Lawyers promote fraud bureau’s tip hotline

Rarely do you associate trial attorneys with anti-fraud efforts, but a law firm in Florida is doing just that with a new public service video warning consumers about door-to-door scammers looking to sign up auto accident victims.

“If you’ve been in an accident and a stranger knocks on your door to get you to sign up for a doctor or lawyer, they’re breaking the law. Some of these criminals even have the nerve to walk into your hospital room. They may even text you to get your case. They probably illegally obtained your police report…These people are not only annoying, they’re trying to steal from you. Don’t sign anything. Instead call the insurance fraud hotline. You could be entitled to a reward.”

The video then flashes the fraud hotline number of the Florida Division of Insurance Fraud.

Soliciting accident victims within 60 days of a crash is a crime in the state, thanks to a law enacted a few years ago that was pushed by fraud fighters in Florida and the Coalition.

Illegal soliciting still occurs, although much less frequently.

So what’s the motivation behind the Rubenstein Law firm in sponsoring this PSA? Are they trying to cut the crooked lawyers out of the action to gain more clients for themselves? Or perhaps they truly do care that solicitation scams hurt consumers.

Whatever their motivation, we commend the law firm for supporting anti-fraud efforts in the Sunshine State.

About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.

Humble and brazen health claims

$100,000 for ear wax removal? $46,000 to remove a bunion? Those are some of the outrageous charges cited this week by a judge who awarded Aetna $51.4 million from a Houston surgical hospital.

In a two-year period, Humble Surgical Hospital in Houston, Tex. billed the insurer more than $68 million. Humble billings these are not.

The five-bed surgical center, created by 10 doctors in 2010, charged patients in-network rates but billed the insurer at out-of-network rates. Some bills were as high as ten times what other hospitals charge.

Why did the insurer paid $41 million before challenging Humble’s bills? Aetna isn’t known for throwing money at medical providers, and it sponsors a good SIU team. (Full disclosure: Aetna provides health insurance for Coalition staff.)

Perhaps part of the problem is prompt-pay laws in many states that encourage insurers to “pay and chase” suspect claims. Some states grant delays in paying claims when fraud is suspected. Others do not.

The Humble claims spanned 2010 to 2012. Since then, new technologies such as predictive modeling have been developed to help insurers detect claim anomalies quicker and better. Another new development is the sharing of suspect claims information through the Healthcare Fraud Prevention Partnership.

As someone who pays a hefty monthly premium for health insurance, I hope Aetna and other health insurers use all the anti-fraud tools at their disposal to keep such brazen claims practices in check.

About the author: Dennis Jay is executive director of the Coalition Against Insurance Fraud.

Fraud of the Month

Jamal Abu Samak blew up a New Orleans grocery store, firing up an insurance arson that went tragically wrong and incinerated a tenant living upstairs.

Samak has lodged unappealing appeals for years in Hail Mary efforts to reduce his life sentence in federal prison.

A federal court denied Samak’s latest bid in January 2017 after years in jail. He launched the botched scam in 1991. Still, that decades-old case reveals the chilling potential of insurance arsons.

The arsonists often botch attempts to burn down homes or businesses for insurance paydays. Think napalm strike: Unstable gas fumes explode, or clumsily set fires simply race out of control. Nearby homes and businesses are gutted. Innocent people are maimed or burned alive.

The owners of the Community Grocery Store hired Samak and his sidekick Samuel Joseph Lee to torch the place. The owners raised their insurance on the store’s contents to $75,000 from $50,000 just two months before the fire.

Filled gasoline containers

Samak and Lee filled four grey plastic containers of gasoline on the fatal night. The containers were lethal munitions — each held fully five gallons of gas.

The pair entered through an unlocked side door. They emptied two containers inside the store, and the other two in an upstairs apartment.

Samak plotted to make Lee take the fall. They stashed the empty containers in the getaway car’s trunk, and Samak sent Lee back inside to turn off a store light. Lee knew something was wrong just as he stepped inside. Samak had followed him, tossed a lit match inside and slammed the door shut — trapping Lee inside.

The building exploded, throwing Lee back outside the store and blowing out the store windows. Still, he survived. Samak received third-degree burns over much of his body. Neighbors thought a bomb went off.

A man sleeping in an apartment above the store was incinerated. Tenants James Quincy Whitehead and Melanie Williams were blown down the stairs, yet barely escaped the flames by crawling through a small hole in the wall.

Fire starter’s appeal denied

Lee pleaded guilty early on and gladly cooperated with prosecutors to finger the man who betrayed him. Samak was handed life in federal prison.

Samak was rehabilitated, he claimed in his latest appeal for early freedom. The court disagreed, sending Samak back to finish his life term.

In another bungled insurance fire, Bob Leonard helped open a natural-gas line in an Indianapolis home. A timer rigged to a microwave triggered the unstable fumes. It was a $300,000 insurance plot. The house detonated. A thunderous explosion burned next-door neighbors Jennifer and Dion Longworth alive, collapsing their house.

Much of the neighborhood was leveled, traumatizing families up and down the tree-lined streets. Leonard received life without parole in federal prison — and a coveted spot in the Insurance Fraud Hall of Shame.

Ill-conceived Washington bill would harm fraud fight, consumers

A valued and effective anti-fraud tool that benefits consumers would be hobbled under a misguided bill in Washington State. It’s called the examination under oath, or EUO.

Insurers interview claimants, who are legally bound to answer questions truthfully. Thoughtful questioning by trained investigators can expose lies and mistruths by claimants trying to hide suspected scams. Telltale clues often can be uncovered only by EUOs. This is why they’re crucial to exposing often well-hidden crimes.

Many fraudsters don’t even bother showing up for an EUO, which helps insurers halt suspected claim payments and close out bad claims.

Under the Washington bill, the statute of limitations for using EUOs would begin when a suspected scam happens, instead of when an insurer discovers it. This strict time limit imposes arbitrary legal handcuffs, regardless of the actual crime-fighting need.

The bill’s stated goal is to protect consumers from supposed insurer fishing expeditions — though where’s the proof of fishing trips? We’ve seen no evidence.

“This would set up a system where insurers would be forced to pay suspect claims before they could adequately decide whether the claim is legitimate,” the Coalition wrote the chair of a subcommittee that’s vetting the measure.

Insurers use EUOs judiciously, only when clear red flags of possible fraud are uncovered first. Companies have neither the time nor budgets to conduct large volumes of EUOs on all claims.

The Washington bill thus would backfire. Insurers would be forced to pay suspicious claims because they wouldn’t have time to fully investigate for warning signals. More bogus claims means more crime and higher premiums for honest insurance consumers in Washington.

If an insurer is abusing the privilege of compelling claimants to appear at EUOs to answer questions, regulators and existing law have existing remedies to punish them. Curtailing this important tool across the board is not in the best interest of public policy.

The Coalition will publish a white paper on EUOs later this year. We will shed more light on how EUOs work, and why we need them to work effectively as anti-fraud tools.

About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.

8 worst scammers of 2016 chosen

A home explodes … hundreds of setup car crashes churn fake whiplash claims … a helpless cerebral palsy patient starves to death.

All to steal insurance money.

The year’s extreme schemers are among the eight worst insurance criminals of 2016. They were elected to the Insurance Fraud Hall of Shame by the Coalition Against Insurance Fraud.

The Shamers reveal the year’s most brazen, bungling or vicious convicted insurance swindlers.

Insurance fraud is one of America’s largest financial crimes. Scams steal at least $80 billion annually, and many insurers say fraud is growing. Many consumers believe it’s ok to inflate claims, and they’re at risk of committing this crime, research reveals.

Victims are traumatized, maimed, lose their savings and have their credit ruined. Some die.

Exploding home. Two neighbors were incinerated and an Indianapolis subdivision nearly leveled when Bob Leonard helped accidentally blow up a house in a botched $300,000 home arson. “Oh well, they died,” Leonard said of the next-door couple. Sentence: life without parole.

Faulty no-fault con. Michael Danilovich masterminded a $279-million attempted looting of auto insurers with hundreds of staged car crashes in the New York City area. It was the largest no-fault auto scam in U.S. history. Crooked medical providers deluged insurers with fake whiplash claims. Sentence: 25 years.

Deer deception. Mob associate Ron Galati used deer parts and blood to gore up cars and claim the vehicles crashed into deer. Galati’s Philadelphia body shop made $5 million of inflated damage claims from phantom deer and other collisions. He even took a sledgehammer to cars, and plotted to have a witness shot. Sentence: up to 29 years.

Lawless libido. John Alfonzo Smiley was shot and paralyzed while arguing with a couple after he and his wife swapped sex with them at a San Francisco swingers club. Smiley claimed $4 million of workers comp money. The corrections officer contended — with a straight face — that a former inmate with a grudge shot him. Sentence: eight months.

Samaritan scam. Shannon Egeland had his son shotgun him in the legs to scam his disability policy. Egeland’s legs were shattered and a foot amputated. He claimed he was ambushed after stopping to help a stranded pregnant motorist near Caldwell, Idaho late one night. Sentence: awaiting jail term.

Killer caregiver. Makayla Norman was a cheerful 14-year old — and bedridden with cerebral palsy. The Dayton teen’s home caregiver Mollie Parsons starved her to death while making large Medicaid claims for supposedly steady care. Makayla weighed 28 pounds. Sentence: 10 years.

Baby murdered. Moussa Sissoko shook his infant son Shane to death for $750,000 of life insurance he took out on the baby. The Washington, D.C.-area man seemed like a caring father, yet plotted Shane’s death from the start. Sentence: 50 years.

Mental error. Dr. Fernando Mendez-Villamil made $60 million in false Medicare and Medicaid claims for mental-illness drugs. The Miami physician plied patients with powerful drugs whether or not they needed the meds. Insurance fraud bought him a mansion and art collection. Sentence: 12 years.

Fortunately, a small army of fraud fighters is committed to turning the corner on this crime. Most insurers have agile investigators, and so do most states. Technology even can predict some scams. And most Americans are honest.

Progress is being made. Yet the insurance money’s too good and attracts too many scammers for easy answers. As the Shamers show us, sometimes a cold jail cell is the best deterrent.

About the author: Jim Quiggle is director of communications for the Coalition Against Insurance Fraud.

Will election changes boost anti-fraud efforts?

The late David Bowie sang about “ch-ch-ch-ch-changes” in his memorable rock song. This theme could define anti-fraud legislation in 2017.

A new year always brings aspirations for success. Same with fraud fighters seeking new state laws clamping down on insurance swindlers.

Several statehouses are opening this week, and anti-fraud bills already are being docketed for debate. All amid many ch-ch-ch-ch-changes in leadership this big election year.

New state legislatures, governors and insurance commissioners have taken office. A new U.S. president and Congress could change the face of anti-fraud efforts. We’re watching closely for signals on how they’ll fund scam-busting programs for Obamacare, Medicare and Medicaid.

The anti-fraud community needs to help policymakers see that their constituents benefit greatly from robust, well-funded anti-fraud efforts.

So here’s our bucket list for 2017:

  • Michigan finally creates a state insurance-fraud authority to go after widespread auto fraud rings in the state;
  • New York’s legislature sets aside turf wars to clamp down on staged-crash rings and shady contractors; and
  • Congress and the Administration properly fund the Healthcare Fraud Prevention Partnership. It has saved hundreds of millions of dollars by uncovering scams against private health insurers and taxpayer-funded health programs such as Medicare. And that’s just the beginning.

Other states will take up the call for stronger anti-fraud laws as well. The Coalition will work with our partners to get those laws onto the books.

We’re on board — will you be?

About the author: Howard Goldblatt is director of government affairs for the Coalition Against Insurance Fraud.

Video: The Psychiatrist and the Selfie (Sneak Peek)

Patient attempts to kill his psychiatrist since his cousin–the psychiatrist’s ex-girlfriend–told him to for the psychiatrist’s life insurance policy.

Full vid & story: http://www.cbsnews.com/news/jacob-nolan-case-was-young-man-brainwashed-into-attempted-murder-of-psychiatrist/ 

 

Study: Fraud spreading, tech helps apply brakes

tech_study_mobile_homeTechnology is a valued ally of insurers in combatting insurance fraud. And for good reason — this crime is growing.

These are two findings of the Coalition’s newest study of how insurers use tech to combat billions of dollars in fraud each year.

The study is one of the surest barometers of progress in how insurers wield technology against fraudsters. It’s also a window into scams that most concern property-casualty insurers, and how they’re responding.

Fraud is climbing, more than 60 percent of insurers say in the study. Cyber-fraud is a newer problem area that insurers are using tech tools to combat.

Technology is especially adept at helping uproot auto-insurance scams — long among the biggest losses inflicted on insurers. High auto premiums are an emotionally charged issue for many consumers. Analytics help keep auto premiums more in line by controlling bogus crash claims. This does a service to drivers who pay their premiums honestly.

Organized rings, crooked medical providers and drivers who falsely register vehicles in other locales to lower their auto premiums are priority schemes analytics play an important role in counting, the study shows.

Fraud-busting tech plays an ever-growing role for insurers. Tech seems to have turned the corner internally. Anti-fraud departments have done a good job of selling upper management on the business benefits of tech in helping stem large losses. Fraud fighters see less need to keep justifying tech, and fully one-third of insurers expect larger IT budgets in 2017.

Predictive analytics — which can forecast the likelihood of certain fraud crimes — continues rising as a star player. Powerful software also helps insurers automate detection of false claims, thus making fraud-busting faster and more-efficient than ever.

For all the gee-wiz headlines that cool tech breeds as a kind of new-era fraud-busting messiah, we should remember that tech tools are mostly buckets of code and data until humans make sense of the findings.

More to the point … fraud fighters also bring an unmatched 360-degree ability to size up fraud investigations from every angle — digital and street-level — to reach correct conclusions about claims. Nor am I aware of software programs grunting through a home’s blackened rubble for a possible insurance arson.

Analytics also are more than just hi-IQ data crunchers. Anti-fraud tech helps insurers serve the ultimate master: policyholders. Claims can get resolved faster and more accurately. Premiums are better controlled. Honest policyholders have a better experience, and fraudsters have a worse one. That’s what insurance should be all about.

About the author: Jim Quiggle is director of communications for the Coalition Against Insurance Fraud.