Opinion | This Simple Tool Flags Complex Workers’ Comp Fraud Operations

By: | October 15, 2018 • 2 min read
Roberto Ceniceros is senior editor at Risk & Insurance® and chair of the National Workers' Compensation and Disability Conference® & Expo. He can be reached at rceniceros@lrp.com. Read more of his columns and features.

Showing workers’ compensation claimants fictitious bills containing their names and health data can rile them into helping prosecutors nab fraud perpetrators.

That is why it’s surprising that with medical provider fraud being a costlier problem than claimant fraud, workers’ comp insurers don’t deploy a simple tool for combatting the illegal schemes harming their policyholders and injured workers alike.


Explanation of benefit statements, or EOB letters, like those mailed to health care insurance patients, could spur more workers’ comp claimants into reporting the massive medical-provider fraud schemes committed using their identities, said Shaddi Kamiabipour, senior deputy district attorney in the Orange County, California District Attorney’s Insurance Fraud Unit.

Kamiabipour knows the power of claimants who are livid when they learn their own medical treatment is stalled because insurers were busy processing scores of phony bills using their names.

“The cases that break open for us are the cases where the patients are upset” after prosecutors showed them medical bills for services and care they never received or from clinics they never visited, she said.

“I can’t tell you how many times we have talked to patients who didn’t know that $200,000 worth of diagnostic bills were submitted in their names,” Kamiabipour continued. “They didn’t know that the [scammers] billed for interpretation [services] when the patients speak perfectly good English.”

“Righteously indignant” patients provide “the golden ticket” for obtaining search warrants needed to raid fraud mills, she said.

That is why Kamiabipour and other prosecutors believe EOBs periodically sent to injured workers could substantially speed the fight against workers’ comp fraud.

Otherwise, a December 2017 California State Auditor report found that the current lack of patient bill review allows fraudulent medical providers and their co-conspirators to go undetected for years while billing multiple insurers for millions of dollars.

There is evidence that EOBs help.

The report cites the experience of self-insured employers like Disney, which found that the 50 cents it spends for each EOB periodically mailed to its injured workers helps to uncover “provider billing mistakes, billing mischief, or fraud.”

The report also cites how Medicare beneficiaries reviewing their EOBs have stopped provider fraud.

But without anyone requiring them to do so, workers’ comp insurers generally don’t mail out EOBs.


A belief that injured workers won’t even bother reading the EOBs is one reason given for the lack of effort to mail them out.

“People assume that if they tell the patients, they are not going to care,” Kamiabipour said. “That has not been my experience.

“If I want a patient to cooperate with me, the fastest way is to show them all the bills. They usually look at them and say, ‘I didn’t go there. That didn’t happen.’ ”

It’s great the workers’ comp industry is deploying more data analytics systems to fight fraud, but EOBs could also shed light on an illegal activity that costs policyholders and injured workers. &

More from Risk & Insurance

More from Risk & Insurance

2018 Risk All Stars

Stop Mitigating Risk. Start Conquering It Like These 2018 Risk All Stars

The concept of risk mastery and ownership, as displayed by the 2018 Risk All Stars, includes not simply seeking to control outcomes but taking full responsibility for them.
By: | September 14, 2018 • 3 min read

People talk a lot about how risk managers can get a seat at the table. The discussion implies that the risk manager is an outsider, striving to get the ear or the attention of an insider, the CEO or CFO.


But there are risk managers who go about things in a different way. And the 2018 Risk All Stars are prime examples of that.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Goodyear’s Craig Melnick had only been with the global tire maker a few months when Hurricane Harvey dumped a record amount of rainfall on Houston.

Brilliant communication between Melnick and his new teammates gave him timely and valuable updates on the condition of manufacturing locations. Melnick remained in Akron, mastering the situation by moving inventory out of the storm’s path and making sure remediation crews were lined up ahead of time to give Goodyear its best leg up once the storm passed and the flood waters receded.

Goodyear’s resiliency in the face of the storm gave it credibility when it went to the insurance markets later that year for renewals. And here is where we hear a key phrase, produced by Kevin Garvey, one of Goodyear’s brokers at Aon.

“The markets always appreciate a risk manager who demonstrates ownership,” Garvey said, in what may be something of an understatement.

These risk managers put in gear their passion, creativity and perseverance to become masters of a situation, pushing aside any notion that they are anything other than key players.

Dianne Howard, a 2018 Risk All Star and the director of benefits and risk management for the Palm Beach County School District, achieved ownership of $50 million in property storm exposures for the district.

With FEMA saying it wouldn’t pay again for district storm losses it had already paid for, Howard went to the London markets and was successful in getting coverage. She also hammered out a deal in London that would partially reimburse the district if it suffered a mass shooting and needed to demolish a building, like what happened at Sandy Hook in Connecticut.

2018 Risk All Star Jim Cunningham was well-versed enough to know what traditional risk management theories would say when hospitality workers were suffering too many kitchen cuts. “Put a cut-prevention plan in place,” is the traditional wisdom.

But Cunningham, the vice president of risk management for the gaming company Pinnacle Entertainment, wasn’t satisfied with what looked to him like a Band-Aid approach.


Instead, he used predictive analytics, depending on his own team to assemble company-specific data, to determine which safety measures should be used company wide. The result? Claims frequency at the company dropped 60 percent in the first year of his program.

Alumine Bellone, a 2018 Risk All Star and the vice president of risk management for Ardent Health Services, faced an overwhelming task: Create a uniform risk management program when her hospital group grew from 14 hospitals in three states to 31 hospitals in seven.

Bellone owned the situation by visiting each facility right before the acquisition and again right after, to make sure each caregiving population was ready to integrate into a standardized risk management system.

After consolidating insurance policies, Bellone achieved $893,000 in synergies.

In each of these cases, and in more on the following pages, we see examples of risk managers who weren’t just knocking on the door; they were owning the room. &


Risk All Stars stand out from their peers by overcoming challenges through exceptional problem solving, creativity, clarity of vision and passion.

See the complete list of 2018 Risk All Stars.

Dan Reynolds is editor-in-chief of Risk & Insurance. He can be reached at dreynolds@lrp.com.