* Iowa would be among the strongest states in fighting workers-comp fraud under a bill in the Senate. The measure makes claimants, attorneys, medical providers and insurers all liable and culpable for workers-comp fraud penalties. The bill also would create a new comp fraud unit within the the state’s existing fraud bureau. Fraud penalties would fund at least 1 fulltime investigator and 1 prosecutor. The law equally would provide broader immunity protection for reporting suspected comp fraud. The added fraud proposals come on the heels of major reforms in 2017. Those led to debate over whether Iowa’s lower 2018 comp rates help or hurt injured workers. “Quite frankly, this bill is very good and very impressive,” the Coalition’s legislative chief Matthew Smith told WorkCompCentral.
* Legislation to limit fraud and abuse with expensive compound creams in workers comp fizzled in the Pennsylvania House on a 98-98 tie vote. The bill would’ve amended the state’s workers-comp program to allow more oversight and regulation of compound creams. The Coalition is working with advocate House member Marguerite Quinn to seek a re-vote when the House reconvenes from recess in March. The Senate decisively passed a similar version last October. Abuse of expensive and often medically worthless compound creams is imposing large losses on insurers in Pennsylvania — including auto and workers comp. The Philadelphia area is one of the state’s hotspots. Many other states face similar compound problems. NCOIL is considering a model bill to require tighter standards for physician dispensing of compounds. The Coalition plans to support the anti-fraud provisions in the model at NCOIL’s winter meeting in March.
* Legislative efforts to ban injury-causing counterfeit airbags are literally “popping out” across the U.S. Already 5 state legislatures have begun tackling bills only 6 weeks into 2018. Hawaii … Massachusetts … Nebraska … and Tennessee are the first 4 states. Selling the life-saving measures to colleagues is the big challenge. Look to the 5th state, Rhode Island, for strong messaging in a news video. It features sponsor State Rep. Brian Kennedy, who’s championing H 7125. … The recent bust of a suspected airbag ring in Los Angeles also features some of the challenges fraud fighters are confronting around the U.S.
* Legislators in New Jersey are being asked to protect consumers from unsolicited offers for medical and legal services. A bill would prohibit public release of traffic crash reports for 90 days, except for criminal investigations. Unsavory marketing by medical providers, personal-injury attorneys and other profiteers increasingly has ramped up to extract large insurance payouts, often regardless of actual injury. In response, states are grappling with the balance of access to public records and desire of crash victims to be protected from release of their personal info to outsiders. This issue also was tackled by the U.S. Congress in 1994 through the Driver Privacy Protection Act. Enacted in the internet’s infancy, the Act prohibits any state DMV from knowingly disclosing personal info in a police crash report, except for limited purposes. Issues regularly arise in balancing federal protections with public-record “sunshine” laws passed in many states. Equally troubling is that many cash-strapped local law-enforcement agencies augment their budgets by selling crash reports. The info often is sold to runners for dishonest providers seeking to prey on crash victims and auto insurers.
* A bill would’ve all but eliminated insurer rights to take examinations under oath (EUOs) for claims in Washington state last year. The measure died in committee with overwhelming opposition. Sponsors, however, resurrected the bill and refiled the restrictive measure in its entirety. The bill would place unfairly strict time limits and other restrictions on insurer use of EUOs. The Coalition is closely monitoring, along with the Washington insurance department and other partners. We’ll staunchly oppose the bill if it starts moving ahead. The Coalition believes insurers should treat policyholders fairly. An insurer’s right to fairly question a claimant, however, is crucial to properly resolving many claims, and should be preserved to protect all parties.
* Efforts to stop costly fraud and abuses stemming from contractor takeovers of home-repair claims are on life support in Florida. Home contractors are exploiting so-called assignment of benefits (AOB). Losses from inflated repair claims and frivolous lawsuits are spiking premiums dramatically. The state House passed a meaningful reform bill to reign in AOB scams. The Senate version does nothing to address the root problem, and will only keep premiums rising. The short 60-day legislative session leaves little time for both chambers to agree on a bill that would solve the crisis. The Coalition is urging fraud fighters in Florida to write their state Senators asap — asking them to support strong reforms. Separately … there’s a glimmer of hope for AOB scams involving auto windshield replacements in Florida. Drivers are signing over claims to auto-glass firms. Lawsuits ballooned from 397 in 2006 to 19,513 last year, the state CFO says. Insurers can require that they inspect auto windshields for damage before authorizing glass replacements under a Senate bill (SB 396). It’s still in committee, so time is growing short. A House version must start going through committees.
* Life insurance policies couldn’t be murder weapons anymore under a bill in the Maryland legislature. The measure would limit life coverage of kids. It would impose strict guidelines for life applications for youths — including requiring consents, signatures and proof of an insurable interest. Underwriting standards also would tighten. And life insurers would be empowered to reject applications, and Maryland will file away rejected applications for investigation. The Coalition advised the legislator in drafting the reform bill, and supports the measure. The Coalition started a firestorm of debate that helped prompt the bill. A financially shaky Joaquin Rams murdered his infant son Prince for more than $400,000 of life insurance in the D.C. area. “Other states, including Maryland and Virginia, need to follow their lead and tighten a system that turns children into prey,” the Washington Post wrote in an oped inspired by a Coalition letter to the editor.
* Iowa would empower victimized insurers to seek restitution from fraudsters in civil court. Most states have restitution laws that make consumers whole if they’ve been victimized. A movement is underway in states such as Iowa to strengthen restitution laws, and let victimized corporate citizens such as insurers wield civil suits against fraudsters.
* The Coalition’s Matthew Smith was appointed to the NAIC’s Consumer Liaison Committee. There are 37 members total. The Consumer Liaison Program promotes greater consumer involvement with state insurance departments. The Coalition serves as a major source of info on insurance-fraud trends, legislation and regulation across all lines of insurance. A Coalition representative has served on the committee for many years.
* “Many contractors abuse illicit claim takeovers to secretly gouge insurers with inflated repair claims while doing shoddy or no work,” the Coalition’s Matthew Smith blogs about a major scam that’s hiking homeowner premiums in Florida. “… Yet homeowners are hopping mad. They demand relief, not excuses. With elections coming in November, Tallahassee owes besieged homeowners nothing less.”
* Mississippi legislators are working to increase immunity protection for insurance-fraud reporting. Right now fraud fighters have no civil immunity — they’re widely exposed to lawsuits if they share claim or case info. At least 3 remedial bills have been filed — one in the Senate bill and 2 House bills. They all would grant fraud fighters immunity for reporting suspected insurance scams. One House bill allows immunity only for reporting workers-comp fraud. The other House bill offers broader immunity for all insurance schemes. A similar Senate bill also would grant wide immunity. The Coalition favors the broader immunity bills in a state known for lack of laws in fighting fraud. Immunity bills have stalled in past sessions, so time will tell if 2018 brings a change of heart.
* Leaders in Kentucky are pulling up the fraudster welcome mat and working to beef up insurance-scam penalties. Kentucky would no longer require a criminal conviction before a civil fraud recovery action can be pursued under a bill being drafted. Fines and penalties for fraud convictions also would increase. The bill will be filed later this winter. Leading the effort is the Kentucky Insurance Council (part of the Insurance Institute of Kentucky). The Council is partnering with state leaders and the private sector on the bill. Kentucky has seen a dramatic rise in insurance fraud activity in recent years, especially in the Louisville/Jefferson County metro area. The Coalition regularly takes part in the Council’s meetings, and supports reforms to better protect Kentucky consumers from fraudsters and their shenanigans.
* Michigan urgently needs an anti-fraud agency to tackle crash rings … More states aim to criminalize installing of unsafe knockoff airbags … a dogged Arkansas legislator’s personal passion is to inspire more states to pass stronger fraud laws. Read all this plus much more in the inaugural 2018 issue of Advocate. It’s the Coalition’s online quarterly of the latest news and insight about legislation, trends and court decisions. Sign up today for this must-read info source today, free of charge. Stay informed, updated and inspired by Advocate — and get involved in moving legislation in your state.
* The sound of bills dropping in the hopper rang through Trenton as New Jersey kicked off the 2018 session. At least 4 fraud bills were filed in the first week. Proposals would: make it an insurance fraud for a 3rd party to waive, rebate or pay a deductible for healthcare services … create an online registry for convicted insurance fraudsters (A 315, A 1678 —the latter bill cites the Coalition’s $80-billion fraud estimate) … expand the state’s RICO statute to include workers-comp fraud if more than $25,000 is stolen. The Coalition will monitor these and other bills across New Jersey.
* Florida is making early moves to stop contractors, plumbers, remediation firms and others from taking over and abusing homeowner damage claims. The state House passed a bill that seeks to: let policyholders rescind an assignment-of-benefits contract without penalty or fee … require cost estimates for work … require notices that a vendor intends to sue an insurer … limit attorney fees — which helps discourage frivolous lawsuits against insurers over inflated claims. Overall, the bill would protect consumers from dishonest contractors who pressure homeowners into signing over their insurance policies. They inflate the cost and scope of repair work, and illicitly sue insurers that refuse to pay. Fraud losses have grown so acute that homeowner premiums are rising in some areas of the state. The bill now heads to the House. For more useful background, see this week’s front-page story in the Daytona Beach News Journal.
* “On their surface, Association Health Plans are well-intended efforts to help small businesses obtain affordable health coverage. But small businesses and their workers will face a large and intolerable risk of fraud,” the Coalition’s Matthew Smith writes in a letter to the U.S. Department of Labor. The Coalition opposes the Administration’s plan to authorize AHPs. They’re cross-state group health plans. Limited authorization of such plans bred more than 144 unauthorized “plans” in 2002-2004. They peddled bogus health coverage to more than 200 million Americans — stealing at least $250 million in premiums and unpaid medical claims. That’s something the Coalition doesn’t want repeated again. You also can voice your opposition by uploading comments and referencing RIN:1210-AB85.
* More than 800 undocumented Florida workers have been charged with workers-comp fraud for falsely using SSNs to seek comp benefits when injured, get jobs or both, a news investigation says. SB 1568 would clarify that undocumented workers can receive comp benefits once enrolled in the system. Florida currently makes it an insurance crime to file a comp claim using a false ID. Immigrants can be charged with comp fraud even if they aren’t injured or filed a claim — it’s illegal to use a fake ID to get a job. Trying to collect comp for workplace injuries also can trigger fraud charges and deportation.