Second Quarter 2018
We’re excited to continue expanding our appetite and increasing the value we bring to your agency. Beginning July 1, CompWest will write business in the social services sector, targeting California-only accounts with annual premiums between $10,000 and $1,000,000 – and observing no experience modifier limits.
The social services industry is significant for CompWest growth and aligns well with our focus on health care and related industries. Our dedicated service team, together with our agent partners, has the industry expertise necessary to deliver trusted workers’ compensation solutions for social services accounts.
- Drug and alcohol rehabilitation
- Group homes
- Crisis intervention centers
- Counseling services
- Sheltered workshops
- Soup kitchens
- Food banks and pantries
- Adult day care
- Community centers
- Social service agencies
- Ex-offender rehabilitation agencies
- Home construction organizations
To learn more about our expansion into social services, visit CompWestInsurance.com or contact your business development consultant.
We asked Tony Torres, CompWest Investigative Services Unit (ISU) specialist, to highlight the greatest challenges and lesser-known facts about fighting workers’ compensation fraud in California. With 30 years of experience in the field, Tony is an effective asset to CompWest, our agent partners and our policyholders.
What’s the most important thing to know about investigating fraud?
TT: It’s about being patient and objective. To successfully investigate and prosecute a fraudulent claim, it’s not enough to have a suspicion alone – there must be a case. The life of an investigated claim can be long and complex, and instances of fraud must be proven in criminal court with proof beyond a reasonable doubt.
We know and understand employers take fraud extremely seriously, and we want our partners to know we take it seriously too – by doing the right thing and following lawful processes. A case itself will warrant the amount of time and money necessary for investigation. And if there’s a case, we’ll absolutely find it.
How do we determine if a red flag is legitimate fraud?
TT: A red flag is an indicator of unusual circumstances that alerts claims staff to look at a claim and determine whether further investigation is needed. For a red flag to be considered fraud, it must be proven beyond a reasonable doubt that fraud has occurred. We must prove a material representation combined with the individual’s knowledge, intent and lies, and we do that through investigation, surveillance, close review of claim file documents and consultation with medical providers. The process begins when we receive a report of red flags on a file. We assign one of our ISU vendor investigators to conduct witness interviews, complete a thorough report and return all findings to our ISU team for further review. If additional investigation is warranted, we’ll request that surveillance is conducted by the vendor, which generally requires three days of continuous observation. This is where we wait for proof and determine whether or not there is a case. We look to see whether the individual’s activities in the surveillance video are inconsistent with what has been reported to their medical provider.
When CompWest has a reasonable belief that fraud is occurring or has occurred, we have 60 days from the date of discovery to submit a suspected fraudulent claim to the California Department of Insurance and the local prosecutor within the proper jurisdiction. That’s why we don’t officially use the word “fraud” until we have proof beyond a reasonable doubt; the mere use of the word fraud in an email or a claim file can trigger the four years statute of limitation. A district attorney and a criminal defense attorney will look back to find when an insurer or employer first identified a claim as fraudulent.
How likely is prosecution?
TT: When we identify fraud, we are mandated to report the suspected fraudulent claim to both the California Department of Insurance (CDI) Fraud Division and the district attorney’s office. Both agencies review the claim and determine if there is sufficient evidence to open a criminal investigation. The district attorney’s office is the agency that decides if a criminal complaint will be filed based on the facts and evidence in a case — and on their ability to prove a case beyond a reasonable doubt. The large number of insurance carriers operating in California and their thousands of fraud referrals to the CDI and DA offices means not every suspected fraudulent claim can be prosecuted. That’s why we’re extremely diligent in collecting proof and presenting a case that will meet the criteria necessary to successfully prosecute.
What is the most challenging part of this type of work?
TT: Fraud cases are generally not solved quickly. Investigating fraud takes time, patience, experience and objective thinking. Fraud cases can take years to discover, whether involving individuals or organized rings and schemes designed to cheat an insurance carrier out of money.
Despite the challenges, rest assured our team is educated in identifying and fighting fraud, and we are committed to working with our stakeholders to address issues in a timely manner.
To learn more about our enterprise ISU efforts, visit our website or contact your business development consultant.
When it comes to managing claims, AF Group and its brands – including CompWest — are committed to providing superior service and cost containment solutions. We strive to keep costs manageable for our policyholders while providing injured workers with superb care.
To help you highlight our superior and innovative claims services, we’ve created this brochure. This piece provides a snapshot of our medical management strategies, such as Care Analytics, early detection and pharmacy programs, and predictive modeling. It also highlights our experienced claims team demonstrating our knowledge and expertise in this area.
We hope you’ll check it out and would encourage you to share it with your CompWest customers.
Click here for a list of our top 10 written class codes during the past six months in both our Southern and Northern California regions.
Please contact your business development consultant with questions or to learn more.
California Election Results
All and all, not a bad result in governor primary, which potentially has the most impact on our industry moving forward.
Governor: Lt. Governor Gavin Newsom (D) and San Diego businessman John Cox (R) will face off in the General Election. There was some speculation that two Democrats would move through to the General Election, but Republican voters coalesced around Mr. Cox and pushed him through. Lt. Gov. Newsom enters the race as a heavy favorite in a state where Democratic registration outpaces Republican registration by nearly 20 points.
Attorney General: Insurance Commissioner Dave Jones failed to move forward to the General Election, coming in fourth amongst the four candidates. Xavier Becerra (D), the current Attorney General, will face Steve Bailey (R).
Insurance Commissioner: Former Insurance Commissioner Steve Poizner was the leading vote-getter among the candidates, edging out Senator Ricardo Lara (D) who will be his opponent in November. Mr. Poizner dropped his Republican affiliation and is running without a party affiliation. This is shaping up to be a close race. Mr. Poizner is well funded and has some name ID from his prior term as commissioner. Sen. Lara has the advantage of running as a the only Democrat in the race in a very blue state where the Democrat turnout is expected to be higher in November.