Fighting Insurance Fraud Still Gumshoe Work
Auto Insurance Quotes : Fighting Insurance Fraud Still Gumshoe Work Despite all the advances in technology making the information highway a speed ramp of data, fighting insurance fraud still takes the hard work of gumshoe investigators to get the job done.
An example are the recent arrests on March 2 of 25 individuals in Miami accused of staging car accidents and scamming insurers under the Personal Injury Protection policies out of nearly $100,000 in fraudulent billings. The accused include doctors, clinic owners, staged-accident recruiters and others yet to be arrested, said Jeff Atwater, chief financial officer for the state of Florida.
The participants allegedly staged accidents, faked injuries and billed insurance companies for treatments they never received.
“This is just one example of the hundreds of similar fraud schemes run daily by accident clinics operating throughout Florida,” Mr. Atwater said in a statement.
The 25 arrested individuals face more than 142 various charges including staging an accident, insurance fraud, grand theft, racketeering and organized scheme to defraud. Collectively, they face up to 1,115 years in prison if convicted on all charges.
For all the advances made in technology, however, it was old-fashioned detective work that uncovered the fraud ring and developed the case, said Steve Smith, captain of the South Region (Broward, Dade and Monroe Counties) Division of Insurance Fraud, a law enforcement division within the Department of Financial Services.
Despite the size of the operation, the ring’s modus operandi was very much the same as other auto-accident fraud rings. The rings are usually comprised of a single ethnic group because organizers want to keep people they know and are comfortable with around them, Capt. Smith said.
What was different about this group was that instead of staging real accidents, they allegedly staged paper accidents where no auto accidents took place but papers were filed saying there was an accident involving injuries.
While a lot of the evidence is still under wraps, according to Capt. Smith, he did reveal that the enforcement office learned about the ring from a cooperating witness who helped an undercover officer infiltrate the ring.
“As time goes on, more details will be released and it will open your eyes to how blatant the activity is,” he said.
When it comes to unearthing insurance fraud, technology can only go so far, explained Frank Scafidi, spokesman for the National Insurance Crime Bureau. The organization has access to claims from the Insurance Services Office and what member insurers refer to the organization, but ultimately it comes down to investigators at the NICB working with local police to spot trends and do the field work.
Investigators within insurance companies, NICB investigators and police all look for trends, whether its medical providers or attorneys names or something else that will point them in the direction of fraud. But ultimately it is the investigator putting two-and-two together that uncovers the fraudsters.
Mr. Scafidi noted that data-mining tools are often employed to sift through data, but not all insurers are as attentive to uncovering fraud in their midst.
“Companies themselves will turn evidence over,” he said. “Some are very good at it and others are not so good. Some are tech savvy; others are more traditional.”
Mr. Scafidi said that, ultimately, it is the investigator’s suspicions that will bring notice to a pattern of activity.
“It’s pretty subjective,” he said. “There are things that you can’t measure from one company to the next. Every company is very different on how they do it.”
The Insurance Information Institute Fact Book for 2010 estimated that fraud accounts for 10 percent of the property and casualty insurance industry’s incurred losses and loss adjustment expenses, or about $30 billion annually in recent years.
“We have to keep the pressure on constantly,” observed Capt. Smith.
For his part, Mr. Atwater has proposed fighting the PIP fraud problem in his state by:
- Strengthening billing practices so only appropriate services rendered are covered.
- Create civil penalties for those convicted of auto insurance fraud and allow the proceeds to fund additional anti-fraud efforts.
- Require police to list all passengers in accident reports so those who weren’t there can’t later claim they were injured.
- Tighten requirements for clinic ownership.
