Archive

Archive for August, 2011

Make ‘em pay correctly: BWC Premium Audit Department

Checking balanceBy Michael Glass, Director, Premium Audit Department

BWC’s Premium Audit Department is responsible for ensuring proper payroll reporting and manual classification assignment. By auditing employers’ payroll, the Premium Audit Department strives for a fair and equitable rating structure.

The Premium Audit Department works closely with the Employer Compliance Department and the Special Investigations Department in BWC’s efforts to fight fraud. For example, Special Investigations Department staff may request an audit when an employer subject’s amount of premium is needed to support a criminal case. The Premium Audit Department refers policies to the Special Investigations Department when, in the course of an audit, it is suspected that willful and possibly illegal activity has occurred.

A Case In Point

The Special Investigations Department received a referral from the Premium Auditing Department that a Kenton pizzeria was operating their business with lapsed workers’ compensation coverage. The Premium Auditing Department contacted the employer several times in an attempt to bring the employer into compliance but the employer failed to secure coverage. An investigation by the Special Investigations Department confirmed that several employees work at the business, thus confirming the need for workers’ compensation coverage. Investigators requested that the Premium Auditing Department conduct an audit to calculate premiums owed, however, the owner of the company failed to cooperate with the audit. The owner pled guilty to one second degree misdemeanor count of failure to comply.

If you suspect that an employer is not paying their fair share of premiums, let us know. You may report it online at http://bit.ly/reportfraud or you may speak with a fraud hotline agent by calling 1-800-OHIOBWC.

Make ‘em pay: BWC Employer Compliance Unit

By John Sledd, Manager, Employer Compliance Department

BWC’s Employer Compliance Department works closely with the Special Investigations Department. The Employer Compliance Department’s role is to identify employers who are operating their business without participating in the Ohio’s Workers’ Compensation System. Additionally, the department attempts to determine the causes of non-compliance and assist employers in obtaining or reinstating their coverage.  In some instances, employers who attempt to avoid or evade their worker’s compensation obligations commit criminal acts such as failing to pay their premiums, improperly reporting their employees or forging or altering documents to obtain lower premiums.

When the Employer Compliance Department suspects that a criminal act has been committed, the employer is referred to the Special Investigations Department for a criminal investigation.  In some instances, the Employer Compliance Department may pursue civil remedies, such as an Injunction, to prevent an employer from operating until they have paid their outstanding premium and have obtained proper coverage. Our overarching goal is to help employers identify and use the proper tools to insure coverage for their employees to maintain a safe and financially sound business operation.  

A Case In Point
The Special Investigations Department received a referral from the Employer Compliance Department that a Columbus health services company was currently operating with lapsed coverage. The Employer Compliance Department attempted to bring the subject into compliance but the employer failed to make payments to become compliant. During an interview with investigators, the owner of the company admitted to having five part-time employees. Later, the owner told investigators that she made contact with the Ohio Attorney General’s Office’s Collection Division to pay her past due BWC premiums. Investigators determined that the Collections Division made numerous phone calls to the owner, which were never returned. The owner of the company was convicted of one second degree misdemeanor count of failure to comply.

If you suspect that an employer is operating without workers’ compensation coverage, let us know. You may report it online at http://bit.ly/reportfraud or you may speak with a fraud hotline agent by calling 1-800-OHIOBWC.

Changing It Up: Employers That Avoid Premiums by Risk Shifting

Risk shifting is a scheme where employers cancel their policy and/or create a new policy to intentionally avoid negative claims experience ratings and past due balances associated with their original policy.

A Case in Point
BWC created a policy for a Cleveland area automotive repair company after an industrial injury claim was filed by an employee. In response to the claim, the owner of the company attempted to apply for new coverage in person and was advised by BWC that he could only have one policy as a sole proprietor. Later, the owner attempted to open another policy online for his automotive company online but the policy was rejected after an initial review by BWC. A BWC investigator visited the business workplace to discuss the employer’s non-compliance and observed an updated BWC certificate of coverage. The investigator questioned the owner about the new certificate and was advised that owner sold the business to his wife. After review, the investigator determined that new coverage for this policy was in the owner’s wife’s name but the deposit was paid with the owner’s credit card and the receipt was signed by the owner. The application was not truthful about pre-existing policies associated with the business. The owner pled guilty to one fourth degree felony count of Workers’ Compensation Fraud and one fifth degree felony count of Forgery.

Red flags that may indicate risk shifting include:

  • Multiple policies associated with one address;
  • Businesses with high experience and premium suddenly canceling its policy; and
  • Different policies operating with the same employees.

If you suspect that an employer is risk shifting, let us know. You may report it online at http://bit.ly/reportfraud or you may speak with a fraud hotline agent by calling 1-800-OHIOBWC.

SID Annual Report for Fiscal Year 2011

FY11 Annual Report CoverWe published our fiscal year (FY) 2011 fraud results, ongoing trends and future strategies. View our FY 2011 Annual Report.

SID concluded FY 2011 by exceeding our operational goals. We increased effectiveness during FY 2011, referring 245 subjects for criminal prosecution or 20.8 percent of all founded, closed cases. Our prosecution referrals generated 276 convictions during FY 2010 and FY 2011 – the highest level of performance on this measure during any two-year period. We increased efficiency during FY 2011, reducing the average lag days from date allegation received to date case closed by fully 27 days or 10 percent. These results contribute to the agency’s priorities — improving operations and providing better service and care for customers.

During the last 12 months, we focused on improving our investigation and prosecution of medical provider and employer premium fraud. The FY 2011 fraud report includes information about these efforts and the condition of workers’ compensation fraud in Ohio. The report reviews results since our department’s inception in 1993 – including that we have closed more than 54,000 cases and identified $1.4 billion in savings to the Ohio workers’ compensation system. The report highlights our achievements during fiscal year 2011, including performance against goals measured via key indicators and summaries of noteworthy cases investigated and/or prosecuted. The report also identifies fraud trends by subject type and highlights future strategies as specified in our department’s five-year strategic plan.

To report fraud online, please visit: http://bit.ly/reportfraud.
To speak with a fraud hotline agent, please call: 1-800-OHIOBWC.

Categories: SID Information Tags: , ,

Making Copies: Employers That Falsify BWC Certificates of Coverage

Every six months, BWC provides a new certificate of coverage for employers to post in a high visible location. Devious employers alter the validation dates on past BWC certificates to make it appear they have maintained current coverage; for example, when a certificate is needed for a bidding process.

A Case in Point
The Employer Fraud Team received an online allegation alleging that a contracting company was operating without workers’ compensation coverage. The investigation revealed that the contractor had provided two false BWC certificates of coverage to their clients, in addition to operating with employees, while reporting zero payroll for eight years. The owners of the company each pleaded guilty to fourth degree felony counts of workers compensation fraud and were ordered to pay $52,245 in restitution to BWC.

Red flags that may indicate a falsified or an altered certificate of coverage include:

  • Alterations to dates or other information on certificates, e.g. cross-outs, type-overs, etc.
  • Name of business is different from the name on workers’ compensation certificate
  • BWC Administrator’s name is incorrect

Anyone is able to determine whether an employer operating in Ohio has workers’ compensation coverage by visiting BWC’s online employer lookup at: https://www.ohiobwc.com/provider/services/mcolookup/nlbwc/default.asp.

We are hiring!

We are hiring various investigative positions throughout the state. Apply to each position below or visit http://careers.ohio.gov/.

Cincinnati

Position

Team

Closing Date

Fraud Investigator

Health Care Provider Team

08/29/2011

Fraud Investigator

Region 3

08/29/2011

Cleveland

Position

Team

Closing Date

Fraud Investigator

Region 1

08/29/2011

Safety Violations Investigator

SVIU

08/29/2011

 

Lima

Position

Team

Closing Date

Fraud Investigator

Region 3

08/29/2011

Mansfield

Position

Team

Closing Date

Fraud Investigator

Health Care Provider Team

08/29/2011

Portsmouth

Position

Team

Closing Date

Fraud Investigator

Region 2

08/29/2011

Categories: SID Information Tags: ,

BWC Investigations Result in Nine Workers’ Comp Fraud Convictions in July

Ohio Bureau of Workers’ Compensation (BWC) Administrator/CEO Stephen Buehrer today announced nine individuals were convicted of or pleaded guilty to charges related to defrauding Ohio’s workers’ compensation system during the month of July. The court actions are the result of investigations conducted by BWC’s Special Investigations Department (SID), which works to deter, detect, investigate, and prosecute workers’ compensation fraud.

“Several of these individuals went to great lengths in their attempts to cheat the system so they could receive undue compensation and access to prescription drugs,” said Buehrer.  “They likely did not anticipate the expertise and dedication our investigators have when it comes to finding and eliminating fraud.”

Following is a sampling of cases that resulted in a guilty plea or conviction during the month of July.

 Charles Watson (Toledo, Lucas County) pleaded guilty to one count of deception to obtain dangerous drugs for fraudulently receiving BWC paid narcotic prescriptions from two different physicians.  Watson was traveling from one physician in Toledo to another physician in Dover (Tuscarawas County) to obtain similar narcotics.  Neither physician knew Watson received narcotics from prescriptions written by the other physician.  Watson was sentenced nine months suspended incarceration and was placed on community control for two years.  As a condition of community control, Watson was ordered to pay restitution of $930.24 and court costs.  The court also suspended his driver’s license for six months. 

Misti Marshall (Elyria, Lorain County) entered a plea of guilty to one count of workers’ compensation fraud for working while receiving benefits. BWC’s Automated Detection and Intelligence unit noted a cross match with the Ohio Department of Job and Family Services (ODJFS) indicating potential fraud.  Investigators found Marshall was receiving wages from Assured Home Health, Rono Investments, Industrial Plastics and Kelly Services while she was collecting Temporary Total Disability and Living Maintenance benefits. Marshall must pay restitution of $18,177.15 and an additional $3,000 for investigative costs. Her sentencing is scheduled for September 22.

Benton Crist (Delphos, Allen County) pleaded guilty to one count of workers’ compensation fraud for working while receiving benefits.  Crist failed to inform BWC that he was working as a truck driver for Martin Transportation Systems, in Byron Center, Michigan (formerly Topline Express out of Lima, Ohio) during the time he was applying for and collecting Non-Working Wage Loss benefits.  The investigation began after a BWC claims service specialist recognized signs of possible fraud in his claim documents. Crist was sentenced to five years of community control and ordered to pay court costs and restitution of $ 42,876.34.  He was also sentenced to 12 months suspended incarceration.

Donald Fisher (Clermont County) pleaded guilty in Clermont County to one count of deception to obtain a dangerous drug, a fourth degree felony. Investigators found that Fisher was having his granddaughter use and sell narcotics prescribed by his BWC physician.  Between May 2010 to March 2011, Fisher gave his adult granddaughter 10 Opana and 10 Percocet pills each week to traffic on the street in exchange for sexual favors. Rebecca Fisher sold the Opana for $50 per pill and the Percocet for $12 per pill and split her profits with Fisher.  Both confessed to selling the BWC prescribed narcotics during the same period Fisher received Permanent Total Disability benefits. Fisher’s sentencing is pending.

http://www.ohiobwc.com/home/current/releases/2011/081211.asp

To report fraud online, please visit: http://bit.ly/reportfraud.
To speak with a fraud hotline agent, please call: 1-800-OHIOBWC.