Flip It on Fraud

Ask yourself, “What would I expect from a legitimate claimant?”

February 10, 2021 Photo

When it comes to insurance fraud, everyone is affected. Whether it is through higher premiums for customers; delayed handling of legitimate claims; delayed access to customer service or claims personnel (because fraudulent claimants often push for quick payments through multiple calls, texts, or emails, taking time away from legitimate claimants); costs to investigate fraudulent claims; and sometimes, injuries or death to others, we are all affected by these fraudulent claims for money.

Fraud can also be tough to spot. While there is the occasional and obvious altered/forged document; the inappropriate use of verbiage on a claims form; contradictory statements about the incident prompting the claims filing; and fax or caller ID information that indicates a return to work (despite a continuing claim of disability), most attempts at fraud are not that easy to identify. Claimants with fraudulent claims will submit false information or omit pertinent information to achieve their goal of receiving benefits not due to them. When that information comes in either dribbles or floods, discerning fraud becomes even more difficult. The “dribbles” make it challenging to keep track of all the information received over time, while the “floods” require a discerning eye to detect falsity, due to the sheer number of documents submitted for review.

Red-flag training and fraud case-scenario reviews are necessary, and integral anti-fraud personnel need to pursue this training on a regular basis, to help them recognize fraud indicators and actions that some claimants will take to receive benefits not due to them.

However, beyond this foundational approach to fraud detection is something that is rarely mentioned in investigations: It is just as important to examine the behavior of claimants who submit legitimate claims. These claimants have never committed fraud, have never even attempted to commit fraud, and will never consider fraud as an option for obtaining benefits.

A New Approach to Detection

Since most claims are legitimate, recognizing how claimants with legitimate claims behave can help investigators better detect claimants attempting to make fraudulent claims. In other words, we need to “flip it” and let fraud reveal itself when we ask ourselves: What do most claimants do?

They make legitimate claims. This seems simplistic, but it is the first step of fraud detection. Most claimants do not lie because they don’t need to lie. Their claims are true; their statements regarding their claims are true; and they are truly owed benefits for their claims. If you discover that a claimant lied during a claim, then look into it, because lies come with reasons behind them—and fraud can be one of them.

They provide accurate and complete information. Claimants who submit legitimate claims will submit the information needed for claims processing, since they need their benefits and understand that information is necessary to achieve this goal. Even claimants who question whether certain information or documentation is needed will understand the necessity once they have communicated with a claims professional, and they will submit what is requested to ensure their benefits are paid. Pay attention when you see one or more of these behaviors:

•    Claimants do not provide accurate and complete information.

•    Claimants push back against requests for clarification and verification of the information they did provide.

•    Claimants say they will submit requested information but consistently do not, despite multiple requests and conversations about why the information is necessary.

•    Claimants do not fully answer questions on claims documents, or their answers do not make sense.

They sign all of their claims documents. Claims documents, including authorizations, request information from a claimant. The claimant’s signature on a document attests to the validity of the information provided. Whether the signature is “wet” or electronic, the claimant who signs is saying, “All of this information is true and correct.”

Fraud is not the only reason why a claimant may choose not to sign a document, but it is a definite possibility. Does the claimant’s lack of signature on a particular document hinder the claims process? Did the claimant provide an explanation for not signing the document? Does that explanation make sense? A lack of signature on a claims document may not seem significant in the moment, but it can cause significant problems later if the claim is identified as possibly fraudulent.

 They obtain appropriate medical care for their conditions. Is the claimant disabled? Did the claimant sustain an accidental injury? Legitimate claims include corresponding medical documentation, with appropriate provider and treatment information. Medical documentation will reflect all pages of medical records, with no apparent alterations. Medical documentation will not have been forged. The claimant will disclose all provider names and contact information.

If you encounter a situation in which medical documentation is not accurate; there are missing, altered, or forged pages; or the provider information is questionable, take the time to check further. You may have just discovered fraud.

They do not frequently request rushed benefits. Claimants who submit legitimate claims provide the information requested to receive benefits due to them. They submit additional documentation as needed to keep their benefits current. Such claimants will occasionally call to request a rushed benefit due to a specific or temporary need, such as to pay a new, unexpected bill; new medication; or treatment by a new specialist. Once the “new” is over, the claimant does not call again until or unless another need prompts such communication.

Take notice if a claimant requests rushed benefits frequently—particularly if this behavior originated at the outset of the claim. If the claimant has not provided an explanation for this behavior, then talk to the claimant about it. Did a regular payment date for a bill or mortgage change? Has something else occurred that requires benefits earlier than the usual payment date? If the claimant cannot or will not provide a reasonable explanation for the frequency of the rush requests, consider that the claimant may be requesting rushes to get money before a fraudulent claim is discovered.

By paying attention to how most claimants act, we can better detect and address fraud. And by doing so, we can potentially reduce the current number of fraudulent claims to zero. 

About The Authors
Tami Bayless

Tami Bayless, HCAFA, is special investigator II at American Fidelity Assurance Co.  tami.bayless@americanfidelity.com

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CLM’s Insurance Fraud Committee identifies, analyzes, and offers education on emerging fraud schemes and tactics; monitors and reports on developments in case law, state fraud statutes and applicable regulations; collaborates with other anti-fraud industry organizations and associations; and seeks to provide amicus support in matters of importance in the fight against insurance fraud.

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