Medical worker sentenced to year in jail, $472k in insurance fraud case

Here's a press release we issued a few minutes ago:

A medical worker who pretended to be a doctor and submitted millions of dollars in bogus bills to insurance companies has been sentenced to a year in jail and $472,458 in restitution.


Kenneth R. Welling, 45, of Lake Forest Park, was sentenced Aug. 24 in King County Superior Court. He pleaded guilty to seven felony counts of theft in June.

“We found numerous cases in which Welling billed for surgeries that never happened,” said state Insurance Commissioner Mike Kreidler. Kreidler’s office was tipped off to the scam when a patient complained, saying that Welling had tried to bill her insurer $89,000 for six surgeries that never took place.

Welling is a registered surgical technologist and sole proprietor of Shoreline, Wash.-based Alpine Surgical Services. His license allows him to perform tasks like preparing supplies and instruments, passing them to the surgeon and preparing basic sterile packs and trays. But after patients had procedures done, he would often submit large bills with codes listing himself as a doctor or physician’s assistant. He is neither. Sometimes he would include post-operative reports, listing himself as the surgeon.

No evidence was found to indicate that Welling was playing an improper role in actual medical care. The fraud involved billing.

“As far as we could tell, the only time he pretended to be a doctor was when he submitted bills,” said Kreidler.

In one woman’s case, Welling billed $140,323 as assisting surgeon for nine surgeries that never took place. Over a five-year period, he billed another woman’s insurer 107 times for 51 different surgeries, listing himself as the primary doctor. Hospital records show she’d only had surgery twice.

From 2004 through 2011, according to medical records obtained by Kreidler’s Special Investigations Unit, Welling billed five insurance companies at least $4.1 million for services he did not provide. He was paid $461,000.

“Part of the reason he got away with this for so long is that he’d rarely challenge an insurer who paid little or nothing,” said Kreidler. “He’d just send them the bills and hope they’d pay.”

Interesting story about how the Apollo 11 astronauts got life insurance

NPR has posted an interesting story about how the Apollo 11 astronauts sort of self-insured their lives when they headed for the moon.

Rather than try to get conventional life insurance, the three astronauts spent their spare moments during their month of pre-launch quarantine signing autographed envelopes, according to NPR's Chana Joffe-Walt. That way, if they died on their lunar adventure, their families could sell the autographs, which today command up to $30,000 at auction.

To make the autographs more valuable, each was on an envelope that a friend would have postmarked on key days, like the launch date and the date they landed on the moon. Writes Joffe-Walt:

It was life insurance in the form of autographs.

"If they did not return from the moon, their families could sell them — to not just fund their day-to-day lives, but also fund their kids' college education and other life needs," (space historian Robert) Pearlman said.

The life insurance autographs were not needed. Armstrong and Aldrin walked on the moon and came home safely. They signed probably tens of thousands more autographs for free.

Sept. 13 hearing set re: Sagicor Life's acquisition of PEMCO Life

Insurance Commissioner Mike Kreidler has scheduled a hearing for Sept. 13 at 10 a.m. at his Tumwater, Wash. office to consider approval of Sagicor Life Insurance Company's request to acquire Washington-based PEMCO Life Insurance Company.

Sagicor Life is proposing to acquire all outstanding stock of PEMCO Life Insurance Company, and is also proposing to merge PEMCO Life with and into Sagicor Life at a later date after receiving approval of the acquisition.

PEMCO Life Insurance Company, which has been a Washington-based insurer since 1963, provides life and disability products to approximately 15 thousand Washington individual and group policyholders, and is wholly owned by its parent company, PEMCO Mutual Insurance Company. PEMCO Mutual Insurance Company is a mutual property and casualty insurer located in Seattle, WA and is licensed in Idaho, Oregon, and Washington.

Sagicor Life is a Texas-based insurer licensed in Texas to offer accident, health and life insurance and has been authorized to conduct life and disability insurance in Washington since 1961. Sagicor Life operates primarily in the US and is wholly-owned by Sagicor Financial Corporation. Sagicor Financial Corp. is a Barbados corporation which operates internationally in various European and Caribbean countries, and is publicly traded on the Barbados, Trinidad and Tobago, and London Stock Exchanges. Sagicor Financial Corp. had $142.6 million in US revenue in 2011, $1.35 billion in total revenue (both US and international) and 632,123 individual life policies in-force overall. As of December 31, 2011, Sagicor Financial Corp.’s consolidated stockholders’ equity was $797.5 million.

For more information, including how to submit letters of support or objection, please see the hearing notice.

Insurance tips: What to know before renting your home/boat/etc.

We get a number of calls from folks who rent out their homes, vacation cabins, vacant lakefront sites, boats, RVs, motorcycles, etc. to others every once in a while. They want to know if that affects their insurance.

It very well could. Here's why: When property is rented, that's considered a business activity. And that can affect any existing coverage for property damage and liability protection.

There may also be coverage limitations or exclusions built into the policy that activated by your renting the property.

We recommend that you talk to your agent or the insurer before you rent, so you're not left personally responsible for property damage costs or legal costs in a lawsuit stemming from renting the property.

Do I have "minimal essential" insurance coverage?

As part of health care reform, starting in January 2014 most Americans will need to have “minimum essential” health insurance coverage or face a tax penalty.

We've gotten a number of calls from consumers wondering if their current health coverage qualifies. (In particular, a number of people who get their medical care through the Veterans Administration have called to check.)

In many cases, the answer is yes. Many existing plans qualify as minimal essential health insurance coverage. Here are some examples:
• Medicare Part A

• Health programs administered by Washington state (such as Medicaid or the Children’s Health Insurance Program)

• TriCare

• Coverage through the Veteran’s Administration

• Coverage from an employer, regardless of whether the employer is a government agency, a private-sector employer, or an Indian tribe.

• A individual plan (i.e. a plan that you buy on your own directly from a health insurance company).

“Hole-in-Won” Golf tournament insurer charged with felonies after not paying up

OLYMPIA, Wash. _ A Connecticut businessman who specializes in insurance for golf tournament hole-in-one prizes has been charged with multiple felonies after repeatedly failing to pay up.

Kevin Kolenda, of Norwalk, Conn., was charged Wednesday in King County Superior Court with five counts of transacting insurance without a license, a class B felony. His arraignment is slated for Sept. 5.

Kolenda, 54, ignored a previous cease-and-desist order and a $125,000 fine from state Insurance Commissioner Mike Kreidler.

“We’ve been warning the public about Mr. Kolenda’s scam for years,” said Kreidler, whose Special Investigations Unit did the investigation that led to the charges. “He has a long history of selling illegal insurance, refusing to pay prize winners, and thumbing his nose at regulators.”

In some cases, charities have had to come up with the prize money. In others, the prize winners agreed to forego a prize.

Kolenda in 1995 started a business called Golf Marketing, working out of a home his parents owned in Norwalk. Since then, the business’ name has changed several times, including: Golf Marketing Worldwide LLC, Golf Marketing Inc., Hole-in-Won.com, and currently Hole-in-Won.com Worldwide. The company also has a regional office in Rye, N.Y.

Kolenda has repeatedly failed to pay winning golfers in Washington. Among them:

• In 2003, Kolenda illegally sold insurance for a tournament in Bremerton. But when a golfer got a hole in one and tried to claim the $10,000 prize, Kolenda wouldn’t pay.
• In 2004, Kolenda sold insurance for a Vancouver tournament. Again, a golfer got a hole in one. Kolenda refused to pay the $50,000 prize. After a hearing at which Kolenda failed to appear, he was ordered in 2008 to pay a $125,000 fine. He never did.
• In 2010, Kolenda sold coverage to pay $25,000 for a hole in one during a golf tournament in Snohomish. A player got a hole in one. His golf partners signed notarized forms attesting to the hole in one. The prize remains unpaid, despite numerous calls and emails from the partners and tournament officials.
Similar allegations have been made against Mr. Kolenda and/or his business in numerous other states, including Montana, Ohio, Georgia, California, New York, Hawaii, Alabama, Massachusetts, Florida, Connecticut and North Carolina.

"Auto accidents have decreased. Why did my insurance rates go up?"

Q: I read that auto accidents in Washington state have decreased, as have accident-related deaths. But my insurance premium just went up 15 percent. What's going on?

A: As Washington state's insurance regulator, we do our best to hold down insurance costs. But there are things other than accident rates that can affect your auto insurance premiums. Theft rates, auto glass costs, health care costs (for injuries in a crash) can all play a role. So can the fact that modern vehicles, with more airbags, high-strength steel and sophisticated safety features can be more expensive to repair.

Rates are driven by insurers' actual claim payments, administration costs and the company's cost and loss projections for the near future.