Understanding computer technology could save funds to fight fraud

Before you waste hundreds or thousands of dollars investigating a potentially fraudulent workers' comp claim, make sure you're sending your investigator to the right house. That shouldn't cost more than about 25 cents, according to a former commander for the Connecticut State Police.

"The amount spent on surveillance can be fairly expensive -- in excess of $500 a day," said Tim Barry. "So you do a well-organized surveillance and have a plan in mind so it's not a hit or miss proposition."

As the director of the special investigations unit and fraud for third-party administrator Specialty Risk Services, Barry uses the technological expertise he perfected during his 24 years with the Connecticut police force. These days, that means harnessing the Internet for optimum use.

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"There are social networking, interactive and mapping techniques," Barry said.

While the newer technology may be unfamiliar, Barry said it's really just applying modern methods to basic concepts. For example, whereas in the past you may have had to rely on an investigator's knowledge of a particular area to set up surveillance, you can now do it through a few mouse clicks.

"We use different mapping techniques to see where an individual lives. We determine if it is a rural or city area, and adjust the plan accordingly," he said.

That type of technological change can save a company hundreds of dollars per day per claim. Barry says the average investigation five years ago involved eight hours of SIU time per file. "We've reduced the cost of the average file to less than two hours per claim," he said. "We've had a 75 percent reduction in costs."

The advances in technology have not been lost on claimants who are seeking to commit fraud, either. So it pays to be aware of the latest trends.

"We've discovered people with completely different names using the same cell phone numbers to make claims," Barry said. "The other trend is criminal impersonation and identity theft . . . you'd be amazed how many cases we've had that the claimant isn't the employee but a relative or friend trying to get medical coverage."

To detect such cases of fraud Barry's team runs information through a claims database to look at different variables, i.e., prior addresses, maiden names, name variations -- all of which is in the public domain. With the hundreds of pages of documents generated, you can put it into a simple diagram that gives you a picture of the claim.

Barry offers several suggestions to detect fraud:

Know your claimant. Make sure the person filing the claim is who he says he is.
Trust but verify. It helps to have a protocol in place to verify everything about a claim, such as the statement from the injured party, statements from witnesses, and hospital reports.
Use common sense. "Listen to the story that's related," Barry said. "Do the facts fit with that particular type of work and that particular type of injury? Was it witnessed? How does the claimant sound -- nervous, or just reporting the events matter-of-factly, or does it sound scripted?"
Look for red flags. For example, an employee who reports an injury five minutes after showing up on a Monday morning may be seeking workers' comp for an injury that happened over the weekend.

Read more at the WorkersComp Forum homepage.

November 8, 2010

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