NU Online News Service, April 7, 3:17 p.m.EDT

Enactment of the new health care reform law has spawned fraudschemes by which individuals are seeking to sell bogus policiesthrough 1-800 numbers and by going door-to-door, federal regulatorsare warning.

Kathleen Sebelius, secretary of the Department of Health andHuman Services, Tuesday disclosed that she has sent letters tostate insurance regulators and prosecutors about the newschemes.

At the same time, Medical Mutual Insurance Company of Ohio hassent out an alert urging its customers and the public to beware ofscammers who may try to sell phony health insurance policies.

"They may try to tell you that, under the reform law, you willneed to buy new health insurance," said Brien Shanahan, MedicalMutual's director of legal affairs.

"These pitches may come to you in the form of phony e-mails,fraudulent online ads, door-to-door, or by way of pushytelemarketers," Mr. Shanahan said.

The scams may promise a variety of bogus benefits, Mr. Shanahansaid. "They include fake coverage, where you end up making hugepayments for a worthless piece of paper with totally worthlessbenefits."

"Some may even offer enticements such as 'medical discount'cards, which are also worthless," he added.

In her comments and in the letters to state officials, Ms.Sebelius said she has notified the agency's aging networks and putits Senior Medicare Patrol teams on alert.

In addition to their existing responsibilities, she said, theagency's Health Care Fraud Prevention and Enforcement Action Teams"will also vigorously monitor and crack down on new forms ofabuse."

In her letters, Ms. Sebelius noted there will be new insuranceoptions in the near future, specifically a high-risk pool for thoseblocked out of insurance policies due to preexisting conditions andnew insurance protections that begin in September.

At the same time, she said, consumers should beware of policiesthat are time-limited, offer limited benefits, or advertise beingnecessitated by health insurance reform.

In her letters to regulators and state attorneys general, shesaid, "I urge you to vigorously monitor and prosecute anyindividuals who attempt to operate or profit from dishonest scamsand take advantage of the new law."

And, she said, "I hope you will act quickly to makeinvestigating and prosecuting these cases one of your toppriorities."