AASCIF - july-august-september

Ten years ago the Ohio General Assembly passed House Bill 107, creating a statute which authorizes the criminal prosecution of workers’ compensation fraud.

Armed with this statutory authority, the Ohio Bureau of Workers’ Compensation launched a progressive fraud investigation initiative to combat fraud related to Ohio’s workers’ compensation system. This initiative has so far resulted in the prosecution of 691 individuals and has identified more than $684 million in savings to Ohio’s state insurance fund.

This initiative covers the entire spectrum of the Ohio workers’ compensation system, including not only individuals who file fraudulent claims but also healthcare providers, employers and workers’ compensation attorneys.

The BWC Special Investigations Department provides fraud identification training and offers a straightforward referral process for BWC’s internal and external customers. The department’s philosophy is to continually offer freshly updated fraud awareness training as an important part of its partnership with BWC claims staff and Ohio employers.

Tips phoned to BWC’s hotline, complaints entered on BWC’s Dolphin website, and referrals from BWC’s managed care organizations and BWC’s claims division have resulted in approximately 53,000 allegations received since 1993.

The Special Investigations Department has also increased its efforts to proactively detect fraudulent activity using computer tools. The department’s Automated Detection and Intelligence Team runs queries in BWC’s data warehouse—the central store of information from BWC’s computer operating systems—to look for suspicious activity. These detection queries highlight “red flags” and outliers among medical payments, injured worker benefits, and employer premiums. AD&I analyzes the query results to determine whether they indicate potential fraud and should be forwarded for investigation.

AD&I is constantly expanding its detection efforts. During the current year, the detection plan includes more than 40 detection query runs to identify potential fraud behavior by injured workers, employers, healthcare providers, and managed care organizations.

Cyber forensics
A recent addition to the Special Investigations Department is the BWC Cyber Crime Task Force. This group is responsible for analyzing computer data to secure evidence of fraud.

As BWC implemented its Dolphin website, allowing customers and partners to apply for benefits and coverage, update information and submit payments online, the department recognized the need for expertise in identifying and investigating fraud via the Internet.

In addition, fraud perpetrators increasingly rely on computers and other technology to store information which may be vital to an investigation, such as bank account numbers, names and addresses of associates, financial transactions, email and other correspondence.

To meet these challenges, the Special Investigations Department requires dedicated agents trained and equipped for computer seizure and forensics. These Cyber Crime Task Force members can image a suspect’s computer and perform forensic analysis to reveal the contents.

BWC’s Special Investigations Department also maintains a specialized team to investigate complex healthcare provider fraud cases.

The healthcare provider team participates in the U.S. Attorney’s Health Care Fraud Task Force and works with other state agencies and managed care organizations to detect and investigate fraud by doctors and other healthcare providers. The team employs a variety of investigative strategies including covert operations, provider record audits and patient interviews to investigate healthcare providers who have upcoded bills, billed for services not rendered or billed for treatments not related to industrial injuries.

Since 1993, BWC’s healthcare provider investigations have resulted in the prosecution of 24 individuals and have identified more than $96 million in savings to Ohio’s state insurance fund.

Field investigation teams
The underpinning of the Special Investigations Department lies in its field investigations.

Analysts and special agents are teamed in Special Investigations Units located throughout the state at each of BWC’s 21 service offices. These analysts and agents are charged with investigating fraud by injured workers, employers, healthcare providers and workers’ compensation attorneys, and they’re trained in the use of advanced surveillance equipment, interviewing techniques, financial investigations, claims processing and claims law.

Special Investigations Units often combine efforts with other state, local and federal agencies to investigate and prosecute those who commit fraud against the BWC.

Since 1993, the Special Investigations Department has identified more than $684 million in savings. The current return on investment is $9.85 for every dollar spent to detect, investigate and prosecute fraud against BWC. The department’s 691 criminal convictions were achieved in cooperation with the Ohio attorney general, the U.S. attorney and numerous local prosecutors. We are constantly searching for new ways of doing business while at the same time increasing service and reducing costs to Ohio’s state insurance fund.

Other states and Canadian workers’ compensation jurisdictions also recognize that fraud and abuse is an issue.

For example, each of the Canadian boards has detection and prevention programs involving certain components similar to Ohio’s. While workers’ compensation legislation in certain Canadian jurisdictions does have penalty provisions for abuse, it is pursuant to the Criminal Code of Canada under which fraud is prosecuted. Penalties range from fines to imprisonment. Convictions carry a criminal record. Canadian boards have found that publication of convictions has served as a major deterrent in their fight against fraud and abuse.

The AASCIF Law, National Issues and Policyholder Services committees plan to conduct a joint workshop Oct. 8-10 to discuss fraud issues and the results of a national fraud survey. To learn more about the Ohio BWC, please visit www.ohiobwc.com.

John Annarino can be reached at john.annarino@bwc.state.oh.us or (614) 728-4634.

$9.85 returned for every $1 spent Ohio's creative anti-fraud approaches pay off

$9.85 returned for every $1 spent
Ohio's creative anti-fraud approaches pay off