Fraud surveillance cuts

Insurers are cutting back on fraud investigation funding, a veteran claims investigator told comp time.

A few weeks ago I reported in a Business Insurance story that state insurance department fraud investigation units are facing budget and staff cuts nationwide. Meanwhile, anecdotal evidence suggests the economy is driving an increase in workers comp fraud.

Now a private investigator with 22-years experience says there has been a substantial decrease in the number of hours that insurers authorize for surveillance.

The investigator for a claims-service company on the East Coast who asked not to be identified said investigation results were better in the past because insurance adjusters typically authorized two days of surveillance.

Now insurers are authorizing only 4-hour blocks of surveillance time and increasing the allotment only if something promising turns up during those first four hours.

“The reins are a lot tighter,” he said.

Comp Time would like to hear if others in the industry are experiencing a similar trend.