American Airlines employees were the primary targets of an insurance fraud scheme that unfolded over five years and resulted in nearly $17 million in improper payments. In the Northern District of Texas last month, federal prosecutors indicted 66-year-old Terry Anderson and his 36-year-old son Rocky Anderson on multiple charges, including conspiracy to commit health care fraud, health care fraud, and aggravated identity theft.
The Andersons ran Anderson Optical & Hearing as state-licensed hearing instrument dispensers. According to the indictment, they submitted fraudulent claims to Blue Cross Blue Shield of Texas between January 2011 and November 2016, falsely presenting many of those claims as services provided to American Airlines employees and their dependents.
Prosecutors say the defendants targeted American Airlines plan members deliberately. Prior to 2014, the airline’s insurance plans allegedly placed no maximum limit on the cost of hearing aids, and policyholders were eligible for devices once per plan year or every 36 months. That coverage feature created an opportunity the indictment claims the Andersons exploited.
According to the U.S. attorney’s office for the Northern District of Texas, “In 2013, approximately 84.6 percent of Anderson Optical & Hearing’s total income came from BCBS and 99.7 percent of the BCBS payments were based on claims submitted for American Airlines employees and their dependents.” Those figures underscore how heavily the practice relied on a single insurer and a specific employee population.
The indictment alleges the Andersons used inducements to recruit victims. They reportedly offered Blue Cross Blue Shield subscribers free, high-end sunglasses and prescription eyeglasses in exchange for taking a hearing aid assessment. After administering a screening test, the defendants allegedly told patients they had measurable hearing loss, then submitted claims for hearing aids and related services that were unnecessary or not provided.
Blue Cross Blue Shield of Texas reports that the Andersons submitted claims totaling more than $27 million on behalf of American Airlines employees and dependents. The insurer paid nearly $17 million to Anderson Optical & Hearing before the suspicious billing patterns were identified and investigated.
The charges against the Andersons include criminal counts that carry substantial penalties. If convicted, the defendants could face significant fines and imprisonment. The case highlights ongoing concerns about provider fraud in the health care and insurance sectors, the importance of plan design and oversight, and the need for vigilance by both employers and insurers to detect and prevent abusive billing practices.
Investigations like this one typically involve review of billing records, patient files, and communications between providers and patients, as well as cooperation from the affected insurer. Criminal indictments of providers serve to deter similar schemes and to recover improperly paid funds, though they also underscore the challenge of policing complex medical benefit programs across large populations of employees.
The legal process will determine the outcome for the Andersons; federal prosecutors will present the evidence gathered during the investigation, and the defendants will have the opportunity to contest the charges in court. Meanwhile, insurers and plan sponsors continue refining fraud detection and compliance strategies to protect plan members and limit exposure to costly, fraudulent claims.