Live-cell analysis may be billed as one or more tests for vitamin deficiency. Nonstandard allergy tests may be represented as standard ones. Services not covered because they were performed outside of the United States may be billed as though they were performed within the United States. The company, in turn, may sell the policy to a third-party investor. The company or the investor then becomes the beneficiary to the policy, pays the premiums, and collects the face value of the policy after the original policyholder dies.
Fraud occurs when agents recruit terminally ill people to apply for multiple policies.
Healthy impostors then undergo the medical evaluation. In many cases, the insurance agent who issues the policy is a party to the scheme. The agent or one applicant may even submit the same application to many insurance companies. Viatical settlement companies then purchase the policies and sell them to unsuspecting third-party investors. Several large insurance companies have joined forces through the National Health Care Anti-Fraud Association to develop sophisticated computer systems to detect suspicious billing patterns.