Rate of questionable comp claims up 24 percent, report indicates

Medical issues produced the most significant uptick in questionable insurance claims for the first quarter of the year compared to the same period last year, according to a new report.

The analysis from the National Insurance Crime Bureau examines referrals of questionable claims submitted by its more than 1,100 property/casualty insurers and self-insured organizations.

There were more than 1,100 workers' comp claims referred to the organization in first quarter 2011. That follows a decrease from Q1 of 2009 to Q1 of 2010.

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The analysis breaks down the specific reasons for the questionable claims. Workers' comp claims questioned for possible "inflated medical billing," topped the list and were up more than 100 percent from Q1 2010.

"It's significant," said Aaron Soline, a manager in NICB's data analytics unit. "It tends to show medical providers are, obviously, involved in this. That's an indication of fraud shifting from previous years."

The largest increase from Q1 2009 to Q1 2010 was "material misrepresentation on employer application," which was up 86 percent. However, that only accounted for an increase of 15 percent from Q1 2010 to Q1 2011.

Soline said while "inflated medical billing" showed a notable increase, it was not the biggest change from the two most recent first quarters. "The biggest increase is the 'prior injury/not related to work,'" he said. "It decreased in the previous year [down 9 percent] and now is up almost 60 percent."

Claims referred for suspected claimant fraud increased by 23 percent, following a decrease of 18 percent in Q1 2009. The percent of claims referred due to "working while collecting" actually decreased by 15 percent, following a decrease of 17 percent in the previous year.

Other reasons cited for questionable claims included:

Premium fraud -- up 50 percent from Q1 2010. That followed a decrease of 33 percent from Q1 2009.
Material misrepresentation on Fraud Warning Form -- up 44 percent following a decrease of 10 percent in 2009.
False Social Security number -- increased by 38 percent following a slight increase in the previous year.

In addition to workers' comp, the report analyzed claims for property, casualty, commercial, vehicle, and miscellaneous insurance. In all, there were 24,497 questionable claims referred -- an 8 percent increase from Q1 2010 and a 13 percent increase from Q1 2009.

Read more at the WorkersComp Forum homepage.

June 23, 2011

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