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Workers Bear The Brunt Of Fraud Cases

#1 Guest_IDB_*

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Posted 01 December 2004 - 04:21 PM

Workers bear the brunt of fraud cases


Less than 2 percent of total WCB fraud was caused by workers. Employers and medical service providers caused the rest!

The Labor Research Association contends that a misplaced focus on worker fraud has created "an atmosphere of fear and intimidation for injured workers with legitimate claims."

In New York, a 1997 study documented more than $6 million in insurance fraud; less than 2 percent of that involved false claims in workers' compensation cases.

The report listed cases involving doctors, pharmacists and clinics totaling almost $3 million in claims.


http://new.in-forum....

By Patrick Springer,The Forum
Published Monday, November 29, 2004


Fraud investigations by the North Dakota workers' compensation program have overwhelmingly targeted injured workers compared to employers or medical providers.

A recent report by a consulting firm, Octagon Risk Services, found that 89 percent of the bureau's fraud caseload in 2003 involved injured workers' eligibility to receive disability benefits. Workers can defraud the program by misrepresenting their ability to work or failing to report other sources of income.

The bureau's fraud unit investigated 317 injured workers, 40 employers and one medical provider last year, according to the report.

The $1 million the bureau spent investigating injured workers in 2003 was more than 10 times what it paid to probe cheating employers.

Employer fraud involves misrepresenting employees, by not counting them or falsely reporting their type of work, in order to reduce workers' comp insurance premiums or avoid paying them altogether. Provider fraud involves false billing.

Sandy Blunt WSI executive director Says a greater emphasis will be put on employer and provider fraud

"This is dramatically inappropriate," said Sen. Tim Mathern, D-Fargo. "I think that warrants some investigation on our part."

The breakdown in the Octagon report is consistent with historical figures that surfaced four years ago during litigation of a fraud case involving an injured worker.

The case record showed that, as of May 2000, the bureau had conducted 1,352 fraud investigations of workers, or 1.1 percent of total claims, since the fraud program was established in 1994.

During the same period, the bureau conducted 82 investigations of employers, or 0.4 percent of the 21,500 employer accounts in 1999. Also, the bureau had performed 611 audits of the accounts, to determine whether employers were correctly paying premiums, or about 2.8 percent of the total.

By contrast, approximately 156,000 statements for medical services each year are subject to audit, but an administrative law judge determined there was no evidence of the number actually audited.

Since 2002, the bureau's fraud investigations have resulted in 20 criminal convictions - 16 workers and four employers, according to figures obtained by The Forum.

Sandy Blunt, who took over six months ago as executive director of the state bureau, Workforce Safety and Insurance, said a greater emphasis will be placed on employer and provider fraud in the future.

"After interviewing the Special Investigations Unit investigators, it is obvious they have not been provided the technical skills needed to pursue these areas effectively," the Octagon report said.

An insurance fraud specialist is working to train staff investigators in more sophisticated techniques required to detect and prosecute employer and provider fraud.

In Minnesota, the state workers' compensation program last year referred 225 fraud cases involving workers or providers to prosecutors, and 524 "mandatory coverage" cases involving employers' premiums to the state fund.

South Dakota's workers' compensation program doesn't track fraud investigations, which are handled by private insurers. The state has two investigators to handle all types of insurance fraud.

A disparity in scrutiny between workers and employers isn't uncommon, said Dennis Jay, executive director of the national Coalition Against Insurance Fraud.

Nor is it appropriate, he said. "In theory, you should see a more even split," in the caseload percentages.

One reason workers often bear such a lopsided brunt, many agree: It's easier to prove fraud against workers, where videotape of an activity the worker has said he can't do becomes powerful evidence of deliberate misrepresentation.

By contrast, proving fraud against employers for intentionally failing to pay adequate insurance premiums is more difficult. Similarly, proving that a health provider intentionally over-billed for medical services is complex, industry observers said.

"The stuff that gets the most attention is not necessarily the worst fraud," said Gregory Quinn, a spokesman for the National Council on Compensation Insurance Inc., which claims to have the nation's largest database of workers' compensation insurance information.

"The tape-recorded guy who supposedly hurt his back digging in his yard is what most people think of" when they picture workers' comp fraud, he said.

"The major fraud is not done by individuals, but by groups acting together, including providers," Quinn added.

More than 33 states have programs to weed out fraud in workers' compensation claims. All states have documented worker fraud, and there is universal agreement that fraud detection programs serve as a much-needed deterrent to fraud and abuse.

Several studies have concluded, however, that fraud by employers and medical providers costs much more than false claims filed by workers.

In New York, a 1997 study documented more than $6 million in insurance fraud; less than 2 percent of that involved false claims in workers' compensation cases. The report listed cases involving doctors, pharmacists and clinics totaling almost $3 million in claims.

The Labor Research Association contends that a misplaced focus on worker fraud has created "an atmosphere of fear and intimidation for injured workers with legitimate claims."

The National Insurance Crime Bureau, an insurance industry organization, estimates that workers' compensation fraud costs insurance companies roughly $5 billion a year.

Readers can reach Forum reporter

Patrick Springer at (701) 241-5522

http://new.in-forum.com/articles/index.cfm...6473%A7ion=News

Photo caption: Sandy Blunt WSI executive director Says a greater emphasis will be put on employer and provider fraud

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#2 Guest_IDB_*

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Posted 01 December 2004 - 04:23 PM

a very interesting read:
http://www.in-forum.com/collections/index....ection=workcomp
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#3 User is offline   fairgo 

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Posted 01 December 2004 - 08:31 PM

and this probably mirrors what is going on here as well.

Some extremely interesting articles on the above link.... just what constitutes 'work' is something I have just spoken to someone over the phone about. They have been investigated because they occasionally wander down to a friend's business and "muck about a bit"...nothing that harms his injury..... doesn't get paid..... helps relieve the boredom........ and helps him 'feel useful'.

Now ACC have called him in for a 'meeting'..... *sigh*
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#4 User is offline   doppelganger 

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Posted 01 December 2004 - 09:16 PM

now there is a court case that the ACC or WINZ claimed that a person was committing fraud. They watched a claimant working for weeks and then tried to procute him.

ACC or WINZ lost the case as for months they new that the person was doing wrong but did nothing about it.

There is also a sinular case were either ACC or WINZ had place a claimant in a position were his debt had got to the point were the person started earning with out telling either of them. The Judge remarked thatthe orginisation involved is close to committing a serious crime from the crimes Act.
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#5 Guest_IDB_*

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Posted 01 December 2004 - 10:34 PM

statistics

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#6 Guest_IDB_*

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Posted 01 December 2004 - 10:41 PM

Types of fraud
By Patrick Springer, The Forum
Published Sunday, November 28, 2004

Major types of workers' compensation fraud

Worker fraud: Workers can commit fraud by falsely claiming that their injuries prevent them from working, or limit the extent of their ability to work. Workers also can commit fraud by deliberately failing to report work activity or income.

Employer fraud: Employers commit fraud in three basic ways, all of which eliminate or reduce their insurance premiums to cover injured employees: failing to pay their premiums altogether; failing to report employees; or misrepresenting the work employees do, to minimize the level of risk, and therefore lower the premium.

Provider fraud: Medical providers can commit fraud by billing for services not delivered, or overcharging for services. Provider fraud merges with worker fraud if a doctor conspires with a worker to misrepresent the worker's injuries in order to collect benefits.

In North Dakota and in most states, fraud requires evidence of intentional, deliberate misrepresentation.

http://www.in-forum....ex.cfm?id=76463


they missed a section:

they ought to add: Corporate Fraud.
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#7 Guest_IDB_*

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Posted 01 December 2004 - 10:43 PM

injuries

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