A federal grand jury yesterday indicted a longtime Washington physician on 13 counts of mail fraud for allegedly filing phony medical reports and inflated bills with 10 private and government insurance carriers.

The indictment is the latest development in a grand jury investigation focusing on local doctors and lawyers suspected of regularly filing false and inflated claims with insurance carriers, according to Assistant U.S. Attorney Jeffrey T. Demerath.

The U.S. Postal Inspection Service along with the Insurance Crime Prevention Institute, a nonprofit organization with 100 investigators representing 370 insurance carriers, are also participating in the investigation.

Law enforcement officials say the investigations, which have been conducted nationwide by the insurance institute, signal new scrutiny of an old practice in some corners of the medical and legal community -- making false and inflated claims to prosperous insurance carriers.

In the indictment returned here yesterday, the grand jury charged that Dr. Daniel Jackson Veal Jr., 54, submitted bills for patients' office visits and medical treatment that never occurred. It alleged he also exaggerated the extent of some injuries to increase his share of the recovery from insurance companies. All of the cases involved car accidents, the indictment alleged.

Patients were referred to Veal by local accidents lawyers, some of whom were aware that Veal was allegedly filing fraudulent claims, law enforcement sources said. The indictment charged that Veal would check with a patient's lawyer on the damage to automobiles to avoid filing claims so exaggerated that the insurance companies would be suspicious.

Sources say inflated claims are generally made for "soft tissue" injuries, such as sprains, bruises or other ailments that cannot be easily verified by X-ray and other testing.

As part of the scheme, claims are also kept relatively small, usually $1,000 to $2,000, the sources said. Because of the limited injuries and the relatively low value of the claims, the insurance industry has been reluctant to devote time and money to investigating possible fraud in this area, sources said.

The starting point for such fraudulent claims are accidents in which injury was clearly caused by negligence, assuring at least some recovery from an insurance company, law enforcement sources said.

Their investigations have focused on cases in which doctors and lawyers took such cases and manipulated insurance claims. The injured person, whose injury may have been minor, thus provides a claim for the financial gain of the doctors and lawyers, these sources said.

The grand jury charged that Veal operated an allegedly fraudulent billing scheme from 1972 to 1978. Veal, who lives at 5900 New Hampshire Ave. NE, has an office at 221 Florida Ave. NW.

The indictment alleged that as part of the scheme Veal concealed the allegedly fraudulent insurance claim reports and bills from patients and sent them directly to their lawyers. The grand jury also said that from October 1975 to December 1976 Veal referred patients to a physical therapist who made accurate reports on treatment.

But Veal then allegedly prepared false reports to submit to insurance companies.

The indictment noted that medical reports and bills are the primary basis insurance companies use in resolving accident claims.

In addition to the 13 counts of mail fraud, the grand jury also charged Veal with one count of obstruction of justice. The indictment alleged that in May Veal induced his sister-in-law to lie to the grand jury investigating him.

Law enforcement officials said yesterday that Veal, if convicted on all charges, faces 70 years in jail, an $18,000 fine or both.

In a related development yesterday, law enforcement officers searched offices of a local doctor and lawyer for papers and records on bills submitted to insurance companies.

The indictment yesterday was the fourth returned as a result of the federal investigation.

In December, a Washington doctor and a former Washington attorney pleaded guilty to charges arising from a scheme that involved about $600,000 in false and inflated medical insurance claims.

In another case last week, a Washington lawyer pleaded guilty to cashing an insurance check intended for a client.