The recent conviction of three former Tristar Risk Management employees –two brothers and their father- underscores why smart employers always learn specifically which third party administrator workers touch their claims.

Risk managers I respect say when they contract with a TPA they pay for specific adjuster experience depending on the complexity of their claims and then they forge ongoing working relations with those contracted adjusters.

They don't just contract with a TPA and then forget about it, assuming everything will be taken care of without regular interaction with the adjusters.

The fraud convictions of the three former Tristar workers, and two of their wives, show that things will be taken care of, but not always in the fashion employers expect.

According to a Los Angeles County District Attorney press release, the two brothers who worked as Tristar adjusters pled guilty to fraud and will be serving prison sentences. Their father, a former Tristar data entry clerk, drew jail time and the two spouses also served jail time.

The three former Tristar employees handled claims filed by Los Angeles County employees.

State Insurance Department investigators told Comp Time that an employer audit uncovered suspicious billing that was being approved by the convicted data entry clerk.

Further investigation revealed that the former Tristar employees figured they could make more money by becoming workers comp vendors on the side.

They created businesses under their wives' names and began billing for claims investigation work and for transporting injured workers to medical appointments.

“But the services were either unnecessary or they were not rendered,” an investigator said. “The sons imputed (bills) into the system and then the father approved the check.”

Fortunately, the employer's audit revealed the fraud, but it also seems a bit odd that an entire family would be handling the same employer's claims. Again, it pays to know who those people are and don't assume your TPA is always watching out for your interests.