Prosecuting fraud Featured

9:44am EDT July 22, 2002

Less than a decade ago, someone cheating the Bureau of Workers’ Compensation had little chance of being caught.

That changed in 1993, when the insurance industry as a whole began recognizing the huge amounts of money lost to fraud and the crime became a felony in Ohio. Before that, offenders could only be charged under general theft standards.

With the change in the law, the BWC established its first special investigators unit with just three investigators to police the entire state. Today, the 125 staff members in that unit identify about $100 million in fraud savings per year, says J.C. Benton, BWC spokesman.

“That’s money we’ve identified that did not go out (in fraudulent payments) to injured workers and medical providers,” Benton says. “We estimate a 900 percent return on investment in the area of fraud. For every dollar we invest, we recover nine.”

When CEO Jim Conrad joined the bureau in 1995, he beefed up the fraud unit, added investigators and began looking into fraud committed outside the state against the Ohio bureau.

“There’s nothing illegal about it if you’re injured and collecting workers’ comp and you move out of the state, but what we’ve found is people moving out of he state, then taking other jobs,” Benton says.

The BWC trades files with other agencies, including those in other states, to run cross checks on people collecting workers’ comp. If another agency has evidence that someone is working, the bureau investigates. It also checks prison records, because those serving time are not eligible to collect benefits.

“You have the right to collect if you’re injured on the job, but you give up that right when you go to jail,” Benton says.

In addition to automated detection systems, the BWC relies heavily on tips to catch those cheating the system.

“A lot of referrals come in around the holidays,” Benton says. “Relatives turn in other relatives. They’ve been spending time together over the holidays and someone hears Uncle Larry telling the story about how he’s collecting workers’ comp and is working somewhere else, but he’ll never be caught.”

Ex-wives and ex-husbands are also a rich source of tips, as are suspicious employers, Benton says.

In November 1999 alone, the BWC received 400 allegations, and is currently investigating about 1,800 cases. In 1999, it referred 246 offenders for prosecution and identified more than $101 million in fraudulent activities.

Although some offenders are jailed for committing fraud, the BWC’s biggest priority is recouping its money.

“As soon as someone pleads guilty in court, we make arrangements with the injured worker, or, in some cases, the medical provider, for a payment plan,” Benton said. “If someone doesn’t make a good faith effort to return the funds, we go back to the court. Sometimes a few days in jail will speed up our process of collecting money.”

It’s not only injured workers who commit fraud. Relatives have been caught cashing the workers’ comp checks of deceased relatives. And the health care provider unit focuses solely on fraud committed by health care organizations, which bill for services not related to a worker’s injury.

In the largest bust to date, a Florida provider was arrested for allegedly billing the BWC for $1.68 million for services not provided to an injured worker living in that state. And in Ohio, the owner of a chiropractic center was found guilty of conspiracy to commit mail fraud. In addition to fines and jail time, he was ordered to pay $250,000 in restitution, $230,000 of that to the BWC.

Benton stresses that cheating the system is stealing from the Ohio employers who pay into it. He encourages employers to pay careful attention to injured workers and report suspicious claims.

Anyone who suspects fraud can anonymously phone the BWC hotline at (800) OHIOBWC.