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Member, Beacon International Group, Ltd.
Insurers are increasingly concerned about workers compensation fraud, particularly in regions where economic recovery lags.
That is according to FICO, a San Jose, Calif.-based predictive analytics company that received 260 responses from U.S. and Canadian insurers it surveyed.
FICO found that 55% of those insurers said they are seeing a rise in work comp fraud rings.
Fraud rings refer to groups such as doctors billing for services they don’t perform or services they provide that are not necessary, said Russ Schreiber, vice president of FICO’s insurance and healthcare practice. Others included in the fraud ring definition are people who recruit others living in economically-depressed neighborhoods to file workers comp claims.
The practices are more common in regions such as the mid-Atlantic states, including New York, New Jersey, and Pennsylvania, Mr. Schreiber said.
At the same time, Mr. Schreiber said he is seeing insurers increasingly fighting fraud as a business problem and not just a crime problem. They are doing that by working to detect fraudulent claims before they pay on them rather than only prosecuting them after paying for them.
In other news, Salem, Ore.-based SAIF Corp. , a state-chartered insurer, said it will pay out a $130 million dividend to approximately 43,000 customers.