TN Insurance Bulletin (1996-09-20): Workers' Compensation Anti-fraud Plans and Summaries

DON SUNDQUIST GOVERNOR Attention: Subject: Date: STATE OF TENNESSEE DEPARTMENT OF COMMERCE AND INSURANCE 500 JAMES ROBERTSON PARKWAY NASHVILLE, TENNESSEE 37243 BULLETIN All Insurers writing Workers' Compensation Insurance, Self Insured Plans and Self-Insured Groups Workers' compensation Anti-fraud Plans and Summaries September 20, 1996 DOUGLAS M. SIZEMORE COMMISSIONER Tennessee has enacted new workers' compensation legislation. The new law amends and repeals portions of Tennessee Code Annotated relative to workers safety, injuries and workers' compensation. The new law mandates that all insurers writing workers' compensation, including self-insured employers and self-insured groups implement an anti-fraud plan to be filed with the Department of Commerce and Insurance by January 1, 1997. There are certain sections in the new law relating to the anti-fraud plan, which are of importance to employers. This Bulletin will inform you ofthe requirements ofthis new law. ANTI-FRAUD PLAN The law requires every insurer including self-insured employers and groups, to prepare, implement, maintain and submit to the Department of Commerce and Insurance a workers' compensation antifraud plan. This includes self-insured employers and groups. Each insurer's anti-fraud plan shall outline specific procedures to: 1) Prevent, detect and investigate all forms of insurance fraud, including fraud involving the insurer's employees or agents, fraud resulting from misrepresentations in the application, renewal or rating of insurance policies; claims fraud; and security ofthe insurer's data processing system; 2) Educate appropriate employees on fraud detection and the insurer's antifraud plan; 3) Provide for the hiring of, or contracting for, fraud investigators; .......... n . 4) Report insurance fraud to appropriate law enforcement and regulatory authorities in the investigation and prosecution of insurance fraud; 5) Pursue restitution for financial loss caused by insurance fraud, where appropriate. To make compliance with the new law easier. we have developed an anti-fraud plan guideline and fonns for your use. The model plan guidelines may be ordered, if you desire. in hard copy or diskette form (WordPerfect fonnat on a 3.5 inch disk). An order form is included with this bulletin. You must customize the plan to meet the requirements of your company and to include the specific procedures described in numbers 1 to 5 above. A fraud plan that your company already has in place that complies with the new law may be submitted. All companies should promptly notify all their Tennesseeagents and employees of the provisions of this plan. At any time the plan is modified. a copy of the modified plan is to be refiled with the Department ofCommerce and Insurance. FRALID REPORTING A copy of standard reporting forms for workers' compensation fraud are attached. These forms must be submitted when reporting potential fraudulent activity. All fraud relating to employer/insurer fraud must be reported to the Tennessee Department ofCommerce and Insurance at : Lewis F. Elrod Director, Fraud & Special Investigations Department ofCommerce and Insurance 500 James Robertson Parkway, 4th Floor Nashville, TN 37243-0574 Phone: 615-532-5341 (800)-792-7573 FAX: 615-532-7389 All employee related fraud must be reported to the Tennessee Department of Labor at: Dina Tobin, Director of Workers Compensation Department of Labor 710 James Robertson Parkway, 2nd Floor Nashville, TN 37243-0655 Phone: 615-741-2395 The above referenced form can be used for both types of reporting. ANNUAL SUMMARY REPORT Each insurer must file an annual summary on actions taken under its anti-fraud plan to prevent and combat insurance fraud. This summary shall include details regarding fraudulent activity and any recoveries identified during the reporting period with emphasis being placed on criminal activities of an organized nature. The report should include claim costs for discovered fraud from claims activity and also any and all internal activities taken to detect fraud in the workers' compensation system. A copy of a report form that outlines the information that should be part of your summary report is attached to this document. The law provides privacy protection for these reports. Both the antifraud plans and the summary of anti-fraud activities and results are not public record and are exempt from the provisions of the public records act and shall be proprietary and not subject to public examination. MANDATED FRAllD NOTICE On or before January I, 1997 all printed applications for Insurance, and all printed claim forms provided and required by an insuror or self-insured are required by law as a condition of payment of a claim, shall contain a statement, permanently affixed to the application or claim form, that clearly states in substance the following: It is a crime to knowingly provide false, incomplete a misleading information to any party to a workers' compensation transaction for the purpose of committing fraud. Penalties include imprisonment, fines and denial of insurance benefits. PENALTIES Failure to file the plan subjects an insurer to a penalty of five hundred dollars ($500) per day, not to exceed twenty-five thousand dollars ($25,000). All other filings and inquiries regarding these requirements should be directed to: Lewis F. Elrod Director, Fraud & Special Investigations Department of Commerce and Insurance 500 James Robertson Parkway Nashville, TN 37243-0574 Phone: 615-532-5341 FAX: 615-532-7389 Thank you for your cooperation with the new Workers' Compensation Law. VICTIM INFORMATION NameofCompany ______________________________________________ __ Address. ______________________________________________ _ ------------------------------Telephone# __________ _ Contact Person. _________________________ Telephone# __________ _ Name of Individual Telephone# ______ _ Address. __________________________________________ _ Date of Birth. _____ SS# ______ Race....__ Sex __ OTHERS INVOLVED IDENTIFY ALL PRINCIPALS AND THEIR ROLES USING THE FOLLOWING: ADJ- Adjuster; AGT- Agent; APP- Appraiser; ATT- Attorney; CHIRO- Chiropractor; CLMT- Claimant; INSD- Insured; ME DOC- Medical Doctor; PASS- Passenger; PHYS- Physical Therapist; WIT- Witness . .) Name Telephone# ___________ _ ( \ Address. _______________________________________________ _ Role Name~----------------------------- Telephone# Address. __________________________________________ _ Role Name~------------------------ Telephone# Addressi.-....----------------------------------- Role Name. __________________________ _ Telephone# Address~------------------------------------ Role Name. _______________________ _ Telephone# Address. __________________________________________ __ Role MAIL COMPLETED FORMS AND SUPPORTING DOCUMENTATION AS DIRECTED BELOW: EMPLOYEE FRAUD TN. DEPT. OF LABOR AITN: DIRECTOR DINA TOBIN GATEWAY PLAZA, 2ND FLOOR 710 JAMES ROBERTSON PKWY. NASHVILLE, TN 37243-0661 ALL OTHER fRAUD TN. DEPT. OF COMMERCE & INSURANCE AITN: DIRECTOR LEWIS ELROD FRAUD & SPECIAL INVESTIGATIONS-4th FLOOR 500 JAMES ROBERTSON PARKWAY NASHVILLE, TN 37243-0574 ~ ..• --·r- ~.-'! '• ; WORKERS' COMPENSATION FRAUD REFERRAL FORM PLEASE TYPE OR PRINT INFORMATION (COMPLETE ALL APPLICABLE SECTIONS) Date of Referral. ________ _ Referral By: Insurance Co. Other. ___________________ _ ReferringPerson: Telephone# __________ _ Referred to Law Enforcement Agency: No_Y es_Who. ____________ _ REASON FOR REFERRAL <PLEASE ATTACH RELEVANT DOCUMENTS) CONTACT INFORMATION Contact Person. _____________ Telephone# _________ _ Address. ______________________________ _ Company Name. _________________ Telephone # _______ _ Company Address'--------------------------- Type of Workers' Comp Fraud: (Please mark applicable category) __ Claimant/Benefits Fraud( i.e, false application, staged accident, etc.) __ Premium Avoidance Fraud( i.e, payroll and/or employee misclassification, etc.) __ Agent Theft __ Other _____________________________ _ LOSS INFORMATION Date of Accident/Loss'------ Location of Accident/Loss. __________ _ Description of Accident/Loss: ______________________ _ Insurance Claim# _________ Police Report# ___________ _ Other Insurance Company Involved. ___________________ _ Address. ______________________________ _ Contact Person.__ _____________ Telephone# ________ _ Claim#___________ Policy# ______________ _ Value of Claim: $. _________ Amount of Demand __________ _ SUSPECT INFORMATION Name Telephone# ______ _ Address~------------~---------------- Date of Birth SS# Race Sex~---- Height. __ _ Weight __ Hair __ Eyes __ Scars/Marksffattoos. ______________ _ Vehicle: Year Make Model ____ _ Color ___ _ Tag# ____ State __ YIN# ______ Driver's License# ______ State_ n \ ORDER FORM MODEL WORKERS COMPENSATION ANTI-FRAlJD PLAN To: DEPARTMENT OF COMMERCE AND INSURANCE Fraud & Special Investigations - 4th Floor 500 James Robertson Parkway Nashville, Tennessee 37243-0574 From: Name: Company: Mailing Address: City: State Item Hard copy ofthe Tennessee Model Workers' Compensation Anti-Fraud Plan, printed on 8.5 by II inch paper Tennessee Model Workers' Compensation Anti-Fraud Plan on 3.5 inch diskette in WordPerfect format Amount Enclosed $ Cost $10.00 $10.00 ----- PLEASE DO NOT SEND CASH! Zip Quantity Make checks payable to: Tennessee Department ofCommerce and Insurance. And enclose with a copy ofthis completed form. Items will be mailed in the order received and in the shortest possible time. ·' .· . -~~ ·~ ~ . :., .. ' . SUMMARY REPORT FORM FOR WORKERS' COMPENSATION ANTI-FRAUD PLAN Company Name: ________________________________________________________ __ Report prepared by: ___________________________________________________ _;_ Finn: ------------------------------------------------------- Address: ___________________ City ______ ST __ Zip ____ _ ------------------------------------------------------------------------------------------------------------------- Reporting Period: ______________________________________ _ ------------------------------------------------------------------------------------------------------------------- I. Describe the resources committed to the combating of fraud in this reporting period (number of employee, investigations performed by contracted investigators, costs of the resources used, etc.) 2. List the number of instances and amount of fraud discovered in this reporting period. 3. List the number and amount of recovery during this reporting period. 4. Describe, in as much detail as possible, any and all discovered criminal activities of an organized nature. 5. List the claim costs for discovered fraud from claims activity. 6. Describe the internal activities taken to detect fraud among company employees. THIS FORM MUST BE SIGNED AND DATED REGJSTRATJON FORM FOR WORKERS COMPENSATION ANTJ-FRAUD PLAN* ------------------------------------------------------------------------------------------------------------------- Mark one box: 0 Original Filing 0 Refiling of Modified Plan ------------------------------------------------------------------------------------------------------------------- Company Name: ____ ~----------------------- Contact Person: ___________________________ _ Position Title: ______________________ -:-------- Phone: _______________________________ _ Location Address: ______ -'---~------------------ City: ___________________ ST: ___ ZIP _____ ~ Mailing Address: ___________________________ _ C.t ST: ZIP .I y:____________________ --- -------- ------------------------------------------------------------------------------------------------------------------- Mark one box: D Insurance Company 0 Self-insured Employer 0 Self-insured Group ------------------------------------------------------------------------------------------------------------------- JfSelf-insured Employer or Group, are you using a TPA to manage your plan? 0 Yes 0 No TPA Name: ------------------~------------ Address: ______________________________ _ City: ST: ZIP -------------------- ---- ------- Contact Person: ----------------------------- Phone: ---------------------------------- --------------------------------------------------------------------------------·---------------------------------- Signed at: ________________ By: _______ ----'--------- Date: Title: -------- ------- --- -------------------- * This form or the information required by this form must be a cover to your anti-fraud plan. ~ . \