Posts Tagged ‘fraud’

Social Media as Evidence: Good Times Yield Bad Results

Monday, February 6th, 2012

ABC news has picked up a story out of Arkansas: Zack Clement suffered a hernia while moving a refrigerator for his employer, Johnson’s Warehouse Showroom. He underwent multiple surgeries, but the pain lingered, so he filed for a continuation of benefits. Among the pieces of evidence at his trial were party photos posted on his Facebook page, which show Clement drinking (and little else). When his claim for reinstatement was denied, Clement appealed, citing the unfairness of the Facebook evidence.
ABC wrote as follows:

In an opinion, written by Judge David M. Glover, the Arkansas Court of Appeals states: “We find no abuse of discretion in the allowance of photographs. Clement contended that he was in excruciating pain, but these pictures show him drinking and partying.”
“Certainly these pictures could have a bearing on a Clement’s credibility, albeit a negative effect that Clement might not wish to be demonstrated to the ALJ or the Commission, ” Glover continues. “We hold that there was not an abuse of discretion in allowing the photographs.”

Justice in the Details
At first glance, the judge’s comments might be cause for alarm. An injured worker suffering from chronic pain might well be capable of having a few drinks with friends. (One can only hope that the alcohol does not interfere with any prescribed -or unprescribed – pain medications.) If the photos were the primary evidence of Clement’s condition and the basis for denying the claim, Clement would have good reason to object. However, this is not the case.
In the course of his carefully reasoned findings, Judge Glover reviews in detail the medical history of Clement’s claim. Even after multiple surgeries and several changes in treating doctors, Clement complained of ongoing pain. Extensive medical testing revealed no abnormalities and no evidence for the pain itself. He has been released to full duty. It is this detailed history and the lack of medical evidence that lead Glover to conclude that any further treatment would fall outside of the workers comp system. The Facebook photos are by no means the foundation of his findings. Nonetheless, he decides that the photos are a legitimate piece of the case file and admissable as evidence.
In my limited experience, Facebook seems to be a platform for superficial news and, for the most part, images of the good times. It is difficult to imagine that Clement would have used this public forum to post pictures of himself suffering excrutiating pain. If he had chosen to do so, this might have provided evidence in his favor. However, his friends would likely have chided him for being such a downer and even then, the court might have dismissed the images as theatrical exaggeration.
Facebook may now be the preferred means of presenting our personal narratives, but it is unlikely to help us make our case in a court of law.

Holiday Health Wonk Review, news notes, and holiday humor

Thursday, December 22nd, 2011

Gary Schwitzer makes his hosting debut with Unwrapping early presents, wrapping up ’11 Health Wonk Review series. Gary is the publisher of the excellent HealthNewsReview.org and its associated Health News Watchdog blog – take a look around while you are there.
Absence Management – The Disability Management Employers Coalition and Liberty Mutual recently released a set of best practice for absence management and easing the transition back to work after a disability leave. Download a whitepaper on Best Practices in Return to Work or view Taming the Intermittent Beast, a one-hour webinar on managing intermittent leave.
Support a good guy – Joe Paduda explains why you should join the Friends of Sandy Blunt on LinkedIn.
Desperate Housewives – Reality just got a little harsher for a would-be reality TV star caught in a huge California workers comp scam, She and her husband were charged with $30 million in premium fraud. “The couple gained notoriety in 2010 after fraud investigators raided several properties they owned and found luxury cars including a Bentley, two Ferraris, $500,000 in jewelry and $51,000 in cash. They also found an application for Kile to appear on the television show.”
Going and coming – Injuries that occur while traveling to and from work generally are not compensable. There are several common exceptions to this “going and coming” rule – if an employer provides transportation, if traveling is part of the normal course and scope of an employee’s job (such as a salesperson), or if the employee is on a “special mission” for the employer. Risk and Insurance reports on a recent benefit denial by the New Jersey Superior Court, Appellate Division in a case where a company president was invoking the “special mission” exception for an injury that occurred during an early trip to work for a special meeting. In denying the appeal, the court reasoned that the exception did not apply because the president was not required to be away from the restaurant’s usual place of business and he did not have “identifiable time and space limits on his employment.”
Up in smoke – Roberto Ceniceros posts about a denied claim involving a landscaper injured after a fall from a tree. Ceniceros notes that, “A urine sample taken at the hospital the day after the Tennessee man fell showed he had an intoxicant level 50 times beyond the threshold for a positive result, leading a doctor to describe him as a chronic pot user.” The court concluded that while the employee was not guilty of willful misconduct, his intoxication was a proximate cause of the injuries.
Hope for PTSD relief?Wired has an interesting article on a how the Navy is testing neck injections to relieve PTSD. The unorthodox procedure, which is called stellate-ganglion block (SGB), has secured immediate relief for some PTSD sufferers.
NYWCB Web change – Effective December 20, the New York State Workers’ Compensation Board (WCB) updated its website to use the standard “ny.gov” domain naming convention – the new web address is www.wcb.ny.gov. WorkersCompensation.com has more detail about related email changes.
On the lighter side: Holiday roundup
In honor of the holiday season, we’ve put together a grab bag of some fun holiday links. We wish all our friends the best for the season!

Health Wonkery and other news of note

Thursday, October 13th, 2011

Health Wonkery – Christopher Fleming hosts Health Wonk Review Unadorned at the Health Affairs Blog. Check out the latest from the best of the health policy bloggers. And if healthcare is of concern to you, Health Affairs should be a regular read!
Bad behavior – When it comes to bad behavior, we are equal opportunity finger pointers. We’ve seen fraudulent employees. We’ve seen terrible bosses. We’ve seen bad brokers, bad insurers, and quack docs. Fraud is a game everyone can play and no one has a corner on the stupidity market. Among the recent crop of losers, we start with a post from HR Web Cafe about a mean-spirited employer who got a smackdown from a labor judge for a rather unusual contest he used to “motivate” his workers to better performance. And also on the employer side of the house, we have a classic case of premium fraud by a California tree trimming business that failed to pay workers comp premiums, under-reported payroll by more than $2 million, and failed to pay taxes. On the employee side, Roberto Ceniceros tells the story of nightmare employees who let rage over a small thing turn into a tragic event.
Spying on Employees – Employment law attorney Heather Bussing offers some useful guidelines on employee privacy and what employers can monitor. This is a really good overview. We encourage reading the entire article. Here’s some of her take-aways: “If the employer owns the system, hardware or both, the employer can monitor employees’ use of it, including personal files and communications.
If the employee owns the system and hardware, the employer’s ability to view and obtain personal files depends on the whether the employee is using it at work, whether the employer has a legitimate interest in viewing the communication, what the state’s laws and employer’s policies are, and what the employee’s objective expectations of privacy are.”

Repackaged Drugs – Joe Paduda has been in the forefront of a crusade against the practice of repackaged drugs, which has been promoted as a convenience for patients, but in practice is a costly work around for fee schedules. This is one of those under-the-radar issues that many employers may not see, but in states where the practice is allowed, it is costing big bucks. Joe first talked about the practice in 2006, and has been regularly posting updates. He brings you the latest from the eye of the storm: Is Florida finally going to fix its (repackaged) drug problem?
OSHA – OSHA has recently issued Nail Gun Safety – A Guide for Construction Contactors. OSHA says that nail gun injuries are responsible for approximately 37,000 emergency room visits annually. “These injuries occur as a result of unintended nail discharge; nails that bounce off a hard surface or miss the work piece and become airborne; and disabling the gun’s safety features, among other causes. Injury prevention is possible if contractors take steps such as using full sequential trigger nail guns; establishing nail gun work procedures; and providing workers with personal protective equipment.”
Child Workers – Celest Monforton gets the bureaucratic runaround when she tries to find out why child labor regulations were delayed by the White House’s Office of Management and Budget. A Labor Department update to the 40-year old regulations were stalled for 9 months – meanwhile, two teens lost legs in a grain auger accident, precisely the type of event that made such an update to regulations imperative.
Excess Loss Development – NCCI had released a new research report on Workers Compensation Excess Loss Development. They note that, “Large loss and excess development is relevant to calculating excess loss factors used in retrospective rating.”
News Briefs

Cavalcade of Risk & other news briefs

Wednesday, August 24th, 2011

Nina Kallen hosts this week’s Cavalcade of Risk at Insurance Coverage Law in Massachusetts – check it out.
Other noteworthy new briefs:
Business Insurance has had a complete online overhaul – here’s a guide to the new BusinessInsurance.com
HealthLawProf Blog covers the intersection of pharmaceuticals and online media in a pair of recent posts worth checking out: Social Media and Drug Promotion and Do No Evil: Googling Canadian Drug Imports.
Roberto Ceniceros: Top 20 largest workers comp insurers
Dave DePaolo: The 5 Stages of Work Comp Death
Jon Gelman: What to Do During an Earthquake
Joe Paduda: Work comp claim reserves – not good, but not too bad either
Claims Journal: “Fraud Dog” to Bring Insurance Fraud Cases to Reality TV
MEMIC Safety Blog: The Bite Stuff: Dogs not always a worker’s best friend
Safety Daily Advisor: Are Your Exit Routes OSHA Compliant?
New York Times, Room for Debate: Could Farms Survive Without Illegal Labor?

Cavalcade of Risk and some quick links

Thursday, May 7th, 2009

Joe Kristan is hosting the latest edition of Cavalcade of Risk at his Tax Update Blog. Unsurprisingly, swine flu is a common themes in this issue – but there’s a grab bag of other risk-related topics, too – check it out!
Other links of note:
May is Electrical Safety month. OSHA resources on electrical safety
Does a focus on employee wellness pay off? The Wellness Calculator will help you to evaluate potential savings.
NIOSH: Safety and Health in the Horse Racing Industry.
Dissecting Fraud – a podcast from Legal Talk Network. Host Alan S. Pierce discusses employer fraud with his guest Attorney Michael I. Fish.
Various newsfeeds on Swine Flu – a good resource to keep you up to date on any developments.

Cavalcade of Risk #66 and sundry workers comp news notes

Wednesday, December 3rd, 2008

Cavalcade of Risk #66 is posted at Political Calculations, where the blogger who goes under the alias of Ironman takes an innovative approach by offering two editions with all posts presented in a grid-like format, applying a blog post rating system. See Investment Grade and Kit and Caboodle versions for this week’s entries.
State cost variationsRisk & Insurance looked at variations in state workers comp costs for employers in all 50 states and determined that in this regard, Arizona is the most favorable place for employers. Other states with low workers’ comp costs include Arkansas, Indiana, Virginia, North Dakota and South Dakota. Michael Keating reports on survey results and discusses various structural factors within a state system that contribute to workers compensation costs. Note: my colleague Jon Coppelman was quoted in the article.
Ohio – another scandal brewing? – According to The Cleveland Plain Dealer, “Federal agents are investigating links between Cuyahoga County Auditor Frank Russo and a politically connected firm that manages medical claims of injured workers and employed Russo’s son, according to subpoenas and interviews.” It’s a complicated story, and apparently part of a larger story on a federal investigation into Cuyahoga County corruption.
The $18 million fraud charge – The CEO and CFO of Staffing Services, a firm based in southern California, are being charged with conspiracy to defraud the State Compensation Insurance Fund of $18 million in premium payments. While news reports aren’t specific as to how, the pair are being charged with providing false information. While we can’t know specifics in this case, such charges often relate to misclassification of employees. The stakes for this type of fraud are high – if convicted, each of the two men face the potential for 20 years in prison and up to $40 million in fines.
Weathering the storm – worth your time: The Financial Crisis & the P/C Insurance Industry: Challenges Amid the Economic Storm – a presentation and analysis by Robert Hartwig of the Insurance Information Institute. This was presented to the Excess/Surplus Lines Claims Association in late September.
Blood-borne disease and healthcare workers – the Centers for Disease Control has recently issued the results of a study showing that health care workers face an increased risk of dying from blood-borne diseases, such as HIV, and related illnesses compared with workers in other fields. The study encompassed data over a 20-year period, including 248,550 deaths from HIV/AIDS, hepatitis B and C, liver cancer and cirrhosis. Researchers were unable to determine how much of the increased risk is related to occupational versus non-occupational exposure.

Health Wonk Review, help for paraplegics, crane safety, PBM shakeups and more

Thursday, July 24th, 2008

Health Wonk Review – David Williams has a snappy new edition of Health Wonk Review posted over at Health Business Blog. Because HWR took a little summer hiatus last week, this issue is packed – and it’s all organized in a great format that allows for quick and easy scanning. David’s witty summaries are fun – check it out, it’s a good edition.
Cool development in assistive technology for paraplegics – Radi Kioff is a 40-year-old Israeli who spent the last 20 years in a wheelchair after being shot in the back while serving in the Israel Defense Forces. The video in this post shows him walking and climbing stairs with the help of a light wearable brace called ReWalk, a system designed to help paraplegics regain mobility. The system is undergoing clinical trials in Israel and scheduled to begin US trials in November. It’s great to see such a promising development for those who have suffered spinal chord injuries. (Thanks to Medgadget for the pointer.)
Crane fatalitiesrawblogXport points us to the story of an eyewitness account from one of the workers who escaped in last week’s LyondellBasell’s crane collapse that killed 4 workers and injured 7. The article’s sidebar recounts the number of crane accidents so far this year. Celeste Monforton posts more on this and other crane fatalities at The Pump Handle.
PBM shakeup – Joe Paduda has the skinny on PMSI’s recent sale to investment firm HIG. Find more detail in his post PMSI sale – the numbers.
Disgruntled claimant on trial for murder – When you’ve worked in insurance for awhile, you know that a lot of anger and tension can surface around money matters, even more so when things reach a litigation stage. And many a claims manager can cite a litany of stories about angry calls or threats from disgruntled claimants who feel they’d had a raw deal. A story from California today reports on the trial of a claimant who shot and killed his own attorney two years ago. Angus McIntyre was very angry at his workers compensation settlement. He had reportedly threatened and harassed his claims adjuster in e-mails and voice mails on numerous occasions and apparently also held his attorney responsible. One evening he walked into that attorneys office and shot him in the head. Terrible story, and a sad reminder that violent threats must never be taken lightly.
Provider jailed for fraud – It’s 12 months jail time for a New York social worker who double-billed insurance companies to the tune of $102,000 for health care services. A health care provider may bill two insurance companies for the same treatment, but is obligate to disclose the double billing and cannot keep amount beyond 100 percent of the cost of the service. The conviction is not surprising, but I can’t recall too many insurance fraud cases that result in jail time. It’s also a reminder that fraud comes in many flavors – it is not synonymous with “employee.”
Fall protection – Brooks Schuelke posts an overview of fall protection systems at InjuryBoard.com. Falls are one of the most common source of injury and death in construction work. (Related: our prior post on human fall traps)

How not to commit fraud

Tuesday, March 25th, 2008

If you are a corrections officer on leave for a workers compensation injury, you should probably avoid getting dressed up in drag and competing in a public 40-yard dash, running in high heels. Nor should you work two other jobs while collecting workers comp benefits due to your inability to work. Come on people, you will have to do better than that – this is the work of fraud amateurs!
There is no shortage of resources for how to bilk your boss on the web, but many of them sound rather dubious. How to fake an injury is outright lame, but there is a little more thought put behind How to call in sick when you just need a day off – right down to short how-tos for creating illness sound effects. This would probably not faze your average HR director – they’ve heard everything. Every year, CareerBuilder does a survey to learn the worst sick day work excuses for the year. Forbes has an interesting slide show “Yeah, Right on the topic of work excuses.
There are probably few among us who haven’t taken a day or two here or there in the course of our careers, but there are some “excuse-mills” online who are upping the ante a bit. These are vendors who provide templated excuse letters for doctor visits, jury duty, and the like. For $24.95, My Excused Absence offers a series of templates, including an emergency room visit and a medical evaluation form. Of course, these are “for entertainment purposes only.” Phoney Excuses bills its products as “novelty excuses.” You can get a doctor’s note for $19.95 and the site offers explanations of the “legal aspects of a doctor’s note” and how doctor’s notes are important in workers comp, disabilities, or SSI. Fake Doctor’s Excuse are a bargain in comparison, only $9.95. They suggest their notes are for entertainment or novelty only, and might be suitable for framing. You can hang one in your cubicle. These forms sound pretty bogus to us – somehow the people who rely on them sound like also they might be the type of people to dress up in drag to run a high-heeled road race while out on disability.
Fraud is no laughing matter – it costs money for all the honest folks. Plus, in most jurisdictions, it is a felony. That being said, we’ve always found that estimates of worker fraud in workers comp are usually overblown. While there is indeed premeditated fraud and employers and insurers would do well to be vigilant and prosecute it vigorously when found, we find more abuse that falls in the category of malingering. An injury did indeed occur, and after time, the worker may fall into disability syndrome. It has been our experience that employers who have a good workers comp program encompassing both injury prevention and point-of-injury and post-injury management aren’t as susceptible to fraud as those who don’t.
Here are a few practices we would recommend for employers to deter fraud:

  • Don’t adopt a suspicious approach. Did you ever have a teacher who made draconian rules for your entire class just to punish one or two bad apples? Those of us who did all resented it. Don’t build punitive or mistrustful programs to defend against the few bad apples in your workplace and risk alienating the vast majority of good people who work for you. Be fair, open, consistent, and honest. Treat the bad apples as exceptions not the rule.
  • Explain the rules. Make workers comp a part of your orientation program just as you would any other benefit. Most employees (in fact, many employers) don’t understand what its purpose is or how it works. Better you explain it than the daytime or late night TV lawyers. First, explain your safety policies and your expectation that these will be followed diligently. Then explain what will happen should an injury occur. Explain how the benefits work and about your return to work program and your intent to take the best possible care of any injured workers. At the same time, note that fraud is a felony and will be aggressively prosecuted. If there are any professional fraudsters, they may move on to an easier target if you alert them to your tightly managed program.
  • Stay connected. If an employee is out for more than a few days for an injury or illness, stay in good communication. Be supportive and let the employee know you value them and want them back on the team. Establish goals for return to work.
  • Conduct accident analyses on every accident. It’s important to know what happened so that you can prevent future similar accidents. We use the term “analysis” rather than “investigation” intentionally – this should not be about blame, but about establishing the facts of the event and learning how to keep other workers safe. Train your managers to be alert for red flags that might indicate fraud and, if found, alert your insurer.

But the single best tip for preventing fraud?
Be a great employer who earns the respect of your employees.
For more information on insurance fraud:
The Coalition Against Insurer Fraud has links to insurer fraud bureaus, as well as a variety of other resources and organizations.

Justice for Judge Joyce?

Tuesday, August 21st, 2007

For unadulterated audacity and out and out gall, Michael Joyce, a Pennsylvania Superior Court Judge, may currently hold the lead in this year’s gold medal competition.
Scanning Insurance Journal Online today, we learned that last Wednesday, federal prosecutors indicted Judge Joyce for mail fraud and money laundering, claiming that he cheated the Erie Insurance Group and State Farm Insurance out of $440,000, a charge the judge denies as he protests his innocence.
Judge Joyce came to our attention not for what he is accused of doing, but for how he is alleged to have done it. According to the indictment, Judge Joyce, while parked in his Mercedes-Benz sedan in 2001, was rear-ended by an SUV traveling about 5 mph. That’s right, five miles per hour – I’ve crested middle age and I still can run that fast.
Following this horrendoma of a crash, no police or medics were called to the scene, yet the Judge asserted that the impact rendered him unable to exercise or play golf for more than a year. He was paid $390,000 by his insurer, the Erie Group, and $50,000 by State Farm, which insured the poor SUV driver.
Unfortunately for Judge Joyce, the indictment alleges that, not only was he playing 18- hole rounds of golf shortly after the “accident,” but he was doing it on vacation in Jamaica. It also claims that he was scuba diving, inline skating (I’ve never gotten the hang of that) and working out in his local Gym. The man must be a medical and physical marvel.
At any rate, Judge Joyce has announced that, infirmities and indictments notwithstanding, he will continue his run for a second ten-year term in this fall’s coming election.
The state’s Supreme Court last Friday suspended Judge Joyce, with pay, “to protect and preserve the integrity of the Unified Judicial System, etc…”
And what, you may ask, did Judge Joyce do with his new-found wealth? Well, according to the indictment, he used it to buy a motorcycle and make down payments on a house and an airplane, which, of course, he intended to fly. We know that, because on the application for his pilot’s license he asserted that he had no injuries or physical problems that would preclude his flying up, up and away, which he then did about 50 times.
There is terrible injustice here. We’ll let the courts decide whether it has been done to the Judge, or by him.

A proliferation of premium fraud?

Friday, February 18th, 2005

You know that workers comp is a problem when the so-called mainstream media begin to take note. Normally, workers comp is a topic relegated to the trade journals or the deepest nooks and crannies of the business pages in the daily news. Contrast this with the early 1990s, when headlines screamed about runaway costs and story after story included tales of employers closing shop or moving operations from one state to another due to the burdens of workers compensation.
This month, Forbes features a story about current workers comp woes, and it is interesting to note that this story entitled Workers Con deals primarily with the proliferation of premium fraud.
The story cites a number of examples: a FL PEO that pocketed $600 million in premium leaving employers and their employees uncovered; a California janitorial firm that underreported the number of employees by several hundred; a Texas janitorial firm that played a shell game by switching employees between a number of companies; an Illinois temp service that misclassified warehouse workers as clerical workers, and a California PEO that hid more than a million dollars in wages by calling them “partnership distributions.”
Is employer fraud actually more widespread in reaction to rising costs, or are state regulators just taking a harder look now that reforms have wrung the fat out of other aspects of the system? Hard to say for sure since fraud statistics – both on the employer and the employee side – are often difficult to quantify and generally rather squishy at best. The Forbes article says yes, if the rising number of suits filed by state and private insurers is an indicator.
One thing is for sure – fraud schemes hurt us all: the injured employee is often left without recourse or forced to bring suit to pay for medical care; the honest employer pays higher premiums as insurer costs “trickle down.” In addition, fradulent employers often enjoy an unfair competitive edge. By illegally evafing a cost of business tht can be substantial, fraud perpetrators can offer lower prices in competitve or bidding situations.
Employers that hire contract workers through a third party, such as through a temp agency, or a leasing company, and employers who purchase workers comp packaged in a bundle of other services, such as in a PEO, need to be particularly alert to the issue of coverage lest they find themselves holding the bag. The California Department of Industrial Relations offers an employer tip sheet on ensuring the legitimacy of workers comp coverage. It is worth kicking the tires before cementing any arrangements: check business licenses and verify coverage with a local insurance authority.
Related:
Florida uninsured employer jailed for fraud after two deaths

West Virginia is cracking down on deadbeat employers


Ohio getting tough on premium compliance


Insurer insolvencies, guaranty funds, and joint and several liabilities between temp staffing agencies & contracting employers