Insurance Fraud NEWS
Do comp insurers know they’re being scammed in California?
June 17, 2019, San Francisco, CA
It was the overriding message that came out of a “Speed Networking” session held at the WCIRB Annual Conference in San Francisco last week. The session, facilitated by Shaddi Kamiabipour, Sr. Deputy DA for Orange County and Gordon Oard, Sr. Special Investigator for the Berkshire Hathaway Homestate Companies, focused primarily on provider fraud in workers' comp, which in California has been a major issue. But let's not fool ourselves. It is a big issue everywhere else, too.
And according to Oard and Kamiabipour, the odds are that workers' compensation carriers don't really have a clue it is happening.
Kamiabipour talked about the challenges of prosecuting fraud when many of the victims really did not know they had been victimized. She indicated that relatively few insurers have systems in place to really track and identify fraudulent charges generated by unethical medical providers. She told the group that data is the best weapon against fraud yet lamented that many carriers and employers either are not looking at the information they have or fail to properly assemble it in the first place. And with estimates that ten percent or more of medical bills may be fraudulent, there is a strong case to be made for focusing on this issue.
Some of what they were saying resonated with me, simply because I have experienced the lack of direct awareness firsthand. A number of years ago, when the fight over physician dispensing was raging here in Florida, I did some research regarding specific examples of billing abuse on the topic. I contacted a few of our carrier customers, asking for specific examples of prescriptions they had paid for from any Florida dispensing physician. Most of the ones I spoke to had no idea if or what they had paid to any dispensing physician. One, after doing some research, did return a list of a few transactions that met the criteria. All were vastly overpriced when compared to retail purchases. One transaction, which was over $550, had a retail equivalent at my local CVS pharmacy of $47. Even the carrier who provided the data did not previously recognize the issue I was researching.
And as previously indicated, you cannot address or correct an issue you do not know exists.
In short, there were several key takeaways from this session. We outline them here but will be offering more detailed analysis in a series of articles all this week.
Fraud cannot be defeated if you do not know you are a victim
Provider fraud is organized and smart
Fraudsters know your operation and have probed your weaknesses
Common data elements can be used to identify potential fraud
Lack of significant punishment is a problem for the fight
There are many moving parts to managing workers' comp claims and getting positive outcomes. The advent of technology now allows us to collect and manage more data than at any time previously in our history. This means you may already have the tools in your arsenal to help identify areas where your company is being taken advantage of. You just need to know where to look. We will discuss that in our next installment, where we will cover “Breaking the Enigma Code of Workers' Comp Provider Fraud.”