Disney Fights WC Med Billing Fraud

Friday, September 18, 2009 | 0

By Eugene F. Keefe


Synopsis: What will the scam-artists think of next — medical billing fraud in workers' compensation.
 
Editor's comment: While looking up other things, we found this stunning new twist on workers' compensation fraud that our readers should be aware of. We are not sure what to make of it or how to best prevent it.
 
The Los Angeles Times recently reported some California employers, including Walt Disney Co., were taking a new approach to fighting work comp medical billing fraud. Turns out they started to receive medical billing and were paying it to later learn their injured workers had never been inside the phony clinics of the scammer.

In response, the insurance carriers/TPAs for these organizations plan to send notices to injured workers to check if they in fact received medial services that were being billed for.

The fraud is being perpetrated by con artists that obtain state reporting data on injured workers and then set up fake medical labs or clinics to then bill insurers/TPAs for treatment that never occurred. The Times reports fraudulent medical billing scams cost hundreds of millions of dollars in California.

The Los Angeles Times story focuses on how insurers/TPAs killed legislation that would have required them to send notices to injured employees to check if they received treatment billed for. Insurers say the effort would cost too much and better ways exist to fight the fraud.

Such notices are standard practice in health insurance but generally are not used for workers' compensation insurance. The insurance companies opposed the proposal because they said sending notices would be overly expensive. The American Insurance Association did not offer an estimate for the cost of the mailings.

Regardless of the cost, Disney reportedly will mail notices next year to 20,000 employees when work comp medical bills get paid. Companies such as Disney have been at the forefront of successfully reducing work comp costs for years.

We ask your thoughts. Obviously, assigning a wily nurse case manager (NCM) may create a check on such practices — all you would have to do is cross-check all medical billing against the NCM's reports. If the NCM isn't aware of and otherwise advising the adjuster of such care, the billing should be very carefully scrutinized. We urge the top nurse case management companies to let their clients know of this further benefit to using a nurse case manager on major claims.
   
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Eugene F. Keefe is a partner in the Chicago law firm of Keefe, Campbell & Associates.
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