Insurance fraud investigations Miami Beach South Beach

Insurance fraud investigations are any act committed with the intent to obtain a fraudulent outcome from an insurance process. This may occur when a claimant attempts to obtain some benefit or advantage to which they are not otherwise entitled, or when an insurer knowingly denies some benefit that is due.

According to the United States Federal Bureau of Investigation, the most common schemes include Premium Diversion, Fee Churning, Asset Diversion, and Workers Compensation Fraud. The perpetrators of these schemes can be both insurance company employees and claimants. False insurance claims are insurance claims filed with the intent to defraud an insurance provider.

insurance fraud investigations have existed since the beginning of insurance as a commercial enterprise. Fraudulent claims account for a significant portion of all claims received by insurers and cost billions of dollars annually. Types of insurance fraud investigations are diverse and occur in all areas of insurance.

Insurance crimes also range in severity, from slightly exaggerating claims to deliberately causing accidents or damage. Fraudulent activities affect the lives of innocent people, both directly through accidental or intentional injury or damage, and indirectly as these crimes cause insurance premiums to be higher. insurance fraud investigations pose a significant problem, and governments and other organizations make efforts to deter such activities.

Types of insurance fraud investigations

Life insurance: An example of life insurance fraud investigations is the John Darwin disappearance case, which was an investigation into the act of pseudocide committed by the British former teacher and prison officer John Darwin, who turned up alive in December 2007, five years after he was thought to have died in a canoeing accident.

Darwin was reported as missing after failing to report to work following a canoeing trip on March 21, 2002. He reappeared on December 1, 2007, claiming to have no memory of the past five years.

Another example is former British Government minister John Stonehouse who went missing in 1974 from a beach in Miami. He was discovered living under an assumed name in Australia, extradited to Britain and jailed for seven years for fraud, theft, and forgery.

Health care insurance

Health insurance fraud investigations are described as an intentional act of deceiving, concealing or misrepresenting information that results in health care benefits being paid to an individual or group.

Fraud can be committed either by an insured person or by a provider. Member fraud consists of claims on behalf of ineligible members and/or dependents, alterations on enrollment forms, concealing pre-existing conditions, failure to report other coverage, prescription drug fraud, and failure to disclose claims that were a result of a work-related injury.

Provider fraud consists of claims submitted by bogus physicians, billing for services not rendered, billing for a higher level of services, diagnosis or treatments that are outside the scope of practice, alterations on claims submissions, and providing services while medical licenses are either suspended or revoked. Independent medical examinations debunk false insurance claims and allow the insurance company or claimant to seek a non-partial medical view for injury-related cases.

According to the Coalition Against insurance fraud investigations, health insurance fraud investigations depletes taxpayer-funded programs like Medicare and may victimize patients in the hands of certain doctors.

Some scams involve double-billing by doctors who charge insurers for treatments that never occurred and surgeons who perform unnecessary surgery.

According to Roger Feldman, Blue Cross Professor of Health Insurance at the University of Minnesota, one of the main reasons that medical fraud is such a prevalent practice is that nearly all of the parties involved find it favorable in some way.

Many physicians see it as necessary to provide quality care for their patients. Many patients, although disapproving of the idea of fraud, are sometimes more willing to accept it when it affects their own medical care. Program administrators are often lenient on the issue of insurance fraud investigations, as they want to maximize the services of their providers.

The most common perpetrators of healthcare insurance fraud investigations are health care providers. One reason for this, according to David Hyman, a Professor at the University of Maryland School of Law, is that the historically prevailing attitude in the medical profession is one of “fidelity to patients”.

This incentive can lead to fraudulent practices such as billing insurers for treatments that are not covered by the patient’s insurance policy. To do this, physicians often bill for a different service, which is covered by the policy, rather than that which they rendered.

Another motivation for insurance fraud investigations is a desire for financial gain. Public healthcare programs such as Medicare and Medicaid are especially conducive to fraudulent activities, as they are often run on a fee-for-service structure.

Physicians use several fraudulent techniques to achieve this end. These can include “up-coding” or “upgrading,” which involve billing for more expensive treatments than those actually provided; providing, and subsequently billing for, treatments that are not medically necessary; scheduling extra visits for patients; referring patients to other physicians when no further treatment is actually necessary; "phantom billing," or billing for services not rendered; and “ganging,” or billing for services to family members or other individuals who are accompanying the patient but who did not personally receive any services.

Perhaps the greatest total dollar amount of fraud is committed by the health insurance companies themselves. There are numerous studies and articles detailing examples of insurance companies intentionally not paying claims and deleting them from their systems, denying and canceling coverage, and the blatant underpayment to hospitals and physicians beneath what are normal fees for the care they provide.

 There is a wide variety of schemes used to defraud automobile insurance providers. These ploys can differ greatly in complexity and severity. Richard A. Derrig, vice president of research for the insurance fraud investigations Bureau of Massachusetts, lists several ways that auto-insurance fraud investigations can occur, such as:

Staged collisions

In staged collision fraud, fraudsters use a motor vehicle to stage an accident with the innocent party. Typically, the fraudsters' vehicle carries four or five passengers. Its driver makes an unexpected maneuver, forcing an innocent party to collide with the fraudster's vehicle. Each of the fraudsters then files claims for injuries sustained in the vehicle. A “recruited” doctor diagnoses whiplash or other soft-tissue injuries which are hard to dispute later.

Other examples include jumping in front of cars as done in Russia. The driving conditions and roads are dangerous with many people trying to scam drivers by jumping in front of expensive-looking cars or crashing into them. Hit and runs are very common and insurance companies notoriously specialize in denying claims. Two-way insurance coverage is very expensive and almost completely unavailable for vehicles over ten years old–the drivers can only obtain basic liability. Because Russian courts do not like using verbal claims, most people have dashboard cameras installed to warn would-be perpetrators or provide evidence for/against claims

Exaggerated claims

A real accident may occur, but the dishonest owner may take the opportunity to incorporate a whole range of previous minor damage to the vehicle into the garage bill associated with the real accident. Personal injuries may also be exaggerated, particularly whiplash.

insurance fraud investigations cases of exaggerated claims can also include claiming damage to the car that never occurred as a result of an accident that damaged a different part of the vehicle.

Examples

Examples of soft auto-insurance fraud investigations can include filing more than one claim for a single injury, filing claims for injuries not related to an automobile accident, misreporting wage losses due to injuries, or reporting higher costs for car repairs than those that were actually paid.

Hard auto-insurance fraud investigations can include activities such as staging automobile collisions, filing claims when the claimant was not actually involved in the accident, submitting claims for medical treatments that were not received, or inventing injuries. Hard fraud can also occur when claimants falsely report their vehicle as stolen. Soft fraud accounts for the majority of fraudulent auto insurance claims.

Another example is that a person may illegally register their car to a location that would let them cheaper insurance rates than where they actually live, sometimes called "rate evasion". For example, some drivers in Brooklyn drive with Pennsylvania license plates because registering their car in a rural part of Pennsylvania will cost a lot less than registering it in Brooklyn.

Another form of automobile insurance fraud investigations, known as "fronting," involves registering someone other than the real primary driver of a car as the primary driver of the car. For example, parents might list themselves as the primary driver of their children's vehicles to avoid young driver premiums.

"Crash for cash" scams may involve random unaware strangers, set to appear as the perpetrators of the orchestrated crashes. Such techniques are the classic rear-end shunt (the driver in front suddenly slams on the brakes, possibly with brake lights disabled), the decoy rear-end shunt (when following one car, another one pulls in front of it, causing it to brake sharply, then the first car drives off) or the helpful wave shunt (the driver is waved into a line of queuing traffic by the scammer who promptly crashes, then denies waving)

Organized crime rings can also be involved in auto-insurance fraud investigations, sometimes carrying out schemes that are very complex. An example of one such plot is given by Ken Dornstein, author of Accidentally, on Purpose: The Making of a Personal Injury Underworld in America. In this scheme, known as a “swoop-and-squat,” one or more drivers in “swoop” cars force an unsuspecting driver into position behind a “squad” car.

This squat car, which is usually filled with several passengers, then slows abruptly, forcing the driver of the chosen car to collide with the squat car. The passengers in the squad car then file a claim with the other driver’s insurance company. This claim often includes bills for medical treatments that were not necessary or not received.

An incident that took place on Golden State Freeway June 17, 1992, brought public attention to the existence of organized crime rings that stage auto accidents for insurance fraud investigations.

Although difficult to obtain the information, this fraud by insurance companies can be estimated by comparing revenues from premium payments and expenditures on health claims.

In response to the increased amount of health care fraud in the United States, Congress, through the Health Insurance Portability and Accountability Act of 1996 (HIPAA), has specifically established health care fraud as a federal criminal offense with punishment of up to ten years in prison in addition to significant financial penalties.

Automobile insurance

Fraud rings or groups may fake traffic deaths or stage collisions to make false insurance or exaggerated claims and collect insurance money. The ring may involve insurance claims adjusters and other people who create phony police reports to process claims.

The insurance fraud investigations Bureau in the UK estimated there have already been more than 20,000 staged collisions and false insurance claims across the UK from 1999 to 2006. One tactic fraudster use is to drive to a busy junction or roundabout and brake sharply causing a motorist to drive into the back of them.

They claim the other motorist was at fault because they were driving too fast or too close behind them, and make a false and inflated claim to the motorist's insurer for whiplash and damage which can give the fraudsters up to £30,000. In the insurance fraud investigations Bureau's first year or operation, the usage of data mining initiatives exposed insurance fraud investigations networks and led to 74 arrests and a five-to-one return on investment.

The Insurance Research Council estimated that in 1996, 21 to 36 percent of auto-insurance claims contained elements of suspected fraud. There is a wide variety of schemes used to defraud automobile insurance providers. These ploys can differ greatly in complexity and severity. Richard A. Derrig, vice president of research for the insurance fraud investigations Bureau of Massachusetts, lists several ways that auto-insurance fraud investigations can occur, such as:

Staged collisions

In staged collision fraud, fraudsters use a motor vehicle to stage an accident with the innocent party. Typically, the fraudsters' vehicle carries four or five passengers. Its driver makes an unexpected maneuver, forcing an innocent party to collide with the fraudster's vehicle. Each of the fraudsters then files claims for injuries sustained in the vehicle. A “recruited” doctor diagnoses whiplash or other soft-tissue injuries which are hard to dispute later.

Other examples include jumping in front of cars as done in Russia. The driving conditions and roads are dangerous with many people trying to scam drivers by jumping in front of expensive-looking cars or crashing into them. Hit and runs are very common and insurance companies notoriously specialize in denying claims.

Two-way insurance coverage is very expensive and almost completely unavailable for vehicles over ten years old–the drivers can only obtain basic liability. Because Russian courts do not like using verbal claims, most people have dashboard cameras installed to warn would-be perpetrators or provide evidence for/against claims.

Exaggerated claims

A real accident may occur, but the dishonest owner may take the opportunity to incorporate a whole range of previous minor damage to the vehicle into the garage bill associated with the real accident. Personal injuries may also be exaggerated, particularly whiplash.

insurance fraud investigations cases of exaggerated claims can also include claiming damage to the car that never occurred as a result of an accident that damaged a different part of the vehicle.

Examples

Examples of soft auto-insurance fraud investigations can include filing more than one claim for a single injury, filing claims for injuries not related to an automobile accident, misreporting wage losses due to injuries, or reporting higher costs for car repairs than those that were actually paid.

Hard auto-insurance fraud investigations can include activities such as staging automobile collisions, filing claims when the claimant was not actually involved in the accident, submitting claims for medical treatments that were not received, or inventing injuries. Hard fraud can also occur when claimants falsely report their vehicle as stolen. Soft fraud accounts for the majority of fraudulent auto insurance claims.

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