What gets a case to the insurer’s Special Investigation Unit for a fraud investigation? Here are some signposts of which you should be aware.
- Evasive identification. The claimant refused to or cannot produce solid or correct identification. This may also raise “red flags” in the adjuster’s mind, leading to a suspicion of claim fraud.
- Murky address or no fixed address. The claimant uses addresses of friends, family, or post office boxes; has no known permanent address and moves frequently.
- Claimant avoids the use of U.S. mail, preferring instead to hand-deliver documents. This signals to an adjuster that the claimant is wise to mail fraud laws and is consciously avoiding using the mails for this purpose.
- Claimant attitude. The claimant is perceived by the claims adjuster as being overly pushy, demanding a quick settlement, commitment, or decision or is unusually familiar with claims-handling procedures.
- Financial distress. The claimant was experiencing financial difficulties and/or domestic problems prior to submission of the claim. Adjusters think this shows heightened motivation to either fabricate a claim or exaggerate an injury.
- Lifestyle inconsistencies. The claimant’s lifestyle does not coincide with reported known income. Adjusters are by nature a skeptical lot. If the lifestyle is relatively opulent compared to reported income, adjusters start wondering what other sources of earnings may exist, either through illicit activity or from insurance settlements or “sub rosa” employment that might jeopardize a claimant’s allegation of physical limitations and disability.
Lack of Medical Credibility
- Discrepancies between medical records and claimant’s version of accident. Good adjusters will dig through the medical reports and carefully compare the differing “versions” of injury and accident given. Claimants are thought to be less guarded and more candid in speaking to medical personnel, and so any discrepancies between the description of the accident or injury given to the adjuster and what is reflected in the medical records will be viewed very guardedly by the adjuster.
- Discrepancies in medical treatment. An adjuster is often wary of a claim where the treatment, as reported by the claimant, is different from doctor’s statements in a medical report, or if the treatment received is inconsistent with the injury alleged, such as the precipitous ordering of “objective tests” in soft tissue injury (e.g., EMG, evoked potentials); the use of so-called objective tests not yet accepted by established licensing bodies (e.g., using ultrasound for injury to the paraspinal muscles); or ultra-quick assignment of an “objective” impairment rating (often based on subjective criteria). Similarly, if new or additional medical problems are alleged and attributed to the original injury, an adjuster’s suspicions may be aroused. Adjusters are attuned to any signs of over-treatment, especially with subjective complaints or soft tissue injuries. Call them cynical, but they often suspect that over-treatment is used to “goose up” the damages in an effort to present a higher demand package.
- Physical inconsistencies with disability claim. Where the physical description of the claimant in the medical records indicates muscular, well-tanned individual with callused hands, grease under fingernails, or other signs of active work, but the claimant is claiming an inability to do activity of any kind, an adjuster will be likely to fully disregard the claim.
- Inconsistent or inaccurate medical reports or bills. Any inaccurate terminology, spelling errors, variations in the physician’s signature or rubber-stamped signatures, cross-outs, white-outs, or other alterations in the medical records raise red flags in an adjuster’s mind. Further, any medical reports that appear to be second or third-generation photocopies or that look like they sprang from a fill-in-the-blanks template cause an adjuster to suspect a claim. Adjusters in a given city or locale quickly get familiar with certain doctors and develop a “book” on them, just as they do the nearby personal injury attorneys. If they start noticing that a doctor’s reports tend to be fairly uniform, except for such items as the patient’s name, they pick up on this and start wondering about the claim’s legitimacy.
- Lack of credibility of medical provider. Where the treating physician cannot be located at the address shown on documentation; the medical facility uses multiple names or changes names often; billings are received for unnecessary or not rendered services; the claimant is unable to define the medical ailment as listed in the medical records; or if the claimant states that a “friend,” whose name he or she no longer remembers, provided the reference to an attorney or a clinic, insurance claim people may take this as a sign that the medical records may be fictitious or false.
- Increase in treatment beyond the norm. When the insurance company believes the medical treatment has exceeded the “norm” relative to the standards of that particular carrier, (standards vary widely from carrier to carrier), the adjuster may believe the case is a “build up” and refer the case to the Special Investigation Unit for that reason alone.
- Referral to doctor by attorney on a frequent basis. When the adjuster believes there is a routine between the primary treating doctor and the attorney handling the case and that this occurs on a frequent basis, suspicion may arise of a build-up or fraud. The case may be referred to the Special Investigation Unit for that reason as well.
- Medical expenses not in proportion to property damage to vehicle. Although chiropractors will routinely indicate that it is a non sequitur to assume a direct causal relationship between the extent of damage to the body in comparison with the amount of property damage, the insurance industry’s position is to the contrary. When medical expenses seem disproportionately high in comparison with the amount of damage to the car, e.g. $7,000 of chiropractic treatment with a $900 impact, fraud is often suspected and the Special Investigation Unit may be called into play.
- Inconsistent version of how accident happened. If the claimant’s version of the accident has inconsistencies, or if the claimant alters his or her version of how the accident occurred after learning of inconsistencies, misrepresentation or fabrication by another person, the adjuster may wonder what else about the claim lacks genuineness or veracity.
- Lack of witnesses to the accident. Alarms go off for the adjuster if there are no witnesses to the accident, witnesses to the accident conflict with the claimant’s version or with other witnesses’ versions; or if witnesses are “miraculously” found the day of arbitration or trial.
- Late report of accident. Fraud may be indicated where a claimant fails to report the injury in a timely manner. The longer the gap between the date of accident and the date of first medical treatment, the more skeptical you can expect the adjuster to be about the claim.
- Notice of attorney representation. An adjuster suspects a claim where the lawyer’s letter is dated the same day or shortly thereafter as the reported incident or where the letter of representation or a letter from the treating medical clinic is the adjuster’s first notice of a claim.
These are just a few of the many indications that an adjuster might consider to be fraudulent, causing him or her to investigate a claim more thoroughly. Keep in mind, however, that many legitimate claims have records with inconsistencies due to doctor error and some accidents have no witnesses.