Pay me now or …

Police are responding less and less to minor auto accidents

If you crash cars for a living in New Orleans, your life may be getting a bit easier.

Thanks to a bill in the state legislature, police in the Crescent City may no longer be required to respond to fender benders. If you’re involved in a minor accident, just head over to your local police station, give them the details, and they’ll  hand you an accident report you can use to file your insurance claim.

Crashers will no longer need to  stage a collision. Just report it. How convenient.

The bill aims to relieve the cash-strapped city so police can focus more on violent and more-serious crimes. Responding to some 14,000 minor accidents each year is a drain on city resources, according to news reports.

That argument is hard to argue with. And it’s one that more and more jurisdictions are grappling with as cities continue struggling with adequate funding for police.

The extra dollars residents likely will pay in auto premiums rarely gets discussed in these deliberations. It’s a hidden tax that’s better spent paying for more police.

So while fraud fighters likely won’t win this policy battle, they can try to minimize the losses by educating the public and beefing up anti-fraud training of claims reps.

Pay now or pay later. Either way, this legislation will cost taxpayers and consumers.

About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.

Partnering to combat workers-comp schemes

Joint efforts magnify impact and boost efforts against premium cons

Dollar for dollar, workers-compensation premium scams may be larger than bogus work injury claims. At least that’s what many expert say. And the problem seem to be getting worse, especially in urban centers with deep underground economies.

The Coalition met recently with an unlikely ally in this effort: the United Brotherhood of Carpenters. It represents organized labor in the building trades. The union believes premium-avoidance schemes harm workers and cost governments mightily in lost revenue.

Why lost revenues?

Shady businesses lowball how many workers they have, and their payroll size. They often pay workers in cash, under the table. All of this helps dishonest employers avoid paying full workers-comp premiums, plus a bevy of federal, state and local taxes.

So, governments lose tax revenues. Workers are cheated out of workers- comp protection, wages, overtime, unemployment benefits and Social Security. Honest employers lose business and income because cheaters use the illicit savings to underbid them for contracts. And, workers comp insurers lose premiums.

Our recent meeting with the carpenters union revealed disturbing examples of prominent building jobs that included premium-avoidance schemes: A building at the University of Connecticut, a Florida hospital, construction at the Atlanta airport, and a building at the Walter Reed military hospital complex in suburban Washington, D.C.

The latter hits close to home — I drive by the hospital complex almost daily.

The carpenters’ proposals for comp insurers are a primer on why partnerships could be a great resource to move an anti-fraud agenda forward more decisively:

  • Work together on best practices for conducting audits and investigations into premium-avoidance schemes;
  • Adopt procedures to red-flag potential premium fraud; and
  • Cooperate with stakeholders on investigations.

Workers-comp insurers already appear to be doing much of this. Yet it  needs repeating that expanding everyone’s knowledge of schemes is a force multiplier. This will help identify more plots schemes, and boost the entire anti-fraud effort.

Fraud fighters must work with allies to educate state policymakers to better stop costly comp scams — premium avoidance and bogus injury claims.

We can make greater progress by including non-traditional allies such as the carpenters union. The more influential allies that are brought together, the stronger the efforts against comp scams will become.

The carpenters union is a clarion call that effective partnerships will help everyone better combat workers-comp schemes of every kind.

About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.

 

$1 billion (in savings) or bust

The Healthcare Fraud Prevention Partnership aims high

When the ground-breaking anti-fraud partnership between the federal government and the private sector was launched in 2012, there were grand expectations that they could jointly combat fraud much more forcefully that going it alone.

More than 60 organizations have teamed up to share strategy and exchange data. They include federal and state agencies, health plans and p-c insurers. Billions of bits of information have been pooled through a trusted third party.The results are encouraging.More than $260 million has been been saved in recoveries and fraudulent claims not paid.

The HFPP executive board met two weeks ago. It set a goal to expand savings to $1 billion by this time next year. It’s an ambitious goal, yet achievable given the early success of this collaborative effort.

The potential success in future years could far surpass $1 billion as more data is shared and more partners sign up., And it should, seeing that healthcare fraud totals tens of billions of stolen dollars each year in the U.S..

The ultimate goal is to get so effective in combating healthcare scams that fraudsters will view the risks too high to even try. We’re a long way from that day, but collaborative efforts and advanced technology offer the best chance of getting us there.

About the author: Dennis is executive director of the Coalition Against Insurance Fraud and serves as co-chair of the Healthcare Fraud Prevention Partnership. 

Getting riled up for fraud in Twittersphere

Useful for egging on scams, teaching about dumb choices

Fraud braggadocio is alive and kicking on the Twittersphere, as we recently reported in FraudBlog. Now for another frontline dispatch …

Easy money … fun … risk-free. Like a video game — only for stealing real insurance dollars. That’s a frequent voice vote by consumers in our daily Twitter and Facebook convos.

Tweeter riled up folks about slipping and falling his way to illicit payoffs in a recent thread using the hash tag #BoutToSlip. He said:

“I prayed and asked God to increase my finances and BEHOLD I found a wet floor with no sign in sight. #BoutToSlip”

Others used the same #BoutToSlip hash tag and chimed in:

“A wet floor with no sign at work? I prayed for this come up #BoutToSlip” 

“God is good. I asked the Lord to finance my college and I see this unsalted and not shoveled pavement. #BoutToSlip”

We don’t know if these people made illegal claims. Yet mere braggadocio might click on a crime lightbulb and convince other Twitter followers to try an insurance scam. The thread above was retweeted 17,000 times. Fraud looks like so much fun. Why wouldn’t others wet their lips and try a seemingly easy grab for insurance payouts?

Until the real world steps in. Make dumb choices, make time for a permanent criminal record. That’s a big deterrent message we share on Twitter.

Doses of dumbness showed up in our recent live Twitter chat. Workers-comp investigators advised how to thwart fake injury claims.

The nub — bilk your employer at your peril. Surveillance videos posted and retweeted during the live chat drove home the point. Like the rocker who did a Beatles tribute concert while “injured.” … Or the guy who said he couldn’t turn his head yet had a sweet swing on the golf course.

A worker stomped a hole in the floor and claimed he fell in it.

Twitter is a great forum for bragging and egging people to try an insurance scam. It’s an equally useful way to show people that dumb choices can earn a permanent price. Is a criminal conviction really worth it?

Tag team is winning formula for fraud bills

Investigators wield impact as expert constituent voices

A couple of years ago I blogged about how fraud investigators can be key to enacting strong fraud laws.

The state legislative season is heating up, so let’s revisit. We need to think of how to mobilize for action.

Lobbying legislators can be top-down and bottom-up.

Top-down involves national groups like the Coalition or insurers raising the issues with legislators. Often we testify before committees or the full chamber. That carries weight. We discuss the big picture, and how a state bill is good (or bad) for combating fraud from a larger viewpoint.

The bottom-up approach is the grassroots level. Investigators and other frontliners can take a lead role.

Investigators can wield great influence. State lawmakers listen to constituents. Local people put a local face on fraud bills. Investigators also are respected crime-fighting experts. That voice speaks convincingly to lawmakers. They may know little about a fraud bill — or the crime it combats.

A tag team is the best formula for rallying support for fraud laws: Local investigators work with national groups like the Coalition. We all bring vital strengths to the table.

State legislators usually don’t receive letters or messages about fraud issues. So when an investigator writes a letter, that could be the first time a legislator hears about the fraud bill, and why it’s good for the state.

This leads to my Rule of Five. One constituent letter raises few eyebrows in a legislator’s office. Five letters, and the legislator thinks about the issue. And 25 letters signals a groundswell of support. That can convince a legislator to support a fraud bill.

Enacting strong fraud laws has four positive goals. 1) Create an infrastructure for insurers to investigate and report scams; 2) Give fraud fighters laws and regs that are pillars for chasing down swindlers; 3) Oppose weak bills that undermine the fraud fight; and 4) Educate lawmakers about the benefits of strong fraud laws.

Together, our influence can place more fraud laws onto the books. We will educate lawmakers about how strong fraud laws benefit consumers throughout a state.

So let’s add a fifth goal for fraud laws: Empower consumers and insurers to better fight back against insurance fraud.

About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.

Why worry about fraud?

Victims and damage revealed in Hall of Shame

Ok, so insurance fraud steals $80 billion a year.

Impressive number. Helpful to know — though hardly a rousing battle cry.

As a wise person said … Stats are like a drunk using a lamppost — for support, not illumination.

So what makes our blood boil? Let’s look at true-life fraud cases. They show how seedy and sleazy fraud really is. And the innocent people who are damaged by this supposedly victimless crime.

Check out the Insurance Fraud Hall of Shame — the No-Class of 2015. Real cases … real victims … real damage.

Will you be next?

Financially strapped, Mark Leonard tried to burn down his Indianapolis home for $300,000 of insurance money. He blew it — literally. The home exploded, leveling much of the neighborhood and incinerating two neighbors.

Dion Longworth lived next door. He was trapped inside his burning basement, begging firefighters to free him. Too late — Dion was burned alive. His wife Jennifer died when the super-heated insurance blast first crashed into their home.

Gloria Lee tried to burn 28 terrified puppies in their cages at her Las Vegas pet store. Luckily Lee’s own fire sprinklers helped douse the flames in time.

Spine surgeon Dr. Aria Sabit sliced open perfectly healthy people, pretending to operate on their spines. The Detroit doc also botched surgeries of patients who needed spine fusions. All for $32 million of insurance money.

Patients were left disfigured and in permanent pain. Some needed more pain-filled surgeries to correct the damage Sabit caused.

Sure, these are the extremest schemers … the masters of disaster. Yet many more innocent people are being scammed around the U.S. Some more, some less — though victims all.

So why worry about insurance fraud? We all could be next. In fact you already are … higher insurance premiums are draining your bank accounts.

Stay alert and fight back. Let’s all help make insurance fraud a dead-end street instead of a fast road to riches.

About the author: Jim Quiggle is director of communications for the Coalition Against Insurance Fraud.

Committing insurance fraud is funny, no big deal

That’s the message of crude TV programs

I’m no fan of Fox TV’s The Family Guy. To me, it’s crude, moronic and not very funny. But I recently found myself watching a rerun that featured a plot involving insurance fraud. The three main characters got caught burning down their friend’s financially troubled pharmacy.

They pleaded with the arresting officer to let them go. “Insurance agencies are all scumbags. They deserve to get hurt,” one character says. After thinking about how his health insurer had screwed him, the cop destroys the evidence and lets the trio go on their merry way.

Cringe factor aside, I realize that this is only a cartoon and few people take the messages seriously. Yet, those messages do have an impact. They plant seeds. And over time, as other similar messages pile on, they reinforce the idea that committing insurance fraud is no big deal.

More than five million people watched this episode of The Family Guy when it first ran — the most popular program on TV that evening. The fraud-fighting community struggles to reach five million people in a year with anti-fraud messages.

I was reminded of this episode today when I saw the tweet below from a young woman who wants to secretly push her car off a cliff. How did these ideas form in her head? How can we discourage such destructive thinking?

For one, public outreach needs to be beefed up bigtime. And secondly, let’s keep our young children from watching such crude and socially irresponsible TV programs like The Family Guy. What shows are your kids watching?

tweet

Oregon needs insurance-fraud law

Would court rule against an insurer if Oregon had fraud law?

Oregon fraud failNearly every state in the union has made insurance fraud a specific crime. Oregon and Virginia are the only states without a specific insurance fraud law.

At least Virginia has a fraud unit, housed within the state police. There are robust investigations, and prosecutors use the state’s false pretense law to convict scammers.

Oregon has little anti-fraud infrastructure to call on. The governor vetoed a bill back in 1997 because it wasn’t “good enough.” Efforts to make fraud a specific crime have been garaged ever since.

And here’s the fallout: An Oregon appellate court recently ordered an insurer to pay a $10-million loss after a claimant’s expensive home burned down. The insurer suspected a misrepresentation that could’ve been fraud. The insurer refused payout, and a lower court agreed.

My first reaction was that the appellate court wouldn’t have required that payout if the state had a robust insurance fraud law. An insurance-fraud law would’ve allowed the insurer to investigate, and refer the case to a prosecutor if it suspected fraud. Instead, the court decided the claim had to be paid, without a whiff of looking at whether fraud was involved.

Some 48 states plus Washington, D.C. have insurance-fraud laws, and for the most part, they work well. They all reference willfully misrepresenting or filing a false claim. Insurers thus have a potent tool for seeking justice when they suspect a false claim. Fraud laws adroitly cover willful and knowing lies about a claim and loss.

The Oregon case involved, among other things, the cost of chandeliers destroyed by the fire. The insurer believed the claimant had misrepresented by inflating the cost of those chandeliers.

Insurance fraud laws protect insurers and consumers from schemes. Insurers can keep premiums down if convictions can help reduce pass-along cost that scams impose.

Oregon has no insurance-fraud law, dedicated fraud prosecutors, or even a state agency to lead investigations. Instead, we have state courts coming down with questionable decisions like the latest one.

It’s high time Oregon joins the rest of the nation by making insurance fraud a specific crime.

Medical ID theft going mobile?

Scammers looking to hack mobile phones for patient medical info

Mobile phones may be the newest emerging battleground in combating widespread heisting of people’s medical identities. Two recent reports provide telling evidence.

More than 25 million people will have their medical and/or personal info stolen from their health providers between now and 2019, says a new report by Accenture. That’s one of every 13 patients.

Mobile transactions form the newest arena for ID theft in general, adds a report by IDology. The report focuses on broader ID theft, with some healthcare organizations taking part. Still, it’s a warning of emerging vulnerability for healthcare providers – and their patients.

Some 8 percent of polled organizations report rising mobile scamming this year, up from 3 percent last year. Spoofing, account takeovers and device cloning are favored tactics.

“Fraudsters have become quite skilled at exploiting the many nuances that accompany mobile devices — from the millions of change events to the increasing ability of fraudsters to attack mobile technology with methods similar to what we found in these survey results — porting, spoofing, cloning and more,” IDology says.

More organizations plan to invest in mobile-based transactions, yet nearly half say they lack resources to properly manage mobile security, IDology says.

“Mobile fraud has become increasingly top of mind for businesses as the use of smart devices gains in popularity and usage. With the convenience of smart devices being able to access a consumer’s personal accounts across multiple industries, security is becoming more and more of a priority for organizations of all sizes,” IDology says.

It takes only a small leap to see how mobile hacking and security will increasingly become next big fraud problem for the healthcare industry and their patients.

Mobile transactions are rapidly becoming prime portals for healthcare transactions. Just Google “health care mobile devices.” You get 46 million hits.

For more information on medical ID theft, check out the Coalition’s latest podcast.

HHS also is warning healthcare organizations about mobile security. We’re looking at a double security problem. The vast digital highway of healthcare records and record sharing, combined with a growing migration of everyday transactions to mobile devices.

With the healthcare sector accounting for nearly 43 percent of data breaches — the highest percent — the U.S. healthcare sector remains the largest target for sophisticated hackers. The 80 million records stolen in the famous Anthem breach drives that point home poignantly.

Health records are far more valuable to black marketeers than standard credit card info. Each record can easily command up to $50 in sale value compared to $1 or so for credit-card info. Why? Health claims can steal many thousands of dollars before they’re discovered and shut down. Credit card scams often are discovered and stopped in real time.

Nearly 2/3 of consumer victims each pays an average of $13,500 out of pocket to clear up the mess, says an earlier report by Ponemon Institute. That also can siphon hundreds of hours. Nearly half of frustrated patients will find another healthcare provider if they learn their personal records were hacked. The cumulative cost to breached providers will reach $305 billion by 2019, Accenture adds in its analysis.

So the Next Big Thing in medical ID theft may be little mobile phones. Younger mobile-savvy consumers, especially, should ask what their health providers are doing to ensure the safety of mobile-shared health transactions.

About the author: Jim Quiggle is director of communications for the Coalition Against Insurance Fraud.

Surprise medical bills

Out-of-network charges a growing fraud ruse?

A patient goes to a medical facility for a surgery. Maybe a hospital or outpatient clinic. He checks to ensure the facility is part of his health-insurance network, and that it will cover his bills.

Then after the surgery … a surprise: A whopping bill from an out-of-network anesthesiologist who doesn’t take the patient’s insurance. The stunned patient has to pay several thousand dollars from his own pocket.

The facility is in-network, the primary medical provider is in-network. Then a consulting provider is brought in to treat the patient, and that person is out-of-network.

Many such charges could be unfair and abusive. Some could be fraudulent.

Uninsured billings are occurring more often. Consumers and insurers both are surprised. Yet the finger of public opinion typically points at insurers for supposedly having too few providers the patient could turn to. Or for simply not paying bills in general.

One insurer has sued hospitals and other facilities, alleging fraudulent out-of-network billing and kickbacks. Fraudsters may have discovered a large loophole in the healthcare billing system.

More states are stepping up to the plate and working to control this practice.

At least a dozen states restrict surprise billing. They should go farther.

New York, for example, requires insurers and health facilities to notify patients of expected out-of-network billings. New York also has a dispute- resolution procedure requiring providers to bill only for in-network cost sharing.

The National Conference of Insurance Legislators is developing a model bill based on New York’s law. NCOIL is working to complete the model in 2016.

California requires contracts between the network providers and insurers to disclose up-front to patients out-of-network providers who may provide care — and the estimated cost of that uninsured care.

Many health plans also are doing away with annual caps for policyholders’ out-of-network costs, leaving consumers facing unlimited financial exposure.

Patients shouldn’t be forced to pay high, surprise bills from in-network facilities. And insurers should be protected from billing and kickback scams disguised as routine out-of-network billings. There’s nothing routine about these charges.

About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.