Tuesday, January 24, 2012

OK Fraud Battlers Could Learn From CA

An interesting dichotomy of an understanding of fraud in workers' compensation is highlighted in this morning's WorkCompCentral News.

In one story California Division of Workers' Compensation (DWC) Administrative Director, Rosa Moran, told attendees at yesterday's Employer's Fraud Task Force meeting that before the meeting she didn't understand the scope of fraudulent activities in workers' compensation.

The common perception of fraud as the injured worker participating in activities such as bungee jumping while at the same time saying he's too injured to work is just a small part of the problem, Moran told our reporter.

"I was kind of shocked to find out employee fraud is only about 10% of the problem and 90% of the problem is elsewhere," she said. "When I say elsewhere, I'm talking about employer fraud, provider fraud, attorney fraud, doctors, equipment companies."

"I have this really bad feeling that we have tens of millions of dollars flying under the radar," she said.

Moran said suggestions to help identify fraud include asking injured workers during depositions about the treatments they received and comparing that with billing records. She also said carriers should develop red flag criteria for auditing billers.

The division and its parent agency, the Department of Industrial Relations, identified red flags to conduct targeted audits of employers, and Moran said the red flags have helped identify more violations without bothering law-abiding employers.

The other story highlights that at least one politician in Oklahoma is concerned with fraud, but the implications are that the scope of concern is based on a limited understanding of the problem.

Oklahoma Lt. Gov. Todd Lamb (R) has issued a policy report to be delivered to legislators next month, calling for additional changes in the state's workers' compensation system -- including hiring more workers' comp fraud investigators at the Attorney General's Office.

And Sen. Dan Newberry, R-Tulsa, has already introduced legislation to accomplish that recommendation.

Newberry said the proposed "Workers’ Compensation Anti-Fraud Act" (SB 1174) is part of a continuing effort to reduce costs to businesses while protecting the rights of injured workers.

Newberry’s proposal would allow the attorney general to hire, or contract with, additional investigators to review workers’ compensation claims.

The bill as introduced does not focus on injured worker fraud at all. As stated above, the bill only amends existing law to permit the attorney general's office to expand its investigative service options.

But the suggestion in Lamb's interview with WorkCompCentral is that the motivation is fraud being committed by injured workers and that would be the focus of these resources.

Lamb told our reporter that SB 1174 is based on concerns expressed to him by “actual business owners” who suggested the Attorney General's Office hire additional fraud investigators or contract with investigators.

The state should lead the way by encouraging CompSource Oklahoma, which provides workers’ compensation coverage for state agencies, to beef up its fraud investigation unit, Lamb added.

Oklahoma is obviously a much smaller state than California, but that may make it even more enticing to those who don't want to play by the rules to try and "fly under the radar".

Perhaps Oklahoma could learn more about fraud by talking to colleagues in California who already have fraud-battling resources allocated to them to understand the full scope of where the fraud is occurring. And to understand the level of sophistication that enables the fraud in the first place.workers compensation, work comp, injured worker 

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