Missouri Revised Statutes

Chapter 375
Provisions Applicable to All Insurance Companies
Section 375.991

August 28, 2014


Beginning January 1, 2017--Fraudulent insurance act, committed, when--powers and duties of department--penalties.

375.991. 1. As used in sections 375.991 to 375.994, the term "statement" means any communication, notice statement, proof of loss, bill of lading, receipt for payment, invoice, account, estimate of damages, bills for services, diagnosis, prescription, hospital or doctor records, x-rays, test results or other evidence of loss, injury or expense.

2. For the purposes of sections 375.991 to 375.994, a person commits a "fraudulent insurance act" if such person knowingly presents, causes to be presented, or prepares with knowledge or belief that it will be presented, to or by an insurer, purported insurer, broker, or any agent thereof, any oral or written statement including computer generated documents as part of, or in support of, an application for the issuance of, or the rating of, an insurance policy for commercial or personal insurance, or a claim for payment or other benefit pursuant to an insurance policy for commercial or personal insurance, which such person knows to contain materially false information concerning any fact material thereto or if such person conceals, for the purpose of misleading another, information concerning any fact material thereto.

3. A "fraudulent insurance act" shall also include but not be limited to knowingly filing false insurance claims with an insurer, health services corporation, or health maintenance organization by engaging in any one or more of the following false billing practices:

(1) "Unbundling", an insurance claim by claiming a number of medical procedures were performed instead of a single comprehensive procedure;

(2) "Upcoding", an insurance claim by claiming that a more serious or extensive procedure was performed than was actually performed;

(3) "Exploding", an insurance claim by claiming a series of tests was performed on a single sample of blood, urine, or other bodily fluid, when actually the series of tests was part of one battery of tests; or

(4) "Duplicating", a medical, hospital or rehabilitative insurance claim made by a health care provider by resubmitting the claim through another health care provider in which the original health care provider has an ownership interest.

Nothing in sections 375.991 to 375.994 shall prohibit providers from making good faith efforts to ensure that claims for reimbursement are coded to reflect the proper diagnosis and treatment.

4. If, by its own inquiries or as a result of complaints, the department of insurance, financial institutions and professional registration has reason to believe that a person has engaged in, or is engaging in, any fraudulent insurance act or has violated any provision of chapters 375 to 385, it may administer oaths and affirmations, serve subpoenas ordering the attendance of witnesses or proffering of matter, and collect evidence. The director may refer such evidence as is available concerning violations of this chapter to the proper prosecuting attorney or circuit attorney who may, with or without such reference, initiate the appropriate criminal proceedings.

5. If the matter that the department of insurance, financial institutions and professional registration seeks to obtain by request is located outside the state, the person so requested may make it available to the department or its representative to examine the matter at the place where it is located. The department may designate representatives, including officials of the state in which the matter is located, to inspect the matter on its behalf, and it may respond to similar requests from officials of other states.

6. A fraudulent insurance act for a first offense is a class E felony. Any person who is found guilty of a fraudulent insurance act who has previously been found guilty of a fraudulent insurance act shall be guilty of a class D felony.

7. Any person who pleads guilty or is found guilty of a fraudulent insurance act shall be ordered by the court to make restitution to any person or insurer for any financial loss sustained as a result of such violation. The court shall determine the extent and method of restitution.

8. Nothing in this section shall limit the power of the state to punish any person for any conduct that constitutes a crime by any other state statute.

(L. 1990 H.B. 1739 § 3 subsecs. 1, 2, 3, A.L. 1992 S.B. 796, A.L. 1994 S.B. 732, A.L. 2005 H.B. 866, A.L. 2014 S.B. 491)

Effective 1-01-17

Until December 31, 2016--Fraudulent insurance act, committed, when--powers and duties of department--penalties.

375.991. 1. As used in sections 375.991 to 375.994, the term "statement" means any communication, notice statement, proof of loss, bill of lading, receipt for payment, invoice, account, estimate of damages, bills for services, diagnosis, prescription, hospital or doctor records, x-rays, test results or other evidence of loss, injury or expense.

2. For the purposes of sections 375.991 to 375.994, a person commits a "fraudulent insurance act" if such person knowingly presents, causes to be presented, or prepares with knowledge or belief that it will be presented, to or by an insurer, purported insurer, broker, or any agent thereof, any oral or written statement including computer generated documents as part of, or in support of, an application for the issuance of, or the rating of, an insurance policy for commercial or personal insurance, or a claim for payment or other benefit pursuant to an insurance policy for commercial or personal insurance, which such person knows to contain materially false information concerning any fact material thereto or if such person conceals, for the purpose of misleading another, information concerning any fact material thereto.

3. A "fraudulent insurance act" shall also include but not be limited to knowingly filing false insurance claims with an insurer, health services corporation, or health maintenance organization by engaging in any one or more of the following false billing practices:

(1) "Unbundling", an insurance claim by claiming a number of medical procedures were performed instead of a single comprehensive procedure;

(2) "Upcoding", an insurance claim by claiming that a more serious or extensive procedure was performed than was actually performed;

(3) "Exploding", an insurance claim by claiming a series of tests was performed on a single sample of blood, urine, or other bodily fluid, when actually the series of tests was part of one battery of tests; or

(4) "Duplicating", a medical, hospital or rehabilitative insurance claim made by a health care provider by resubmitting the claim through another health care provider in which the original health care provider has an ownership interest.

Nothing in sections 375.991 to 375.994 shall prohibit providers from making good faith efforts to ensure that claims for reimbursement are coded to reflect the proper diagnosis and treatment.

4. If, by its own inquiries or as a result of complaints, the department of insurance, financial institutions and professional registration has reason to believe that a person has engaged in, or is engaging in, any fraudulent insurance act or has violated any provision of chapters 375 to 385, it may administer oaths and affirmations, serve subpoenas ordering the attendance of witnesses or proffering of matter, and collect evidence. The director may refer such evidence as is available concerning violations of this chapter to the proper prosecuting attorney or circuit attorney who may, with or without such reference, initiate the appropriate criminal proceedings.

5. If the matter that the department of insurance, financial institutions and professional registration seeks to obtain by request is located outside the state, the person so requested may make it available to the department or its representative to examine the matter at the place where it is located. The department may designate representatives, including officials of the state in which the matter is located, to inspect the matter on its behalf, and it may respond to similar requests from officials of other states.

6. A fraudulent insurance act for a first offense is a class D felony. Any person who pleads guilty to or is found guilty of a fraudulent insurance act who has previously pled guilty to or has been found guilty of a fraudulent insurance act shall be guilty of a class C felony.

7. Any person who pleads guilty or is found guilty of a fraudulent insurance act shall be ordered by the court to make restitution to any person or insurer for any financial loss sustained as a result of such violation. The court shall determine the extent and method of restitution.

8. Nothing in this section shall limit the power of the state to punish any person for any conduct that constitutes a crime by any other state statute.

(L. 1990 H.B. 1739 § 3 subsecs. 1, 2, 3, A.L. 1992 S.B. 796, A.L. 1994 S.B. 732, A.L. 2005 H.B. 866)

*This section was amended by S.B. 491, 2014, effective 1-01-17. Due to the delayed effective date, both versions of this section are printed here.


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