Washington Saves $128 Million By Fighting Fraud

January 7, 2010

The fight against fraud in the workers’ compensation system brought in $128 million to Washington last year, according to a new report from the state Department of Labor & Industries (L&I). In addition to recovering fraudulent payments and overpayments to workers and health-care providers, the agency collects payments from employers for delinquent or falsely reported premiums.

The fraud program collections in fiscal year 2009 increased by 3 percent from the previous year.

In addition, L&I avoided an estimated $5.9 million in future costs by uncovering and stopping fraudulent payments.

“Our results show that we continue to get better at catching fraud and abuse,” said Carl Hammersburg, manager of L&I’s Fraud Prevention and Compliance Program. “Each year we improve our ability to share data and analyze it, which means we can catch problems sooner.”

L&I compares internal and external data while reviewing up to 2,000 claims each month that have been flagged as potentially fraudulent. As one example of increasing productivity, the agency in 2009 identified 56 percent more overpayments and questionable billings to health-care and vocational providers compared to last year.

L&I also referred 25 fraud cases for criminal prosecution, including 18 workers, four employers, and three health-care providers — with a 100 percent success rate.

“These results from the fraud report demonstrate L&I’s commitment to really fighting fraud and going after those that cheat the system. People have the right to expect that their insurance premium money is spent honestly on injured workers, and we just won’t tolerate people who try to take advantage of that,” said Selena Davis, L&I’s communications manager.

In one fraud case, an anonymous tip led L&I to a Snohomish County man who had returned to work using his son’s Social Security number. At the same time, the man was collecting a pension for job-related injuries that supposedly prevented employment. He was sentenced to four months with work release and ordered to repay $60,000.

Another criminal case involved a Spokane painting contractor who must repay $212,000 in premiums and penalties. He was guilty of false reporting and cash payment of wages to avoid paying workers’ compensation premiums.

The annual report, “Targeting Fraud and Abuse,” shows that Fraud Prevention and Compliance brings in about $8 for every dollar spent on preventing fraud and improving employer compliance with reporting requirements.

To view the report, visit http://www.lni.wa.gov/ClaimsIns/FraudComp/WCFraud/About/Reports/default.asp#reports.

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