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

By: | October 15, 2018

Roberto Ceniceros is a retired senior editor of Risk & Insurance® and the former chair of the National Workers' Compensation and Disability Conference® & Expo. 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. &

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