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PIP Insurance Fraud Dennis Handley Special Agent March 20 & 21, 2015.

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Presentation on theme: "PIP Insurance Fraud Dennis Handley Special Agent March 20 & 21, 2015."— Presentation transcript:

1 PIP Insurance Fraud Dennis Handley Special Agent March 20 & 21, 2015

2 © 2015 National Insurance Crime Bureau 2 About NICB The National Insurance Crime Bureau (NICB) is a not- for-profit organization that receives support from nearly 1,100 property and casualty insurance companies and self-insured organizations. The NICB partners with insurers and law enforcement agencies to facilitate the identification, detection and prosecution of insurance criminals. The vision of the NICB is to be the preeminent organization fighting insurance fraud and crime.

3 © 2015 National Insurance Crime Bureau 3 NICB Mission Lead a united effort of insurers, law enforcement agencies and representatives of the public to prevent and combat insurance fraud and crime through data analytics, investigations, training, legislative advocacy and public awareness.

4 © 2015 National Insurance Crime Bureau 4 NICB Disciplines  Investigations  Data Analytics  Training  Legislative Advocacy  Public Awareness

5 © 2015 National Insurance Crime Bureau 5

6 6 Questionable Claims  Insurance professional identifies questionable claims  Makes NICB aware of the claim  Provides multiple benefits

7 © 2015 National Insurance Crime Bureau 7 NICB Questionable Claims  Single, most important tool in identifying fraudulent claims  Allows cross referencing on single claims  Builds intelligence, to identify patterns and trends  Used to initiate major cases  Used to increase public awareness regarding insurance fraud and vehicle crimes

8 © 2015 National Insurance Crime Bureau 8 Investigative Resources  Special Agents  Investigative Assistants 24/7  Hot Line TEL-NICB Text Keyword “Fraud” to TIP411 Via Tip app (iPhone, iPad, iPod touch compatible)

9 PIP Claims and Insurance Fraud March 20 & 21, 2015

10 © 2015 National Insurance Crime Bureau 10 What are we talking about? What is: PERSONAL INJURY PROTECTION (PIP)

11 © 2015 National Insurance Crime Bureau 11 Personal Injury Protection THRESHOLDS: VERBAL AND MONETARY

12 © 2015 National Insurance Crime Bureau 12 Scope of the Benefits Lifetime Benefits for Injured Persons  Most generous medical-expense and patient care provisions of any No-Fault Act in the country Lifetime Medical Expenses  Michigan Catastrophic Claims Attendant Care or Nursing Services  Hire outside help or employ family members so the injured person can remain at home rather than be institutionalized

13 © 2015 National Insurance Crime Bureau 13 Scope of the Benefits continued Replacement Services Expense Benefits  Maximum of three years Rehabilitation  Physical Rehabilitation  Vocational Rehabilitation Work Loss/Wage Loss Benefits  Maximum of three years  Monthly maximum

14 © 2015 National Insurance Crime Bureau 14 Personal Injury Protection  So what happened?  It was such a good idea!  Why are we seeing so many questionable PIP claims?

15 © 2015 National Insurance Crime Bureau 15 Personal Injury Protection GREED

16 © 2015 National Insurance Crime Bureau 16 PIP FRAUD Why? “ Why do I rob banks? Because that’s where the money is” Attributed to bank robber Willie “the Actor” Banks, Not anymore Willie ! CNNMoney Healthcare fraud costs $100 billion dollars per year FBI puts the figure at $80 billion dollars per year Federal Bureau of Investigation Durable Medical Equipment DME fraud could cost between $1.5 and $5 billion dollars per year

17 © 2015 National Insurance Crime Bureau 17 PIP Fraud WHAT IS FRAUD Webster: Deceit, Trickery specifically : intentional perversion of truth in order to induce another to part with something of value or to surrender a legal right. Simple definition: Fraud is a deceptive act intended to get a benefit to which a person is not entitled.

18 © 2015 National Insurance Crime Bureau 18 PIP Fraud Elements of fraud 1. Material false statement 2. Knowledge that the statement was false 3. Victim must rely on the material false statement 4.Victim must suffer damages due to their reliance on the false statement

19 © 2015 National Insurance Crime Bureau 19 PIP Fraud Schemes 10 common health care provider schemes 1. Billing for services not rendered 2. Billing for a non-covered service as a covered service 3. Misrepresenting dates of service 4. Misrepresenting locations of service 5. Misrepresenting provider of services

20 © 2015 National Insurance Crime Bureau 20 PIP Fraud Schemes Continued 6. Waiving of deductibles and/or co-payments 7. Incorrect reporting of diagnoses or procedures (includes unbundling ) 8. Overutilization of services 9. Corruption (kickbacks and bribery) 10. False or unnecessary issuance of prescription drugs

21 © 2015 National Insurance Crime Bureau 21 Opportunistic/Professional Claimant PIP Fraud: How It’s Done Subjective Injuries Wants time off of work Wants Replacement Services Wants pain medications Knowledge of insurance/medical

22 © 2015 National Insurance Crime Bureau 22 PIP Fraud: How It’s Done Solo Medical Provider Take advantage of liberal PIP payments Enhance extent of injuries Get claimant/patient off of work Get claimant/patient extra money

23 © 2015 National Insurance Crime Bureau 23 PIP Fraud: How It’s Done Personal Injury Mill The Structure of the Scam ClaimantCapperAttorney Medical Providers

24 © 2015 National Insurance Crime Bureau 24 PIP Fraud: How It’s Done Attorney Mail Insurance Office Personal Injury Mill The Structure of the Scam Continued

25 © 2015 National Insurance Crime Bureau 25 PIP Fraud: How It’s Done Attorney Medical Providers Personal Injury Mill The Structure of the Scam Continued

26 © 2015 National Insurance Crime Bureau 26 PIP Fraud How It’s Done Attorney Other Patients Referrals, Cappers, Runners, etc. Medical Clinic Diagnostic Tests Therapists Consultant M.D., D.O. Supply Company Billing Company Unlicensed Owner Vertical Integrated Billing Management Companies

27 © 2015 National Insurance Crime Bureau 27 Insurance Investigative Process Insurance PIP claim investigations Questionable claims Develop Claim Adjustors

28 © 2015 National Insurance Crime Bureau 28 PIP Questionable Claims Medical Bill Soap Notes Police Report Letters of Medical Necessity Claimant Statement DME Documents Therapy Worksheets Prescriptions Imaging Bills/Reports Vehicle Photos ER Reports Paramedic Reports Compare to Claimant Interviews

29 © 2015 National Insurance Crime Bureau 29 PIP Fraud Questionable Claims What are the characteristics? Claim adjustor investigations

30 © 2015 National Insurance Crime Bureau 30 PIP Fraud Characteristics Characteristics of a Questionable PIP Claim The threshold is exceeded Usually in a metropolitan area Early involvement of an attorney Appearance of “supporting “ indicators

31 © 2015 National Insurance Crime Bureau 31 PIP Fraud Supporting Indicators What are they?

32 © 2015 National Insurance Crime Bureau 32 PIP Supporting Indicators Injuries are subjective (e.g. pain, headaches, nausea, inability to sleep, depression, dizziness and soft tissue). Injuries are inconsistent with the collision (e.g. extensive injuries with very low speed impact) Extensive or unnecessary treatment for minor subjective injuries. A test or series of diagnostic imaging tests is given to all patients at a clinic or medical office regardless of injury.

33 © 2015 National Insurance Crime Bureau 33 PIP Supporting Indicators Individuals travel across town to receive medical treatment. Individual initially wants to settle with insurer, but after retaining an attorney, complains of increased subjective injuries On-the-scene treatment is refused. Participants seek treatment from a hospital far away from their home or place of employment.

34 © 2015 National Insurance Crime Bureau 34 Characteristics with Indictors They should be looked at in combination with the “characteristics”. Threshold exceeded. Metropolitan area. Early attorney involvement, $2 - $15 lost. One or more “supporting” indicators. So What Now?

35 © 2015 National Insurance Crime Bureau 35 PIP Claim Fraud Investigators have the combination of characteristics and supporting indicators. WHAT DO INVESTIGTORS DO NOW? They take the action step of determining what kind of fraud it may be by looking for other indicators

36 © 2015 National Insurance Crime Bureau 36 PIP Claim Fraud Other Indicators: Three or more passengers Same injuries Same doctor Same attorney

37 © 2015 National Insurance Crime Bureau 37 PIP Claim Fraud – Indicators Numerous prior questionable claims from the same attorney. Attorney refuses to allow insured/claimant to appear for statements or IME. Physician is known for handling suspect claims (sometimes with same attorney. Attorney reports claim to insurance company.

38 © 2015 National Insurance Crime Bureau 38 PIP Claim Fraud - Indicators Individual cannot identify other vehicle in “hit and run” injury loss. Vehicle or vehicles are not available for inspection (photos may be submitted in lieu of inspection ). Individual is self-employed but vague about the business and actual responsibilities. Claimant started employment shortly before accident occurred. During statements, individuals appear to have “selective memories” on some facts, and cannot remember simple issues that would be common to remember. Is unusually familiar with insurance terms or procedures.

39 © 2015 National Insurance Crime Bureau 39 PIP Fraud Questionable Claims Here’s a $64,000 dollar question. What do you do if you suspect fraud in a PIP claim but the threshold isn’t met?

40 © 2015 National Insurance Crime Bureau 40 PIP Fraud Questionable Claims Possible indicators: Claimant’s recovery unduly long. Claimant’s injuries inconsistent with IME. Police report inconsistent with injuries. No emergency treatment. Injuries are soft tissue (sprain and strain). Two types of indicators missing: No indicators of previous similar claims No indicators of any kind of questionable activity by A medical provider or an attorney

41 © 2015 National Insurance Crime Bureau 41 PIP Fraud Questionable Claims Okay the Claim Adjustor established a combination of “characteristics” and “supporting” indicators that makes the claim questionable and they identified the probable scheme. So where are we???

42 © 2015 National Insurance Crime Bureau 42 PIP Fraud Questionable Claims Special Investigation Unit SIU Claim is transferred to:

43 © 2015 National Insurance Crime Bureau 43 PIP Questionable Claims Medical Bill Soap Notes Police Report Letters of Medical Necessity Claimant Statement DME Documents Therapy Worksheets Prescriptions Imaging Bills/Reports Vehicle Photos ER Reports Paramedic Reports Compare to Claimant Interviews

44 © 2015 National Insurance Crime Bureau 44 PIP Fraud Questionable Claims Action Steps Police reports (if available). Recorded interviews of involved party(s). Lots of photos of the vehicle involved. More Informational Gathering Techniques Special Investigation Unit SIU

45 © 2015 National Insurance Crime Bureau 45 PIP Fraud Questionable Claims Action Steps Cont. More Informational Gathering Techniques Background check for previous claim history. Background check on medical and attorney providers. Independent Medical Exams (IME”S). Surveillance.

46 © 2015 National Insurance Crime Bureau 46 PIP Fraud Questionable Claims More Informational Gathering Techniques Action Steps Cont. Enhanced Interviewing Methods Accident Damage Analysis Medical Record Reviews Legal Support Expert Support

47 © 2015 National Insurance Crime Bureau 47 PIP Fraud Questionable Claims NICB Questionable Claims Data Base Single, most important tool in identifying fraudulent claims Allows cross referencing on single claims Builds intelligence, to identify patterns and trends Used to initiate major cases Used to increase public awareness regarding insurance fraud

48 © 2015 National Insurance Crime Bureau 48 PIP Claim Fraud Possible Outcomes Criminal Prosecution  Local  State  Federal Civil Lawsuits Claim denied

49 © 2015 National Insurance Crime Bureau 49 Reporting Fraud NICB  Hot Line TEL-NICB Text Keyword “Fraud” to TIP411 Via Tip app (iPhone, iPad, iPod touch compatible)

50 © 2015 National Insurance Crime Bureau 50 Reporting Fraud Medicare Medicaid HHS Office of Inspector General Call TTY: Mail: HHS Tips Hotline P.O. Box Washington, DC OR Centers for Medicare & Medicaid Services Call: TTY: Mail: Medicare Beneficiary Contact Center P.O. Box 39 Lawrence, KS 66044

51 © 2015 National Insurance Crime Bureau 51 Reporting Fraud Blue Cross Blue Shield of Michigan (BCBSM) BCBSM Call: Dedicated Medicare Anti-Fraud Hotline Call:

52 © 2015 National Insurance Crime Bureau 52 Contact Information Special Agent: Dennis Handley Address: P.O. Box Ferndale, MI Phone:


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