Insurance fraud is an unfortunate reality within the industry. When successful, these scams hurt not only insurers but also policyholders who get entangled in them.
In response to an increase in insurance fraud cases, Central has developed a Special Investigations Unit responsible for identifying potential scams before they happen, stopping in-progress insurance fraud, and developing technologies that discourage potential fraudsters from choosing Central as a target.
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 the Major Case Unit.
Developing this niche and highly trained team is just another way Central has upheld our commitment to protect our policyholders and fulfill 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’s had on insurance fraud at Central and beyond.
Question: How did the Major Case Unit come to fruition?
Jeff Lieberman (Director of Anti Fraud & Recovery at Central): “About a year ago, we realized Central was receiving medical bills that did not appear in line with services rendered. We were receiving bills requesting exorbitant amounts for simple procedures. For instance, what should have been a $10,000 epidural injection was billed for $500,000.
As we started to take a closer look, we discovered many providers behind these bills had thousands of fraud referrals in the system. That doesn’t necessarily make everything a legitimate fraud case, but it does raise some red flags. Once we began peeling back the layers, we quickly realized we had more than just an isolated incident on our hands. Our Major Case Unit was created in response to that discovery.”
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What are the different types of major insurance fraud cases the team investigates?
Tobi Haynes (Major Case Investigator at Central): “There are two core types of major cases Central investigates: multicarrier cases and multi-claim cases.
“A major case is typically considered multicarrier when multiple insurers are investigating the same entity or provider. For example, several individuals and claimants might be involved in staged accidents or ring activity, which results in multiple carriers investigating.
“A multi-claim is when you have one entity involved in lots of 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.
“Medical tends to be a high-dollar amount, so we focus significant time and energy there. Typically, these range from auto accidents to slip-and-fall incidents to Workers’ Compensation. Chiropractors are another group that frequently gets tangled up in fraud, often by accident. When newly licensed, they’ll start receiving phone calls from attorneys who know these chiropractors have student loans and debt to pay down. The attorneys offer to send some clients their way, and before they know it, they’re hundreds of thousands of dollars indebted to the attorneys with no idea how 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 backside, they’re submitting exorbitant invoices that ultimately cost the people they’re claiming 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 from the policyholder’s pocket. It’s frustrating when they’re in a minor auto accident and later discover the claimant has an attorney asking for $75,000 in damages that don’t exist. Our job is to identify and prevent these things from happening on behalf of those who place their trust in us.”
What has empowered Central to be an industry leader in insurance fraud detection and investigation?
Young: “Our Major Case Program development is the epitome of synergy. From claims and underwriting to legal, we have the support and resources to push back on bad guys and schemes. It’s amazing how much help and support we have across different teams and departments. Our internal relationships and ability to work closely with one another greatly enhance our ability to get questions answered so we can move on things. We’re not fighting internal red tape like a lot of the larger carriers. Central is the only carrier I’ve worked for that allows us to partner with and train 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 off, it makes all the difference.”
Lieberman: “Buy-in from our executive leadership team has been key. If we didn’t have that, we couldn’t be successful at doing what we do. The C-level and senior-level support we receive to build, design, and create enables us to keep getting better, and that’s really what this journey is about. We’ve evolved from building and designing to creating something that is helping the company, our policyholders, and agents, and raising the bar by setting new standards for best in class within the industry.”
Can you tell us more about how the Major Case Unit has moved the needle on stopping insurance fraud?
Lieberman: “Our zero tolerance for fraud also sends a message that deters anyone who might think Central is an easy target. We’ve seen a change in behavior since the implementation of this group, and I directly attribute that to our stronger fraud-fighting messaging and investigative capabilities. Perpetrators of fraud are learning that if they submit a questionable claim to Central, between our knowledgeable adjusters and advanced analytical capabilities, there’s a high probability it will be flagged for investigation.”
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Haynes: “Since the launch of our SIU two years ago, we have directly impacted behaviors for the better. I’ve seen a drastic change in billing from roofers and public adjusters notorious for sending outrageous invoices. We’re also seeing improvements on the medical side, though it can be a bit slower to evolve since the attorneys involved tend to be quite stubborn. That said, with one of the medical cases I’m investigating, a medical provider has gone from billing $25,000 to $40,000 per treatment to more like $10,000 per treatment. That’s progress.”
Lieberman: “In 2022 alone, we’ll be close to 2,000 fraud investigations for the year. Before we had these capabilities, there were zero. When I joined in 2019, I was the first and only person focused on fraud. In only three years, our team has grown to 10 people, which has given us the strength and ability to combat and mitigate fraud on behalf of Central.”
What’s next for the Major Case Unit?
Lieberman: “Three words I strive to manage by 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 technology. We must constantly think outside the box and beyond traditional parameters to prevent fraud. Currently, we’re creating third-party data interfaces that no other company or carrier has done before—and that’s just one piece of all that’s to come.”