Insurance fraud is an unfortunate reality in the industry. When successful, these scams hurt not only insurance companies but also policyholders who fall for them.
In response to an increase in insurance fraud cases, Central has developed a Special Investigations Unit responsible for identifying potential fraud before it occurs, stopping insurance fraud in progress, and developing technologies that deter potential fraudsters from targeting Central.
Within the Special Investigations Unit is a specialized team that investigates some of our largest potential and active fraud cases. This group is known as Major Case Unit.
Developing this niche and highly skilled team is just one more way Central has maintained our commitment to protecting our policyholders and delivering on our promise to deliver on integrity and excellence at every opportunity.
We had a chance to sit down with some of the core members of the Major Case Unit at Central and discuss how this group was formed, what it does and the impact it has had on insurance fraud at Central and beyond.
Question: How did the Major Case Unit come about?
Jeff Lieberman (Director of Anti Fraud & Recovery at Central): “About a year ago, we realized that Central was getting medical bills that didn’t show up in line with services rendered. We were getting bills that were asking for exorbitant amounts for simple procedures. For example, what should have been a $10,000 epidural injection was billed for $500 000 USD.
When we started looking more closely, we discovered that many providers behind these bills had thousands of fraudulent referrals in the system. That doesn’t necessarily make it all a legitimate fraud case, but it does raise some red flags. As we began to pull back the layers, we quickly realized that we had more than just an isolated incident on our hands. Our Major Case Unit was created in response to that discovery.”
What are the different types of major insurance fraud that the team investigates?
Tobi Haynes (Major Case Investigator at Central): “There are two core types of large cases that the center investigates: multi-carrier cases and multi-target cases.
“A large case is typically considered multicarrier when multiple insurance companies investigate the same entity or provider. For example, multiple individuals and claimants may be involved in staged accidents or ring activity, resulting in multiple carriers investigating.
“A multi-claim is when you have one entity involved in many claims. Another version is organized ring activity, which is when multiple parties are involved.”
What are the most common types of major insurance fraud?
Haynes: “Fraud attempts fall across a wide spectrum. Whenever a person can get treatment, someone will try to take advantage of the situation.
“Medicine tends to cost a lot, so we focus a lot of time and energy there. These typically range from car accidents to slip-and-fall incidents to workers’ compensation. Chiropractors are another group that often gets entangled in fraud, often by mistake. When they are newly licensed, they will start receiving phone calls from attorneys who know these chiropractors have student loans and debt to pay off.The attorneys offer to send some clients their way, and before they know it, they are in debt to the attorneys in hundreds of thousands of dollars with no idea how they are going to get out of the situation.”
Mark Young (Major Case Investigator at Central): “We’ve also seen tree service and towing companies try to position themselves as heroes united against the insurance companies. They come in and help people affected by CAT storms or other emergencies, but on the flip side they send in exorbitant bills that end up costing the people they claim to represent.”
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For those not in the insurance industry, can you help explain why the work of the Major Case Unit is so important?
Haynes: “Our work is designed to protect our policyholders. Every dollar paid out on a fraudulent claim comes out of the policyholder’s pocket. It is frustrating when they are involved in a minor car accident and later discover that the plaintiff has a lawyer asking for $75,000 in damages that does not exist. Our job is to identify and prevent these things from happening on behalf of those who trust us.”
What has enabled Central to be an industry leader in the detection and investigation of insurance fraud?
Young: “The development of our Major Case Program is the epitome of synergy. From claims and warranties to legal, we have the support and resources to push back against bad guys and schemes. It’s amazing how much help and support we have across teams and departments. Our internal relationships and ability to work closely with each other greatly improves our ability to get questions answered so we can move forward.We don’t fight internal red tape like many of the larger carriers.Central is the only carrier I’ve worked for that allows us to collaborate with and educate underwriters and agents on what to look for as our first line of defense against fraud. When our frontline people and first points of contact know what to look for and feel empowered to speak up when something feels wrong, it makes all the difference.”
Liebermann: “Buy-in from our management team has been key. If we didn’t have that, we wouldn’t be able to be successful doing what we do. The C-level and senior-level support we get to build, design and create allows us to keep getting better, and that’s really what this journey is all about. We’ve evolved from building and designing to creating something that helps the business, our policyholders and agents, raising the bar by setting new standards for best-in-class in the industry.”
Can you tell us more about how the Major Case Unit has moved the needle on stopping insurance fraud?
Liebermann: “Our zero tolerance for fraud also sends a message of deterrence to anyone who thinks Central is an easy target. We’ve seen a change in behavior since implementing this group, and I attribute that directly to our stronger anti-fraud messaging and investigative capabilities. The fraudsters learn themselves that if they submit a questionable claim to Central, between our knowledgeable adjusters and advanced analytical capabilities, there is a high probability that it will be flagged for investigation.”
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Haynes: “Since the launch of our SIU two years ago, we have directly influenced behavior for the better. I have seen a drastic change in billing from roofers and public adjusters who are notorious for sending outrageous invoices. We are also seeing improvements on the medical side, although it may be a bit slower to develop as the lawyers involved tend to be quite stubborn. That said, with one of the medical cases I’m investigating, a medical provider has gone from charging $25,000 to $40,000 per treatment to more like $10,000 per treatment. That is progress.”
Lieberman: “In 2022 alone, we will be close to 2,000 fraud investigations for the year. Before we had these abilities, there was zero. When I joined in 2019, I was the first and only person to focus on scams. In just three years, our team has grown to 10 people, giving us the strength and capability to fight and mitigate fraud on behalf of Central.”
What’s next for the Major Case Unit?
Lieberman: “Three words I strive to manage are unique, innovative and creative. When you embrace that kind of thinking, you can do some fascinating things—from developing people to innovating and implementing new processes and technologies. We must constantly think outside the box and beyond traditional parameters to prevent fraud. Currently we are creating third-party data interfaces like no other company or carrier has done before – and that’s just part of what’s to come.”