The Healthcare Industry Has Learned?

Unfortunately, criminals will always find a way to disrupt and infiltrate any system deemed as an opportunity of profit, even individuals who have pledged a Hippocratic Oath to Primum non nocere “First, do no harm.” It is the responsibility of IROs to ensure there is no level of compromise in the services provided to consumers and insurance carriers.  It is the insurance carrier’s responsibility to ensure all vendor partners are accountable and resolute in the application of protocols of their credentialing programs. Every provider in the business of insurance must have alignment as good stewards of healthcare and ensure the highest level of quality of care is being delivered to our society.

Otherwise, the industry is complicit by virtue of complacency.


Reference Notes