Disability Event Horizion

Communicate changes that impact your client as part of your anti-fraud protocols  

NY’s Finest Scammers 

It was recently reported that New York City Police and Firefighters were caught defrauding Social Security Disability Insurance benefits.  The disabilities being claimed were psychological in nature and many blamed the trauma they suffered was a result of the September 11 terrorist attacks. Several claims were investigated and 106 people were found to be involved in the scheme.

http://ehstoday.com/

The claimant’s were caught through the use of traditional surveillance and through observation of their social media posts.  The information gathered through these channels revealed their claims were not only invalid but also potentially fraudulent.   This allowed the investigators to deny the benefits and to charge the group with various levels of larceny.

A vulnerable system

Private disability carriers who have full time Special Investigation Units and ongoing anti-fraud training are typically well prepared to ferret out these scams. As for the SSDI, the Office of Inspector General is charged with protecting these funds.  But because the program is so large, it is hard to police.  Hearing about a scam that was discovered involving the SSDI fund is not that common.  Because it is hard to protect, the fund is vulnerable to fraud by the unscrupulous; including organized criminals.

In this case, it was clear that coordination was a part of the formula to defraud.  Leading this scam were a group of “advisors” who directed the claimant’s behaviors in an attempt to make their bogus claims believable. These “coaches” received kickbacks from the claimants in exchange for their advice. This strategic configuration to illicitly harvest funds from the trust fund is by definition organized crime.

What brought this case together though, was the cooperation between the Office of Inspector General, the NY district attorney’s office and their relationship with police and fire internal affairs. What forced this alliance was the exploitation of an event (9/11) and the PTSD it caused.  Or in this case, allegedly caused.

It’s different when businesses protect money

Private disability carriers also utilize surveillance and social media research to identify claimant behaviors that might be incongruent with their limitations and restrictions.  While these tools are powerful, it is the keen observation of the claim manager that is critical to the discovery of red flag indicators in a claim.  

Claim managers have the most intimate contact with the file and the claimant during the life cycle of the claim. As such, it stands to reason that they must receive comprehensive and consistent anti-fraud training to ensure suspect claims are identified.  However, for good anti-fraud efforts to work, it is  important that these critical employees see the bigger picture.

Flow of information is key

While private disability carriers or self-insured’s might not experience a scam as large as the one identified in New York, the potential exists for several claims to be filed related to a specific event experienced by a client- akin to the mass PTSD claims caused by 9/11.  

When these changes or events become apparent, it should be top of mind for claim professionals to communicate this information throughout their organization, especially to claim managers who are on the ground floor.  For instance, if a client announces that a plant is closing, the claim managers should be made aware of this as employees might file disingenuous claims in an attempt to extend income during a layoff.

Turn information into wisdom

Keeping a keen eye out for events that impact businesses you insure is a wise and healthy thing to do.  But keep in mind this information is not just useful to those in upper management.  Recognize how important this type of information could be to your front line employees.  In summary, keep in mind the following tips:

1. Anti-Fraud training should include fostering awareness of the client’s business situation.  
2. Claim managers need to be made aware of the changes to client’s status so that they can react appropriately to claims.
3. Claim Directors and above need to take it upon themselves to not only inform the claim managers of a change or significant event a client experienced but also demonstrate what that change might mean to claims and claim operations.
4. Be aware that weaknesses caused by changes my be exploited by coordinated efforts.
5. Know that incentives for third parties can influence claimant behavior.  

Don’t have an SIU?  Contact CSI for professional claim investigations and anti-fraud training.