Printer Friendly

TRAVELERS SAVES $54 MILLION IN 1992 BY CRACKING DOWN ON FRAUD

 HARTFORD, Conn., July 26 /PRNewswire/ -- The Travelers Corporation (NYSE: TIC) saved $54 million last year -- $34 million in health care and workers compensation alone -- by cracking down on insurance fraud.
 "Fighting insurance fraud doesn't have to be a losing battle," said Ken Rains, manager of investigations in Travelers Managed Care and Employee Benefits Operations (MCEBO). "The National Healthcare Anti- Fraud Association estimates that between 3 percent and 10 percent of all health care claims contain some element of fraud Travelers is making progress and each year we are able to identify more and more cases of fraud -- it's important because all consumers pick up the tab when fraud forces insurance companies to pay unnecessary claims."
 Savings from detecting health, dental, life and disability insurance fraud were $20 million, and another $14 million was saved from finding fraud and abuse in workers compensation claims. In addition, $20 million of savings is attributed to detecting fraud from property- casualty insurance claims.
 Last year Travelers researched a total of 10,370 cases and found 1,886 incidents of suspected fraud.
 The National Healthcare Anti-Fraud Association defines fraud as an intentional deception or misrepresentation that is made in an attempt to reap financial benefit. This includes false statements and deliberate omissions that result in higher claim payments.
 Travelers began its anti-fraud activity in 1978 by creating special units to investigate a plague of auto thefts in Boston. Because of success there, units were created to detect fraudulent claims in other lines of insurance, staffed by investigators with extensive backgrounds in law enforcement and claims handling.
 The difficult job of detecting health care fraud is made easier by an electronic fraud detection system developed by Travelers to monitor the billing activities of health care providers. Using artificial intelligence and "trigger patterns," the system measures each health care provider's behavior, compares it to the norm, and tips investigators off to possible fraud when the provider stands out as being unusual in any way. When a new insurance scam develops, investigators develop new trigger patterns to detect the fraud.
 "The system is flexible and adaptive. The old way of looking for fraud was very cumbersome," said Rains. "This system can do a mass review of medical claims data. It turns the claims system into an investigative tool."
 But fraud can also be detected in more traditional ways. The Property-Casualty Department and the Managed Care Operations have installed 800 numbers that serve as fraud hotlines.
 "A person may know that a neighbor is on workers compensation, but sees the neighbor outside shoveling snow and knows that something is not right," said Jim Ronan, director of fraud management for Travelers Property-Casualty Department. "With an 800 number, people can call in anonymously and report suspected fraud."
 Typically investigators forward information to public authorities for potential prosecution.
 "Unfortunately, the percentage of solid fraud cases that actually go to prosecution is relatively small because of court back-logs and limited prosecutorial resources," Ronan said. "This year's goal is to try to help more in the area of prosecution, actually preparing cases for district attorney's offices. This would ease the burden on government agencies."
 In some states, exposing fraudulent claims can sometimes open insurers to accusations of libel and slander. But as an example of how legislative relief can help fight fraud, recent immunity laws in some states allow insurance companies more leeway to expose fraud.
 "Emphasizing insurer's ability to recover the proceeds of fraud would help them to continue serving their customers at a reasonable cost," Ronan said. "A federal immunity statute would allow insurers to present evidence of fraud in good faith without fear of repercussions. A federal civil cause of action, modeled on the federal False Claims Act, would give the private sector an effective means of recovering the proceeds of fraud. Mandatory restitution as part of the criminal process to insurers and other reimbursement organizations that have paid fraudulent health care claims, and the revision of current restrictions on the use of patient information as part of fraud investigations, would also add to the solution."
 The Travelers is a founding member of both the National Healthcare Anti-Fraud Association and the newly formed Coalition Against Insurance Fraud which will advocate federal and state anti-fraud legislation and regulation as well as inform the public about the high cost of fraud.
 The Travelers is one of the world's largest multiline financial services companies focusing on insurance, managed health care and investments.
 /EDITORS NOTE: Fraud Hotline Numbers: MCEBO 800-666-FRAUD, Property-Casualty 800-6-FRAUD-0/
 -0- 7/26/93
 /CONTACT: Shannon Ilenaghan at 203-277-4935 of The Travelers Corporation/
 (TIC)


CO: The Travelers Corporation ST: Connecticut IN: INS SU:

CM -- NE006 -- 5551 07/26/93 09:20 EDT
COPYRIGHT 1993 PR Newswire Association LLC
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
Publication:PR Newswire
Date:Jul 26, 1993
Words:779
Previous Article:BIS REMARKS ON RECENT PDA ANNOUNCEMENTS
Next Article:REUTERS PLANS TO DISTRIBUTE 350 MILLION POUNDS BY WAY OF SHARE REPURCHASE
Topics:


Related Articles
HOWARD JOHNSON OFFERS UP TO $54 MILLION IN TRAVEL DISCOUNTS THROUGH STAY AND SAVE! FALL MARKETING CAMPAIGN
A.M. BEST LOWERS TRAVELERS LIFE/HEALTH RATING
MAUNA LOA MACADAMIA PARTNERS L.P. REPORTS FIRST QUARTER RESULTS
ALAMO EXPANDS VALUE-ADDED BOOKLETS TO REACH BUSINESS TRAVELERS
THE TRAVELERS POSTS GAIN OF 67% IN FOURTH QUARTER OPERATING EPS TO $1.10; FULL YEAR OPERATING NET PER SHARE $3.67, UP 41%
PA Gov. Ridge Announces Pennsylvania Saved More Tax Dollars Last Year in Fight Against Welfare Fraud.
VALLEY MAN GETS PRISON FOR FRAUD.
Bies addresses challenges in retirement savings.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters