Fraud rife as one sector leads others in questionable insurance claims

Questionable claims rose across nearly all sectors in the first three quarters, with one industry posting the greatest increase.

Workers Comp


Questionable insurance claims submitted for investigation increased by 24% during the first three quarters of 2013 as compared to the same period in 2011, the National Insurance Crime Bureau reported Monday. The upsurge occurred across all sectors, with one industry reporting the highest number of questionable claims.

Medical provider referrals increased by 61% between 2011 and 2013, the NICB said. These referrals topped the chart for questionable claims in the miscellaneous sector, as well as in the vehicle, workers compensation, property and casualty sectors.

According to the Association of Certified Fraud Examiners, medical provider fraud is attractive to scammers due to its “huge, alluring, easy pile of cash.” Health spending is also expected to grow in the coming years by a 6.2% annually, increasing the enticement.

Billing for services not rendered, misrepresenting dates of service, misrepresenting locations of service, misrepresenting provider of service and billing for services not rendered constituted to the top five medical provider health schemes, ACFE said.

On the other end of the spectrum, the NICB reported questionable property claims remained relatively stagnant, with increases in dubious flood and water damage claims, and decreases in hail damage claims and suspicious disappearances of jewelry.

The NICB noted that this lack of change was noteworthy when compared to results from the first three quarters of 2011 and 2012.

“This is significant because for the first three quarters 2011 to the first 3 quarters 2012, property questionable claims referral reasons increased by 41%,” the NICB said in its report. “Moreover, in the first three quarters 2011 and the first three quarters 2012, all but one of the referral categories displayed an increase.”

Among other sectors, questionable theft accounted for the greatest volume of reports in the vehicle sector, claimant fraud in workers compensation, slip and fall accidents in commercial, faked or exaggerated injury in casualty and suspicious theft or loss in property.

In the miscellaneous sector, agent or adjuster fraud, catastrophe damage and premium avoidance experienced the highest increase in questionable claims volume, behind medical provider referrals.

The miscellaneous sector saw the greatest rise in questionable claims, with a 16% increase from 2011 to 2013, followed by the vehicle and workers comp sectors with a 4% increase each.


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