In one of my past incarnations, I used to be a medical fraud investigator. My job was to catch medical providers and clinic operators who were ripping off insurance companies -- mostly by billing for unnecessary and expensive treatments for fabricated car accident injuries.

The vast majority of the cases I investigated were in the state of New Jersey, where insurance laws meant to protect consumers actually make it a magnet for insurance fraud. There were scam artists from states as far away as Massachusetts who commuted to clinics in NJ after being shut down, it was that easy - and that lucrative.

The scam was usually run in poor urban areas. Personal injury lawyers hired people to drive vans around town, and if there was a fender bender, the driver would scoop up the "victims," take them to the lawyer to sign a contract, and then drive them to the crooked chiropractic clinic.

When you'd look at the patient files (as a representative of the insurance company, I had the right to see the patient files), you'd see rubber-stamping. Every patient had the exact same diagnosis, every patient got the exact same treatment - i.e., just about anything the chiro could bill. Some of them had their secretaries do the "treatments."

I remember one of the crooked chiros (he had a chain, they hardly ever had just one office) had all the people who worked for him snowed. One of his former employees described him to me as "a saint" who really didn't care about money - "I worked for him for five years, and he didn't make enough to give me a raise," she told me.

"Would you be surprised if I told you your doctor was stopped carrying three million dollars in cash to the Cayman Islands?" I told her. "Because he was." (These crooks invariably cultivated flirtations and even relationships with the women who worked for them to keep them from looking too closely.)

You should have seen the look on her face.

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It's really important to understand that insurers are not to be trusted, especially now that we know they've been defrauding us all along. Former CIGNA communications chief Wendell Potter (watch the complete video here) testified before the Commerce Committee yesterday and summed it up: Don't trust the insurance companies.

Health insurers have forced consumers to pay billions of dollars in medical bills that the insurers themselves should have paid, according to a report released today by the staff of the Senate Commerce Committee.

The report was part of a multi-pronged assault on the credibility of private insurers by Commerce Committee Chairman John D. Rockefeller IV (D-W.Va.). It came at a time when Rockefeller, President Obama and others are seeking to offer a public alternative to private health plans as part of broad health reform legislation. Health insurers are doing everything they can to block the public option.

At a committee hearing today, three health care specialists testified that insurers go to great lengths to avoid responsibility for sick people, use deliberately incomprehensible documents to mislead consumers about their benefits, and sell "junk" policies that fail to cover needed care. Rockefeller said he was exploring "why consumers get such a raw deal from their insurance companies."

The star witness at the hearing was a former public relations executive for major health insurers whose testimony boiled down to this: Don't trust the insurers.

"The industry and its backers are using fear tactics, as they did in 1994, to tar a transparent and accountable -- publicly accountable -- health care option," said Wendell Potter, who until early last year was vice president for corporate communications at the big insurer CIGNA.

Potter said he worries "that the industry's charm offensive, which is the most visible part of duplicitous and well-financed PR and lobbying campaigns, may well shape reform in a way that benefits Wall Street far more than average Americans."

Insurers make paperwork confusing because "they realize that people will just simply give up and not pursue it" if they think they have been shortchanged, Potter said.

Sen. Mike Johanns (R-Neb.) questioned the government's ability make matters clearer, saying federal regulation of mortgage disclosures have made the documents borrowers encounter in real estate transactions "hopelessly complicated."

Asked to address the hearing testimony, Robert Zirkelbach, a spokesman for the industry group America's Health Insurance Plans, said insurers have proposed "overhauling the market rules and enacting new consumer protections so nobody is left out, simplifying health care choices for individuals and small businesses, and reforming the delivery system to improve the quality and affordability of health care coverage."

The report released today alleged that insurers have systematically underpaid for so-called out-of-network care. The issue had been brought to light previously in litigation, committee hearings, and other investigations, including a probe by New York Attorney General Andrew Cuomo. But as politicians and interests groups clash over the current effort to overhaul the nation's health care system, it took on new relevance.

Cuomo described it last year as "a scheme by health insurers to defraud consumers by manipulating reimbursement rates."

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