Printer Friendly

Quiet riot.

Workers' compensation fraud is considered a bloodless crime, yet the resulting hemorrhage of the bottom line can affect the health of a company. Tough prosecution would be the greatest deterrent, but for the people exploiting the system the risk of being prosecuted is minimal. According to Robert Buckley, a special investigations officer for Kemper National Insurance Company in Long Grove, Illinois, security managers can help prosecutors by conducting thorough investigations, documenting everything, and creating a work environment that is not conducive to fraud.

Buckley, who spoke recently at the Risk and Insurance Management Society's annual conference in Orlando, pointed out some of the red flags that can alert security managers to possible fraud. The list includes the desire to settle quickly, the denial of treatment, an unstable employment record, the suspicious timing of injuries, an absence of witnesses, an inconsistent or vague description of the accident, and late reporting. "These are areas that don't necessarily establish that a fraudulent claim has occurred, but they are certainly indications that further investigation would be appropriate," he says.

Companies can eliminate part of the problem with proper screening, says Buckley. "If you don't prevent the people from coming in, you are inviting them."

Other ways to reduce or prevent fraud include training, collaboration between the company and the insurance provider, medical cost management, and criminal prosecution. Kemper focuses its attention in these areas. "In our case, training is first," he explains. Kemper wants to make sure that its entire adjustor force is alert to the indicators of fraud. The insurer also trains its examiners and stresses to its litigation staff that settlement isn't always the way to go. Buckley feels that his company has a responsibility to the industry not to make payments on suspicious claims without an investigation.

In working with its clients, Kemper emphasizes safety instruction, ergonomics, and a return-to-work policy. The company also asks that its customers conduct a front-line investigation of the accident scene as soon as possible so that information is available for prosecution. Buckley suggests getting employees involved by posting awareness posters and implementing a hot line. Kemper makes awareness posters available to its customers and offers cash awards to any individual whose tip leads to a fraudulent claim.

Paying attention to where the money is going is another way to combat fraud. "You really need someone who is reviewing the bills when they come in," Buckley says. Last year, Kemper did not pay $128 million for which it was billed. "Much of it was duplicate billings," he says. Although most of these were innocent mistakes, if no one is watching, the money will be lost. Other elements to watch out for include unwarranted treatments and inaccurate math.

"Once you get a fraudulent claim you have to pursue a criminal prosecution," urges Buckley. He notes that the attitude within the prosecutorial community is changing because a stronger political emphasis is being placed on litigating fraud, but a company will still have to entice a prosecutor to take a case.

To do this, explains Buckley, the company must be the victim of a "hard-core" fraud, meaning a substantial loss had to occur. Also, the company must give the district attorney enough material to make a case by outlining the misrepresentation precisely. "It is not easy to do without good supporting documentation," Buckley says.

That documentation can take the form of surveillance tapes, witnesses, interviews, or photos. Kemper has created a special investigations database that includes information on every claim and identifies everyone involved. According to Buckley, that information helps them if and when the times comes to prosecute the suspect.

Reading is Fundamental

Two recently published government manuals offer information for security professionals on software and crime statistics:

The Commerce Department has published High Integrity Software Standards and Guidelines (order number 003-003-03171-2). High integrity software must be trusted to work dependably in critical functions. Its failure to do so may have catastrophic results, such as serious injury, loss of life or property, business failure, or breach of security. Examples include software used in safety systems or nuclear power plants, medical devices, electronic banking, air traffic control, automated manufacturing, and military systems. Standards, draft standards, and guidelines from each of these fields were examined in this study. The cost is $6.50

The Justice Department has published Report to the Nation on Crime and Justice (order number 027-000-01295-7). This report presents national data on crime and the criminal justice system. It includes information on victims, offenders, costs, and the government's response. The cost is $8.50.

To order either of these publications send prepayment to Superintendent of Documents, Washington, DC 20402-9325. To pay by VISA or MasterCard, call 202/783-3238.
COPYRIGHT 1993 American Society for Industrial Security
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Security Spotlight; workers' compensation fraud
Author:Arbetter, Lisa
Publication:Security Management
Date:Jul 1, 1993
Previous Article:The fine art of museum security.
Next Article:The widening gap.

Related Articles
Workers' compensation.
Workers' compensation: traps for the unwary.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters