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Tennessee man’s false injury claim costs him $33K

 Ohio BWC releases latest fraud convictions

A Tennessee man pleaded guilty to felony workers’ compensation fraud Sept. 9 after collecting more than $33,000 from the Ohio Bureau of Workers’ Compensation for a work injury he falsely claimed occurred in Ohio.

Roger Frankenberg, 60, of Sevierville, Tennessee, pleaded guilty to the fifth-degree felony in Franklin County Common Pleas Court. A judge sentenced him to 11 months in jail, suspended for five years of probation, and ordered Frankenberg to pay BWC $33,210 in restitution.

“As many fraudsters discover, ripping off this agency clearly doesn’t pay, thanks to the good work of our Special Investigations Department,” said BWC Administrator/CEO Stephanie McCloud. “Not only does Mr. Frankenberg owe us $33,000, he has a felony record.”

 Acting on a tip, BWC discovered Frankenberg had returned to work for his self-owned company, Custom Renovations and Beyond Inc., while receiving BWC disability benefits from December 2015 until December 2016.

 Further investigation determined Frankenberg sustained his injury in Pennsylvania, not Ohio. But because he didn’t have insurance coverage in Pennsylvania, he fabricated a BWC claim so he could have his medical bills covered and collect indemnity payments.

In a separate case on Sept. 9, a Columbus woman pleaded guilty to workers’ compensation fraud after BWC found she had returned to work but didn’t tell the agency so she could continue to receive disability benefits.

Deborah Chenault pleaded guilty to one misdemeanor count of workers’ compensation fraud and was ordered to pay BWC $6,000 in restitution. A three-month jail term was suspended for five years of probation.

In other news, BWC secured three fraud-related convictions in August, bringing its 2020 calendar year total to 51. They include a case involving a Dayton man who stole a near $4,000 check BWC had sent his employer.

  • Eric Walker-Mabry of Dayton pleaded guilty Aug. 25 to one count each of theft of property, theft, and forgery, all fifth-degree felonies. A Montgomery County judge ordered Walker-Mabry to pay BWC $3,707 in restitution and sentenced him to five years of probation. BWC issued a full refund to the employer.

 

  • Danny Mitchell of Clarksburg, West Virginia, dba Mitchell Drilling Inc., pleaded no contest Aug. 18 in Tuscarawas County to one minor misdemeanor count of failure to comply and was found guilty after BWC found him operating his business in Ohio without BWC coverage. A judge waived fines and court costs. Mitchell Drilling paid BWC its outstanding premiums and is no longer operating in Ohio.

 

  • Nina Washington of Dayton must pay BWC $4,616 in restitution after pleading guilty Aug. 17 to a misdemeanor count of workers’ compensation fraud. A Franklin County judge also sentenced Washington to five years of probation for collecting disability benefits after she returned to work. Washington paid $500 toward her restitution the morning of her sentencing.

 

To report suspected workers’ compensation fraud, call 1-800-644-6292 or visit bwc.ohio.gov.

Dayton claims representative is BWC’s Fraud Finder of the Year

By Jeff Baker, Program Administrator, BWC Special Investigations Department

A claims service specialist (CSS) in our Dayton Service Office is our 2019 Fraud Finder of the Year award winner.

We can’t name the employee because we don’t publicly identify our fraud tipsters, but this longtime BWC veteran tipped us off about a claimant collecting disability benefits after going to prison for shooting a SWAT officer.

“Thanks to this employee’s actions, we were able to save the BWC system more than $2 million,” said Jim Wernecke, director of our Special Investigations Department (SID), referring to the estimated cost over the life of the claim.

With characteristic humility, the CSS, who referred five other allegations to SID during fiscal year 2019, said, “I was just doing my job.”

About a fourth of the nearly 3,000 fraud allegations we received in fiscal year 2019 came from BWC personnel around the state. These included claims representatives, employer representatives, and others who suspected illicit behavior on the part of injured workers, employers, health-care providers or others connected to Ohio’s workers’ compensation system. Our investigations led to an estimated $5.9 million in savings to the BWC system.

“We encourage all BWC employees and the general public to contact us immediately if they suspect fraudulent behavior in our system, even the slightest hint of it,” said Director Wernecke. “We will conduct a thorough investigation, and the sooner we get started, the better.”

To report suspected cases of workers’ compensation fraud, call 1-800-644-6292 (then select option 0, option 4, option 1) or visit www.bwc.ohio.gov.

Spreading joy is a tradition here at BWC

Each year our agency supports local charities.

In December 2019, we supported the following:

FireFighters 4 Kids Toy Drive (gifts); Franklin County Children Services Holiday Wish (cash donation); and the Beach House Family Shelter (supplies) located in Toledo, Ohio. #giveback

The gifts pictured left were delivered to the Columbus area FireFighters 4 Kids Toy Drive today.

 

 

 

An appreciative Columbus area firefighter pictured below coordinated receipt of the gifts by the local FireFighters 4 Kids Toy Drive.

 

 

 

 

 

 

 

 

 

 

 

On Thursday, December 19, the gifts pictured below were delivered to the Beach House Family Shelter located in Toledo, Ohio.

   

The gifts below will be donated to Richland County Children’s Services.

 

Thanks to our BWC executives and SID employees for these generous donations that will benefit local charities.
Categories: SID Information Tags: ,

Fraud hurts us all

Fraud hurts us all, says Jim Wernecke, head of BWC’s special investigations department, in this video.

 

To report suspected workers’ compensation fraud, call 1-800-644-6292 or visit bwc.ohio.gov.

Spotlight: Our college interns

By Jeff Baker, Program Administrator, BWC Special Investigations Department

In recognition of International Fraud Awareness Week 2017, we are highlighting careers in criminal investigations, especially those that commence with the study of criminology, criminal justice, law enforcement, digital forensics or data analytics.

History:  BWC’s Special Investigations Department (SID) created its college relations program in 1995 to promote the study and practice of criminology, criminal justice, law enforcement and public administration. On college and university campuses throughout Ohio (and beyond), SID staff members exchange insights with students, faculty and staff members on how to combat crime.

Since the program began 20 years ago, SID has recruited, selected and trained more than 300 paid interns and unpaid externs. Many have gone on to become law enforcement officers, criminal investigators, special agents, digital forensic analysts, assistant special agents in charge and special agents in charge. We currently employ in full time positions, thirteen graduates from our SID college internship program.

On Campus: BWC representatives travel to colleges and universities to meet with candidates. For example, on Nov. 14, BWC was represented at Bowling Green State University by SID Special Agent in Charge Craig Matthews and BWC Human Capital Management Analyst Megan Lentz.

They participated in a job fair specifically targeted toward criminal justice majors. Matthews described the internship program in the special investigations department at the Toledo service office and Lentz explained the application process.

Panel Discussion:  For two hours on Nov. 15, two investigative professionals, Taylor Scarberry and Paul Balzer, participated in our agency’s second panel event where five current permanent employees who started out at BWC as interns discussed their experiences with our current interns. Moderated by Megan Lentz, these successful professionals painted a picture of what it is like to permanently come on board with our agency.

The former SID interns described their success and career paths working in specialized units, including the intelligence and special investigations units (SIUs), as well the health care provider team and regional claimant SIU.

Megan Lentz, Kayla Michel, Luke Bogner, Nathan LaChappelle, Taylor Scarberry and Paul Balzer

They described their many important responsibilities as a college intern with SID. They also mentioned what they did not do, such as getting coffee or food for their co-workers, running any errand, or any other trivial activity.

Panelist Taylor Scarberry: Taylor started his career with BWC in November 2012 as an exemplary college intern with the Columbus SIU. On August 22, 2016, he commenced his permanent employment with BWC as a Criminal Investigator with the Southeast Regional Claimant SIU, assigned to the Cambridge service office. He reports to special agent in charge Scott Lape, a former SID college intern.

During today’s panel discussion, Taylor offered the following knowledge, understanding and wisdom:

“Following my experience as a college intern with the Special Investigations Department and obtaining my Bachelor’s degree in Criminology from The Ohio State University, it was important to me to find a career in criminal justice.  I discovered quickly during my internship that criminal justice was something I was passionate about and saw myself establishing a career in.  BWC provided me that opportunity and the team atmosphere within the SID is something I enjoy being a part of every day.”

Panelist Paul Balzer: Paul started his career with BWC in 2010 while a student at The Ohio State University. Following his internship, he joined BWC full-time as a criminal investigator with health care provider team (HCPT) in December 2011. On October 7, 2012, Paul was promoted to special agent with the HCPT. On Nov. 28, 2016, he was promoted to fraud analyst with the intelligence unit, a team supervised by a former SID college intern, special agent in charge Eric Brown.

As an experienced panelist who has already earned multiple promotions, Paul offered the following recollections and insights:

“I had no idea what this agency did or that it even existed. But the synopsis I read about the internship combined all three things I had wanted to do – work in health care, computer science and criminology. In my current position, I want to continue to make an impact. There are a lot of challenges in the criminal justice system, but we can still make an impact and improve the lives of others. I hope we continue to use critical resources in the most efficient manner possible to stop fraud, because fraud just drives up costs for the entire system.”

Reasons for Ongoing Success: The SID college relations program has been successful in hiring interns with a variety of backgrounds, majors and career goals who quickly become vital assets to BWC’s efforts to fight workers’ compensation fraud. We solicit and heed feedback from our interns to continually improve our program.

The Future: If you know of any students that would be a great fit in our program, please encourage them to submit an application via our Future Opportunities posting. We have an intern position that we are looking to fill right now and we are using the Future Opportunities posting to select our applications. Additionally, we have the specific intern positions posted:

Spotlight on SID’s college relations program

Developing tomorrow’s leaders in criminal justice, law enforcement

By Jeff Baker, Program Administrator, BWC Special Investigations Department

Interested in getting coffee? Making photocopies?

You won’t find that at the Ohio Bureau of Workers’ Compensation’s (BWC) Special Investigations Department (SID). SID interns are real employees who do real work as part of our college relations program, now in its 23rd year.

“We’re treated like coworkers,” says Ohio State University student Gabby Master, an intern in SID’s intelligence unit. “We do all the projects everyone else does.”

On top of all that, she adds, “It’s really fun!”

(You can catch Gabby sharing more about her intern experience in this YouTube video.)

Established in 1995, SID’s college relations program promotes the study and practice of criminology, criminal justice, law enforcement and public administration. Since its inception, SID has recruited, selected, oriented and trained more than 300 paid college interns.

Gabby Master, Kelsey Wilson, Loryn Competti and Brianna Belmonte

Many have humbled us with favorable feedback over the years, but we know the credit and accolades go to them. Their careers are testament to their professionalism.

Many have gone on to become officers, criminal investigators, special agents, fraud analysts, digital forensic analysts, assistant special agents in charge, special agents in charge and assistant director.

We’re pleased that for more than 20 years our college relations program has attracted students from a variety of backgrounds, schools and experiences.

Today we have seven talented interns working with our special investigations units (SIUs) statewide. Four college interns (pictured above) are based in our Columbus headquarters: Gabby Master, Kelsey Wilson, Loryn Competti and Brianna Belmonte. Our other SID interns (not pictured) are Allison Castle (Lima), Stephen Kersey (Toledo) and Connor Yuellig (Governor’s Hill).

These interns are here for the same reasons that our past interns have worked with SID. They want a challenge, and that’s what they get.

“Our interns have helped us tremendously over the years,” says SID Director Jim Wernecke. “Their work has helped us convict hundreds of fraudsters and saved the BWC system tens of millions of dollars.”

Are you enrolled at a college or university and interested in joining our team as an intern? If so, I invite you to contact me at Jeffrey.B.1@bwc.state.oh.us.

Spotlight: Eric Brown – From college extern to special agent in charge of two elite teams

By Jeff Baker, Program Administrator, BWC Special Investigations Department

eric-brown-picMembers of the Special Investigations Department (SID) congratulate Eric Brown. On Oct. 17, 2016, Eric was promoted to special agent in charge (SAC) of the intelligence unit (IU) and the safety violations investigation unit (SVIU).

Eric started his career with BWC in September 2007 as a college extern with SID Administration’s fraud hotline team. Well-deserved promotions soon followed. Since March 2008, Eric has served the department as a college intern with IU, and full time as a criminal investigator and special agent with the health care provider team (HCPT).

intelligence4While working with SID, Eric  completed two degrees. He earned a Bachelor of Arts from The Ohio State University, with a major in Political Science and a minor in Sociology/Criminology, and a Master of Business Administration  from the University of Cincinnati.

Throughout his career, applying insight, initiative and perseverance, Eric  has significantly contributed to the department’s success. For example, he:

  • Initiated and developed the SID Case Management application;
  • Initiated and co-administered the SID Social Media campaign;
  • Co-initiated the SID 2014 Electronic Surveillance Equipment Symposium;
  • Co-initiated, staffed and co-executed the SID Technical Operations Group.

Eric was one of four special agents on Sept. 14 to receive a 2016 Innovator award. He and his co-recipients met criteria including: developed trend-setting initiatives, created an original idea or uniquely adapted an existing program, process or concept, which resulted in a long term benefit to the department; developed new work methods that reduced waste or stretched resources; and provided creative suggestions that saved the department time or money.

safety-violations2Certainly, for all of the above reasons, you can see why we thank and congratulate SAC Brown! We look forward to his continued leadership and success in our department.

For more information about IU, see our Jan.22 article, Spotlight: Intelligence Unit — Predicting even more results, here.

For more information about SVIU, see our 2011 article, SVIU: Investigating suspected violations of specific safety requirements, here, or our 2013 article, Completing the circle of coverage: A look at our Safety Violations Investigation Unit, here.

For more information about the SID see our most recent annual report here.

Spotlight: Dan Fodor – From college intern to assistant director, special investigations central operations

October 14, 2016 1 comment

By Jeff Baker, Program Administrator, BWC Special Investigations Department

fodor-picMembers of the Special Investigations Department (SID) congratulate Dan Fodor. In June 2016, Dan (shown presenting at the 2016 SID in-service meeting on Sept. 14) was promoted to assistant director, central operations.

Assistant director (AD) Fodor started his career with BWC in June 1991 as a college intern with the internal audit department. During this time, Dan completed his degree and became a certified public accountant. He earned a bachelor’s in accounting from The Ohio State University. In December 1991, Dan commenced his initial full-time position with BWC as a  financial/operational auditor and consultant. By the autumn of 1996, he had earned the title of audit senior and commenced his stellar management career.

sid-text-3In November 1999, Dan joined SID as the special agent in charge of the intelligence unit (IU), providing essential support to special investigations unit field agents through fraud detection and data analysis. Given his knowledge, skills and successes with IU, Dan accepted, in June 2014, the additional responsibility of supervising the safety violations investigation unit (SVIU), a team devoted to investigating alleged safety requirement violations that have resulted in a workplace injury, illness or death.

Throughout his career, applying uncanny intuition, uncommon sense and diligence, AD Fodor has energetically prompted our agency’s success and earned the respect of his SID colleagues.

A few examples from his 25-year career, include:

  • Guided and directed the department’s effective use of the agency’s data warehouse;
  • Developed and executed SID performance measurements and management reporting;
  • Effectively partnered with other BWC operational areas and external entities;
  • Co-administered the SID strategic planning process for several five-year plans;
  • Since 2000, IU has detected 18,950 fraud allegations, resulting in the identification of $473 million in savings; and
  • Between 2000 and June 30, 2016, IU’s fraud allegations resulted in 948 criminal referrals and 480 convictions.

These performance results demonstrate, in part, why Dan is highly qualified to direct our SID central operations. Certainly, for all of the above reasons, you can see why we thank and congratulate AD Fodor! We look forward to his continued guidance, direction, leadership and success in our department.

dan-fodor-quote2
For more information about IU, see our Jan.22 article, Spotlight: Intelligence unit — Predicting even more results, here. For more information about SVIU, see our 2011 article, SVIU: Investigating suspected violations of specific safety requirements, here, or our 2013 article, Completing the circle of coverage: A look at our safety violations investigation unit, here. For more information about the SID, see our most recent annual report here.

SID Annual in-service training – An opportunity to recognize our own – Part 3 of 3

By Jeff Baker, Program Administrator, BWC Special Investigations Department

In our constant quest for improvement, all members of the Bureau of Workers’ Compensation Special Investigations Department (SID) annually complete in-service training. On Sept. 14, led by SID Director James Wernecke, we shared investigative successes, acknowledged team results, and presented individual awards.

Preparations: In August, all 126 SID employees had been invited to nominate a peer to receive an individual award. A management committee furnished behavioral characteristics for use by SID employees when submitting written justifications for any peer nomination. These characteristics varied according to the type of award: Innovator; Excellence; and Leadership. In reviewing all nominations, the committee members found that imminently qualified professionals were nominated by their colleagues. Ultimately, the committee selected the six most-worthy SID employees.

Presentations: These talented and dedicated professionals received their awards at the culmination of the Sept. 14 event.

Four special agents with the SID Health Care Provider Team (HCPT) received Innovator awards. They met criteria including: developed trend-setting initiatives, created an original idea or uniquely adapted an existing program, process or concept, which resulted in a long term benefit to the department; developed new work methods that reduced waste or stretched resources; and provided creative suggestions that saved the department time or money.

josh-g-1A special agent with considerable field training officer experience from the southeast regional claimant special investigations unit (SIU) earned the Excellence award. The special agent met four standards including: performing duties or providing services to others that are beyond the professional’s assigned responsibilities; working on special projects within the department; volunteering or contributing to organizations outside the department; and demonstrating an ability and willingness to work positively, respectfully and effectively with people inside or outside of the department.

Josh Grappy, a forensic computer specialist with the SID digital forensics unit (DFU), received the Leadership award fromDirector Wernecke and SID Assistant Directors Jennifer Cunningham and Dan Fodor. Here are just some of the reasons he was nominated:

josh-g-2“Josh does not sit back and watch the world go by, he is making things happen within our organization. Josh has a high level of perseverance, stick-to-itiveness and drive. He can be counted on to get things done. Josh not only meets the customers’ expectations, he regularly exceeds them.”

Please, join us in thanking and congratulating each of the SID award nominees and recipients. They are the reason we are able to meet our mission: To effectively and proactively prevent losses to the workers’ compensation system and to deter, detect, investigate and prosecute workers’ compensation fraud.

You can read the first article about our Sept. 14 event here, the second article about the event here, and our most recent annual report here.

BWC SID: Annual in-service training – Part 1 of 3

September 23, 2016 2 comments

By Jeff Baker, Program Administrator, BWC Special Investigations Department

admin-morrison-sid-mtgIn our constant quest for improvement, all members of the Bureau of Workers’ Compensation Special Investigations Department (SID) gathered on September 14, 2016 at our Mansfield service office to successfully complete annual in-service training.

BWC Administrator/CEO Sarah Morrison welcomed the 125 attendees and opened the meeting. In her opening remarks, Administrator Morrison praised the department’s more than 20 years of success. She noted that strategies identified and implemented during the past twelve months, under the leadership of SID Director James Wernecke, have positioned the department to extend its tradition of excellence.

Following these remarks, Administrator Morrison, SID Director Wernecke, and SID Assistant Directors Jennifer Cunningham and Dan Fodor presented service pins to 22 SID employees. These recipients included two employees with 30 years of service to the State of Ohio: Shawn Miller, a fraud analyst with the southeast regional claimant special investigations unit (SIU); and Lisa Ray, SID training manager.

Pictured left to right: Sarah Morrison, James Wernecke, Lisa Ray, Shawn Miller, Jennifer Cunningham and Dan Fodor.

Subsequently, Director Wernecke thanked Administrator Morrison for her executive leadership, essential support for SID’s mission and compelling presence at the annual event. All of members of the Special Investigations Department joined Director Wernecke in thanking Administrator Morrison for inspiring us to realize our departmental mission to deter, detect, investigate and prosecute workers’ compensation fraud.

In the coming two weeks, we will offer more details from September 14 training event. Stay tuned for part two of the series, which acknowledges specialized training we received at the event.

In the meantime, you can read the past posts about our SID Director here and our most recent annual report here.

Have presentation, will travel

As part of our mission to effectively and proactively prevent losses to the workers’ compensation system and to deter, detect, investigate and prosecute workers’ compensation fraud, we recognize the importance of educating and informing our stakeholders about how they may join us to combat fraud.

That’s why we annually schedule and conduct dozens of fraud presentations to groups of internal and external stakeholders throughout the state. These groups have included other BWC departments, public and private employers, third party administrators, medical providers, MCOs and members of associations, such as chambers of commerce, safety councils and bar associations.

During fiscal year 2015, we conducted 44 presentations describing and demonstrating how we accomplish our mission. Our SID employees share examples of successful cases and furnish all attendees with the means to detect and report suspected fraud.

In the photo below SID Special Agent in Charge Shawn Fox walks attendees of BWC’s 2016 Safety Congress & Expo through the steps he and his staff took when investigating the Hammond fraud case. More on that case here.

sid presentation

We welcome requests for fraud presentations from all interested organizations. To schedule a fraud presentation, simply e-mail your request to Jeffrey.B.1@bwc.state.oh.us and we will promptly contact you to discuss your group’s event.

We hope you’ll contact us and look forward to meeting you soon!

For more details pertaining to our fraud prevention efforts, view our Annual Report here.

BWC SID: Our Journey to Excellence – Part 1 of 3

0005 -- Administrator Buehrer -- Introductory Remarks -- IMG_2876In our constant quest for improvement, all members of the Bureau of Workers’ Compensation Special Investigations Department (SID) gathered on October 22, 2015 at our Mansfield service office to successfully complete annual in-service training. The theme of this year’s training event was “Our Journey to Excellence: Past, Present and Future.”

BWC Administrator/CEO Steve Buehrer welcomed the 125 attendees and opened the meeting. In his opening remarks, Administrator Buehrer praised the department’s more than 20 years of success, noting that throughout its history SID has generated more than $7 in savings for every budgetary dollar expended. He cited other SID performance results, lauding SID for having annually identified more than $55 million in savings to the State Insurance Fund during each of the last five consecutive years.

“Investigating fraud is a vital part of the workers’ compensation business,” Administrator Buehrer said. “Identifying fraud puts dollars back into the State Insurance Fund and supports our efforts to keep premiums as low as possible.”

SID Mtg 2015

Pictured left to right: James Wernecke, Jennifer Saunders, Tamela Dixon, Sarah Morrison and Steve Buehrer.

Following these remarks, Administrator Buehrer, Chief Legal Officer Sarah Morrison, SID Director James Wernecke and SID Assistant Director Jennifer Saunders presented service pins to 14 SID employees. These recipients included seven employees with 20 years of service and one, Assistant Special Agent in Charge Tamela Dixon, with 25 years of service to the State of Ohio.

Subsequently, SID Director James Wernecke thanked Administrator Buehrer for his executive leadership, ongoing support for SID’s mission, and presence at the annual event. All of members of the Special Investigations Department joined Director Wernecke in thanking Administrator Buehrer for inspiring us to realize our departmental mission to deter, detect, investigate and prosecute workers’ compensation fraud.

In the coming two weeks, we will offer more details from October 22 training event. Stay tuned for part two of the series, which acknowledges specialized training we received at the event.

In the meantime, you can read the past posts about our SID Director here and our most recent annual report here.

Ohio State Highway Patrol veteran to lead BWC fraud unit

James WerneckeCOLUMBUS – Ohio Bureau of Workers’ Compensation (BWC) Administrator/CEO Steve Buehrer today announced the appointment of a 25-year Ohio State Highway Patrol veteran as director of BWC’s Special Investigations Department. James Wernecke began his duties yesterday, overseeing 123 employees who work to deter, detect and investigate workers’ compensation fraud. The department pursues cases of claimant, medical provider and employer fraud by identifying savings, disallowing claims and referring criminal matters for prosecution.

“With more than 25 years of law enforcement experience, Jim is a public safety and criminal investigation expert who is exceptionally qualified to lead our fraud prevention efforts,” said Buehrer. “We look forward to having Jim join our outstanding team of skilled, professional investigators and take the lead in identifying wrongdoing to protect the State Insurance Fund, keep employer premiums as low as possible and provide the best care possible to Ohioans injured on the job.”

A Tuscawaras County native, Wernecke began his career as a trooper in Massillon in 1990 and later served as an investigator in Massillon and Bucyrus, and commander at the Mansfield Patrol Post. He was appointed in 2012 commander of the Ohio Investigative Unit, which is charged with enforcing the state’s liquor laws and is the only state law enforcement agency specifically tasked with investigating food stamp fraud crimes. Agents also investigate tobacco violations.

Wernecke served as an investigative team leader with the Ohio Inspector General’s Task Force and was also assistant commander of the Special Operations Office of Investigative Services from 2006 to 2012.

Wernecke completed advanced law enforcement and investigative training at a number of law enforcement agencies in and outside of Ohio, including the United States Army War College, the West Virginia and Delaware State Police, the New York State Police Academy, Ohio University and the Ohio State University. He also attended the Northwestern University for Public Safety and North Central State College.

From January 2011 to present, BWC’s Special Investigations Department obtained 601 convictions, identifying a total of $260 million in savings for the State Insurance Fund.

The reason we collaborate with law enforcement agencies

As a criminal justice agency, we regularly consult and partner with law enforcement and criminal justice agencies for our investigations. Municipal police departments, county sheriff’s offices, state agencies and federal offices, prosecutors at the city, county, state and federal level – BWC’s Special Investigations Department works with all types of agencies to investigate workers’ compensation fraud.

The reason is simple: One of the most effective ways to discover alternate methods of fraud detection and investigation is to consult or partner with other criminal justice and law enforcement agencies. Such collaboration allows SID to learn ways to accomplish tasks more efficiently and glean new strategies and technologies for conducting investigations.

Most frequently, our fraud investigators collaborate with other agencies to conduct joint criminal investigations of fraud suspects. They often execute search warrants with local, state and federal law enforcement agencies as well.

Here are just three examples of cases in which we received assistance from other law enforcement agencies:

  • Joseph Curto, of Conway, South Carolina, who had worked for seven employers since 1999 and used his wife’s Social Security number to report his earnings in an effort to conceal his income to continue receiving workers’ comp benefits. The Social Security Administration, Office of Inspector General assisted in the out-of-state investigation;
  • Lawanna Porter, of Shaker Heights, who operated Palladium Healthcare, a home healthcare agency with more than 100 employees, failed to report having employees to various state agencies or to secure workers’ compensation, and failed to report her payroll to BWC. SID conducted this joint investigation with the Ohio Attorney General’s Office, Medicaid Fraud Control Unit;
  • Daren L. Snyder, of Chillicothe, who was convicted of workers’ compensation fraud in 2011. However, when Snyder failed to meet the conditions of his probation, a warrant was issued for his arrest. On Nov. 25, 2014, the Franklin County Sheriff’s Office arrested Snyder.

We are honored to be associated with other criminal justice and law enforcement agencies, and the many professionals who make up these organizations. We respect and appreciate their dedication to serving and protecting the citizens of Ohio.

Want to learn more? You can read the past posts about our history here and our current efforts here.

Spreading holiday joy with toy drive

BWC’s Special Investigations Department (SID) has been busy again this holiday season, collecting toys to donate to toy drives around Ohio. Spreading joy to children in need has become a tradition in SID.

“I’m proud of our department’s efforts each year for the past several years to make the holidays a little brighter for children in need,” said SID Interim Director Jennifer Saunders. “We have an impressive team of dedicated professionals who not only do outstanding work all year, but really shine when they come together each December make a difference in their communities.”

We encourage you to join the generosity, and find a way to make a difference in your community this holiday season.

Thank you for reading our blog, and happy holidays!

Categories: SID Information

Meet Karen, our fraud hotline dispatcher

We really like Karen, our fraud hotline dispatcher.

Why? She thoroughly interviewed a source and effectively documented suspected fraud, which resulted in the identification of $374,175 in savings. To thank her, a member of our Special Investigations Department recently presented a certificate of appreciation to Karen for her dedication and success as a dispatcher with the fraud hotline, which is operated by BWC’s customer contact center.

A fraud analyst and a special agent for our department note that one of their recent investigations would not have occurred without Karen’s initial interview of a source.

Karen, thanks for all that you do! To report workers’ comp fraud to Karen, click here or call her at the BWC fraud hotline at 1-800-644-6292.

Categories: SID Information

Ohio Attorney General Law Enforcement Conference 2014

October 31, 2014 1 comment

AG LE Conf - 10-29-2014

Investigators at the Ohio Bureau of Workers’ Compensation’s Special Investigations Department wear many hats. When they’re not digging into casework, conducting surveillance or researching leads, they’re either educating the public about workers’ compensation fraud or learning how to advance their skills to become more effective in the future.  Earlier this week, for example, more than one dozen SID professionals attended the Ohio Attorney General (OAG) Law Enforcement Conference 2014 here in Columbus.

For their personal and professional development, they gleaned ideas from the conference’s four keynote speakers:

  • Bobby Smith, a retired Louisiana state trooper and internationally recognized speaker;
  • James A. White Sr., a senior master training coach and owner of Performance Consulting Services in Columbus;
  • Michael LaRiviere, a member of the Salem (MA) Police Department; and
  • Ursel McElroy Drake, deputy director of education and policy for the Ohio Attorney General’s Crime Victim Services Section.

To acquire the latest information on specialized investigative topics, each investigator attended five of the conference’s 30 workshops, including two related to social media:

  • Social Media and Law Enforcement, presented by David Oliver, chief, Brimfield (OH) Police Department; and
  • Social Media Evidence: What is There and How Do I Get It? presented by Michael Sullivan, assistant U.S. attorney, U.S. Attorney’s Office.

Here is how one investigator from the Columbus Special Investigations Unit (SIU) described the conference:

“I met many people including personnel from the US Attorney’s Office, Common Pleas Court Judges, investigators from other state agencies and law enforcement personal from various departments.  This will be valuable in the SIU’s continued efforts to build relationships with others in the law enforcement community.”

Having completed the productive two-day conference, the investigators are now back on the street, increasingly protecting the State Insurance Fund. They are ready to deploy more and better strategies to deter, detect, investigate and prosecute workers’ compensation fraud. These strategies include conducting joint investigations with other law enforcement professionals, such as those who attended this week’s OAG Law Enforcement Conference 2014 and the hundreds of law enforcement professionals from around Ohio and the U.S. who gathered on April 17 in Columbus for the Electronic Surveillance and Equipment Symposium (ESES14), co-sponsored by SID and the Ohio State Highway Patrol.

And, they are even better prepared as presenters to educate and inform stakeholders about how they may help us to deter and detect fraud, as we advised our blog readers last September.

Ultimately, using what they learned at this and other training seminars, the BWC investigators seek to secure even more results than the $60.1 million in savings they identified last year, as outlined in our FY 2014 annual report.

For more articles from our blog, please visit ohiobwcfraud.wordpress.com.

Coming Soon…SID FY 2014 Annual Report

Like a good movie trailer that entices you to go to the movie theater, we would like to make you aware of our soon-to-be released SID fiscal year 2014 Annual Report.  Each year, we furnish an annual report of our performance, strategic initiatives and fraud trends we have identified.  In the coming weeks, we will be hard at work reviewing operations, assessing performance outcomes and tallying the results achieved during fiscal year 2014, which concludes on June 30. Since fiscal year 2001, this year-end process has culminated in the publication (during late July) of our SID annual report.

Like in the movie, The Wizard of Oz, we are like the man behind the curtain.  Our investigative staff works diligently to ensure those with legitimate work-related injuries receive benefits and medical care…and those who are not answer for their actions to the fullest extent of the law.  In the coming report, we will highlight some of our successes in the past year, profile some interesting fraud cases and provide a sneak peak of our new strategic initiatives.

Since SID performance results are generated by effective collaborations with our governmental and public law enforcement colleagues, the report will acknowledge those agencies with which we conducted joint investigations during fiscal year 2014.

The document will also offer achievements of respective teams and task forces, as well as shine a spotlight upon operational trends and strategies. Debuting in this year’s report will be a summary of presentations facilitated by SID employees. These include our sponsorship of an inaugural Electronic Surveillance Equipment Symposium, conducted for 300 members of governmental and public law enforcement agencies on April 17.

Most importantly, we’re pleased that the current level of performance suggests we will surpass our outstanding results from fiscal year 2013. View the entire 2013 annual report here.

Of course, criminals do not take sabbaticals. Neither do we. Even as we create and finalize the fiscal year 2014 report, we continue to detect, investigate, prosecute and deter fraud. On July 1, we commence the work that will warrant review in our fiscal year 2015 Annual Report.

Meanwhile, stay tuned for the late July release of the SID fiscal year 2014 Annual Report.

Spotlight: SID college relations program

In 1995, BWC’s Special Investigations Department (SID) created its college relations program to promote the study and practice of criminology, criminal justice, law enforcement and public administration. On college and university campuses throughout Ohio (and beyond), SID staff members have shared with students, faculty and staff members our department’s results and exchanged insights on how to further combat crime. SID supervisors have also offered to furnish practical work experience to the most qualified students.

Since the inception of the program nearly 20 years ago, SID has recruited, selected, oriented and trained more than 300 paid interns and unpaid externs. Most of the externs elected to earn course credit for their practicums with our special investigations units (SIUs). Whether they have been interns or externs, the dedicated graduates of our college relations program have humbled us with favorable feedback. However, we know that the credit and the accolades go to them. Their careers are testament to their professionalism. Many have gone on to become officers, criminal investigators, special agents, analysts, digital forensic analysts, assistant special agents in charge and special agents in charge.

In the coming weeks, we will be featuring a four-part series that highlights SID’s college relations program. We will describe the four types of college internships and externships we offer, profile graduates of our program, recognize current SID college interns and externs and list current vacancies. Stay tuned for part one of the series, which outlines the four types.

Categories: SID Information

Electronic surveillance tools, trends discussed at symposium

eses14

Hundreds of law enforcement professionals from around Ohio and the U.S. gathered yesterday in Columbus for the first Electronic Surveillance and Equipment Symposium. These investigative agencies came together to discuss the latest electronic surveillance tools and trends.

The event was co-sponsored by BWC’s Special Investigations Department and the Ohio State Highway Patrol.

Due to the sensitive nature of the information presented, the event was restricted to personnel from government and public law enforcement agencies.

Leading experts in the field presented information about cell phone tracking equipment, concealing cameras in everyday items, surveillance techniques and legal issues regarding electronic surveillance. More than two dozen vendors and law enforcement exhibitors were on hand for a trade fair as well.

ESES14 picture2Effective surveillance plays an important role in law enforcement and criminal investigations. This event provided a secure environment in which law enforcement professionals shared best practices and advice in hopes of strengthening our efforts to contribute to safer communities.

Thank you to all who participated in and made ESES14 a success!

Follow BWC’s Special Investigations Department on Twitter @OhioBWCFraud and on Facebook at facebook.com/ohiobwcfraud to stay up-to-date on our continuing efforts to detect, deter, investigate and prosecute all types of workers’ compensation fraud in Ohio.

Categories: SID Information

Understanding surveillance: Making the difference in the courtroom

If a picture is worth a thousand words, how much is a whole video?  For Jason Dross, of Celina, Ohio, it’s worth at least $31,736.98. That’s how much he has to pay in court-ordered restitution after a video of him bench-pressing more than 500 pounds at his local YMCA aided in his workers’ compensation fraud conviction.

This crime could have been harder to prove had it not been for the quality surveillance performed and video gathered by BWC Special Investigations Department (SID) agents. It’s one thing to hear that Dross lifted large amounts of weights while claiming to be able to lift no more than 10 pounds, but it’s an entirely different matter to see the objective evidence.

Facts are stubborn, and it turns out they’re even harder to ignore. Good surveillance supports criminal investigators by establishing beyond a reasonable doubt that a crime has been committed. When it comes to preserving the State Insurance Fund for honest employers and truly injured workers, ensuring that SID has up-to-date electronic surveillance equipment is crucial to our mission of detecting and prosecuting workers’ compensation fraud.

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Yet, this technology is changing and improving every day. The equipment becomes better and the results not only become more certifiable, but also more valuable to an investigation. Because electronic surveillance is essential to any good investigation, the BWC, in partnership with the Ohio State Highway Patrol, is hosting an Electronic Surveillance Equipment Symposium on April 17.

Law enforcement professionals from state, local, federal and international agencies are invited to attend. Together, we will see the latest electronic surveillance equipment as well as seminar lectures and equipment demonstrations by some of the leading experts in the field. A few spots are still available, so register now if you’re a law enforcement official and would like to attend.

For more information, we also encourage you to read our previous articles on the ESES, “In Law Enforcement? Attend Our Free Symposium!” and “What to Expect at ESES 2014.”

Categories: SID Information

Suspect fraud? Call our Fraud Hotline!

One of our goals is to increase awareness of fraud and the vigilance of everyday citizens to report fraudulent activity when suspected. Fraud can be reported online, by mail or by calling our Fraud Hotline at 1-800-644-6292. Calling the Fraud Hotline is the most interactive and direct way that you, our partners in fraud prevention and detection, can help. 

We realize that such partnerships are necessary to achieve our fraud prevention goals. For example, the conviction of Alfreda Dozier in October 2013 was the result of a call to the BWC Fraud Hotline from an anonymous source.

You may suspect someone is working while receiving compensation, filed a false claim for an injury that did not happen or is committing another type of workers’ compensation fraud. Calling a fraud hotline may seem rather intimidating. We understand that it can be a nerve-wracking decision to make the call. The person you suspect of fraud could be a friend, a loved-one or even an immediate family member.

Above all, we realize the importance of personal security and safety to each caller.

When you call the BWC Fraud Hotline, you will speak with a real person on the other end, one who is ready and willing to record your concerns and one who has years of knowledge, skills and experience securing information from sources like you.

While fraud hurts honest workers and employers, resolution does not have to wait for investigation and conviction to begin. “Occasionally, I took calls from people turning themselves in because they felt guilt for the crime they alleged to commit,” said Bre, a former BWC Fraud Hotline dispatcher who currently works in BWC’s Special Investigations Department (SID) Intelligence Unit. It was always rewarding to see people do the right thing.” 

Honest consciences do not need to wait.

When you call, you’ll speak with a professional like Bre. She will enter your responses directly into our secure fraud management software. Your identity will remain either anonymous or confidential, depending upon your preference. You do not need to have all of the facts worked out; you do not even need to hold 100 percent confidence in your suspicion. You need only to suspect that fraud may have occurred or continues to occur.       

“The whole process entails as few as five to 10 minutes,” said SID Training Coordinator Jeff Baker. “Nonetheless, collecting the right information from a caller requires BWC Fraud Hotline professionals to devote as much time as the caller’s unique allegation merits.”

When calling, please provide the information you have, including:

  • The name and address of the subject you’re reporting;
  • Known details regarding the subject’s alleged behavior;
  • Any other information that might pertain to the suspected fraudulent activity.

It is through the efforts and vigilance of fellow workers and citizens like you, that we can help curb workers’ compensation fraud in Ohio.

Categories: SID Information

Electronic Surveillance Equipment Symposium: Calling Equipment Vendors!

ESES14 imageAs promised in our recent article, 2013: A Year in Review, we are happy to announce more information regarding upcoming Ohio Bureau of Workers’ Compensation (BWC) Special Investigations Department (SID) events. On April 17, SID, in partnership with the Ohio State Highway Patrol (OSHP) is hosting our first Electronic Surveillance Equipment Symposium (ESES).

We invite interested equipment vendors who provide electronic surveillance equipment to law enforcement agencies. While the first part of the symposium will feature a variety of presentations and law enforcement seminars, attendees will have the opportunity to browse a vendor exhibition area.

As a vendor, you will have the opportunity to get your products and services in front of law enforcement professionals from a wide array of local, state and federal agencies. Technology changes rapidly and investigators across Ohio must frequently adapt to learn the latest techniques in using electronic surveillance to expose unlawful activity.

Your organization could be integral to Ohio’s law enforcement agencies not only keeping up with the most recent trends of illegal activities, but also in staying ahead of them. This is true no matter where your organization is located. For example, one of the first commitments to attend the event we received was from a vendor located in northern California.

As a result, we would like vendors to exhibit at the ESES on April 17 at the Ohio Expo Center, Rhodes Center, 717 E. 17th Avenue, Columbus, Ohio 43211. Moreover, BWC and OSHP would like to emphasize that exhibitors will be provided tables, chairs and electric service free of charge. Space is abundantly available and exhibitors are welcome to propose additional setup options at their expense. The Rhodes Center has garage doors, which enable exhibitors to bring in large equipment and even vehicles. The venue will be open for early setup on Wednesday, April 16 with prearrangement.

Vendors seeking to exhibit at this year’s Electronic Surveillance Equipment Symposium should call (614) 466-8090 or email BWC SID Training by Feb. 15.

Categories: SID Information

Spotlight: Digital Forensics Unit

Each day, we place a great deal of trust in our electronic devices. We are confident that they will effectively perform their designed tasks and protect the information we store on them. Like all tools, however, technology can be used for good and useful purposes, but it may just as easily be used to cause harm.Fraud blog image 1-17-14

BWC investigators rely on the Special Investigations Department’s (SID) Digital Forensics Unit (DFU) to extract data from the devices criminals use while committing workers’ compensation fraud.

Computers, laptops, tablets, servers, and smartphones all contain stored data, but may also contain information about how and when devices are  used. Many criminals believe their level of technical knowledge will ensure that their actions remain hidden. However, using digital forensics, the DFU may be able to recover critical evidence. DFU provides support to BWC agents through forensic imaging as well as analysis and processing of electronic data. Through their combined experience, specialized training and certification as Certified Forensic Computer Examiners, the digital forensic analysts of the DFU have proven themselves to be invaluable to SID’s operations.

Using their investigative techniques and Social Media, DFU forensic analysts successfully located fugitives Randy and Robin Hammond, who had fled to the town of Hurricane, Utah. DFU’s information gathering helped lead to their arrest, extradition back to Ohio and subsequent conviction in the summer of 2012 on charges of workers’ compensation fraud and complicity.

In 2013, DFU shattered its own record of success when it processed more than 27,000 gigabytes of data. This quantity of data is equivalent to the printed content stored in 27 Columbus Metropolitan Library main branch buildings. Thus, the unit more than doubled the impressive level of performance it achieved during 2012.

Thank you for your interest in learning more about a workers’ compensation system that serves hundreds of thousands of deserving, law-abiding citizens in the state of Ohio. Check out archived articles here to learn more about helping us continue to protect the state of Ohio. Complete an online form or contact our toll-free fraud hotline, 1-800-644-6292, to report any suspicion of Ohio worker’s compensation fraud.

Categories: SID Information

Spotlight: Intelligence Unit

FraudOne of the many integral parts of the Special Investigations Department’s (SID) success is the heard-but-not-seen work done by our Intelligence Unit (IU). In 2013, as in past years, the IU continued to add to its record of proficiency and achievement. Since July 1999, this unit identified more than 16,700 allegations of fraud or abuse, which resulted in almost $375 million in savings. Its key functions are to provide support to BWC SID field agents through fraud detection and data analysis.

The IU reviews BWC data about claimants, medical providers and employers. All data tells a story and some stories, unfortunately, include red flags that identify possible fraudulent activities. The daily efforts of the IU uncover filed claims that are potentially false, benefit compensation to which claimants are not entitled, diversion of prescription drugs, medical billing fraud and failure of employers to pay workers’ compensation premiums. For example, the IU was the source of the allegation that resulted in the recent criminal conviction of Eric Mariol, the subject of a Nov. 1, 2013 SID social media article.

The IU is made available to SID special agents in the field investigating fraud allegations. Our criminal investigators depend on the IU to deliver accurate information that supports ongoing investigations.

These data analysis and detection efforts examine not only information provided to BWC, but also our external partners. The IU exchanges data with other state agencies to further detect fraud. Any law enforcement or other criminal investigative agency interested in partnering with the IU should contact Becky Donchess at (614) 466-8090 or Rebecca.D.1@bwc.state.oh.us.

Categories: SID Information

2013: A Year in Review

The staff of the special investigations department (SID), like many individuals, views the start of a new calendar year as an opportunity to reflect on the past and look forward to the days ahead. 2013 represented another year of success for SID. However, we know 2014 can be a year of further achievement and greater improvement.

During the last year, SID identified more than $50 million in savings to the state insurance fund.  From emerging trends to ongoing methods, SID remained focused on our goal to prevent workers’ compensation fraud. We also worked to strengthen interagency partnerships critical to our success. Furthermore, 2013 saw the lowest number of cases open at year-end and the highest number of terabytes of data processed by SID’s digital forensics unit

2013 also marked the 20th Anniversary of SID. Since 1993, SID has and will continue to uphold its dual functions of deterring workers’ compensation fraud and its subsequent investigation if we suspect fraud.

Nonetheless, much of SID’s work could not be possible without the integrity and vigilance of hardworking Ohioans. To show our appreciation for his commitment to protect the Ohio State Insurance Fund, SID presented Toledo business owner Greg Bryant with a Certificate of Appreciation. The certificate acknowledges his referral of a fraud allegation to BWC that resulted in a conviction, sentencing and nearly $50,000 in savings.

Now that 2013 has ended, SID looks forward to the opportunities the new year will bring. A committee of talented SID professionals, in partnership with the Ohio State Highway Patrol, has begun planning for our first Electronic Surveillance Equipment Symposium. Scheduled for April 17, 2014, the symposium will feature a variety of presentations and equipment demonstrations. We expect the symposium will benefit each attendee as well as the law enforcement agencies they represent. More information will be available in the coming weeks.

Much has changed throughout the last 20 years, from digital advancements to more sophisticated methods of committing crimes. However, the SID’s mission remains unaltered: To deter, detect, investigate and prosecute workers’ compensation fraud, and preserve the Ohio State Insurance Fund.

SID spreads holiday joy with toy drive

The Special Investigations Department (SID) has been busy again this holiday season collecting toys to donate to toy drives in the Columbus area. Spreading joy to children in need has become a tradition in SID and is now in its eighth year.IMG_0125

“The Holiday season presents opportunities to help those less fortunate in our community,” says Director of Special Investigations Rick Gregory. “Once again, members of our department donated cash, toys and their personal time to support another toy drive. Our employees know the power of giving and enthusiastically donate to ensure children in our area have a happy holiday when otherwise they would not.”

Join the generosity!

For those in the Columbus area, you still have an opportunity to contribute toys. Join us at the NBC4 Firefighters 4 Kids Toy Drive on Saturday, December 14 from 8 a.m. to 3 p.m. All Columbus fire stations will also accept toy donations until December 24. Visit the Firefighters For Kids website for more details.

The Marine Toys for Tots program has collection sites located throughout Columbus. Visit the Toys For Tots website for donation locations.

In addition, SID is donating $500 to Franklin County Children’s Services (FCCS) Holiday Wish program for gifts to children under the care of FCCS who might not otherwise receive any. Visit the website to grant a child’s holiday wish or to learn more about the program.

Categories: SID Information

A source’s one stop shop: BWC Contact Center

December 6, 2013 1 comment

ImageSince 1996, professionals in the BWC Contact Center’s “fraud hotline” have effectively processed more than 30,000 allegations of workers’ compensation fraud. While this statement is comprised of simple words, the work required is far from simplistic.

To meet the expectations of fraud hotline customers, our BWC Contact Center colleagues:

  • Conduct immediate interviews with sources contacting the BWC fraud hotline to furnish new allegations;
  • Conduct follow-up interviews with sources and witnesses re-contacting the fraud hotline to either furnish additional information or to secure an investigative update;
  • Process allegations submitted to BWC by means of an online allegation referral form accessed and completed by sources via the BWC’s “Reporting fraud” web page;
  • Complete preliminary research pertaining to each subject before re-assigning the new allegations to the Fraud Management System work list of the respective special investigations unit.

The front end work performed by BWC Contact Center colleagues is instrumental to the success of our investigations. Their interviews with sources and preliminary research of BWC information are critical steps. Their considerable efforts have resulted in more than 2,500 cases closed founded (the original allegation was proven) and $163.8 million in savings identified to the Ohio State Fund.

You are our eyes and ears! Members of the BWC Contact Center fraud hotline understand, appreciate and thank you for your help in stamping out fraud. Please, keep those tips coming. To report workers’ comp fraud to one of our BWC Contact Center professionals, click here or call our fraud hotline at 1-800-644-6292.

Categories: SID Information

Another type of BWC certificate — Showing our appreciation to a source

November 22, 2013 2 comments

Normally, when our readers think of the words “BWC” and “certificate”, they think of the BWC Certificate of Coverage. This makes sense. The certificate is widely seen and easily recognized. It is the official document employers often frame to display with pride within their business.

Understandably, the law-abiding business owner wants every employee and customer to11.22.13 blog post see that they have secured workers’ compensation coverage from our agency. They know that others see it as proof of the business’s legitimacy and a sign of the owner’s prudence.

That might explain why Greg Bryant, the owner of a Toledo business, Snyder Snow Service, Inc. was surprised when we contacted him, asking to present him with another type of BWC certificate: a Certificate of Appreciation.

A SID Special Agent in Charge explained to Mr. Bryant that the certificate acknowledges the business owner’s referral of a fraud allegation to BWC – a referral that had resulted in the criminal conviction and sentencing of the subject, just weeks earlier.

Signed by our SID Director of Investigations Rick Gregory, the Certificate of Appreciation read, in part:

“In recognition of your exemplary citizenship and proven commitment to protecting the integrity of the Ohio State Insurance Fund for all Ohio employers. Your prompt reporting of suspected fraud resulted in a criminal conviction and the identification of more than $50,000 in savings. On behalf of all BWC Special Investigations staff, we extend our appreciation.”

We believe that the simple certificate is the least we are willing to do to demonstrate our thanks to Greg Bryant and others who are our partners in combating fraud.

Significantly, Mr. Bryant received his Certificate of Appreciation on November 8th, the Friday of International Fraud Awareness Week.

Just like Greg Bryant, you are our eyes and ears! Thank you for your help in stamping out fraud, and please, keep those tips coming. To report workers’ comp fraud in Ohio, click here or call our fraud hotline at 1-800-644-6292.

Collaboration: The source of our success – Part 2 of 2

November 8, 2013 1 comment

We’ve found that one of the most effective ways to discover alternate methods of fraud detection and investigation is to consult or partner with other criminal justice and law enforcement agencies. Such collaboration allows SID to examine its own methods to see where improvements can be made, how tasks can be accomplished more efficiently, and what new strategies or technologies can be used in the course of an investigation. Examples of our partnerships include:

  • Networking with professionals via active and productive memberships in dozens of anti-fraud associations, including: Association of Certified Fraud Examiners (ACFE), Central Ohio Investigative Network (COIN), National Association of Drug Diversion Investigators (NADDI), National Health Care Anti-Fraud Association (NHCAA), National Society of Professional Insurance Investigators (NSPII), National White Collar Crime Center (NW3C), Ohio High Intensity Drug Trafficking Area (OHIDTA), and Ohio Investigators Association (OIA).
  • Participating in the anti-fraud conferences. This week, selected SID fraud analysts are attending the “2013 Targeting Fraud – Safeguarding Integrity” conference, hosted by Franklin University, National White Collar Crime Center, Ohio Ethics Commission and the Ohio Investigators Association.
  • Benchmarking with the experts from the workers’ compensation systems in dozens of other states. These esteemed benchmarking partners include the Florida Department of Financial Services, Division of Workers’ Compensation; and the Washington State Department of Labor & Industries. Moreover, since 1993, delegations from other workers’ compensation systems have benchmarked with BWC to learn our best practices. These include the states of Kentucky, New York, North Dakota and West Virginia.
  • Conducting operational training for law enforcement colleagues. For example, two of our SID special agents in charge have presented surveillance training at the Ohio Peace Officer Training Academy.
  • Receiving specialized operational training from law enforcement colleagues. Just last month, a Department of Public Safety expert from the Ohio State Highway Patrol (OSHP) was the keynote speaker at our annual in-service training session for all SID professionals.

It’s an honor to be associated with other criminal justice and law enforcement agencies and the many professionals who make up these organizations. We respect and appreciate their dedication to serving and protecting the citizens of Ohio.

In case you missed it, you can find yesterday’s post about collaboration here.

You can read the past posts about our history here and our current efforts here.

Categories: SID Information

Collaboration: The source of our success – Part 1 of 2

Criminal justice and law enforcement agencies are often portrayed as caught up in turfism. We’ve all viewed the all-too-common plot line wherein either “the feds” or “the locals” usurp control of, take credit for or even attempt to thwart an investigation. Perhaps, movie and television producers believe that this dramatic tension is real, as part of the American experience as independence, individualism and athletic competition. But, no matter their rationale, we find such occurrences of turfism are far and few in between.

The reality in our profession is that — driven by their constant, common quest to deter, detect, investigate and prosecute crime — members of the criminal justice and law enforcement community routinely offer cooperation and invite collaboration with other agencies in all jurisdictions.

Most frequently, members of our Special Investigations Department (SID) collaborate with other agencies to share information about and conduct joint criminal investigations of fraud suspects. Throughout Ohio, SID agents consistently launch joint investigations and execute search warrants with local, state and federal law enforcement agencies. Since 1993, we have closed thousands of cases with the direct assistance of countless agencies and entities.

For years, we’ve chronicled these investigative successes and credited the other agencies by name within our annual SID fraud report. For example, in our FY 2012 fraud report, we summarized the investigation and prosecution of Randy and Robin Hammond (formerly of Galion, Ohio). We credited the Office of the Attorney General of Ohio with having issued a nationwide warrant for the arrest of the Hammonds after they fled the state in a futile attempt to avoid prosecution. We thanked the U.S. Marshals Service for arresting the Hammonds, after our Fugitive Task Force and Digital Forensics Unit located them at a Hurricane, Utah mobile home park. Thanks to this effective collaboration, the Hammonds were found guilty. The court sentenced Randy Hammond to serve five years of probation, Robin Hammond to serve one year of incarceration, and both to jointly pay BWC $173,332 in restitution.

In many of these annual fraud reports, we’ve included an appendix listing each agency with which we conducted a joint investigation during the fiscal year. In the FY 2009 report, we listed 91 agencies. Current examples include:

  • Municipal police departments;
  • County sheriff offices;
  • Dozens of state agencies and task forces–in Ohio and elsewhere;
  • Federal administrations, bureaus, commissions, departments, offices and services; and
  • City, county, state and federal prosecutors.

We recognize, praise and thank all of our colleagues and other stakeholders for their successful collaboration with us and others. We respect and appreciate their dedication to serving and protecting the citizens of the state of Ohio.

Check out tomorrow’s post, part two of two, where we’ll give you an inside look at our partnerships with others.

Want to learn more? You can read the past posts about our history here and our current efforts here.

Categories: SID Information

Check out our new video!

November 5, 2013 1 comment

In recognition of International Fraud Awareness Week, we’ve put together this video to raise awareness about workers’ comp fraud and generate more tips from the public.

We welcome your thoughts.

All hands on deck: SID sails into the future

October 25, 2013 1 comment
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From left: Jennifer Saunders, SID Assistant Director; Rick Gregory, SID Director; Amy Huth, Employer Services Specialist; and Steve Buehrer, BWC Administrator/CEO. Amy received a certificate in recognition of her extraordinary performance in pursuit of excellence.

In our constant quest for improvement, all members of the Special Investigations Department (SID) gathered last week at our Columbus main headquarters to successfully complete in-service training. We call this particular type of training event an “All Hands” meeting – as in all hands on deck. Led by SID Director Rick Gregory, we shared investigative successes, learned how to use new technology recently secured, and committed to operational strategies for even greater effectiveness.

We’ve found that one of the chief ways to find new or alternate methods of fraud detection and investigation is to consult counterpart agencies. Such collaboration allows SID to examine its own methods to see where improvements can be made, how tasks can be accomplished more efficiently, and what new strategies or technologies can be used in the course of an investigation. This is why Director Gregory invited a Department of Public Safety expert from the Ohio State Highway Patrol (OSHP) to be our “All Hands” keynote speaker (and what a prudent and wise decision it was!) In just 60 minutes, the dedicated and talented OSHP colleague increased our awareness and skills in ensuring agent safety while conducting effective criminal investigations.

It is an honor for us to recognize, praise and thank our OSHP colleagues. We respect and appreciate all of our law enforcement colleagues for their dedication to serving and protecting the citizens of the state of Ohio. Thanks to their willingness to effectively collaborate, our sails are filled.

You can read the past posts about our history here and our current efforts here.

Completing the circle of coverage: A look at our Safety Violations Investigation Unit

The Ohio Bureau of Workers’ Compensation (BWC) is one of only a few single-line workers’ compensation insurance companies in the country and has several service offerings to match its impressive title. Ohio’s complete circle of coverage to injured workers includes investigating violations of specific safety requirements (VSSR), which may result in a monetary award for injuries stemming from the workplace. Many times, these injuries are catastrophic. The Special Investigations Department’s Safety Violations Investigation Unit (SVIU) provides full-service investigations of an employer’s alleged violation of a specific safety requirement as outlined in the Ohio Administrative Code. Because these investigations examine the facts and determine the truth, they serve employers and injured workers.

Investigators’ work usually begins at the very end of the claims process. In cases of death, SVIU is typically one of the first responders on the scene along with police, ambulance and coroner investigators. The details following a catastrophic incident are vital to the VSSR process, and ultimately, to the award granted to workers or their estates.

“Even though our work is investigative in nature and all factual, a big part of our job is working one-on-one with both the employer and the worker,” said SVIU Supervisor Bill Garver. “The incidents we investigate can be life-altering for the injured worker, their families and the employer. We work tirelessly with the worker and employer to ensure a safe work place for all employees for the future.”

One example is the case of a metal fabrication industry worker whose injury was determined to be the result of his employer’s violation of a specific safety requirement. The worker sustained second and third-degree burns on his body after being splashed with caustic bath solution. The injury occurred while the worker, who wasn’t wearing any protective equipment, prepared metal for processing by removing surface solvents through high temperature chemical baths. After a comprehensive investigation with the employer and the worksite, an SVIU investigator interviewed the injured worker.

“Interviewing injured workers and employers can evoke raw emotion, causing increased anxiety,” an SVIU investigator has noted. “I understand that with each question I ask, I am bringing those involved right back to the day and moment of the incident.”

Conducting these types of investigations requires experience as an interviewer. The detailed chronicling of incident events originating from investigations and interviews allows the Ohio Industrial Commission to better assess whether the merits of Ohio’s safety violation requirements alleged were violated by the employer.

Safety violation additional awards granted by the Industrial Commission can range from 15 to 50 percent of Ohio’s average weekly wage and is paid directly to the injured worker. (The average weekly wage is the median weekly salary of all employees in the state of Ohio.) The monetary award granted to the injured worker is then directly billed – dollar for dollar – to the employer. Additionally, any such ruling can require the employer to correct violations that were determined the cause of the injury or death.

Learn more about VSSRs here.

Categories: SID Information

Provider fraud resources

Categories: SID Information

Combating workers’ compensation fraud committed by health care providers

Workers’ compensation fraud isn’t limited to injured workers, and the Special Investigations Department’s (SID) Health Care Provider Team (HCPT) exclusively investigates alleged fraud committed by health care providers, durable medical equipment companies, third-party administrators, and managed care organizations (MCOs). Since the expansion of the bureau’s health care provider fraud program, most notably in 2012 and 2013, the HCPT focused on detection and investigation.

According to our investigators, the following are common provider fraud schemes:

  • Pill mills, which provide limited or no medical treatment while heavily furnishing prescriptions for narcotics;
  • Billing for services not rendered;
  • Performing medically unnecessary treatments and diagnostics tests;
  • Upcoding, or billing for a more expensive procedure than was actually provided; and
  • Unbundling, or billing BWC separately for services that must be billed together as a single service.

Our OhioBWCFraud Facebook page, our blog and the media are filled with examples of successfully prosecuted providers who committed workers’ compensation fraud.

To learn more and help us in our efforts to combat workers’ comp fraud, check out archived articles in OhioBWCFraud.

SID encourages anyone who suspects a health care provider may be committing fraud to complete an online form or contact our toll-free fraud hotline, 1-800-644-6292.

Categories: SID Information

Exceptional criminals? – No way, but those who commit workers’ compensation fraud are exceptions

Browsing through the cases summarized on our OhioBWCFraud Facebook page, one might draw the conclusion that those who commit workers’ compensation fraud are lurking behind every tree and signpost. Admittedly — thanks to all of our fraud allegation sources — we have had success in identifying and prosecuting fraud.

Therefore we have dozens of Facebook articles that highlight many of the cases we have closed founded in just the last two years. In fact, the more than $23 million in savings we have identified this fiscal year (since July 1, 2013), increases our all time results to nearly $1.6 billion in savings identified since 1993.

However, what is probably not obvious to our readers is most often our thorough and objective investigation proves the suspect has not committed fraud. This is why, since 1993, just 24,169 (or 40.7 percent) of our 59,335 closed investigations have found that a loss was sustained by the State Fund.

We are successful each time we close a case unfounded — because fraud was not committed. Our purpose is not to “catch suspects committing crimes,” rather it is to determine the truth. This may seem like a fine distinction to some, but for the investigative professional it is a critical difference. Further, each time we close an unfounded case, we are reminded that we are meeting the first part of our departmental mission to relentlessly deter crimes against the State Insurance Fund.

When the State Fund is protected, we minimize the premiums paid by compliant employers, while nonetheless ensuring the system is adequately funded. This ensures the State Fund’s essential resources are available to pay for the effective treatment and lost-time benefits deserved by all legitimately injured or ill workers.

As our Director of Investigations Rick Gregory recently noted in an August 29, 2013 Associated Press interview: “When people follow the rules and do it right, they are punished by virtue of the fact that other people don’t do it right,” Gregory said. “And I just think that’s unfair.”

Therefore, we continue to need and want every fraud allegation. Do not hesitate to report your suspicions using our online form or our calling our toll-free fraud hotline, 1-800-OHIOBWC. Know that we will faithfully do our jobs, determining whether or not the State Fund has been victimized.

Thank you for your interest in learning more about a workers’ compensation system that serves hundreds of thousands of deserving, law-abiding citizens in the State of Ohio. Check out archived articles in OhioBWCFraud to learn more about how you may help us protect the State of Ohio.

Confidentially speaking – Reporting suspected fraud as an anonymous source

Have you ever heard or seen something related to workers’ compensation that seems suspicious? If so, you are not alone. Thousands of citizens have suspected fraud and reported these suspicions to BWC. In fact, since 1993, SID has received and reviewed more than 100,000 fraud allegations. Many of these allegations were reported by anonymous sources, just like you.

All of these sources had at least three things in common:See it, report it, stop it!_Page_1

  • They suspected fraud. Perhaps, they read an article posted to our Facebook page. The article may have described examples of common fraud schemes, cases we’ve investigated, and suspects that were brought to justice. Something in a case example may have “clicked” and prompted them to realize they had knowledge of a person or business who is doing something similar. They may have also visited ohiobwc.com and learned more about the red flags of claimant, provider, and employer fraud.
  • They figured out how to report their suspicions to us. Some used an article posted to our Facebook page to learn that they could easily report fraud at ohiobwc.com. They were likely reassured when they learned that to report workers’ compensation fraud to BWC, they needed only to suspect that fraud may have been committed. Further, they realized our trained and experienced special agents conduct the investigation and testify in court, while they remain anonymous.
  • They determined to do the right thing. They took immediate advantage of the online form or our toll-free fraud hotline, 1-800-OHIOBWC, to report their suspicions.

Ultimately, these sources are the reason why we have identified more than $1.5 billion in savings to the State of Ohio… and counting.

Thank you for being our eyes and ears!

Celebrating 20 Years: Eyes on the Future

September 6, 2013 1 comment

In honor of our 20th anniversary of the BWC’s Special Investigations Department (SID), we welcome you to the third of a three-part series of blog posts outlining the history of the department, its current offerings and its future goals. We welcome your thoughts and comments!

In addition to a highly-trained staff, the key to the SID’s success is the continued planning by the director and SID team supervisors. Progress is guided by five-year strategic plans. To date, SID has completed three of these strategic plans, the most recent plan having concluded in fiscal year 2013.  Over the next several months, SID professionals will meet and draft a new strategic plan to guide the department through the next five years.

One of the chief ways to find new or alternate methods of fraud detection and investigation is to consult counterpart agencies in other states and even private fraud investigation firms through periodic benchmarking surveys. Such interstate cooperation allows SID to examine its own methods to see where improvements can be made, how tasks can be accomplished more efficiently, and what new strategies or technologies can be used in the course of an investigation.

SID will continue to improve its use of social media, such as Facebook and Twitter to aid investigations.  Using social media is an example of how SID constantly responds to technological advances and changes.  Check out recent coverage from the Toledo Blade on how social media aids our investigations.

One of the highest priorities for SID is the never-ending search for ways to improve.  We believe that past achievement is not a guarantee for future success, and that contentment is often the quickest road to experiencing failure.

Thank you for following our three-part series about SID’s 20th anniversary! You can read the past posts about our history here and our current efforts here.

Categories: SID Information

Celebrating 20 Years: How SID stays fresh

In honor of our 20th anniversary of the BWC’s Special Investigations Department (SID), we welcome you to the second of a three-part series of blog posts outlining the history of the department, its current offerings and its future goals. We welcome your thoughts and comments!

SID agents, analysts, and supervisors are constantly training both internally and externally to improve and develop new skills.

The department also adapted itself to a myriad legal, technological, and social changes in order to better protect Ohio’s workers and employers, including BWC’s own employees. Think of it this way: SID began in 1993, before the existence of tools like Google, which was founded in 1998, and Facebook, which was founded in 2004.

While much has changed over the last 20 years – from the digital revolution to more sophisticated methods of committing crimes – the mission of SID remains the same: to effectively and proactively prevent losses to the workers’ compensation system and to deter, detect, investigate, and prosecute worker’s compensation fraud. As SID reflects on the past 20 years of service to Ohio, we also find it important to address not only the whole, but also the sum of its parts. Each year, the SID analyzes the effectiveness of its investigations.

Back in 2007, Senate Bill 7 designated the SID as a criminal justice agency, which allowed for cooperation with other state and law enforcement agencies and the strengthening of fraud statutes and sanctions.

With technology forecasting showing the growth of mobile “smart” devices and cloud computing, the SID expanded its Digital Forensics Unit by securing new technology and training to allow for digital analysis of evidence. In the social climate of 2013, the SID security team is committed to education and protection by holding active shooter presentations for all of its employees as well as conducting thorough risk assessments for any threat.

Stay tuned for our third and final post in this series about SID’s future goals.

Categories: SID Information

Annual report highlights SID activities in the last year

SID FY 2013 Annual ReportSID recently published its annual report for fiscal year (FY) 2013. The report reflects and reviews recent performance statistics, ongoing trends, as well as future strategies for preventing and detecting fraud.

We are pleased to report that SID identified $55 million in savings during FY 2013. Among the more than 2,000 cases that were closed, 915 were founded, meaning the original allegation was proven. The average savings identified among the 915 cases was more than $60,000. 236 of these cases were referred for prosecution, resulting in 134 indictments and 140 convictions to date. These 140 convictions were a 14 percent increase over last year. Additionally, SID received more than 3,300 allegations and teams are currently investigating approximately 1,000 open cases.

During the last twelve months, SID staff members remained tuned to emerging trends that affect their work, such as the rise in prescription fraud. The department also creatively utilized available resources such as social media and data digital forensics to root out otherwise undetected fraudulent activity and bring public attention to combating wrongdoing. This resourcefulness and persistence is prevalent in the work of each SID team and reflects the department’s commitment to protecting the Ohio State Insurance Fund. The FY 2013 fraud report includes information about these efforts and the condition of workers’ compensation fraud in Ohio.

Furthermore, the conclusion of FY 2013 also brings to a conclusion the third five-year SID strategic plan. The results of this level of planning are responsible for the success SID experienced in this past fiscal year. Comparatively, SID achieved:

  • The lowest number of cases open at year end;
  • The highest number of terabytes of data processed by Digital Forensics Unit;
  • Second lowest number of investigative lag days per closed case in the past five years;
  • Second highest number of convictions in the past eight years;
  • Second highest percentage of founded cases referred for criminal prosecution in the past six years; and
  • Second highest savings identified per closed and per founded case in the past six years.

Lastly, the report reviews results since our department’s inception in 1993 – including that we have closed nearly 59,000 cases and identified more than $1.5 billion in savings to the Ohio workers’ compensation system.

Celebrating 20 Years: How SID Began

In honor of our 20th anniversary of the BWC’s Special Investigations Department (SID), we welcome you to the first of a three-part series of blog posts outlining the history of the department, its current offerings and its future goals. We welcome your thoughts and comments! 

SID was created in June 1993 to protect the State Insurance Fund by preventing, detecting, and convicting those who commit fraudulent activity. Over the past 20 years, SID identified more than$1.5 billion dollars in savings tDoc12newo the state fund.

Prior to June 1993, fraud detection and investigation existed within BWC and the Ohio Industrial Commission (IC). It was at this time, however, when the department broadened its scope to include Special Investigations Units (SIUs) and officially became the Special Investigations Department. Since then, SID continues to uphold the dual functions of fraud investigation and special investigations. Under the guidance of Ohio criminal fraud statutes found in 2913.48 of the Ohio Revised Code (ORC) put into effect on July 21, 1993, SID is charged with deterring and investigating workers’ compensation fraud. The law made it easier for workers’ compensation crimes to be prosecuted. Previous sections of the ORC were far too general and not specifically written to prohibit this type of fraud.

SID defines its main responsibility as preventing, detecting, investigating, and ultimately prosecuting workers’ compensation fraud. With the development of specialized and innovative teams of employees, SID adopted techniques to support its main goal beyond the typical processes of identifying and investigating fraud allegations.

Significant interagency cooperation has been essential to its success. For example, the Intelligence Unit exchanges data with other agencies, such as the Ohio Department of Job and Family Services, to identify potential claimant fraud as well as the Attorney General to locate subjects with outstanding fraud warrants. Moreover, SID members collaborate with one another through think tank sessions designed to identify fraud red flags. Social media monitoring allows for discreet and easily-accessible fraud identification and investigation.

Stay tuned for our next post about how SID stays one step ahead of fraudsters!

Categories: SID Information

Happy 20th birthday to us!

In June 1993, the Ohio Bureau of Workers’ Compensation (BWC) created its Special Investigations Department (SID) to protect the State Insurance Fund by preventing, detecting, and convicting fraudulent activity.  Since its inception 20 years ago, SID has identified over $1.5 billion dollars in savings to the state fund.

As we begin our New Year—fiscal year 2014, SID and BWC ask our family of stakeholders to join us in our celebration of 20 years of dedicated service to Ohio.

In the coming weeks, we will be featuring a three-part 20th Anniversary series that reflects on SID’s past successes and envisions those yet to come.  Stay tuned for part one of the series which outlines the history of the Special Investigations Department, including some of our most noteworthy cases.

Categories: SID Information

Congratulations, Rich!

SID Director Rick Gregory and Assistant Director Jennifer Saunders honored Rich during a ceremony recognizing his achievement.

BWC Special Investigations Department Director Rick Gregory yesterday recognized Rich Hamilton, a special agent with the Digital Forensics Unit, on completing the Special Investigations field training officer program. 

Congratulations, Rich!  We look forward to your contributions to BWC’s investigative efforts to combat workers’ compensation fraud.

Categories: SID Information

Help us detect fraud

BWC takes fraud very seriously. Since January 2011, the BWC’s fraud department obtained 290 convictions and identified $128 million in savings for the State Insurance Fund. We receive a 6-to-1 return on investment in fraud detection.

Injured workers, providers and employers alike may be involved in fraudulent activity. Keeping fraud at bay helps BWC achieve its goals of providing high-quality care to injured workers and financial stability for Ohio’s employers.

Visit ohiobwc.com to review the red flags that may indicate fraudulent activity.
If you suspect fraud, let us know by filling out our online form or by calling 1-800-OHIOBWC.

Check here for frequent updates about recent fraud cases and other items of interest. Follow us on Twitter @OhioBWCFraud and visit our Facebook page as well!

See it, report it, stop it!

Our updated fraud brochure includes red flags, case summaries and more!  Please share and use it as a resource on workers’ comp fraud.Image

 

 

 

 

 

 

Smart phones call for even smarter forensics

Digital forensics unit gravatarEach day, there are at least 10 times more mobile devices being produced in the world than babies being born (Global). Recent research conducted by the Ohio Bureau of Workers’ Compensation Special Investigations Department examined such growth in mobile technology, its uses within the workers’ compensation realm, and its future implications on fraud investigations. Mobile devices are projected to be the most common way Americans access the Internet by 2015, with a compound annual growth rate of 16.6% according to the International Data Corporation (DeGrasse). 

The health information field is leading the growth, with investment in companies that make health information mobile apps rising 78% in 2011 to $766 million (Edney; Bloomberg). In 2012, nearly 420 million smart phones and 44 million tablets will ship worldwide (Canalys). With smart phones and tablets increasingly being used to perform work previously done on a laptop or PC, the workers’ compensation system can expect to see increased use of mobile devices and applications in the daily activities of its healthcare providers, employers, and workers.

Taking advantage of recent trends, the BWC formulary went mobile in April 2012, allowing healthcare professionals immediate access to a formulary at the point of care and helping to ensure prescription safety and accuracy. Epocrates, Inc., available through app stores, can also be utilized by employers and workers. Another app, called PillManager, boasts of “unparalleled connectivity between consumer and pharmacy” where consumers can track their own medications and submit a repeat request for any prescription directly from their handheld device.

Mobile devices can be used outside of the healthcare realm, however, with apps aiding employers and workers during work activities. The U.S. Department of Labor and OSHA teamed up to allow worksite heat index tracking in order to reduce heat-related illnesses for workers outdoors. Using GPS data and information from the U.S. National Oceanic and Atmospheric Administration the app addresses risk levels and advises of rest breaks, fluid consumption, and adjustment of work operations. The NIOSH Lift Calculator app is also within the public domain, utilizing real-time feedback to reduce lower-back injuries; the app uses variables, such as horizontal distance, to calculate stress on the lower back during lifts.

Conversely, workers’ comp officials are concerned that injury exposure may grow as more workers go mobile – 2012 is expected to see nearly 35 million people working from home or other locations (Simpson). Mobile devices, although helpful in many realms, can prove to be a dangerous distraction while walking or driving; if the devices are owned by the employer, injuries while using such devices may present unclear compensability situations.

Mobile phones are being used in virtually all levels of criminal activity, making it easier for investigators to use mobile technology as incriminating evidence in an investigation. Personal surveillance has evolved with social media and mobile technology; as a result, officials can conduct investigations through “open source intelligence”. It has become common for investigators to identify false worker’s comp claims from social media websites like Facebook and Twitter documenting able-bodied activity (Newberry).

In addition, mobile applications create a full electronic audit trail enabling the tracking of people and transactions in both space and time. Within workers’ compensation, claims data can be correlated with information from apps to identify “hotspots” of activity at different pharmacies; problem pharmacies or providers can be identified and investigated more quickly (Savitz; Forbes).

Mobile technology, although helpful in a variety of field investigative aspects, can prove to be a challenge to a digital forensic examiner. The number of operating systems is much greater for mobile devices (>10) than for desktops (3) and each OS differs from the next in the way data is stored and security is provided. DFE’s must have the knowledge and tools to access information from each type of OS. In addition, the move to mobile technology has increased the use of cloud data storage, making it commonplace; Strategy Analytics forecasts U.S. spending on cloud services to grow $50 billion by 2016. Digital evidence has shifted to the cloud, where information may be found in multiple places and on a variety of platforms; also, data processing is decentralized in the Cloud, with a lack of physical access to servers (Grispos, Glisson, & Storer). As a result, traditional approaches to evidence collection are void Investigators must identify that an individual is using the cloud, obtain a search warrant, and overcome the final obstacle that current digital forensics tools are intended for media that is under the investigator’s control. As the transition is made to mobile device storage, investigators must be ready to make the change to better (and more expensive) technology for digital forensics labs.

As technology changes, the BWC Special Investigations Department continues to change its investigative efforts.  While the majority of people use technology to improve business operations or enhance communication, we are prepared to investigate those that use these types of technologies to commit fraud against the Ohio BWC.

To report suspected workers’ compensation fraud, call 1-800-OHIOBWC, visit ohiobwc.com, or visit www.facebook.com/ohiobwcfraud.

Sources:

Apple App Stores. Available from: http://www.apple.com/iphone/from-the-app-store or http://www.apple.com/ipad/from-the-app-store; 2012 [accessed 06.26.12]

“App stores; direct revenue to exceed $14 billion next year and reach close to $37 billion by 2015.” Canalys. Available from: http://www.canalys.com /newsroom/app-stores-direct-revenue-exceed-14-billion-next-year-and-reach-close-37-billion-2015; 2012 [accessed 06.26.12]

DeGrasse, M. “Mobile devices projected to overtake PCs as connections to Internet.” RCR Wireless. Available from: http://www.rcrwireless.com /blog/20110912/devices/mobile-devices-projected-to-overtake-pcs-as-connections-to-internet/; 2012 [accessed 06.26.12]

Edney, A. “iPad-toting doctors spur venture funding in medical apps.” Bloomberg Report. Available from: http://www.bloomberg.com/news/2012-06-18/oprah-aids-doctors-as-app-investments-soar-health.html; 2012 [accessed 6.26.12]

Grispos, G., Glisson, W., & Storer, T. “Calm before the storm: the emerging challenges of cloud computing in digital forensics.” 2009. [accessed 06.26.12]

Hobson, E. “Securing the cloud: digital investigations for the cloud.” Qinetiq. 2010. [accessed 06.26.12]

Newberry, L. “Social media footprint helps Pa. investigators.” Officer.com. Available from: http://www.officer.com/news/10731208/social-media-footprint-helps-pa-investigators; 2012 [accessed 06.26.12]

Ohio BWC Web. [accessed 06.26.12]

Savitz, E. “5 ways mobile apps will transform healthcare.” Forbes. Available from: http://www.forbes.com/sites/ciocentral/2012/06/04/5-ways-mobile-apps-will-transform-healthcare/; 2012 [accessed 06.26.12]

Simpson, A. “As more workers go mobile, workers’ compensation exposure grows.” Insurance Journal. Available from: http://www.insurancejournal.com /news/national/2011/06/01/200720.htm; 2012 [accessed 06.26.12]

BWC SID spreads holiday joy with toy drive

The Special Investigations Department (SID) achieved another successful toy drive. For the sixth year in a row, SID has collected toys for local toy drives in the Columbus area.

A sampling of toys from SID's toy drive.

A sampling of toys from SID’s toy drive.

“The SID staff really gets into this event every year and it keeps growing as other special investigations units around the state do their own collection” says Director of Special Investigations Tom Wersell.

For those in the Columbus area, you still have an opportunity to contribute. Join Director Wersell at the NBC4 Firefighters 4 Kids Toy Drive on Saturday, December 10th from 8:00 am to 3:00 pm. All Columbus fire stations also accept toy donations until December 24th. Visit https://www.firefighters4kids.com/donations.html more details. The Marine Toys for Tots program have collection sites located throughout Columbus. Visit http://columbus-oh.toysfortots.org/local-coordinator-sites/lco-sites/default.asp for donation locations.

Categories: SID Information Tags: ,

We are hiring!

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

Canton

Position

Team

Closing Date

Fraud Investigator

Region 1

12/14/2011

Cincinnati

Position

Team

Closing Date

Fraud Investigator

Health Care Provider Team

12/14/2011

Cleveland

Position

Team

Closing Date

Fraud Investigator

Region 1

12/14/2011

 Fraud Investigator 

Employer Fraud

12/14/2011

 

Columbus

Position

Team

Closing Date

Criminal Investigator

Region 2

12/14/2011

Lima

Position

Team

Closing Date

Criminal Investigator

Region 3

12/14/2011

Fraud Investigator

Employer Fraud

12/14/2011

Mansfield

Position

Team

Closing Date

Fraud Investigator

Region 1

12/14/2011

Regional Locations TBD (Canton, Cleveland, Mansfield and Youngstown)

Position

Team

Closing Date

Assistant Special Agent In Charge

Region 1

12/08/2011

Safe and secure: BWC Security ensures we are both

The Bureau of Workers’ Compensation is comprised of 1,985 dedicated professionals providing exemplary workers’ compensation services from 15 customer service offices located in 16 facilities throughout the state. Some of these facilities also host employees of the Industrial Commission (IC) of Ohio, including the hearing officers who conduct all IC claim-related administrative hearings. Moreover, the site of our main headquarters – the William Green Building, 30 West Spring Street, in Columbus, Ohio – furnishes office space to other agencies, such as the Ohio Ethics Commission, Ohio Industrial Commission, Ohio Department of Alcohol and Drug Addiction Services, and Ohio Administrative Knowledge Systems. The William Green Building also hosts many large events throughout the year in its auditorium which seats 375 audience members.

BWC facilities annually experience tens of thousands of visits from employees, customers and members of the general public. Moreover, from these BWC facilities, employees also annually experience hundreds of millions of direct customer service interactions. These include more than one hundred million hits to our e-commerce based Web site, www.ohiobwc.com; and hundreds of thousands of incoming and outgoing telephone calls, more than four million pieces of mail, and countless e-mails. Each employee, customer, and visitor deserves and receives our very best. Most essentially, all interactions must be safe and secure.

Ensuring the safety and security for employees and customers is the mission of BWC Security. To meet its mission, a team of 41 dedicated professionals furnishes security services, threat assessments and investigations for all BWC staff statewide. The team uses dozens of key strategies, including:

  • Co-conduct security and safety training for all BWC employees located in each facility;
  • Conduct audits of each facility’s access control cards;
  • Provide quick reference guides detailing the optimal response to any building emergency;
  • Budget security equipment enhancements for facilities;
  • Monitor the security equipment installations and upgrades in all facilities;
  • Maintain an Automated Critical Asset Management System in conjunction with the Ohio Department of Homeland Security and the Ohio Department of Public Safety for first responders during a building emergency;
  • Initiate an Employee Emergency Notification System due to any business interruption or office closure; and
  • Conduct joint investigations with local and state law enforcement officers.

A Case In Point

The BWC SID safety violations investigation unit (SVIU) received an anonymous voice mail message. The caller threatened to “blow up” the SVIU office. BWC Security worked with the SVIU, Ohio State Patrol, and other Special Investigations Department staff to identify the threatening caller as a management employee of an employer investigated by the SVIU.

In the Franklin County Court of Common Pleas, the management employee was charged with two second-degree misdemeanor counts of telephone harassment and one fourth-degree misdemeanor count of disorderly conduct. The defendant pled guilty to one second-degree misdemeanor count of telephone harassment. The court sentenced the convicted subject to serve one year of community control and to pay $189 in court costs, a $100 fine and a $50 probation fee.

Be on the Lookout

This concludes our fraud awareness series. Be sure to read more about BWC fraud investigations in our SID FY 2011 Annual Report.

If you suspect anyone is committing workers’ compensation fraud, 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.

SVIU: Investigating suspected violations of specific safety requirements

November 28, 2011 4 comments

Most employers are ever seeking to improve workplace safety. Their desire to reduce workplace accidents and illnesses is motivated by so much more than merely reducing the operational costs that result from unsafe workplaces. They desire to protect the health and welfare of each member of the organization. Unfortunately, other employers — perhaps motivated by greed, sloth or both — fail to foster and maintain fundamental workplace safety. In fact, these entities often ignore the best safety practices, even to the point of violating specific safety requirements established by regulation(s).

This is why our BWC SID safety violations investigation unit (SVIU) is so essential. SVIU’s primary function is investigating alleged safety requirement violations that have resulted in a workplace injury, illness or death. Thus, the SID SVIU accomplishes its mission to provide impartial and comprehensive investigations regarding grieved industrial and construction deaths, injuries and/or illnesses for determination by Industrial Commission of Ohio staff hearing officers on alleged violations of Ohio’s specific safety requirements and regulations. To meet the ongoing demand for its services, the SVIU has dedicated staff state-wide, exclusively investigating alleged violations of specific safety regulations (VSSRs).

Compensation via VSSR awards:  If a worker is injured, contracts an illness or is killed on the job because of a violation of a specific safety requirement (VSSR) as outlined in the Ohio Administrative Code, the worker, surviving spouse or dependents may be eligible to receive an additional compensation award, ranging from 15 percent to 50 percent of the injured workers’ maximum allowable weekly compensation rate.

The investigative process:  An SVIU investigation commences when an injured worker or the injured worker’s attorney files an application (IC 8/9) for Violation of Specific Safety Requirement in a Worker’s Compensation Claim within two years of the injury, death or initial diagnosis of illness. Our investigative action steps commonly include:

  • Obtain the injured worker’s affidavit;
  • Contact and interview witnesses;
  • Secure and analyze injury reports, machine maintenance records and other documents;
  • Inspect and photograph the work site, machinery and other evidence;
  • Use high-resolution video to document the sights and sounds of a workplace injury scene; and
  • Re-enact events that led up to a workplace injury or death. Employers, demonstrating good faith, often assist us in these re-enactments.

The SVIU’s investigation concludes when the assigned investigator compiles his or her information in a comprehensive Report of Investigation. The SVIU sends the report to the Industrial Commission (IC) of Ohio and all parties to the claim. The IC then conducts a hearing to determine the eligibility of the worker or surviving dependents to receive a VSSR award. The SVIU Report of Investigation plays a critical role in the IC hearing.

Since 1990, the unit has completed 8,562 investigations.

Outcomes:  The IC hearing culminates in the issuance of an administrative order, granting or denying the additional award. The hearing order may impose upon an employer a penalty, fine and also a requirement to correct specific safety regulation violations.

A Case In Point

On March 28, 2011 an employee died at a demolition site in Montgomery County. The injured worker was a member of a demolition team tasked with razing a vacant industrial facility. SVIU responded to the scene and obtained preliminary information. The SVIU investigation revealed the owner of the company had failed to secure coverage with the Ohio Bureau of Workers’ Compensation. Upon the death of the injured worker, the owner of the company fled from the United States. SVIU met with the injured worker’s widow and other family members. A BWC claim was filed on behalf of the decedent. SVIU worked with BWC to establish an employer policy and the claim was subsequently allowed and charged to the employer’s policy.

Be on the Lookout

Red flags that may indicate the employer is operating an unsafe workplace in violation of specific safety regulations:

  • Employer has placed tarps or large equipment to act as “shields” around perimeters of construction trenching sites to block the view of the public and/or safety inspectors;
  • Employer requires workers to provide their own required personal protective equipment;
  • No trained or qualified “competent person” exclusively oversees the job site;
  • Employer fails to require and/or furnish training or certification to workers prior to permitting them to operate industrial vehicles;
  • Equipment is devoid of any sign or label warning workers of dangerous areas or zones;
  • Emergency quick drench stations are non-operational or in need of maintenance;
  • Employer permits persons within construction sites who are not wearing hardhats and/or other required personal protective equipment;
  • Employer permits workers to work at elevated heights or rooftops without fall arrest equipment;
  • Employer makes no modification or change in response to reported “close calls” / near injuries; and
  • Current BWC certificate of coverage is not posted and/or has been altered.

Look for our next fraud awareness article that will discuss our BWC Security operation. Meanwhile, be sure to read more about SVIU investigations in our SVIU FY 2011 Annual Report.

If you suspect anyone is committing workers’ compensation fraud, 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.

The long arm of the law: The SID Fugitive Task Force in action

November 21, 2011 3 comments

Handcuffed

The scenario is all too common in the criminal justice system. By means of a grand jury indictment, a defendant is charged with a crime. Yet – although presumed innocent until proven guilty – the defendant fails to show up in court for a scheduled arraignment hearing. Without even entering a plea to the criminal charge, the defendant has fled. The court promptly issues a bench warrant for the defendant’s arrest. The defendant has become a fugitive from the law.

Many fugitives go into hiding, apparently hoping the court will somehow forget about them. Some leave our state, or even our country, seemingly believing the best bet is to put distance between themselves and their crime. However, little do they understand that they can indeed run, but they certainly cannot hide.

It was for this very reason that, back in 1999, SID assembled an elite team comprised of a fraud analyst and several special agents. This BWC Fugitive Task Force (FTF) – as it was soon to be known – immediately commenced coordinating action with law enforcement agencies to bring our BWC fugitives to justice. The FTF accomplishes its mission by identifying the location of each fugitive, guiding law enforcement to execute the fugitive’s arrest and, where needed, ensuring the fugitive’s extradition to the respective jurisdiction where s/he faces a criminal charge. Of course, the key action step is the first action step – namely, locating the fugitive. To do this, the FTF uses many sources of information, including the databases of other governmental and law enforcement agencies. Often FTF members conduct surveillance. Sometimes they execute undercover operations. Always, these investigative strategies are carefully planned and coordinated to secure otherwise hidden information.

A Case In Point

We received an allegation that a claimant was receiving lost time benefits for a falsified assault and that he routinely engaged in several, strenuous physical activities without any apparent physical restriction. Our investigation revealed the subject had furnished no fewer than 17 versions of how he had sustained his injuries in an attempted robbery reported to, and investigated by, local law enforcement. The evidence we secured included statements from multiple witnesses to whom the subject had admitted he had sustained no injury. Additionally, we secured a security guard’s statement that he observed the claimant put on back and leg braces and a sling in a parking lot prior to attending an Industrial Commission hearing. After viewing our surveillance video, a provider concluded the claimant’s “presentation was not true and it was a conscious and deliberate feigning of an illness or disability.” In fact, our investigation proved that while receiving benefits the claimant had continued to work as a self-employed auto mechanic.

When indicted, the subject fled prosecution. However, our Fugitive Task Force located him in Las Vegas, Nevada and secured his extradition back to Ohio. The subject pled guilty to one fifth-degree felony count of workers’ compensation fraud. The court sentenced the subject to serve five years of probation. The court ordered the subject to pay BWC $33,635 in restitution.

A Case In Point

We received an allegation that a claimant owned and operated a business in Arizona while receiving lost time benefits from BWC. Our investigation revealed the subject owned and operated a home restoration business in Sierra Vista, Arizona. The evidence we secured included reports documenting the subject was found guilty in Arizona on three occasions of operating his business without a contractor’s license. Our evidence also included 149 checks written by customers to the subject. In all, we identified $419,357 in cash and checks the subject received for his active work as a contractor.

The BWC SID Fugitive Task Force coordinated the subject’s arrest at work by the Cochise County (Arizona) Sheriff’s Department. The U.S. Marshalls Service extradited the subject back to the State of Ohio. The subject pled guilty to one fifth-degree felony count of workers’ compensation fraud. The court sentenced the subject to serve 12 months of incarceration (suspended) and five years of probation. The court ordered the subject to pay BWC $64,273 in restitution and $2,727 investigative costs.

Be on the Lookout

You may see the identities and photos of current BWC “Wanted Fugitives” on our SID Facebook page: ohiobwcfraud.

Look for our next fraud awareness article that will discuss our Safety Violations Investigation Unit (SVIU). Meanwhile, be sure to read more about fraud investigations in our SID FY 2011 Annual Report.

If you suspect anyone is committing workers’ compensation fraud, or if you suspect you know the location of a BWC fugitive, 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 digital forensics unit: Ensuring justice for even the smartest criminals

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In our digital age almost all data elements are stored electronically – whether on computers, laptops, servers, digital recorders, iPads or smartphones. Even criminals who think they are too smart to be detected, investigated and prosecuted, routinely use one or more of these electronic devices in the course of their crimes.

To bring these criminals to justice, the SID digital forensics unit (DFU) provides a full range of technical support for special agents conducting workers’ compensation fraud investigations. In fact, the unit’s primary duties include the forensic imaging and analysis of digital data from electronic devices. For example, when executing search warrants, the forensic analysts make exact copies of the storage from these devices. Then, employing specialized training, these uniquely talented professionals use specialized forensic software to filter through a vast amount of information.

During just the last year, the unit has processed 12.88 terabytes of data. This quantity is equivalent to 6,282,923,587 printed pages. These pages, if stacked, would be stretch 397 miles high – or the length of 6,981 football fields.

A Case In Point

Forensic analysts are often required to gain access to proprietary software, such as office billing and point-of-sale software, in order to provide data to investigators. In a recent case, the unit worked with a software developer to successfully gain back-door access to the sales and time keeping software of a long-defunct business. The data provided essential information to SID special agents. The evidence proved to be a very important component of the case, which identified almost $350,000 in savings to the BWC State Fund.

Be on the Lookout

Look for our next fraud awareness article that will discuss our SID Fugitive Task Force. Meanwhile, be sure to read more about fraud investigations in our SID FY 2011 Annual Report.

If you suspect anyone is committing workers’ compensation fraud, 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.

Paying for crime…

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Fraud subjects repaid BWC $8.5 million during fiscal year 2011!

For 18 years we have faithfully fulfilled the mission of our Special Investigations Department. We have effectively and proactively prevented losses to the workers’ compensation system; and deterred, detected, investigated, and prosecuted workers’ compensation fraud. This recovery of money from subjects of investigations protects the BWC State Fund – the fund which is used to collect premiums and pay claim costs. This serves to ensure employers pay their fair share, and those that attempt to get more are punished.

The Special Investigations Department works with the BWC Collections and Legal departments to ensure overpayments and premiums due resulting from our investigations are returned. The following are some of the ways we ensure debts are repaid:

  • Certify accounts to the Office of the Attorney General of Ohio for collection of past due debts;
  • File liens against debtors’ assets;
  • Collect overpayment from future benefit awards;
  • Pursue decertification by BWC for providers that fail to pay back overpayments resulting from fraudulent or inappropriate billing; and
  • Pursue an injunctive relief from courts (i.e., stop work order) against an employer that fails to pay premium.

Restitution also serves to deter prospective criminals from attempting to victimize our BWC State Fund. Criminologists tell us that criminals make a conscious decision to avoid committing crimes against victims whenever there is a high likelihood of being detected, investigated, prosecuted and punished. Accordingly, BWC may administratively order subjects to pay the State Fund more than the actual amount they steal. BWC may impose a financial penalty upon the subjects of closed, founded fraud investigations. For example, BWC may require employers to pay a penalty that is up to ten times of their unpaid premium amount.

Moreover, SID refers its cases to criminal prosecutors at all levels – municipal, county, state and federal. These experienced prosecutors secure appropriate indictments, convictions and sentences. At sentencing, criminal courts often order our convicted fraud subjects to reimburse BWC for the amount of monies stolen and our investigative costs. Therefore, prior to the sentencing of a convicted defendant, SID fraud analysts and special agents submit Victim Impact Statements to the court. In these statements, we ask the court to order the defendant to pay full restitution and our costs to investigate the subject.

Criminal courts often stipulate in their official judgment entries that our convicted defendants must pay BWC restitution according to a monthly payment plan. Indeed, a defendant’s failure to do so could be deemed by the court to constitute a violation of the conditions of probation. The court may then revoke probation and immediately impose upon the sentenced subject a period of incarceration. Thus, to avoid incarceration, our fraud probationers are fairly and appropriately incented are make restitution to BWC.

A Case In Point

During fiscal year 2011, we received, via a U.S. District Court, three restitution checks from a convicted provider subject totaling more than $1.2 million.

In 2006, a jury convicted this provider fraud subject on 56 felony counts, including two counts of wrongful death due to medical malpractice, 21 counts health-care fraud, 8 counts of corrupting another with drugs, 15 counts of mail fraud and 10 counts of wire fraud. After reviewing victim impact statements, the court ordered the provider subject to serve two life sentences, 20 years and 10 years of incarceration. The court ordered the subject to pay $14.3 million in restitution to 15 victims, including $7,275,762 to BWC.

Be on the Lookout

Look for our next fraud awareness article that will discuss the SID digital forensics unit. Meanwhile, be sure to read more about fraud investigations in our SID FY 2011 Annual Report.

If you suspect anyone is committing workers’ compensation fraud, 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.

In summary: SID Health Care Provider Team (HCPT)

October 27, 2011 1 comment

When providers commit workers’ compensation system fraud and other crimes against the State Insurance Fund, the SID Health Care Provider Team (HCPT) responds to ensure compliance and integrity of the system. The team is comprised of dedicated analysts and agents located statewide. SID has recently increased its staffing to combat provider fraud, such as billing for unnecessary or non-rendered services, practicing without an active license, overprescribing narcotics, operating pill mills, trafficking in drugs, operating injury mills, unbundling and/or upcoding.

In the last article, we explained that SID staff members furnish orientation and training to MCOs in how to meet their contractual obligation to detect and report fraud. These SID staff members, who successfully drafted and finalized “Special Investigations – MCO Fraud Reporting and Referral Requirements,” are professionals assigned to HCPT.

To bring criminal providers to justice, these talented HCPT professionals conduct joint investigations with dozens of other agencies, such as the FBI, IRS – Criminal Investigations, U.S. Department of Justice – Drug Enforcement Administration (DEA), and local law enforcement narcotics units, vice units and drug task forces. During the last two years, HCPT made 36 criminal referrals for prosecution to state, county and local prosecutors. During last year alone, their work resulted in the identification of over $8.2 million in savings to the State Insurance Fund.

Be on the Lookout

This concludes our provider fraud awareness series. Look for our next fraud awareness article that will describe how we collect on the debts owed to the BWC State Insurance Fund by subjects of our investigations. In the meantime, be sure to read more about the BWC Special Investigations Department’s strategies and successes in our SID FY 2011 Annual Report.

If you suspect that a subject is committing workers’ compensation fraud, 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.

Managed care organizations (MCOs): Medically managing claims and combating fraud

BWC contracts with managed care organizations (MCOs) to provide several services to both employers and injured workers. The primary service they provide is case management of the medical services the injured worker needs to get better and return to work at the earliest, safest interval. In providing medical case management services, MCOs are in close contact with injured workers, providers of record, and employers to promote the delivery of treatment and a timely return to work.

To provide effective case management, MCOs furnish core medical services, such as:

  • Ongoing contact with the injured worker to assist in finding a physician to provide treatment, to assess their work status, and to help move treatment forward;
  • Ongoing contact with the provider of record (the injured worker’s lead physician) to determine the best treatment plan or plan of care for the injured worker, the status of treatment, and the injured worker’s work restrictions, if any;
  • Ongoing contact with the employer to determine the injured worker’s work status and the availability of light duty or restricted work; and
  • Constant coordination between the provider of record and employer regarding treatment expectations and facilitation of a safe and efficient return to work.

While performing these services, the MCO is in position to identify potential fraudulent activity. After being in close contact with the provider and having knowledge of a specific claim, often the MCO may be alerted to inconsistencies or red flags. Meticulous reviews of the medical documentation and provider billing data may detect errors and fraud. If fraud is suspected, the MCO should timely report such to BWC for investigation. This obligation of each MCO to combat fraud is specified in a signed MCO agreement with BWC. The obligation includes:

“The MCO agrees to identify and report any suspected fraudulent or deceptive behavior committed by injured workers, employers, providers or any other person or entity…”

This fraud detection and reporting obligation is essential. To support each MCO in meeting its obligation, we furnish clear guidance and direction, as specified in an 8-page appendix to the MCO agreement, entitled “Special Investigations – MCO Fraud Reporting and Referral Requirements.” For example, each MCO is required to establish and maintain an effective fraud detection and corrections program. We furnish orientation and training to MCOs in how to meet this requirement because they can and should detect fraud.

A Case in Point

An MCO employee furnished an allegation to the SID Health Care Provider Team (HCPT) pertaining to a provider. The source detected the provider subject was over-prescribing in claims.

HCPT conducted an investigation in conjunction with the U.S. Department of Justice – Drug Enforcement Administration (DEA) and a local law enforcement vice unit. The multi-agency investigation included an undercover operation, a search warrant, and interviews with patients, employees and former employees. The investigation found the subject billed for services not rendered, upcoded bills, tampered with records, and engaged in drug trafficking. Even while under investigation, the subject voluntarily surrendered his DEA certificate. The State Medical Board of Ohio permanently revoked the subject’s license to practice medicine in the State of Ohio.

The case resulted in the identification of savings to the Ohio workers’ compensation system of more than $685,000. The Office of the United States Attorneys for Ohio’s Northern District is currently reviewing the case for prosecutorial merit.

Be on the Lookout

Look for our next fraud awareness article that will conclude this series pertaining to provider fraud. Meanwhile, be sure to read more about provider fraud investigations in our SID FY 2011 Annual Report.

If you suspect that a subject is committing workers’ compensation fraud, 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.

Violating the code: Providers who unbundle or upcode when billing BWC

Some providers commit fraud by billing BWC separately for services that BWC requires to be billed together, as a single or “bundled” service. We refer to this fraudulent act as “unbundling.” For example, BWC requires a provider to cleanse the claimant’s skin with an antiseptic prior to giving him or her any injection. BWC requires providers to bill this as one, single service — for the cleansing of the skin and the injection. Providers are prohibited from unbundling this service. However, a criminal provider, motivated by greed, may attempt to circumvent the bundled billing requirement in order to bill BWC for a greater, total amount.

Some providers commit fraud by billing BWC using a more expensive treatment code than the appropriate code for the service actually performed. The costs of some medical services are based upon the length of time the service is provided. Services are often priced in minute increments. For example, BWC will reimburse a provider for some therapies based upon the number of minutes furnished to a claimant. However, a criminal provider may bill BWC for more minutes of therapy — at a greater cost — than they actually furnished the claimant.

A Case In Point

We detected two brothers — both Illinois psychiatrists, and one an owner/provider of an Ohio psychiatric practice — were upcoding bills they submitted to BWC for psychiatric services. Data analysis by our intelligence unit revealed the psychiatrists billed BWC for more than twenty hours of individual psychotherapy on a single day.

During the course of our investigation, we conducted undercover surveillance, a search warrant, record analyses, subject and patient interviews, and grand jury subpoenas. We obtained evidence to substantiate the allegation that the subjects falsified treatment notes and billed BWC for services not being rendered and upcoded bills for services that were provided. We determined the Ohio provider was spending significantly less time with his patients than he billed to BWC in their claims. The investigation uncovered instances in which the Ohio provider spent less than five minutes with the patient, yet he billed BWC for 45 to 50 minutes of individual psychotherapy. We also proved both brothers billed BWC for services when patients were not even present in the office.

The owner/provider of the Ohio practice pleaded no contest to one fifth-degree felony count of workers’ compensation fraud. The court sentenced this subject to serve 5 years of community control and ordered him to pay $78,573 in restitution and investigative costs to BWC. His brother, the Illinois-based provider, pleaded no contest to one first-degree misdemeanor charge of workers’ compensation fraud. The court ordered this subject to pay $27,423 in restitution and investigative costs to BWC. Subsequently, he made payment in full. An employee of the practice pleaded guilty to one first-degree misdemeanor charge of workers’ compensation fraud. The court ordered this subject to pay a $250 fine.

BWC de-certified both providers; they may no longer provide services to BWC claimants. The convicted owner/provider closed the Ohio practice.

Be on the Lookout

Red flags that may indicate a provider is unbundling or upcoding:

  • Provider inexplicably attempts to explain or justify his/her billing practices to a patient;
  • Provider furnishes services to more patients in a period of time than one suspects is feasible; and
  • Provider furnishes a service for a shorter period of time than the patient suspects is needed for effective treatment.

Look for our next fraud provider awareness article that will discuss the role of managed care organizations (MCOs) in the Ohio workers’ compensation system. Meanwhile, be sure to read more about provider fraud investigations in our SID FY 2011 Annual Report.

If you suspect that a subject is committing workers’ compensation fraud, 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.

Milling about: Providers who operate injury mills

October 20, 2011 1 comment

In the second article of this Provider Fraud Awareness series, we quoted Dr. Louis Lasagna as having taught medical students to meet the following standard of conduct in the modern version of the Hippocratic Oath:

“I will apply, for the benefit of the sick, all measures that are required, avoiding those twin traps of overtreatment and therapeutic nihilism” [non-treatment].”

In the last article we examined examples of overtreatment when we discussed the scourge of criminal providers who overprescribe narcotic drugs. In this article we discuss criminal providers who engage in overtreatment of their patients by overusing multiple, repetitive, often unnecessary and ineffective, medical services. For example, these criminal providers treat patients by performing many diagnostics tests with little or no advance explanation or follow-up interpretation and often for extended periods of time.

Such a practice – from which providers conspire to furnish unnecessary care in order to overbill BWC and/or other insurers – is commonly known as an “injury mill”. In an article entitled “Insurance fraud: How to spot a personal injury mill,” Stephen Barrett, MD, Charles Bender, DC and Frank P Brennan, Esq., describe injury mills as follows:

‘The key players are (a) providers who hope to profit from their expensive services; (b) attorneys who hope to profit from insurance settlements, which often are a multiple of the health-care expense; and (c) patients who may or may not have full knowledge of the conspiracy. Some mills use “runners” to recruit accident victims, but some mills even fabricate their own accidents.’

Clearly, the intent of an injury mill is not to effectively treat the patient’s unique symptoms, to provide a cure, but rather only to maximize billings per patient per visit. Consequently, these criminal providers furnish patients short, incomplete and/or infrequent medical examinations. Injury mill providers ignore the true medical care needs of our claimants.

Be on the Lookout

Red flags that may indicate a provider is operating an injury mill:

  • Provider furnishes unnecessary treatments and/or services, often for extended periods of time;
  • “One-stop shopping” — the provider practice includes multiple provider types, typically at a single location; e.g., medical doctors, chiropractors, physical therapists, and massage therapists;
  • Physical examinations of patients are infrequent, short and incomplete;
  • Provider routinely maximizes billing per patient per visit, for example by performing many diagnostics tests with little or no advance explanation and follow-up interpretation;
  • Provider has close working relationships with attorneys;
  • Provider bills increasing units of service for massage and physical therapy;
  • Provider uses the same treatment even after the patient reports physical health improvement;
  • Patients have multiple claims and frequently receive treatment from the provider; and
  • Patients file new claims shortly after settling their older claims.

Look for our next fraud provider awareness article that will discuss providers who commit fraud by unbundling and/or upcoding bills. Meanwhile, be sure to read more about provider fraud investigations in our SID FY 2011 Annual Report.

If you suspect that a subject is committing workers’ compensation fraud, 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.

Danger — Trafficking area ahead!: Providers who overprescribe narcotics, operate pill mills, and/or traffick in drugs

In the opening article in this Provider Fraud Awareness series, we noted some providers, acting with hypocrisy, violate their Hippocratic Oath and/or professional commitment to prescribe regimens for the good of patients according to the provider’s ability and judgment and never do harm to anyone. These providers deceive us and commit crimes. In that October 7th article, entitled “Hypocrisy rather than Hippocrates: Providers who harm patients and society,” we wrote: “They harm claimants, sometimes fatally…prescribing unnecessary drugs, operating pill mills and injury mills, or drug trafficking.”

Well, these words are no overstatement, embellishment or hyperbole. Proof of such exists throughout our beloved state and beyond. That is why, in a February 2011 press release, the FBI affirmed it “remains committed to working additional health care fraud investigations … to address drug diversion, Internet pharmacies, prescription drug abuse, and other health care fraud threats.” At that time the FBI reported its agents were nationally working more than 2,600 pending health care fraud investigations. Indeed, during fiscal year 2010 alone, the FBI’s collaborative efforts with law enforcement partners – including our BWC Special Investigations Department – led to charges against approximately 930 individuals and convictions of almost 750 subjects. The FBI concluded these investigations had “dismantled dozens of criminal enterprises engaged in widespread health care fraud.”

In a May 21, 2011, Columbus Dispatch article, entitled “Kasich signs ‘pill mill’ bill,” Ohio Governor John Kasich offered insight and leadership. He noted: “We really are a main artery for the transport of drugs, not just in Ohio, but through Ohio to other places.” Thus, Governor Kasich concluded: “We have to really engage even more in the war on drugs in this state.” As a member of Ohio Governor’s Opiate Drug Task Force, we take decisive action in the war to protect Ohioans from pill mill operators. To eradicate this scourge of criminal providers we continue to conduct joint investigations with other agencies. In addition to the FBI, these agencies include:  IRS – Criminal Investigations, U.S. Department of Justice – Drug Enforcement Administration (DEA), and local law enforcement narcotics units, vice units and drug task forces.

A Case In Point

We received an allegation that a Cuyahoga County doctor was prescribing significant amounts of narcotic drugs. The SID Health Care Provider Team (HCPT) conducted an investigation — with the DEA, local law enforcement, and a local drug task force — that included undercover operations and a search warrant. Our undercover operations revealed the subject prescribed narcotic medications to undercover agents without providing them with proper medical examinations and then billed BWC improperly for their office visits. Moreover, the subject wrote a prescription for an undercover agent who advised the subject she was not experiencing any pain. The investigation found the provider continued to prescribe narcotics to patients who were known doctor shoppers, even after she received warnings from pharmacies, parents, spouses, social service agencies and police departments. Our investigation proved the subject falsified records to indicate she delivered services that she did not furnish and that she falsely elevated pain levels and fabricated tests to justify her continual overprescribing of pain medication to patients.

The subject pled guilty to one count each of attempted theft, attempted workers’ compensation fraud and telecommunications fraud, all felonies of the fifth degree. The court sentenced her to serve two years of probation. The court ordered the subject to pay $5,067 in restitution to BWC and a $2,500 fine. The court further stipulated the subject may no longer be a provider of services to BWC claimants.

Be on the Lookout

Red flags that may indicate a provider is overprescribing drugs, operating a pill mill, and/or drug trafficking:

  • The provider ignores a patient’s or guardian’s questions about the necessity of a prescription narcotic drug;
  • The provider dismisses a patient’s or guardian’s questions about the necessity of a prescription narcotic drug with the excuse: “It will cost the patient nothing. The Bureau or another insurer will cover the expense;”
  • The provider fails to require a patient to complete urinalysis drug testing to confirm the patient is taking the prescribed narcotic drug;
  • The provider writes a prescription for a cash payment by the patient;
  • The provider prescribes narcotic drugs without examining and/or treating the patient; and
  • The provider’s patients sell and/or barter their prescribed narcotic drugs to others.

Look for our next fraud provider awareness article that will discuss providers who operate injury mills. Meanwhile, be sure to read more about provider fraud investigations in our SID FY 2011 Annual Report.

If you suspect that a subject is committing workers’ compensation fraud, 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.

Unlicensed to steal: Providers who practice without an active license

October 13, 2011 1 comment

Dubious doctor

Nearly all adult Ohioans, certainly those over the age of 15 years and 6 months, know that to legally operate a motor vehicle one must have a valid driver’s license or a temporary learner’s permit. They also understand that other eligibility requirements exist and must be met, including vehicle registration and proof of insurance. These citizens, whether they like it or not, recognize the State of Ohio will impose penalties, fines and even imprisonment upon those who illegally operate a motor vehicle – either without the required, valid driver’s license or learner’s permit or with a suspended license. Nearly all Ohio drivers obey these laws, reasoning they serve to protect the public interest for safety, including their own self-interest in health and well-being.

For the same reasons, these citizens certainly expect each of their medical providers to be licensed by the State of Ohio before they practice medicine in Ohio. These citizens also expect not to be treated by a provider while his/her license is suspended or otherwise inactive.

Yet, as reasonable as this expectation may seem to us, it is a false assumption. While most providers are duly licensed when they practice medicine, some providers commit the crime of practicing without a license or with a suspended license. For example, some have had their licenses suspended by the State Medical Board of Ohio following a hearing wherein their peers found them to be unfit due to an addiction to alcohol and/or drugs.

These criminal providers engage in a pattern of intentional treatment and/or billing in spite of being unlicensed. They often attempt to deceive BWC, and/or other insurers, by submitting fabricated medical reports and bills with the false identity and forged signature of a licensed provider. Fortunately, in handing down guilty verdicts in our criminal prosecution cases, juries see these providers for what they truly are – felons who preyed upon unsuspecting patients.

A Case In Point

The BWC Managed Care Organization Audit Unit and SID Intelligence Unit suspected a provider billing BWC for physical therapy treatments was unlicensed to provide physical therapy in the State of Ohio. The SID Health Care Provider Team (HCPT) interviewed licensed providers, claimants and other witnesses, conducted undercover operations, and analyzed medical records. The investigation found the unlicensed subject attempted to evade detection by submitting falsified documents using the billing identities of two BWC enrolled providers. The subject submitted documents to BWC using the identities and forged signatures of an Ohio licensed physical therapist and an Ohio certified medical doctor without their authorization or knowledge.

The subject pled guilty to one count of mail fraud and one count of tax evasion. Before sentencing, the subject’s home was sold at a Sheriff’s auction. The court sentenced him to serve 37 months of federal incarceration and three years of supervised release, and to perform 80 hours of community service. The court ordered the subject to pay $2,103,188 in restitution to BWC and $92,148 in restitution to the IRS.

Be on the Lookout

Red flags that may indicate a provider is unlicensed to render services in the State of Ohio:

  • The provider who examines and/or treats the patient is not the provider who bills for the service;
  • An “explanation of benefits” statement from BWC and/or another insurer lists a provider who did not examine and/or treat the patient; and
  • A search of the State Medical Board of Ohio’s on-line “License Center” suggests the provider’s license is in a credential status that is not “active”.

Look for our next fraud provider awareness article that will discuss providers who overprescribe drugs, operate pill mills, and/or engage in drug trafficking. Meanwhile, be sure to read more about provider fraud investigations in our SID FY 2011 Annual Report.

If you suspect that a subject is committing workers’ compensation fraud, 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.

Extreme [con] games: Providers billing for unnecessary or non-rendered services.

October 11, 2011 1 comment

Billing document with penMost providers, in faithfulness to their patients and profession, avoid the extremes. Indeed, they accomplish their life’s mission as described in the modern version of the traditional Hippocratic Oath, by Dr. Louis Lasagna, in the profound words:

“I will apply, for the benefit of the sick, all measures that are required, avoiding those twin traps of overtreatment and therapeutic nihilism” [non-treatment].

Admittedly, even the best providers, through simple, human frailty, will sometimes fail. Occasionally, they over treat one patient and under treat another. As unfortunate as these occurrences are, they are certainly not criminal acts.

Yet, still other providers do, in fact, commit a crime when they over treat or under treat. Here’s how. The criminal provider engages in a pattern of intentional over treatment or non-treatment of patient(s). He or she attempts to deceive BWC, and/or other insurers, by submitting fabricated medical reports to justify falsified bills demanding payment for their unnecessary or non-rendered services. In the latter instance, the criminal provider displays brazen arrogance in submitting any bill for a service that was not provided to a patient. Millions of ‘reasonable people on the street’ have no difficulty deeming such acts as criminal. Thus, jurors appropriately hand down guilty verdicts in our criminal prosecution cases.

A Case In Point

We received an allegation from a managed care organization employee that a provider was billing for durable medical equipment not provided to claimants. The SID Health Care Provider Team (HCPT) interviewed patients and analyzed medical records. The investigation found the provider submitted fraudulent patient progress reports to BWC for reimbursement of medical supplies she did not provide to her claimants.

The subject pled guilty to one fifth-degree felony count of workers’ compensation fraud. The court sentenced her to serve one year of incarceration (suspended) and one year of community control, and to perform 80 hours of community service. The court ordered the subject to pay BWC $11,154: $5,577 in restitution and $5,577 investigative costs.

Be on the Lookout

Red flags that may indicate a provider is engaging in billing for unnecessary or non-rendered services:

  • The provider ignores a patient’s or guardian’s questions about the necessity of a treatment;
  • The provider dismisses a patient’s or guardian’s necessity of a treatment questions with the excuse:  “It will cost the patient nothing; the Bureau or another insurer will cover the expense.
  • An “explanation of benefits” statement from BWC and/or another insurer lists services the patient does not recall receiving from the provider;
  • An “explanation of benefits” statement from BWC and/or another insurer lists dates of services on which the patient was not seen or treated by the provider, perhaps due to a canceled appointment; and
  • An “explanation of benefits” statement from BWC and/or another insurer lists non-feasible dates of service, dates when the provider would not have been available, perhaps on a weekend or holiday.

Look for our next fraud provider awareness article that will discuss providers who practice without a valid license. Meanwhile, be sure to read more about provider fraud investigations in our SID FY 2011 Annual Report.

If you suspect that a subject is committing workers’ compensation fraud, 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.

Hypocrisy rather than Hippocrates: Providers who harm patients and society

Wikipedia explains The Hippocratic Oath is an oath “historically taken by doctors and other healthcare professionals swearing to practice medicine ethically. It is widely believed to have been written by Hippocrates, often regarded as the father of western medicine, or by one of his students.” In the original classic version of the oath, translated into English, the individual established a covenant with patients and society by promising to meet several commitments, including:

“I will prescribe regimens for the good of my patients according to my ability and my judgment and never do harm to anyone.”

Most providers – whether they are physicians, surgeons, chiropractors, pharmacists, or medical professionals in hospitals or urgent care facilities – honor the oath. Further, even those who do not formally take the oath – such as durable medical equipment vendors, members of third-party administrators or managed care organizations – adopt its precepts and meet its intent.

Sadly, however, other providers violate the oath, acting with hypocrisy. They deceive us and commit crimes. They harm claimants, sometimes fatally. They harm insurers, including the BWC State Fund, by billing for services not rendered, not needed, or furnished by an unlicensed provider, manipulating procedure codes to bill for a more expensive treatment than provided, prescribing unnecessary drugs, operating pill mills and injury mills, or drug trafficking. Subsequently, employers are harmed when they must pay additional premiums to cover undetected fraudulent provider costs and manage an impaired work force. Employees are harmed by reduced wages, job loss and workplaces made unsafe by impaired co-workers. Indeed, all of society suffers.

We recognize the impact of provider fraud upon Ohio. In 1994, our department created the Health Care Provider Team to exclusively investigate this type of fraud. In 2005, we expanded the team with dedicated analysts and agents located statewide. During the last two years, the Health Care Provider Team made 36 criminal referrals for prosecution to state, county and local prosecutors. During last year alone, their work resulted in the identification of over $8.2 million in savings to BWC’s State Fund.

During the month of October, we will discuss several of the above provider fraud schemes, introduce other BWC departments tasked with regulating providers and describe strategies that our department uses to detect provider fraud. Look for our next fraud awareness article that will discuss providers who bill for non-rendered or unnecessary services, two of our more common provider fraud complaints.

Meanwhile, be sure to read more about our fraud investigative performance results in the SID FY 2011 Annual Report.

If you suspect that a subject is committing workers’ compensation fraud, 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 Comes of Age: A Retrospective Review at 18

In 1984, the National Crime Prevention Council designated October Crime Prevention Month. Every year since then, government agencies, civic groups, schools, businesses, and youth organizations have reached out to educate the public, showcase their accomplishments, and explore new partnerships during this special month. October has become the official month for recognizing and celebrating the practice of crime prevention, while promoting awareness of important crime prevention strategies. The month-long celebration spotlights successful crime prevention efforts on the local, state, and national levels.

In honor of Crime Prevention Month 2011, we offer the following respective review of the BWC Special Investigations Department.

Our department was formed by statute and commenced operation in 1993. For 18 years we have faithfully fulfilled our mission: effectively and proactively preventing losses to the workers’ compensation system; and deterring, detecting, investigating, and prosecuting workers’ compensation fraud.

During that time, we have achieved significant performance milestones, such as:

  • Completed 55,163 investigations;
  • Closed 22,270 founded cases;
  • Identified more than $1.4 billion in savings;
  • Identified $25,906 per closed case;
  • Referred 3,760 subjects for prosecution; and
  • Secured 1,902 criminal convictions.

Strategic Innovation. To generate these notable outcomes, supported by our agency executives we have consistently identified and implemented innovations.  For example, we created and deployed specialized teams each dedicated to combating a type of workers’ compensation fraud subject; claimants, employers, providers, MCOs, etc. We have identified and implemented new technology to detect fraud, analyze data and secure evidence. For example, the SID Digital Forensics Unit utilizes advanced forensic software and equipment to secure electronic evidence from subjects.

A Common Thread: Detection and Intelligence. The Intelligence Unit program uses various technologies and techniques to detect fraudulent activity and refer allegations to each of our specialized investigative teams. This program includes exchanging data with other agencies and organizations to identify claimants receiving total disability benefits who are gainfully employed, incarcerated, or otherwise not entitled to these benefits. Additionally, the Intelligence Unit identifies fraudulent trends by performing data analyses of BWC indemnity (lost time), medical and employer information.

Most recently, SID has recently increased its staffing to even more effectively combat fraud. In June 2011, BWC Administrator/CEO Stephen Buehrer approved us to post and fill critical vacancies, including those with our Intelligence Unit. The selected professionals will generate significant increases in SID performance results.

Be sure to read more about our fraud investigative strategies and successes in the SID FY 2011 Annual Report.

Look for our next fraud awareness article that will commence a series focused upon health care provider fraud. If you suspect that a subject is committing workers’ compensation fraud, 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.

Special Investigations Units: SID Regional Claimant Fraud Teams

When claimants commit workers’ compensation system fraud and other crimes against the State Insurance Fund, the respective SID regional claimant fraud team responds to ensure compliance and integrity of the system. A special investigations unit (SIU) dedicated to investigating claimant fraud operates within most of the BWC customer service offices. Multiple SIUs comprise each of the three regional claimant fraud investigative teams. These teams are designated by their geographical location in North, South and West regions of the state.

SID has recently increased its staffing to combat claimant fraud, such as working while receiving disability benefits or “double dipping”, reporting false claims, exaggerating the extent of their injuries and/or misrepresenting the status of their physical recovery and their ability to return to work, forgery, falsifying their eligibility for death benefits, drug deception, drug diversion or doctor shopping.

During the last two years, their investigations have resulted in 289 criminal referrals and 195 convictions. Be sure to read more about the claimant fraud investigative successes in our SID FY 2011 Annual Report.

This concludes our claimant fraud awareness series. Look for our next fraud awareness article that will offer a review of the department’s 18 years of effectively and proactively preventing losses to the workers’ compensation system; and deterring, detecting, investigating, and prosecuting workers’ compensation fraud.

If you suspect that a claimant is committing workers’ compensation fraud, 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.

Categories: SID Information

Lost Years and Lives: Prescription Drug Abuse

September 27, 2011 1 comment

Prescription narcotic drugs

Most of us are reluctant to take medicine, but we do so when such is truly needed to protect our health and, even then, only as directed by a trusted physician. However, others in our society – often our friends, neighbors and family members – are alarmingly, increasingly abusing and misusing narcotics prescribed by a medical provider. These highly addictive drugs are, by law and all good reason, “controlled” substances because they can negatively affect a patient’s quality of life, and may lead to death. Sadly, some individuals, including claimants, are committing crimes to obtain drugs. Some are illegally diverting their drugs to others. The scope of this national concern is quite significant here in Ohio.

Fast Facts — BWC Prescription drug statistics for 2010:

  • Claimants received more than $130 million in prescription drugs;
  • Oxycontin accounted for nearly $20 million of the prescription drug costs; and
  • More than 50,000 claimants received prescription narcotic drugs.

Drug Deception: Claimants criminally deceive their honest medical provider to obtain prescriptions. Claimants exaggerate symptoms or fabricate their conditions to cause their medical provider to prescribe drugs to them. For example, some claimants repeatedly file claims at emergency rooms to obtain narcotics. Claimants alter prescriptions to increase prescribed pill count, dosage or strength. Claimants criminally deceive pharmacists to fill prescriptions. Claimants falsify prescriptions, sometimes making copies of a valid prescription or stealing a blank prescription to complete as they will and forging the signature of a medical provider.

Drug Diversion: Some claimants illegally divert their prescribed narcotics to others. The street value of these narcotics can often be 10 times the cost of such to BWC. These “claimants turned drug dealers” sell their pills out of their homes, on the street, or at our schools. They also barter their pills for services, some of which are also illegal. The frequency and magnitude of this criminal behavior cannot be over-stated. In an article, May 21, 2011, entitled “Kasich signs ‘pill mill’ bill,” the Columbus Dispatch reported the Ohio State Patrol “…confiscated 20,219 pills from Jan. 1 through May 10 [2011]. The agency also made 1,979 drug-related arrests through April, a 6 percent increase from the first four months in 2010.”

Doctor Shopping: Claimants criminally deceive multiple medical providers to obtain multiple, often redundant, prescriptions. Some claimants seek and secure treatment from multiple medical providers. Here, the claimant deceives each medical provider, causing them to believe the claimant is receiving treatments and prescriptions exclusively from them. These claimants shop medical providers until they find those that they can successfully deceive. When an effective medical provider challenges the claimant, he/she simply moves on to another prospective medical provider.

A Case In Point

The SID Intelligence Unit detected a claimant had filled prescriptions written by eight physicians for nine narcotics overlapping during an eleven month period of time. Our investigation found the claimant had deceived physicians in order to obtain the narcotic prescriptions. When furnished proof of the claimant’s actual drug use, the physicians stated in writing the claimant had deceived them by failing to disclose his treatment by other physicians. The physicians documented they would not have prescribed narcotics for the claimant had they known of his doctor shopping.

The subject pled guilty to one count of deception to obtain dangerous drugs, a fifth-degree felony. The court sentenced the subject to serve 12 months of incarceration (suspended) and two years of community control, and suspended his driver’s license for six months. The court ordered the subject to pay court costs.

Effective Strategic Responses: Each month our SID Intelligence Unit reviews data pertaining to all claimants receiving BWC-paid prescriptions and refers claims to field operations for review and determination, including scheduling physicians to review the appropriateness of prescribed drugs to treat a claimant’s allowed conditions. Since March 2008, these reviews have resulted in the termination of drugs in 1,666 cases, generating $39.7 million in savings to the Ohio workers’ compensation system. We are increasingly deploying significant resources to conduct joint investigations with federal, state and local law enforcement agencies to combat prescription fraud. For example, our department is a member of the Ohio Governor’s Opiate Drug Task Force.

We work with the BWC pharmacy department, established in 2009, to address issues related to the BWC drug program. During FY 2011, the pharmacy department enacted several changes. We assisted the pharmacy department with several innovations. For example, we are pursuing a rule change that no longer requires BWC to pay for prescriptions written by decertified or non-enrolled providers. Additionally, the BWC Board of Directors approved BWC’s first ever formulary of medications for the outpatient treatment of claimants. Formularies are an industry standard that improve quality of care by enhancing the effectiveness and safety of the medications prescribed to Ohio’s claimants. Our drug formulary will improve treatment and limit the inappropriate use of medications and reduce prescription costs. We are also seeking a rule change that will allow BWC to designate a single pharmacy and/or a single prescribing physician to a given claimant.

Each of these strategies ensures the agency balances good patient care with fiscal responsibility and effectively responds to the dramatic increase in accidental deaths associated with the use of prescription narcotic drugs.

Be on the Lookout

Red flags that may indicate a claimant may be committing deception to obtain a dangerous drug or diverting their narcotic prescriptions by selling or giving them to others:

  • A claimant brags about being able to secure any drugs they want from a “friendly” physician;
  • A claimant is suspected of receiving treatment and/or prescriptions from multiple physicians;
  • A claimant repeatedly files claims at emergency rooms to obtain narcotic;
  • A claimant is suspected of being addicted to narcotics and/or other drugs; and
  • A claimant is suspected of selling narcotics and/or other drugs.

If you suspect anyone is fraudulently receiving the benefits of a deceased claimant, 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.

Dishonored Memories: Deceased Claimants with Dishonest Relatives

September 23, 2011 2 comments

Most of us seek to honor the memories of our deceased loved ones. Sadly, however, dishonest relatives may express their grief quite differently than law-abiding citizens. These criminals choose to dishonor the memory of deceased relatives by committing workers’ compensation fraud in the personal, confidential records of a deceased claimant.

Forgery and Uttering: Our workers’ compensation laws demonstrate compassion by granting death benefits to spouses and dependents of claimants whose injuries result in death. We expect that a responsible, surviving relative will report the claimant’s death to us and other pertinent agencies in order to stop lost time benefits. Yet, this does not always occur. Therefore, we proactively compare our claim data with obituary records to identify deceased claimants and cease lost time benefits payments. However, criminals falsely report to us that their deceased relatives continue to live. These criminals pretend to be the claimants themselves, even adopting the voice of an opposite gender’s voice and/or an elderly person in an attempt to deceive us. These charlatans would seek to intercept any check addressed to a deceased claimant, forge their signature, and pretend to be the claimant (aka “uttering”) in order to cash the check to which they know they are not entitled. In situations where lost time benefits are paid electronically, family members inappropriately access and use monies to which they are not entitled, by concealing the claimant’s death. We prosecute these deceptive acts to the fullest extent of the law.

Falsifying Eligibility for Death Benefits: Our workers’ compensation laws ensure the surviving spouses of deceased claimants receive widow benefits – that is until they re-marry. Unfortunately, dishonest surviving spouses falsely report to us that they are single, even after they have re-married. In attempting to deceive us, they may even submit falsified or altered documents.

Lastly, our workers’ compensation laws permit the surviving dependents of deceased claimants to receive benefits for a work-related death when they are dependent children under 18 years of age, or are attending an accredited educational institution full-time and between 18 and 25 years of age. Unfortunately, dishonest surviving dependents falsely report to us that they are attending an accredited educational institution full-time even after they drop classes and attend only part-time or have discontinued their studies and dropped completely out of such programs. Further, some of these criminals submit enrollment applications to accredited programs only to apparently secure the required, preliminary documentation. They may not, in fact, intend to attend a single class. In attempting to deceive us, they too may submit falsified or altered documents.

A Case In Point

We received an allegation that a subject had submitted falsified college enrollment documentation and was not, in fact, eligible to receive benefits from his father’s death claim. Our investigation identified the subject had forged multiple enrollment verification forms to three institutions from 2003 to 2009 as part of a fraud scheme in order to continue receiving death benefits past the age of 18. We found that at the final institution for which he submitted enrollment documentation, the subject had not attended even one class.

The subject pled guilty to one count of workers’ compensation fraud and one count of forgery, both fifth-degree felonies. The court sentenced the subject to serve 12 months of incarceration concurrently on each count (suspended) and five years of community control, and to perform 40 hours of community service. The court ordered the subject to pay BWC $60,500 in restitution and $2,000 investigative costs.

Be on the Lookout

Red flags that may indicate a person forged and cashed checks of a deceased claimant or falsified eligibility for death benefits:

  • A relative of a deceased claimant brags about receiving benefits;
  • The spouse of a deceased claimant attempts to conceal his/her re-marriage;
  • The college-age dependent of a deceased claimant attempts to conceal his/her part-time enrollment, or non-enrolled, status at an accredited institution;
  • A person accesses and uses funds from a deceased claimant’s bank account (into which BWC makes deposits); and
  • A relative of a deceased claimant asks others to participate in a fraudulent scheme against the workers’ compensation system.

If you suspect anyone is fraudulently receiving the benefits of a deceased claimant, 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.

False is Never True: False Claims and Physical Activities

“The truth, the whole truth, and nothing but the truth” – such is the simple standard we have all known since childhood. Nevertheless, some claimants make the criminal’s choice to commit fraud by reporting false claims, exaggerating the extent of their injuries and/or misrepresenting the status of their physical recovery and their ability to return to work. Unfortunately, these individuals take advantage of our system and fraudulently receive benefits.

False claims include those for which a claimant intentionally files a first report of injury (FROI) form for a non-work related injury. For example, a claimant may falsely report that an injury sustained at home or at play was sustained during the course of his/her employment. A false claim may also be filed by a claimant intentionally misreporting accident details. For example, a claimant may falsely report a pre-existing injury, perhaps one sustained and reported in another state, as new injury just sustained with a current Ohio employer. Lastly, false claims include those filed by claimants who stage accidents, including claimants who intentionally injure themselves.

Physical activity cases include those pertaining to claimants who “malinger” – who prefer not to return to work even when they are able to do so. These claimants exaggerate their injuries, falsely reporting that they cannot return to work. They prefer to receive lost time benefits than to earn an honest living.

Some of these claimants are apparently rather convincing actors when they falsely report during examinations by their healthcare providers that they need continued medical treatment. In fact, they may wear their braces or slings, or use their crutches, only as “props” for medical appointments.

A Case In Point

We received an allegation that a claimant was receiving lost time benefits for a falsified assault and that he routinely engaged in several, strenuous physical activities without any apparent physical restriction. Our investigation revealed the subject had furnished no fewer than 17 versions of how he had sustained his injuries in an attempted robbery reported to, and investigated by, local law enforcement. The evidence we secured included statements from multiple witnesses to whom the subject had admitted he had sustained no injury. Additionally, we secured a security guard’s statement that he observed the claimant put on back and leg braces and a sling in a parking lot prior to attending an Industrial Commission hearing. After viewing our surveillance video, a provider concluded the claimant’s “presentation was not true and it was a conscious and deliberate feigning of an illness or disability.” In fact, our investigation proved that while receiving benefits the claimant had continued to work as a self-employed auto mechanic.

When indicted, the subject fled prosecution. However, our Fugitive Task Force located him in Las Vegas, Nevada and secured his extradition back to Ohio. The subject pled guilty to one fifth-degree felony count of workers’ compensation fraud. The court sentenced the subject to serve five years of probation. The court ordered the subject to pay BWC $33,635 in restitution.

Be on the Lookout

Red flags that may indicate a claimant filed a false claim and/or is engaging in physical activities that are inconsistent with his / her reported physical condition:

  • Accident or injury occurs just prior to strike, layoff, plant closing, job termination or job completion;
  • Claimant is in line for early retirement;
  • Claimant admits to a pre-existing injury;
  • Claimant previously described a related accident or injury;
  • Claimant admits he or she did not sustain the injury in course of employment;
  • Claimant admits he or she gave a different account of the accident to medical providers;
  • Claimant admits he or she has filed for benefits in another state;
  • Injury is not consistent with nature of the claimant’s occupation;
  • Claimant cannot recall the date, time and place of the accident;
  • Claimant cannot recall specific details about the accident, injury or medical treatment;
  • Claimant admits he or she intentionally self-inflicted the injury;
  • Claimant is observed engaging in physical activities that are inconsistent with the reported injury;
  • Claimant is observed behaving differently on days he or she receives medical treatment;
  • Claimant is observed behaving differently on days he or she receives attending a hearing; and
  • Claimant relocates out of state or country shortly after filing claim.

If you suspect that a claimant has filed a false claim or engages in a physical activity, 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.

Double Dipping: Working While Receiving Disability Benefits

While it goes by many names (compensation, indemnity, lost time, disability, etc) the benefit is the same: an insurance to pay claimants an income while they are unable to return to work due to a work-related injury or illness. Unfortunately, individuals take advantage of our system and fraudulently receive these benefits.

Known to us as “work/comp”, working while receiving compensation is our second most common complaint type. This type of claimant fraud occurs when a claimant covertly returns to work, either with an employer or by engaging in self-employment, while he or she is receiving a benefit that is paying for their lost wages and prohibits any employment. It often involves a scheme that conceals the conflict employment from BWC and the claimant’s physician, who requests benefits for the claimant.

A Case In Point

We received an allegation that a claimant owned and operated a business in Arizona while receiving lost time benefits from BWC. Our investigation revealed the subject owned and operated a home restoration business in Sierra Vista, Arizona. The evidence we secured included reports documenting the subject was found guilty in Arizona on three occasions of operating his business without a contractor’s license. Our evidence also included 149 checks written by customers to the subject. In all, we identified $419,357 in cash and checks the subject received for his active work as a contractor.

The BWC SID Fugitive Task Force coordinated the subject’s arrest at work by the Cochise County (Arizona) Sheriff’s Department. The U.S. Marshalls Service extradited the subject back to the State of Ohio.

On February 28, 2011, the subject pled guilty to one fifth-degree felony count of workers’ compensation fraud. The court sentenced the subject to serve 12 months of incarceration (suspended) and five years of probation. The court ordered the subject to pay BWC $64,273 in restitution and $2,727 investigative costs.

Be on the Lookout

Red flags that may indicate a claimant is working while receiving include:

  • Claimant uses alias names;
  • Claimant has calluses on hands, grease under fingernails;
  • Claimant wears a work uniform;
  • Claimant drives a work vehicle;
  • Claimant leaves homes early in the morning and returns home in the evening; and
  • Claimant relocates out of state or country after filing the claim.

If you suspect that a claimant is working while receiving, 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.

Claimant Fraud: Think you won’t get caught? Think again.

BWC is here for those hard-working people who are unfortunate enough to get hurt on the job.  BWC ensures injured workers receive entitled benefits and quality care so they can return to work.

Unfortunately, there are individuals who think it is okay to get more than they deserve. These individuals falsify information about the extent of their injuries or hide the fact that they are working while they still receive benefits to which they would no longer be entitled. Don’t be THAT guy/gal.

Committing workers’ compensation fraud may result in a felony conviction and jail time.  BWC Special Investigations has agents throughout Ohio to identify, investigate, and prosecute individuals who commit workers’ compensation fraud.  Think you won’t get caught?  Think again.

Since its inception in 1993, the Special Investigations Department has made almost 3,800 criminal referrals resulting in over 1,900 convictions for workers’ compensation-related crimes in Ohio.  Furthermore, over 55,000 investigations have been completed resulting in $1.4 billion in identified savings.

This article kicks off our Claimant Fraud Awareness series.  Throughout the month of September, we will release a series of articles on some of the types of claimant fraud, including drug-related fraud.  Additionally, we will let you know of some things that are being done to identify possible fraud.  This series follows our Employer Fraud Awareness series that was completed in August.

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

Make ‘em pay for it: The Employer Fraud Team

When employers fail to comply with the workers’ compensation system, SID’s Employer Fraud Team responds to ensure compliance and integrity of the system. During the last two years, their investigations have resulted in over 160 criminal referrals and 60 convictions. Be sure to read more about the Employer Fraud Team’s success in our SID FY 2011 Annual Report.

SID has recently increased its staffing to combat employer fraud, such as, misclassifying employees as independent contractors.

Misclassification: A National Issue

BWC, as well as other federal and state agencies, continue to see misclassification as a major issue. Employers that misclassify their employees as independent contractors have an unfair advantage as they compete against employers operating legitimately.

What’s misclassification? Here’s a quick overview:

Misclassification occurs when an employer claims a person as an independent contractor, when they should be classified as an employee.

Workers are generally considered employees when someone else controls how and when they perform their work. In contrast, independent contractors are generally in business for themselves and control how and when they perform services.

In addition to legitimate businesses, federal, state and local governments also lose when employers intentionally misclassify employees. Employers are required to withhold taxes from employees’ pay and also pay taxes, such as Social Security, Medicare, unemployment and workers’ compensation, based on their employees’ wages. Employers generally do not have to withhold or paid taxes for independent contractors.

Misclassification costs the State of Ohio millions. A 2009 report by the Ohio Attorney General estimated that Ohio has 92,500 misclassified workers. This level of misclassification annually costs the state up to $20 million in unemployment taxes, up to $103 million in workers’ compensation premiums and up to $36 million in income tax revenue.

To combat this issue, the Internal Revenue Service (IRS) launched a program last year to randomly examine 6,000 companies over the course of three years to specifically address employee misclassification. The federal government estimates the program will generate $7 billion in 10 years through tighter enforcement.

BWC’s Special Investigations Department continues to pursue exchanging data with partners and reviewing our own data to ensure employers pay their fair share or else we make ‘em pay for it.

This concludes our employer fraud awareness series. Look for our next fraud series awareness series on claimant fraud.

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 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: ,

Rippin’ Off the Pot: Employers That Misreport Their Payroll

Misreporting payroll is another scheme employers use to avoid paying their fair share of premiums to BWC.

Commonly used methods include:

  • Underreporting payroll by misclassifying the type of work being performed by the employees;
  • Underreporting payroll by misclassifying employees as independent contractors; and
  • Failing to disclose any or all payroll.

How Premiums are Calculated

To ensure that employers pay a fair share, BWC assigns manual classifications that correspond with the work being done and the risk of injury due to hazards associated with that work. For example, the manual classification for an office worker carriers a lower rate than the manual classification for a construction worker. This is because there is less hazard and risk of injury for the office worker. Thus, claims costs for office workers are typically lower than claims costs for construction workers.

Misclassifying the Type of Work Being Performed

The manual classification rate can vary greatly based on the type of work being done. Dishonest employers falsely report to BWC less expensive manual classifications (e.g., clerical and office work) rather than the more expensive manual classifications in which their employees actually work (e.g., construction and industry).

Penalties for intentionally misclassifying payroll can cost an employer up to 10 times the difference between the premium owed and the amount paid. In addition, the employer could face criminal liability.  The criminal charge is based on the amount of premium avoided by committing the crime and becomes a felony at $500. 

 A Case in Point
The Employer Fraud Team investigated a company that intentionally misclassified laborers as clerical employees. The investigation revealed that the company avoided paying over $300,000 in premiums over the course of two years by intentionally misclassifying these employees.

 
Misclassifying Employees as Independent Contractors

Misclassifying employees as independent contractors is another way employers attempt to avoid paying the correct amount of premium. Here, dishonest employers falsely report to BWC that an employee is an independent contractor. This relieves the employer from paying applicable workers’ compensation premiums, as well as other employer-employee responsibilities such as: unemployment insurance premiums; local, state and federal income taxes; and Social Security and Medicare taxes. Employees often realize that they are improperly classified as an independent contractor when it’s too late… they file a workers’ compensation claim and it’s denied.

If the employer controls the working hours, the selection of materials, the traveling routes, and the worker’s performance reviews, an employer-employee relationship exists, and the employer must provide workers’ compensation coverage for the worker.

Failing to Disclose Payroll

Finally, there are employers that have secured coverage, but fail to report their entire payroll. This also includes employers that report zero or no payroll being paid.

A Case in Point
The Employer Fraud Team received information from BWC’s Premium Audit Department alleging that a Canal Winchester, OH landscaping company had falsely reported zero payroll to BWC. Employees had filed four claims against the employer’s policy. The investigation determined that for three years the landscaping company had failed to disclose its employees’ payroll wages to BWC. The owners of the company pled guilty to three felony counts of workers’ compensation fraud and were subsequently ordered to pay BWC $34,984 in restitution.

Be on the Lookout

Red flags that indicate that an employer might be misreporting payroll include:

  • Large variances in payroll reported;
  • Amount of payroll reported in classifications are inconsistent with its line of business;
  • Variances in the payroll amounts reported to multiple agencies; and
  • Employees receive a 1099-MISC form instead of a W-2 form.

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

Turning a Blind Eye to the Pot: Employers That Operate without Coverage

Financial PlanningOhio law requires employers with one or more employees to obtain workers’ compensation coverage.

When it comes to employers operating without coverage, we typically see the following scenarios:

  • An employer is operating and has never obtained coverage.
  • An employer is operating and has obtained coverage, but failed to maintain it (also known as lapsed coverage).
  • An employer knowingly submits a non-sufficient payment in an attempt to secure coverage and a new certificate of coverage, with their coverage being false.

Claims can be filed against non-compliant employers, aggravating the loss to the “pot” (the State Fund). This additionally impacts the premiums of compliant employers. Noncompliant employers are responsible dollar for dollar for claims costs incurred during a non-covered period. Noncompliant employers may be subjected to criminal and civil proceedings, such as felony workers’ compensation fraud charges, liens and injunctions.

After other BWC departments have made repeated attempts to bring noncompliant employers into the compliance, they typically refer these employers to SID’s Employer Fraud Team. Here are two examples:

A Case in Point: Lapsed Employer with Claims

SID was advised by BWC’s Premium Auditing Department that a Harrison, OH business has been operating with lapsed coverage, has had multiple claims filed against its policy and failed to respond to several inquiries from their staff. An investigation by the Employer Fraud Team concluded that the company had a total of eight claims filed against its policy and owed approximately $73,000 in past due premiums, in addition to non-compliant claims costs. The investigation was referred to the county prosecutor which resulted in a fourth degree felony conviction against owner of the business.

A Case in Point: Lapsed Employer That Issued a NSF Check

SID received information from BWC’s Collection Department that indicated a Mansfield, OH employer submitted a $4,400 check in order to reinstate its coverage. The employer advised BWC that he needed a valid BWC certificate in order to obtain a new contract he was bidding. This check was later returned due to insufficient funds. The Employer Fraud Team referred their investigation to the county prosecutor for passing a bad check, theft, and workers’ compensation fraud charges. The employer was convicted on all three charges, each a fifth degree felony.

SID previously completed an investigation which proved that this employer submitted an altered BWC certificate in order to obtain work. Based on that investigation, the owner of the business was prosecuted in Richland County and found guilty of forgery and tampering with records.

Did you know?

Coverage is required for domestic household employees (e.g., cooks, gardeners, housekeepers, babysitters, etc.) who earn $160 or more during a calendar quarter.  Many home owners are not aware of this coverage requirement until it’s too late… someone gets injured on their property and files a claim.

For more information about employer coverage issues, including how to file for coverage online, visit: https://www.ohiobwc.com/employer/.

What you can do.

You can determine if 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.

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

Employer Fraud: When your competition isn’t paying… you pay more!

Twenties and Coins

Fraudulent employers hurt honest employers. When employers cheat the system, honest employers have to pay additional premiums and are placed at a competitive disadvantage. Here’s how:

BWC maintains a State Fund to pay for services provided to injured workers. This fund can be seen as a pot of money that must be filled by Ohio’s employers. For every dollar dishonest employers don’t contribute, honest employers are forced to pay an extra dollar. Fraudulent employers are then able to undersell honest employers due to their lower labor costs.

We recognize the impact this causes to Ohio’s employers. In 2005, our department created the Employer Fraud Team to exclusively investigate this type of fraud. During the last two years, the Employer Fraud Team made 160 criminal referrals for prosecution to state, county and local prosecutors. Also during the last two years, their work has resulted in the identification of over $7.5 million in premium and penalties owed to BWC’s State Fund.

Since their existence, the Employer Fraud Team has identified the following common employer fraud schemes:

  • Employers operating without workers’ compensation coverage or ceasing to pay for their workers’ compensation coverage;
  • Underreporting payroll by misclassifying and misrepresenting types of employees;
  • Falsifying a BWC Certificate of Premium Coverage to appear to be compliant; and
  • Shifting payroll to different policies to avoid negative experience ratings.

During the month of August, we will be discussing each of these common employer fraud schemes, introducing other BWC departments tasked with regulating employers and describing projects that our department’s Intelligence Unit undertakes to detect employer fraud.

Our next article will discuss employers that operate without coverage and employers that fail to maintain workers’ compensation coverage, our two most common employer fraud complaints.

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

Intro to Our New Fraud Awareness Series

SID Badge and SealBy Tom Wersell, Director of Investigations

We are starting a series of articles to highlight our team’s activities. These articles will contain common fraud schemes, red flags, examples of cases we’ve investigated and special projects. For the month of August, we will focus on employer fraud, followed by claimant fraud in September and health care fraud in October.

Our department is comprised of several types of teams:

  • Three regional claimant fraud special investigation teams operate in most customer service offices;
  • The health care provider team (HCPT), employer team and safety violations investigation unit (SVIU) are each comprised of team members located throughout the state;
  • The intelligence unit; digital forensics unit (DFU); and BWC security services operate through BWC’s central office.

We intend for these articles to be educational and interactive, so we welcome your comments and feedback. We hope others will share their knowledge and experience, as well as, report fraud if they know a person or business is doing something similar.

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