Insurance FraudBlog

Col. bill could put investigators in harm’s way

Posted on March 23, 2010 by Dennis Jay

The Judiciary Committee of the Colorado Senate will take up a bill tomorrow aimed at curbing alleged abuse in surveillance of workers comp claimants. The bill — H.B. 10-1012 — already has passed the House and is now working it’s way through the other chamber.

The original bill contained several onerous provisions that would have had a chilling effect on using surveillance. They are mostly gone.

One provision remaining, however, is disturbing. It would require anyone conducting surveillance to reveal their operation if asked by a claimant.

On the surface, this sounds like an innocuous provision. But investigation firms, insurers and employers fear the requirement could put investigators at risk. This requirement sets up potential confrontations that can lead to injury or worse. There already are incidents where investigators have been threatened, attacked, beaten and shot by confrontational claimants.

I’m at a loss at what benefit this requirement would bring, other than to punish fraud fighters for doing their job. Let’s hope legislators in Colorado strike this awful provision.

Update: The hearing scheduled this week was not held because of a snowstorm that hit Colorado. No word yet on when it might be rescheduled.

House bill ups the ante on fraud funds

Posted on March 22, 2010 by Dennis Jay

HCR The health care reform bill passed by the House of Representatives today contains a few enhanced anti-fraud provisions not included in the its Senate counterpart. The most striking provision is an increase in anti-fraud funding from $100 million over ten years to $250 million.

The former figure sounds like a lot of money, but it equates to spending an extra $1 to combat a $1,000 problem. The latter figure should go further, if spent wisely (I know, I know, a big IF) in combating Medicare fraud.

The House provisions will be merged with those already passed by the Senate. Here’s a list of the anti-fraud provisions enacted today:

Subtitle D – Reducing Fraud, Waste, and Abuse

Sec. 1301. Community Mental Health Centers. Establishes new requirements for community mental health centers that provide Medicare partial hospitalization services in order to prevent fraud and abuse.

Sec. 1302. Medicare prepayment medical review limitations. Streamlines procedures to conduct Medicare prepayment reviews to facilitate additional reviews designed to reduce fraud and abuse.

Sec. 1303. CMS-IRS data match to identify fraudulent providers. Allows the Secretary of Treasury to share IRS data with HHS employees to help screen and identify fraudulent providers or providers with tax debts, and to help recover such debts. Provides strict controls on the use of such information to protect taxpayer privacy.

Sec. 1304. Funding to fight fraud, waste and abuse. Increases funding for the Health Care Fraud and Abuse Control Fund by $250 million over the next decade. Indexes funds to fight Medicaid fraud based on the increase in the Consumer Price Index.

Sec. 1305. 90-day period of enhanced oversight for initial claims of DME suppliers. Requires a 90-day period to withhold payment and conduct enhanced oversight in cases where the HHS Secretary identifies a significant risk of fraud among DME suppliers.

Getting fraud advice on the Net

Posted on March 18, 2010 by Dennis Jay

blog question You file a phony burglary claim with your insurer and after they balk about paying, where do you turn for help? Well, the Internet, of course. That’s what this poster did this morning:

It’s interesting that it was posted on the blog “Fraud Protection & Detection,” so it’s not surprising most replies were less than helpful:

• “I hope they prosecute you…”

• “Let me get this straight. You are asking on a public forum how to commit fraud without it looking like you are attempting fraud? I hope they catch you.”

• “Definite Rhodes Scholar material here…”

I am looking for a way to fake out my insurance company and make it look like i really have the items i dont have my appartment was “broken into.” I filled out police report but the insurance company says that i need prooof of ownership of the items that i claimed how do i do this seeing as how i never owned them?

• “…You’re one of those horrible people that screw up good things for the rest of us.”

• “You will get in trouble for 2 things – filing a false report with the police – which, if you filed it already, you can’t ‘take it back’ & insurance fraud. Hope they send you to jail & throw away the key.”

• “I hope you like prison orange because insurance fraud is a felony.”

and my favorite:

• “You’re the reason everybody complains about their insurance premiums always increasing. I hope they catch you, you have to spend some quality time with “Bubba”, and end up having to sit on a donut the rest of your life. JACK ASS!!!”

The Coalition monitors blogs, Twitter, Facebook, chat rooms, bulletin boards and wherever people in cyberspace discuss insurance fraud. Some of the information shared is helping to spread scams that likely won’t get detected. That’s disturbing. But more and more, people — like the ones above —are voicing their opposition to committing fraud in the strongest terms. And that’s encouraging.

Fraud Interdiction Program ends in Calif.

Posted on March 5, 2010 by Dennis Jay

Budget cuts in California have claimed one of the most effective and innovative anti-fraud programs targeting dishonest medical providers. On Feb. 26, longtime prosecutor Al MacKenzie ended his tenure with the Los Angeles County DA’s office. With Al’s departure, his creation — the Fraud Interdiction Program — also closed up shop.

Al created this program in 2004 to find a quicker and easier way to convict medical providers who were milking workers compensation insurance. His program was designed simply: once he zeroed in on a suspect, he contacted insurers and self-insureds to obtain data on claims paid to the suspect and then compared the amounts to state tax records.

Al reasoned that providers who defrauded insurers likely also cheated in paying taxes. More times than not, he was right. Armed with such hard evidence, suspects pled out quickly. The record of convictions Al’s team wracked up was impressive. His work earned him the 2008 “Prosecutor of the Year” award from the Coalition.

Success isn’t always rewarded, and there are plenty of examples of “penny-wise” decision-making that make little sense. This is surely one of them.

Colorado may restrict surveillance

Posted on March 2, 2010 by Dennis Jay

The Colorado House of Representatives is scheduled to take up HB 1012, a bill targeting the use of video surveillance by insurers this week. HB 1012 was amended in committee last Friday to remove some very onerous provisions. It now is headed to the full House for a vote on Friday.

“The amended bill is better than the original bill that was introduced at the beginning of the 2010 legislative session” said the Coalition’s Howard Goldblatt. Surveillance is a vital tool that helps insurers pay legitimate claims and identify and prove fraudulent activity.

Insurance fraud raises the cost of doing business in Colorado and the goal of any legislative effort should be to weigh the reduction of fraud with the proper level of anti-fraud effort, Goldblatt said.

The current language sets what is considered subjective standards for determining whether video surveillance is necessary as well as whether the surveillance violates the standard of what is “intrusive, intimidating, or harassing.”

The bill further states that all materials collected shall be destroyed within five years after the resolution of the claim, unless the materials are necessary to resolve an ongoing fraud investigation. These issues raise concerns that passage still would place burdens on workers compensation insurers that would ultimately lead to fewer fraud investigations, higher workers comp premiums paid by businesses in Colorado and could lead to a tighter job market as businesses pay more for workers compensation, according to Goldblatt.

The Coalition believes the legislature needs to answer several key questions as it debates the fate of HB 1012 including:

• Are there legitimate purposes other than anti-fraud that insurers use surveillance that could be disrupted by the amended language and are there other legal ramifications for the maintaining the records of an investigation beyond the five-year time frame contemplated by the bill?

Answers to these questions will help all parties to fully understand if HB 1012 will serve the residents of Colorado.

No such thing as a staged accident

Posted on March 1, 2010 by Dennis Jay

fenderBender A few years ago a young state prosecutor from Florida who was hired solely to try staged accident cases was a guest speaker at a Coalition board meeting. She started her talk by saying that the term “staged accident” was a contradiction. An accident by definition cannot be staged. She refused to use the term and admonished those who did. She’s correct, and the term has been banished from my lexicon ever since.

I recalled her admonishment this week when I read about current legislation in Maryland that would strike the word “accident” in state statutes dealing with automobiles and insurance, and replace it with “crash.”

The sponsors of this bill reason that “accident” implies an event over which one has no control, such as an accident of birth. Driving drunk or in very bad weather or on roads with faulty design can lead to car crashes, but people do have some control over those situations. Certainly setting up two vehicles to smash into each other as a means to make a profit is no accident. For our purposes, I think we should lose “accident” and go with “crash” as well. We wish the sponsors of this bill much luck in making this change in law.