What is Insurance Fraud?

What is Insurance Fraud?

Insurance Fraud is the deliberate falsification of information by a claimant in order to obtain a financial advantage or gain. Insurance Fraud ranges from overstating the value of damaged or lost items or not declaring information that is known and relevant to a claim, through to the activities of highly organised criminals coordinating large and complex false claims.
Insurance Fraud can be:

- Opportunistic – the padding and exaggeration of otherwise legitimate claims

- Premeditated – Arson, theft, staged incidents involving the fabrication of a claim

- Based on Non-Disclosure – Misrepresenting or hiding facts relevant to a claim
Insurance Fraud – A Victimless Crime?

Many in the community believe that insurance fraud is a victimless crime, that the only ones to suffer a loss are large faceless insurance companies.

In research carried out by the Insurance Council 25% of people interviewed claimed to know somebody who has committed insurance fraud, 20% endorsed the padding or exaggeration of an insurance claim and 38% believed that insurers can afford the cost and that there are no losers.

However, insurance fraud is a cost on the provision of insurance that ultimately contributes to the cost to members of the public through higher insurance premiums.
Getting Caught

Evidence in Australia suggests that up to 10-15% of claims exhibit fraud ‘indicators’.

Understandably insurers undertake sophisticated anti-fraud measures and will investigate activity believed to be fraudulent. Insurers work closely with law enforcement in each jurisdiction to ensure that appropriate action is taken when fraud is proven to have occurred.

The penalties for a fraud conviction may vary from State to State, but all are classified as serious indictable offences which can result in substantial custodial sentences if convicted.

Improve Insurance Claim Handling and Fraud Detection

Improve Insurance Claim Handling and Fraud Detection

For property and casualty insurance companies, the key to customer satisfaction is settling claims quickly. In fact, a survey by Accenture revealed that most property and casualty insurance claimants prioritize the speed of claim resolution over the settlement amount offered (Accenture, 2002).
Reduce claim cycle times and minimize claim handling costs

PredictiveClaims enables you to increase customer service by reducing claim cycle times. And by reducing claim settlement times, you also minimize claim handling costs and loss adjustment expenses (LAE). At the same time, PredictiveClaims helps you conduct more effective claims fraud detection, and make more efficient use of field agents and your special investigation unit.

With Predictive Claims, property and casualty insurers can:

* Quickly approve legitimate insurance claims to improve customer service and minimize loss adjustment expenses and claim handling costs
* Identify fraudulent insurance claims at an early stage with a high degree of accuracy—even with large claim volumes
* Understand why certain claims are flagged as suspicious, so your special investigation unit know where to focus its investigations
* Combine and analyze data from multiple internal and external sources, including federal and insurance industry databases
* Integrate with existing claims management systems without extensive customization or lengthy implementation periods

Detect claims fraud at an early stage

With PredictiveClaims, you determine whether claims are legitimate or fraudulent at an early stage—often in the initial customer conversation. PredictiveClaims integrates with your existing claims management system to deliver risk-based scores in real time, along with reasons for the score. Even with very high claim volumes, PredictiveClaims’ advanced analytics accurately determine whichclaims to settle quickly—and which require follow-up or investigation.
Improve the productivity and accuracy of claims handling

With PredictiveClaims, property and casualty insurance companies can improve the productivity and accuracy of the entire claim handling process—from first notification of loss to claim settlement—regardless of whether claims are submitted via telephone, fax, mail, the Internet, or in person.

Pharmaceutical & Insurance Fraud

Medical, Pharmaceutical, Health Insurance Fraud

Types of Fraud

1) Billing: Inflated, Double, Phantom, Unbundling, for unnecessary equipment or procedures
2) No Fault Claims Insurance: Provider fraud, insured persons fraud
3) Malpractice in conjunction with fraud: malpractice must occur after and separately from malpractice
4) Pricing: Medicare/Medicaid, FDA
5) Violations of Anti-kickback law: Physician paid referral, E-health website regulations

Acts, Statutes, Laws

1) Anti-kickback law
2) False Claims Act (Qui Tam/Lincoln Act)
3) No Fault Claims
4) “Whistleblower Protection”
5) Drug Pricing Program and Prescription Drug Marketing Act
6) Food, Drug, and Cosmetic Act

Case Studies

1) Pfizer – Warner Lambert Division
2) Schering-Plough
3) Astrazeneca
4) Bayer
5) GlaxoSmithKline
6) Tap Pharmaceutical Products
7) PharMerica Inc.
8) King Pharmaceuticals
9) Eli Lilly and Co.
(First 9 are major pharmaceutical fraud cases violating False Claims Act)
10) Ackerman v. Metropolitan Life Ins. Co.
11) Wickline v. State of CA
12) Simcuski v. Saeli
13) Detwiler v. Bristol Myers Squibb Co.

Strategies of Prosecution

1) Billing/Insurance Fraud (Violations of False Claims Act): Provide evidence of inflated, doubling, or unbundled billing, or arrangement between patient and physician to receive free services for Medicaid/Medicare insurance number. Proof of feigned injuries or treatment by secondary medical reviewer for insurance claim.

2) Proving Fraud in a Medical Malpractice suit: Provide evidence that physician had intentionally concealed prior malpractice or made factual misrepresentations regarding a previous malpractice, leading to faulty therapy or cure that patient justifiably relied upon, leading to patient damages. Must be separate and distinct from damages from the current malpractice case in question. (Simcuski v. Saeli)

3) Anti-kickback Law Violations: Provide evidence of any compensation a physician may have received in exchange for recommending a product – in the form of financial incentive, paid “vacation” conferences, “consulting fees,” etc.

4) Off-Label Marketing (Violations of Food Drug and Cosmetic Act): Pharmaceutical products not approved by the FDA for an intended use may be prescribed for a primary or secondary use by physicians, but are not eligible for reimbursement and are prohibited to be marketed by pharmaceutical companies. Any evidence otherwise would suggest fraud.

Defense Strategies

1) Medical Malpractice versus Medical Fraud: Damages from fraud in a medical malpractice action must be separate and distinct from damages from malpractice. Fraud often dismissed in place of malpractice. NY Law maintains that to establish a claim of fraud, the patient must show elements of fraud and that physician knew of own malpractice and deliberately concealed malpractice, resulting in misguided recommendations/therapy that led to patient damages. Only in this context does fraud apply.

2) No Fault Claims, Overbilling, Excessive Treatment: Insurer should prove lack of claims’ medical necessity in treatment or price. Insurer may submit a claim denial form to Commissioner of Health within 30 days after Insurer has knowledge of patterns of overcharging or excessive treatment. Burden of Proof for overcharging and excessive treatment rests on Insurer and its counsel.

3) Anti-Kick Back Law Defense for E-health Co.’s Referring Physicians: Must show that referral service did not exclude any participants who qualified, did not receive differential payments by participants, did not require the participant to provide services to a referred person, and/or made disclosures to the patient seeking the referral. In general, to show that both E-health Company and physician are “recommending” pharmaceutical products to patient and no quid pro quo arrangements occurred.

Insurance Scam Fraud Protection

If you become a victim of car insurance fraud, you pay. Not only will you pay higher premiums because you may acquire a costly claim, but, as with any car accident, you and your family could pay with your lives. It is important to learn more about fraud protection so you can protect yourself from others who may choose you to be a part of their next car insurance accident fraud scam.

Insurance fraud began when insurance first began. Incidents have been recorded as far back as ancient Greece. Ship scuttling was an insurance scam in ancient Greece where ships were purposely sunk. Later insurance fraud traveled to England then to America. When automobiles were introduced it opened a whole new arena for fraudulent insurance claims. Today, with modern technology, many fraudulent car accident claims do arise from sophisticated organized crime rings that can be hard to detect. Don't let this make you a victim of an insurance scam. Whether the insurance scam is from an organized crime ring or an individual, there are fraud protection steps you can take to help you be more aware and avoid being a scammer’s next victim.

First, it is important to know what types of insurance scams are used. There are many types of car insurance scams. Set-up car accidents can range from vehicles deliberately stopping in front of a driver to cause a rear-end car accident to drivers who pretend they are being helpful but intend to cause a car accident that will look like the innocent drivers fault. Scams can also involve people one would generally trust such as doctors and lawyers.

Educating yourself more about fraud protection against car insurance accident scams is the best way to avoid being someone's next victim. Here is a list of common scams to be aware of:

Staged Rear-End Car Accidents: A scam driver will quickly get in front of an innocent car and then slam on their brakes. This causes the innocent driver to rear-end the scam driver. Along with collecting money for vehicle damages, the scam driver will often fake medical injuries to collect even more.

Adding Damage: After an accident, either staged or not, the scam driver will go to another location and cause extensive damage to their vehicle and claim that the damage happened during the original accident.

Fake Helpers: Scam Helpers will wave an innocent driver into traffic, but then crash into the innocent driver. When it comes time to file the claim, the scam driver will deny waving anyone in. Other ways fake helpers try to scam people is by offering to help an innocent driver find a auto repair shop, doctor, or lawyer. In this case, everyone is in on the scam. The body shop charges you enormous rates, the doctor and lawyer also lie to collect more from your insurance.

Since these scams can happen at any time and place, it is important to be prepared. Awareness is the most important. Watch for drivers who may be following you or examining your driving habits. Also, make sure you leave plenty of room in front of you in order to stop. If an accident does happen, take notes on everything about the other car, the accident, and everybody that was in the other car. Keep a disposable camera in your car to record damage to both vehicles. Furthermore, use your judgment in driving, not others. Make sure you have enough room to get out and just let other cars pass instead of letting others "waive you in." And, when you talk to your insurance company, let them know if you felt something was suspicious.