Fighting Insurance Fraud- What’s In Your Arsenal?
According to the Insurance Reform Institute, insurance fraud costs
insurance companies up to $30 billion per year. According to the National
Insurance Crime Bureau the percentage of questionable claims is up by
23% from January 2011 to June 2013.
Fraud is costly to everyone; not only does worker’s compensation fraud
cost insurers billions of dollars every year; it results in higher health care
costs and insurance rates for US businesses (Risk Control: Managing
Worker’s Compensation Fraud). Ralph Burnham, the executive director of
the PA state Insurance Fraud Prevention Authority stated “As workers’
comp insurance fraud increases, so do the losses and the premium
amounts that businesses must pay; this can be very damaging to any
business, but especially small business.”
In July of 2013 the Delaware County District Attorney’s Office filed a
criminal complaint charging 35 year old Takia Hasben, with insurance fraud
along with several other charges. Hasben was employed by the USPS
when she was reportedly attacked while delivering mail. She filed a claim
for “traumatic injury” and was diagnosed with Post Traumatic Stress
Disorder and Major Depressive Disorder. She and her doctors asserted
that she had to remain housebound and was afraid to go outside suffering
further from constant pain, poor appetite and chronic headaches.
Surveillance was performed which showed Hasben performing many
activities inconsistent with her stated restrictions such as grocery shopping,
driving, having her hair done and smiling and socializing. Further
investigation into her claim showed that she owned several rental
properties whose income she failed to report to the Department of Labor
(DOL). On May 29, 2013 Hasben’s benefits were terminated after she had
received $189,138.66 in total wage loss replacement and medical benefits.
A California man had received $150,000.00 in worker’s compensation
benefits as a result of an injury in which he claimed left him unable to lift
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more than ten pounds and limiting his range of motion. Video surveillance
revealed that this claimant continued physically demanding work on a side
job where he was working on large trucks. He was charged with insurance
fraud after two independent medical experts testified (after viewing the
video tape); that he was not impaired by any major injury nor was he
functioning with any significant level of pain.
John Tawil and his son Ayoub Tawil of Whitehall PA were both charged
with insurance fraud after having made a fraudulent claim on a policy of
renter’s insurance. In the claim, more than $8000.00 in property had been
reported as stolen during a November 2012 burglary. The claimant
provided photographs to Traveler’s Insurance Company of the items stolen.
An investigation into the claim revealed that the photographs provided by
the claimant had been taken in March 2013, some four months after the
alleged burglary.
A New York man claimed “total disability” from a workplace injury in 2004.
However, the insurance company video showed this claimant performing
strenuous physical labor on multiple occasions. An insurance investigation,
launched in February 2012, revealed that the claimant continued to work as
a carpenter despite receiving worker’s compensation benefits. He was
charged criminally with grand larceny, insurance fraud, perjury and
Worker’s Compensation Fraud.
Medical service providers and attorneys are committing insurance fraud in
countless ways as well which contributes to the economic burdens faced by
insurance companies.
In May 2013 a physician, Chandra Sekhar Golla of Pittsburgh PA was
operating an addiction treatment center. Over a three year period Dr. Golla
defrauded Highmark of more than $300,000.00 by claiming that more than
$617,000 in lab testing services had been provided to persons covered by
Highmark health insurance plans. An investigation showed that Dr. Golla’s
practice was not a PA licensed laboratory nor had they found equipment
necessary to perform the lab tests billed to Highmark. In January Dr. Golla
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was required to surrender his medical license and to pay $335,000 to
Highmark as restitution.
Numerous arrests resulted in a drug ring investigation dubbed “Operation
Script King” in which pharmacies in PA, NJ and NY were flooded with
Oxycodone prescription from one medical facility in New York. Between
September 2011 and February 2013, New Jersey pharmacies dispensed
more than 500,000 Oxycodone pills based on more than 4500 prescriptions
originating from the one medical facility. The investigating entities
discovered that the prescriptions were being “sold” to drug dealers for $500
apiece and the pills were sold on the streets for $20-$30 per pill having an
estimated street value of $2.1 million. Ten insurance companies were
victimized by this operation including Aetna, Horizon Health and Medicaid.
Fortunately, there is increasing awareness across the country regarding the
negative impact of questionable worker’s compensation and disability
claims. There have been outreach programs to educate the public about
the detriments of fraud. Also, states across the country are taking
legislative steps to pass laws raising the level of insurance fraud from a
misdemeanor to a felony. Many are also providing immunity from civil
liability to those who report suspected activity and providing hotlines for
reporting fraud.
So what can claims adjusters do to fight insurance fraud? First, they need
to recognize the Questionable Claim Indicators (QCI) (see attachment).
While no one QCI would provide sufficient reason for investigation; when
you have several tied to a particular claimant the probability of fraud spikes
sharply. Investigations can be costly but experts agree that they are the
only way to put an end to a fraudulent claim. The Ohio Bureau of Workers
Compensation reports that for every dollar spent on investigating fraudulent
claims, the state gets back up to five dollars in refunded payments and
fees. Other companies report a 3-8 times return on the cost of fraud
investigation as a whole.
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Ask the Right Questions
When assessing a claim to determine the potential for abuse and fraud,
claims adjusters need to ask the right questions. As field investigators, our
job effectiveness is enhanced by the provision of certain information.
 Obtaining detailed recorded statements from the claimant is essential
in securing the information that can be used to assess the claim and
to determine later if their statements are consistent. In addition, it can
be utilized as a foundation for either paying the claim or denying it.
 Inquiring about medical history, prior submission of claims, civil suits
and medical and legal representation can all provide clues regarding
the claimant’s motivation and interest in submitting a questionable
claim. For example, a claimant who is treating with a “known”
worker’s compensation doctor, while at the same time securing legal
representation may warrant further inquiry.
 Asking a claimant about their current marital and living situations can
also shed light on potential abuse. If a claimant provides an address
that is determined not to be the one in which he resides; this
decreases the claimant’s credibility. If a claimant is in the process of
a messy divorce or child custody battle, this marital situation
information could indicate a financial motivation for abuse.
 Financial considerations should be explored as a prime motivator to
secure worker’s compensation benefits.
 A clear picture of the claimant’s hobbies and possible “side jobs” can
be gathered via interviews and recorded statements. If a claimant is
known to be involved in car repair at his home and “on the side”, this
information is valuable in making a determination as to possible fraud
as well as providing a possible starting point for surveillance.
Claims Adjusters Communication with Investigators
When a case is being referred by a claims adjuster to an investigator, there
are a number of items that increase the likelihood of success. The first is
clear communication between the claims adjusters and the investigators.
Any and all information that a claims adjuster has on a particular claimant
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(referral) should be communicated to the investigative staff. For example,
be sure to share a photograph or physical description of the claimant if one
is available to ensure that the surveillance is being conducted on the right
individual. In addition, any information regarding the claimant’s vehicles,
doctor’s appointments, family members and personal habits that a claims
adjuster is aware of should be provided to the investigator. Also, it is very
helpful to know if the claimant is still working and what work schedule they
have.
In the absence of such identifying information, field investigators must be
creative in making a positive ID on a particular claimant prior to conducting
surveillance.
Investigative Options
Cyber Search and Pre Surveillance
Through years of experience in claims investigations, we have developed a
process that has proven effective. There are certain computer sites that we
explore that provide us with the most “bang for out buck” with regard to the
information gathering stage of the investigation. Sites such as Accurint,
Lexis Nexis, tax assessment sites, Google maps and Google Earth, Twitter
and criminal docket searches have proven fruitful in our pre surveillance
investigations.
Additionally, social media has impacted everyone in our society, including
the claimant. Many are posting videos, pictures and personal information
that are intended for their “friends” and family. Photos and videos posted
on Facebook showing an active, healthy claimant climbing a mountain on
vacation while at the same time collecting worker’s compensation benefits
for a back injury have proven detrimental to many workers’ compensation
beneficiaries. Facebook, Instagram, YouTube and photo sharing sites are
all being used to gather information and evidence in the establishment of
confirming a questionable insurance claim.
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In addition, “geo-tagging” provides the place, time and date of posted
videos and photographs that further allow the determination as to when the
activity took place (ie: pre or post injury).
We use cyber search and pre surveillance tactics to maximize our chance
for success:
 To confirm or deny the appropriateness of further action in the form of
video surveillance.
 We use it to enhance and improve upon the video surveillance by
providing starting points or points of reference.
Surveillance
Surveillance can undermine the credibility of the claimant with evidence
that is visual and difficult to refute. Even attorney’s engaged in worker’s
compensation cases for the claimants recognize the potentially damning
effects of good video footage for their clients. Several on-line attorneys’
posts refer specifically to this fact while attempting to “educate” their clients
(claimants) on how to “beat the system.”
 “A videotape of an injured worker performing activities could be very
damaging to the case. The injured worker may have a hard time
proving that he/she is unable to perform the level of activity seen on
the tape and may place his/her receipt of worker’s compensation
benefits in jeopardy.”
 “Video surveillance can have a devastating impact on a workers’
compensation case. How frequently it occurs is speculative but it is
safe to assume that it occurs in nearly every case.”
 “Surveillance is expensive. However, insurers are willing to shoulder
that expense in order to disprove compensation claims because their
financial bottom-line will wind up better in the end.”
 “As tough as it may be, in order to allow your body time to heal and to
avoid damaging your workers’ comp claim, stick to your doctor’s
orders. If you are caught doing otherwise, it can be used as evidence
to deny your benefits.”
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The Power of the Tape
It appears that the visual imagery of an actual video tape that shows the
claimant performing activities outside of his/her restrictions can be a
powerful tool; even for worker’s compensation judges who tend toward
claimant bias and leniency. The case of Sullivan v. City of Satsuma
seemed to point to the videotaped surveillance evidence as the reason
the claimant lost their benefits.
“The Court finds that the video surveillance is compelling and
demonstrates that Shester Sullivan has not suffered the loss of the
ability to earn wages as a result of any injury sustained within the course
of his employment with the City of Satsuma.”
There are increasing numbers of news story in which claimants are
being prosecuted successful for criminal insurance fraud on the basis for
videotaped surveillance footage.
 An Ohio man was ordered to pay nearly $7000.00 in restitution
and investigative costs for working while collecting worker’s
compensation benefits. The Ohio Bureau of Worker’s
Compensation caught him on video working while he was
supposed to be recovering from an injury. He plead guilty to one
count of worker’s compensation fraud.
 Another Ohio man out of Cincinnati was claiming “total temporary
disability” and was caught on video operating a dump truck while
supposedly recovering from a workplace injury. He later plead
guilty to fraud charges and had to pay back the money he received
from worker’s compensation.
 The US Postal Service used video cameras to document the
activities of two individuals (a couple) who had both claimed they
could not sit for more than 15 minutes at a time due to back pain
and swelling. The videotaped footage showed the couple driving
together, gambling and mowing the lawn among other activities.
The couple was criminally charged and convictions were secured
for crimes involving worker’s compensation fraud.
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 Similarly, a Michigan letter carrier collecting worker’s
compensation benefits was regularly videotaped exercising at the
local YMCA where she was observed bending, twisting, lifting
weights and performing other physically strenuous activities.
The US Postal Service’s Inspector General reported that its
worker’s compensation fraud investigations resulted in $65 million
in savings.
Our own investigations have yielded results in the following cases:
FL1237- Claimant stated that he could not put weight on his right leg. We
followed him to and from his medical appointment. He used crutches while
entering and exited the doctor’s office. We continued to follow him
observing that he did not use his crutches for his subsequent stops.
PA5060- The insurance company paid over $25,000 in transportation costs
for the claimant to travel to and from his medical appointments. The
claimant asserted that he had no vehicle of his own nor did he have access
to one. Surveillance revealed that his live-in girlfriend did own a car and
she did not work. The videotaped footage showed him not only riding in
her car; but driving it.
DE1280 – The claimant’s attorney submitted photographs of the claimant’s
nicely landscaped yard as evidence stating that this is what the claimant’s
yard looked like prior to his injury. He alleged that his client could no longer
perform the physical demands related to the maintenance of his yard. Our
surveillance displayed the claimant watering his yard and plants and
performing other yard work.
Surveillance Challenges
Rural locations can make surveillance difficult at best and non conducive at
worst. We work around this obstacle in several ways:
 Securing information as to the public and private land lines and use
surrounding wooded locations (public lands) to watch
 Determining the most likely exit from the claimant’s residence and
watching from that point.
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 Driving by the location as opposed to sitting in front of it or near it
 Establishing the subject’s schedule (ie: medical appointment) and
following them in conjunction with the scheduled appointment
Attorneys are coaching their clients to become more aware of their
activities; particularly in public.
Surveillance should be done when the questionable claims indicators
reveal some level of suspicious activity on the part of the claimant. (See
Questionable Claims Indicator Index-QCII)
We attempt to document more than one incidence of suspicious activity on
the part of the claimant. We can then present a more comprehensive
picture of the claimant and the range of physical abilities.
We recommend that surveillance be conducted in tandem with recorded
statements and interviews. We secure as much information spoken directly
from the claimant’s mouth as possible. Videotaped footage is much more
effective when coupled with a claimant’s own statements regarding what he
can and cannot do.
Our surveillance can confirm a claimant’s injuries as easily as refute them.
If the claimant is seen on multiple occasions as having limited physical
abilities and movements; then that will potentially confirm their injuries.
Other Services
Activity Checks- Alive and Wells
Activity Checks involve the investigation into the claimant’s neighborhood
and daily activities. It may involve a neighborhood canvas in which
questions are posed to neighbors as to the claimant’s activities and
whereabouts. Does the claimant care for the lawn or home? Are they ever
seen walking their dog or taking out the garbage? Do they leave and arrive
home at the same time each day? (indicating a possible work related
schedule). Do they have any known hobbies or associations within the
community such as a gym membership or golf club?
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Activity checks also are conducted to assess the area in which the claimant
lives to determine suitability for future surveillance. If a claimant lives on a
dead-end street with little traffic, direct video surveillance may be more
difficult. Likewise, a busy street with on street parking may allow for more
options to secure video tape of the claimant.
Activity checks also help to establish exactly who the claimant is prior to
initiating a surveillance case. If there is no physical description of the
claimant and there is no photograph the positive identification of the
claimant is imperative. This can be secured through various pre texting
methods utilized by the field investigators either directly with the claimant or
via neighbors.
Often times activity checks reveal that a claimant is simply never home. It
can also show the opposite; that the claimant never goes anywhere. Both
scenarios need to be explored and confirmed prior to the initiation of a
more cost prohibitive schedule of video surveillance.
And finally activity checks may actually confirm that the claimant is in fact
physically disabled with limited physical abilities. This information could be
secured via neighborhood canvas or direct observation of the residence.
The goal of activity checks is to ascertain the viability of conducting video
surveillance and should be conducted prior to the initiation of any
surveillance schedule.
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