Q1 FY 2005: TWCC Issues Close to $1.56 Million in Penalties for Fraud, Administrative Violations

The Texas Workers’ Compensation Commission issued penalties totaling nearly $1.56 million between Sept. 1, 2004 and Nov. 30, 2004 for administrative violations and fraud committed by system participants.

A total of 1,108 Notices of Violation (NOVs) were issued during the three-month period, for a total of $1,559,496 in penalties. As required by the General Appropriations Act, the initial $100,000 collected in penalties is appropriated to the Commission; the remainder goes to the state’s general fund.

The Commission’s Compliance and Practices Division regularly conducts audits of workers’ compensation system participants. These activities resulted in proposed administrative penalties totaling $1,039,663 in the first quarter of fiscal year 2005. An additional $428,290 in penalties was imposed on insurance carriers based on violations discovered through self-reported data.

In addition to violation referrals and audits, the Commission completed several fraud investigations. Examples of fraudulent acts include someone receiving workers’ comp benefits that they are not entitled to or a medical provider billing for services not rendered.

For the three-month period, the Commission issued 10 warning letters and 8 NOVs for fraud that resulted in orders for $43,626 in restitution and $6,700 in penalties. The Commission forwarded three cases to district attorneys for prosecution.

Summaries of enforcement activities by the Commission’s Compliance and Practices Division are posted on the Web at: www.twcc.state.tx.us under “Fraud and Enforcement.”