Questionable Claim (QC) Reason for Submission Format NICB Questionable Claim (QC) Reason for Submission Format Suspicion of Slip and Fall fraud. Janine Taylor, of 110 Park Avenue, New York, New York appears to have staged a slip/fall at Original House of Pancakes located in the shopping center at Monroe and Bentley April 24, 2012. Taylor had knowledge of insurance terms and process and wanted early settlement. She immediately obtained an attorney, William Bain, and settlement demand letters were sent numerous times. The claimant is apparently in financial hardship as she was late paying her rent and subject to eviction. She has one prior fall at a Chili's Restaurant under similar circumstances. A video was obtained from the restaurant and her accident was closely examined. When Taylor and her attorney were notified of the video, they stopped with any further contact with claims and have not replied to phone calls or letters sent. The claim and investigation are pending waiting on their response. Claimant is demanding a settlement of $50,000 for pain and suffering and wages lost due to time off work. Assigned adjuster: John Smith, 888-555-1212 or jsmith@insurco.com.

QC Submissions Multiple state fraud bureaus require claims be submitted to them when there is a suspicion that fraud has been committed in the claim process (e.g. a questionable claim). A critical feature of the submission is the description the claim circumstances provided in the Reason for Submission field.

QC Submissions To aid investigators in the efficient completion of this requirement, NICB has developed (in conjunction with the International Association of Special Investigation Units and with the support of many of the state fraud bureaus) a standard format (with four areas of focus) for the Reason for Submission.

Reason for Submission Format/Four Areas of Focus The four areas of focus provide the content of the Reason for Submission*. The content should: avoid stating the claim was fraudulent unless the fraudulent activity was proven in court or admitted by the insured/claimant. be as concise as possible while providing the necessary information. provide specific intelligence (e.g. facts, data, identifiers) and actionable information concerning the claim (e.g. quality vs. quantity). *For additional guidance please download the detailed information using the provided link. https://www.nicb.org/File Library/Training-public/QCReasonforSubmissionFormat.pdf

Area of Focus #1 Synopsis*:   Providing the nature of the submission, the questionable or fraudulent activity and a brief description of the claim circumstances including the identifiers of any involved individuals (e.g. providers, witnesses) not identified in the claim documentation. *Avoid using “For Information Only” as the reason for the submission. It is recommended this type of compliance submission reference the appropriate regulatory guidance (e.g. “In compliance with statute” or “As required by state law”, etc.).

Areas of Focus #2, #3 and #4 Investigation Findings: Providing a brief description of the investigation results detailing what indicators are present and what information was discovered. Status: Providing information that the claim is pending or paid, mitigated, denied, closed without payment, withdrawn insured investigation, being investigated by the insurer, referred to a fraud bureau, etc. and/or being investigated by law enforcement. Exposure: Providing any amount paid, reserves established and policy limits as appropriate. Include the current contact information of the claims adjuster or the SIU.

Language and Style Differences It is understood that insurers differ on permissible language and that different authors will have different writing styles. The presented Reason for Submission format is only meant to standardize content. Language and style remain the choice of the author. Several examples have been provided to depict a range of schemes and lines of business using a variety of writing styles.

Reason for Submission Examples The following Reason for Submission examples contain the four areas of focus: Synopsis, Investigation Findings, Status and Exposure. Each focus will have a different font in order to clearly depict a complete Reason for Submission. The bolding, underscoring and italics are used as a means to easily identify the areas and are not meant to be part of actual text. Please see the following legend.

Reason for Submission Legend The following font types are used to highlight the four focus areas Synopsis: Normal font Investigation Findings: Bold Status: Italics Exposure: Underlined

Example #1 – Slip and Fall Suspicion of Slip and Fall fraud. Janine Taylor, of 110 Park Avenue, New York, New York appears to have staged a slip/fall at Original House of Pancakes located in the shopping center at Monroe and Bentley April 24, 2012. Taylor had knowledge of insurance terms and process and wanted early settlement. She immediately obtained an attorney, William Bain, and settlement demand letters were sent numerous times. The claimant is apparently in financial hardship as she was late paying her rent and subject to eviction. She has one prior fall at a Chili's Restaurant under similar circumstances. A video was obtained from the restaurant and her accident was closely examined. When Taylor and her attorney were notified of the video, they stopped with any further contact with claims and have not replied to phone calls or letters sent. The claim and investigation are pending waiting on their response. Claimant is demanding a settlement of $50,000 for pain and suffering and wages lost due to time off work. Assigned adjuster: John Smith, 888-555-1212 or jsmith@insurco.com. Synopsis Investigation Findings Status Exposure Synopsis: Nature of Submission, Involved Suspects/Individuals, 4W’s and How, Fraud Activity, Identifiers and Unusual Circumstances (normal font). Investigation Findings: Description, Indicators, Other Information (Bold) Status: Status of claim, investigation status (Italics) Exposure: Amount paid, denied, reserved, policy limits, Contact Info (Underlined)

Example # 2 – Medical Billing Fraud Suspicion of medical billing fraud. Doctor Smith is suspected of upcoding modalities to procedures (e.g. 97034 Contrast Bath to 97113 Aquatic Therapy) and is using unlicensed personnel (John Jones) to provide therapies.  Over the last 12 months the aquatic therapy has been billed for 90% of Dr. Smith’s patients in his clinic in Des Plaines, IL at 1111 E. Main Street and his clinic in Palos Hills, IL.  A patient, Jane Doe, called the claim adjuster refuting the number of treatments her explanation of benefits reflected and during the discussion stated the “aquatic therapy” consisted of being in a whirlpool run by a John Jones who is a current college student. The SIU investigation consisted of interviewing multiple patients whose medical bills to us reflected the aquatic therapy procedure.  In every instance the interview revealed the therapy was conducted in a whirlpool which does not qualify as the aquatic therapy procedure.  Clinic inspections revealed the facilities do not have the necessary equipment (e.g. a pool) to conduct aquatic therapy.  An interview was conducted with John Jones who acknowledged he has no prior medical training and was provided on the job training by Dr. Smith.  It is suspected that Dr. Smith is upcoding other therapies repeatedly. All inappropriate bills will be denied based on the investigation determining his clinics do not have the proper equipment and an unlicensed person was conducting the procedures.  The SIU investigation has been referred to our major case unit and to the fraud bureau. The amount paid on previous suspicious billings is being determined.  Current claims totaling $2014.00 have been denied.  As there is additional suspected fraud existing in multiple bills for multiple patients the overall exposure has not been determined but will probably be in the tens of thousands of dollars. Assigned SIU: John Jones, 888-555-1313 or jjones@insurco.com. Synopsis Investigation Findings Status Exposure Synopsis: Nature of Submission, Involved Suspects/Individuals, 4W’s and How, Fraud Activity, Identifiers and Unusual Circumstances (normal font). Investigation Findings: Description, Indicators, Other Information (Bold) Status: Status of claim, investigation status (Italics) Exposure: Amount paid, denied, reserved, policy limits, Contact Info (Underlined)

Example # 3 – Property Fraud Suspicion of fraudulent theft claim. Insured Kim Morris of Los Angeles, California, alleged her home was broken into (no forced entry) and her five carat engagement ring, worth $32,000, from her ex-husband was stolen. Insured is now going through a divorce with the husband and struggling for money. The insured could not provide any info on when she last wore the ring or how it was stolen from her safe. Under the provisions of the policy it was vaulted (in a safe in the insured’s basement). It is unlikely that the thieves would have the knowledge of the location of the ring inside the house. The ex-husband agreed to be interviewed and questioned about the mysterious ring theft. He informed us that they both have been struggling for money with the divorce and that she has repeatedly threatened how she was going sell the ring for money and not share it with him even though he purchased the ring. He stated that she refused to give the ring back to him after they split. The ex-husband showed us a picture on his facebook page when his ex-wife was wearing the ring after the claimed date of loss. Claim was denied and investigation closed. Claim is being referred for prosecution. The ring was covered in her policy and listed as “scheduled” jewelry. However, Ms. Morris was not paid out on her claim due to inconsistencies with the time of events and stories. Assigned SIU: John Jones, 888-555-1313 or jjones@insurco.com Synopsis Investigation Findings Status Exposure Synopsis: Nature of Submission, Involved Suspects/Individuals, 4W’s and How, Fraud Activity, Identifiers and Unusual Circumstances (normal font). Investigation Findings: Description, Indicators, Other Information (Bold) Status: Status of claim, investigation status (Italics) Exposure: Amount paid, denied, reserved, policy limits, Contact Info (Underlined)

Example # 4 – Vehicle Fraud Synopsis Fraudulent owner give-up claim. After the theft report, a forensic examination of the ignition was conducted by Jones Locksmith and it was determined that the vehicle had last been driven by use of a key.  SIU investigation revealed insured was behind on his payments and that he had recently taken the vehicle to Smith Auto Repair for engine trouble. When confronted with this information the insured confessed to the owner give-up. This investigation has been closed. Chicago PD arrested the insured on June 30, 2012 for committing the fraud. He was found guilty, sentenced to 150 hours of community service, 2 years probation and ordered to pay back the $19,000 on the claim that was paid. Assigned SIU: John Jones, 888-555-1313 or jjones@insurco.com Investigation Findings Status Exposure Synopsis: Nature of Submission, Involved Suspects/Individuals, 4W’s and How, Fraud Activity, Identifiers and Unusual Circumstances (normal font). Investigation Findings: Description, Indicators, Other Information (Bold) Status: Status of claim, investigation status (Italics) Exposure: Amount paid, denied, reserved, policy limits, Contact Info (Underlined)

Example # 5 – Workers’ Comp Fraud Synopsis Fraudulent Workers’ Comp claim. The allegedly injured worker submitted fraudulent and altered photocopies of bills in support of her claim. Law Enforcement was notified and this investigation is closed and/or ongoing. Database has been flagged in system under her name, SS#, address, birth date and phone number. Donna was arrested and charged with the criminal act of fraudulently receiving over $13,000 in unemployment benefits and fraudulently receiving nearly $19,000 in Workers’ compensation benefits. In addition, she was charged with submitting a fraudulent workers’ compensation claim. Assigned SIU: John Jones, 888-555-1313 or jjones@insurco.com. Investigation Findings Status Exposure Synopsis: Nature of Submission, Involved Suspects/Individuals, 4W’s and How, Fraud Activity, Identifiers and Unusual Circumstances (normal font). Investigation Findings: Description, Indicators, Other Information (Bold) Status: Status of claim, investigation status (Italics) Exposure: Amount paid, denied, reserved, policy limits, Contact Info (Underlined)

Example # 6 – Compliance Synopsis Investigation Findings Status In compliance with statute. Suspected Owner Give Up. Ben Price, of Charleston, South Carolina, filed an insurance claim on 03/23/2004, stating that his super duty custom 2002 Ford F-150 was stolen from his residence located at 444 Gator Alley in Charleston, South Carolina. Price filed a police report with Charleston PD. In the police report, Price stated he was not home at the time of the incident and that he was with a friend in their car miles away from the location of the theft. When asked what he and his friend were doing or where they were going, the story was not consistent when asked several times. When the Charleston PD asked about keys for the vehicle, Price replied he always left them over the visor in the truck. Price seemed overly pushy when dealing with the insurance company and was nearly demanding compensation for his stolen truck so he could quickly buy a new one. Police quickly discovered it only miles from his house, completely burned. Investigators spoke with the friend who verified the insured’s story. The SIU Investigator did discover the owner was behind on his payments, had refinanced the truck twice and had lied about the debt when asked. In spite of the inconsistencies and false information this claim was paid. Mr. Price had a full coverage insurance policy on his vehicle which would cover him fully should anything happen to the vehicle including theft. Fraud is suspected but could not be proven. $42,000.00 was paid on the claim. Assigned SIU: John Jones, 888-555-1313 or jjones@insurco.com. Synopsis Investigation Findings Status Exposure Synopsis: Nature of Submission, Involved Suspects/Individuals, 4W’s and How, Fraud Activity, Identifiers and Unusual Circumstances (normal font). Investigation Findings: Description, Indicators, Other Information (Bold) Status: Status of claim, investigation status (Italics) Exposure: Amount paid, denied, reserved, policy limits, Contact Info (Underlined)

Additional Information For more information concerning QCs, please download NICB’s Questionable Claims Program Guide from the download center (nicbdocs.org). For more detailed information concerning NICB’s QC Reason for Submission format, please click on the PDF accompanying this PowerPoint. If you have any questions, please contact NICB’s Training Department (TrainingDepartment@nicb.org).