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CA Department of Insurance

Two providers arrested in alleged $3.5 million health insurance fraud

News: 2015 Press Release

For Release: March 17, 2015
Media Calls Only: 916-492-3566
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Two providers arrested in alleged $3.5 million health insurance fraud
Nearly $1 million paid out in fraudulent claims

LOS ANGELES, Calif. - Today, Steven Orenstein,57, a marriage and family therapist, and Erin Kayem, 42, a licensed speech therapist, were arrested on multiple felony counts of health insurance fraud for allegedly billing Anthem Blue Cross for services amounting to $3.5 million that were never provided. Both providers have been charged with insurance fraud, conspiracy to commit grand theft and grand theft.

"Health insurance fraud is a multi-billion dollar criminal enterprise in California that everyone pays for through higher premiums," said Insurance Commissioner Dave Jones. "Medical providers are in a position of great trust; unfortunately, the providers in this case broke that trust when they fraudulently billed for services never performed. One of my top priorities as insurance commissioner is to investigate health insurance fraud and put scammers like Orenstein and Kayem out of the business of ripping off insurers and consumers."

Anthem Blue Cross investigators contacted the Department of Insurance for suspected provider fraud. Working with Anthem, department investigators found Steven Orenstein, owner of the Brain Enhancement Institute (BEI) and Erin Kayem, owner of Neurodevelopment Learning Institute(NLI), were billing for services not provided.

Billings for two patients who were seen at BEI and NLI were reviewed and investigators discovered that they billed for multiple services the therapists did not actually provide. In one case, a patient visited the facility for 12 sessions but the insurance company was billed for 59 sessions. Another patient visited NLI for six sessions and Anthem was billed for 74 sessions.

As out-of-network providers, Orenstein and Kayem billed a total of $3.5 million and received nearly $1 million. Orenstein was booked at the inmate reception center in Los Angeles and Kayem was booked at Lynwood Sheriff's Station. Bail for each is set at $350,000 and both face up to 65 years in prison if convicted on all felony counts.

This case is being prosecuted by the Los Angeles County District Attorney's Office.

Media Notes:

  • Arrest photo for Steven Orenstein.
  • Arrest photo for Erin Kayem.
  • Commissioner Jones sponsored Legislative amendments to the Insurance Code in 2012 including increased grant funding for local district attorneys to investigate and prosecute health care fraud. This helps the department and assisting agencies to combat health care fraud cases such as these and reduce the costs to taxpayers who end up paying for these scams through higher premiums.

The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance website at Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.

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