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“State authorities having to play catch-up in insurance-claim scam”
“Clinics dispense more paper than medicine”
“Fraud Probe: Lack of control can lead to trouble in lawyers’ offices”
“Solutions are sought to curb scam problem”
Under headlines such as those, The Seattle Post-Intelligencer published a series of articles in February which focused on a quickly-growing problem in the state of Washington – insurance fraud. The articles, written by reporter Dick Clever, described an increase in criminal activity which has caught the state unprepared.
Clever wrote, “Washington state was a land of innocents, compared with the California that some of Seattle’s newest insurance scammers left behind.” He called Washington a “soft target” for faked insurance claims because of four main factors:
(1) The increase in bilingual paralegals to help a growing Asian population, (2) A state bar which says it has no authority over paralegals, (3) A state medical association which blames insurance fraud on office managers and not physicians, and (4) Prosecutors who are “overwhelmed with crimes more serious than the suspected insurance fraud cases.”
Recently, however, there has been an increase in the effort to fight insurance fraud, either through legislation or by creating a special unit to fight the problem. A bill in the state legislature, which had the support of insurance companies, was designed to provide an easier system of prosecuting insurance fraud. The Attorney General, however, was less than enthusiastic about the measure.
“The fraud bill originally proposed in the State of Washington did not move forward,” reported Michael L. Powell, Regional Vice President of the National Insurance Crime Bureau. The Department of Insurance will be working with attorneys, medical providers, carriers, etc., to further efforts on this matter.”
…the laws should be in place before a special unit is created.
Powell was in attendance at a meeting held by the Washington State Patrol on March 25th at Sand Point Naval Station. The meeting was attended and addressed by representatives of Attorney General Christine Gregoire’s office, the Washington State Patrol, major insurance companies and the NICB. The NICB is among those supporting the idea that the laws should be in place before a special unit is created.
“NICB’s underlying theme is Washington State needs a good insurance fraud statute that makes insurance fraud a felony, provides immunity for reporting insurance fraud offenses to law enforcement, provides for restitution for fraudulently-obtained payments received from insurance claims and, finally, that makes it a crime to knowingly file a false report or claim with a police agency or insurance company,” Powell added. “The NICB rationale is that it is very difficult to establish an insurance fraud investigative unit without proper laws to use in their cause.
“Next, we recommend that if Washington State forms such a unit, they should use existing data bases such as that managed by NICB as it is a national data base, less costly, eliminates duplication and is more effective. Finally, we stated that the decision on whether to establish an insurance fraud investigative unit, its placement and funding, is a decision to be made by the government and citizens of the state.”
The Attorney General and Washington Insurance Commissioner Deborah Senn have announced their intention to create an advisory council to study the problem and determine the best ways to fight it. Their offices already work together to fight insurance companies which break laws. They have a special telephone line for insurance company clients to make their complaints. The situation is different for insurance fraud, however.
Assistant Attorney General Mary Tennyson, General Counsel for the Insurance Commissioner’s Office, explained that, “The Attorney General doesn’t have special authority to prosecute insurance fraud. The Attoney General’s office has very limited prosecuting authority.” The office only gets involved in a case when requested by the governor or local district attorneys.
The changes in the health care system proposed by President Bill Clinton have also taken attention away from insurance fraud, according to Tennyson. “Because of the priorities we’ve been assigned, a lot of our resources our going into that effort,” she said.
She said that an automobile task force has been meeting and will be presenting a report which will include the subject of auto insurance fraud. The report is expected to be ready in late spring or early summer.
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