How to protect yourself from rising medical provider and claimant fraud

According to the National Insurance Crime Bureau (NICB), Workers’ Comp fraud referrals were up by 2% in the first half of 2009. While premium fraud decreased 21%, medical provider and claimant fraud have increased. Frustrated employers often have suspicions about claimant fraud, recognizing that an employee may be faking or exaggerating an injury. Yet, medical-provider fraud is often the biggest cost driver.

Risk and Insurance is currently producing an in-depth series on fraud by Steve Tuckey. In the October 2009 article, he notes that the California Fraud Assessment Commission finds that only 20% of the arrests have to do with claimant fraud and the balance is for medical provider and employer fraud. Medical provider fraud can range from unnecessary surgeries, excessive office visits, inflated billing, billing for services not rendered, etc.

To help combat fraud, here are some tips offered by the NICB.

• Advise injured employees to be wary of attorneys or people who allege to be insurance representatives and immediately solicit treatment at a medical facility.
• Check doctors’ and attorneys’ credentials. Contact state medical licensing boards or bar associations for information.
• Watch for medical mills. Medical mills can include fraudulent physicians who fabricate credentials, billing and provide no medical services, while recruiting individuals with bogus injuries. It also includes double-dipping doctors who do provide medical services but treatments are excessive, redundant or unnecessary. It helps to seek a second medical opinion.
• Be aware of inflated billing. According to NICB, “the most common type of medical mill is a healthcare provider who purposely miscodes diagnoses and inflates bills to receive more insurance money.” Match bills to records of visits and medical treatments.
• Watch for referrals. Attorneys involved in medical mill operations often insist that an injured employee seek medical advice from a specific doctor.

In addition to the tips from the NICB, employers can protect themselves by:

• Being aware of fraudulent billing. According to an article in the Los Angeles Times, some California employers, including Walt Disney Co., plan to send notices to injured workers to check if they in fact received the medical services that are being billed for. Criminals obtain data on injured workers and set up fake medical labs then bill insurers for treatment that never occurred.
• Monitor social media cautiously. Social networking sites can be a useful tool in identifying employee fraud; however, employers need to adhere to privacy laws and avoid spying on private, non-public pages.
• Use evidence-based guidelines. Evidence-based guidelines in determining medical treatments and procedures for Workers’ Compensation injuries can offer protection against unneeded and costly medical treatments. While certain types of fraud such as musculoskeletal treatments may go undetected, the guidelines can slow the incidence of fraud.

Download a helpful brochure by the National Insurance Crime Bureau.