Former claims manager indicted in insurance scheme

Thursday, Nov. 13, 1997 | 9:16 a.m.

Mary Ferris, 36, was arrested Wednesday, U.S. Attorney Kathryn Landreth's office said.

In the indictment handed down Wednesday, Ferris is charged with 11 counts of violating the new federal statutes outlawing health care fraud and embezzlement from health care programs, 10 counts of mail fraud and two counts of forfeiture.

"This case is especially important because it is the first time a defendant has been charged in Nevada under the new federal laws passed specifically to fight health care fraud," Landreth said.

Ferris, a former employee of L&H Administrators, used her position as claims manager to receive payment on 155 fraudulent claims for services never given to actual beneficiaries, the indictment said. Ferris secretly input the false claims into L&H's computer without the beneficiaries' knowledge.

The indictment said Ferris created 10 fictitious medical providers in L&H's computer system, opened mailbox drops to receive the fraudulent checks and a bank account at Nevada State Bank to negotiate the checks, and then input the false claims.

The conceal the fraud, Ferris changed the beneficiaries' mailing addresses in L&H's computer to another mailbox drop she opened, according to the indictment.

Ferris faces a maximum of 160 years in prison and at least $5 million in fines.

The state Committee on Benefits, which oversees the employee health care programs, dumped L&H last spring and in August hired a new company, UICI Administrators. The state panel also authorized a continuing review to ensure controls are in place to prevent fraud.