CA Insurance Commissioner Announces $1 Million Grant To Fight Workers' Compensation Insurance Fraud

Fresno, CA (CompNewsNetwork) - Insurance Commissioner Steve Poizner, joined by Fresno County District Attorney Elizabeth Egan, announced today a $1 million grant for the Fresno County District Attorney's office to fight insurance fraud.

"In this struggling economy, it is more important than ever to help businesses to stay and expand in the state. Because fraud drives up the costs of workers' compensation insurance, we must continue to be vigilant in our battle with those who dishonestly and illegally take advantage of the system," said Commissioner Poizner. "Fraud is not a victimless crime. It imposes a $500 hidden tax on every man, woman and child in California. I am happy to provide this funding to the Fresno County D.A. which will greatly enhance our effort to stamp out fraud that damages the local economy."

Below is a chart of the funds distributed to Fresno and surrounding counties and areas:
Counties Funding 2008-09
Fresno $1,096,200
Kings $279,108
Madera $48,000
Merced $144,000
Tulare $279,939

Counties must annually apply for these grants. The applications are reviewed by the Workers' Compensation Grant Review Panel based on a number of criteria, including the previous year's performance. The panel makes a recommendation to the Insurance Commissioner who can accept or amend the panel's recommendation. At that point, the Insurance Commissioner's final decision must be ratified by the Fraud Assessment Commission.

The funds will be distributed in two installments. The first is expected by the end of February. The funds stem from an assessment authorized by the legislature and collected by the Department of Industrial Relations.

Commissioner Poizner has worked tirelessly to fight insurance fraud. In addition to providing grants to local district attorneys, he oversees 16 CDI Enforcement Branch regional offices throughout the state. Close to 1900 insurance fraud-related arrests have been made by the Department of Insurance's enforcement division since Commissioner Poizner took office in 2007 - more arrests than have been made during any other two year period, under any previous insurance commissioner.

In addition, after a meeting of the Advisory Task Force on Insurance Fraud, Blue Ribbon Review Committee last year, Commissioner Poizner announced the implementation of five actions to help reduce fraudulent claims, including the creation of a fusion center for insurance fraud investigations so law enforcement can share information more efficiently and quickly to identify emerging trends and crime patterns.

Additional steps include:
• Better training for the Special Investigation units on the recognition, documentation, and reporting of suspected insurance fraud claims.
• Recognizing insurance companies that go beyond compliance for their greater commitment to fighting fraud.
• Increasing the outreach efforts of CDI about the consequences of fraud, how the public can recognize it and report it.
• Adopting more aggressive recruiting and retention practices, including pay upgrades, so that CDI can recruit and retain qualified
investigators.

State funds to curb teen smoking cut 28%

Indiana is slashing the amount of money it spends on tobacco prevention by 28 percent this fiscal year, according to a new national report. That ranks it among the bottom half of states when it comes to funding programs designed to keep children from picking up smoking as a habit and helping other smokers quit.

The report was released this week by the Campaign for Tobacco-Free Kids and several other organizations. The study found that many states were in similar shape: nationwide, funding for smoking prevention and cessation programs was cut more than 15 percent. Indiana ranks 29th among all states in funding such programs – down from 28th in a similar report last year, the report said. The Hoosier State also fell far short of the Centers for Disease and Control Prevention’s recommended expenditure on such programs.

Indiana, which has the second-highest smoking rate among adults, according to the CDC, currently spends $11.8 million on smoking prevention and cessation programs, down from $16 million last year. The CDC recommends that Indiana spend upward of $78.8 million on prevention programs.

“I think the cut came because of the economic condition we have right now,” said Melissa Lewis, director of special projects with the Indiana Academy of Family Physicians, who spoke for the Indiana Tobacco Prevention & Cessation agency.

And the cuts are being felt locally. Anti-tobacco agencies have had to deal with fewer grants to give out to local organizations and schools for tobacco education, forgo putting together smoking cessation classes for the public and in some cases cut salaries.

“We need to help our state legislators understand that when cutting those funds, it has a direct impact on the population they serve,” said Dick Conklin, executive director of Tobacco Free Allen County, a government agency.

Conklin said that last year his agency had roughly $300,000 in grant money and other funds to spend on smoking prevention and cessation. That total has dropped to about $180,000, he said, meaning fewer classes and less advertising.

Dave Bell, the executive director of Tobacco-Free LaGrange County, is in a similar situation.

With his budget of $50,000 over the next two years, he cut his work hours from full time to two-thirds time. He can give smoking cessation classes to companies that have eliminated smoking on work property for employees, but he no longer has the funds for public classes. Also in danger was an essay contest that Bell’s agency has for high school students to write about their experience with tobacco. But a sponsor came up with $950 to fund the contest, which includes cash awards for the winners.

“When you cut more than the fat, you cut into the bone,” Bell said.

Indiana is one of 46 states that receive money every year as part a 1998 settlement of a lawsuit against tobacco companies. That settlement, coupled with the taxes from the sale of tobacco products, amounts to $622 million in revenue this fiscal year. Only 1.9 percent will go to prevent smoking, according to the national report.

In each of the past four years, Indiana had spent more than 2 percent of revenue on programs to prevent smoking, according to data compiled by Tobacco-Free Kids.

State legislators hash out where the tobacco money goes as part of the state budget, according to Tim Filler, the grass-roots committee chairman for the Indiana Campaign for Smokefree Air, a coalition of several organizations looking to tighten smoking bans in the state.

Portions of that money go to other health-related issues, not all of which are caused by smoking, Filler said. Mental health, prescription drugs, child health insurance, aging and AIDS programs are all getting a chunk of that money this year, Filler said.

A few programs seemingly unrelated to health are also getting money, like the Rural Economic Fund, according to Filler.

“We don’t want to be seen as competing with those programs,” Filler said. “But hopefully legislators will see (smoking prevention programs) are not only a health savings in the long run, but also an investment that can save money in the long term.”

The Tobacco-Free Kids report warns that it’s a dangerous time to cut such funding as a steady decline of adult smokers nationwide over the years has now stalled.

Jerri Lerch, executive director of the Allen County Drug and Alcohol Consortium, used a report by the Indiana Prevention Resource Center at Indiana University released in September to show that Allen County-area teenagers are smoking less on a monthly and daily basis compared with their peers in the state, and in some cases rate about the same as teenagers nationwide.

But Conklin believes that cutting prevention programs gives tobacco companies a chance to rein in younger smokers as more and more products are targeted to that age group. Tobacco companies spend $426.2 million a year to market products in Indiana, according to the Tobacco-Free Kids report.

RNC SUBSIDIZES ABORTIONS FOR 18 YEARS -- AND COUNTING.

The Republican National Committee will no longer offer employees an insurance plan that covers abortion after POLITICO reported Thursday that the anti-abortion RNC's policy has covered the procedure since 1991.

"Money from our loyal donors should not be used for this purpose," Chairman Michael Steele said in a statement. "I don't know why this policy existed in the past, but it will not exist under my administration. Consider this issue settled."

Steele has told the committee's director of administration to opt out of coverage for elective abortion in the policy it uses from Cigna.

Federal Election Commission Records show the RNC purchases its insurance from Cigna, and two sales agents for the company said that the RNC’s policy covers elective abortion.

As of Thursday, the RNC’s plan covers elective abortion – a procedure the party’s own platform calls “a fundamental assault on innocent human life.”

Informed of the coverage, RNC spokeswoman Gail Gitcho told POLITICO earlier Thursday that the policy pre-dates the tenure of current RNC Chairman Michael Steele.

“The current policy has been in effect since 1991, and we are taking steps to address the issue,” Gitcho said.

The RNC moved quickly Thursday to assuage any concerns its members might have.

In a letter obtained by POLITICO, RNC Chief of Staff Ken McKay writes to the 168 committeemen and committeewomen across the country that Steele "takes this issue very seriously."

He writes that the RNC has been evaluating its health insurance policy and will continue to do so.

Leading up to passage of the House health care reform bill last week, 176 House Republicans joined 64 Democrats in voting for the so-called Stupak amendment, a measure that prohibits federal funds from being used to buy health insurance that covers elective abortions.

A spokeswoman for the National Republican Congressional Committee – the campaign arm for the House Republicans – said it does not include coverage for elective abortions in its employee insurance policy.

“The policy does not cover abortions unless the life of the mother is in danger,” the NRCC spokeswoman said.

According to several Cigna employees, the insurer offers its customers the opportunity to opt out of abortion coverage – and the RNC did not choose to opt out.

But rank-and-file Republicans said Thursday before the change was announced that the policy should – and would – be changed.

“We were not aware of this, obviously, and this will, of course, be fixed,” said James Bopp Jr., a Republican National Committeeman from Indiana. “I think Chairman Steele will see to it that that’s the case.”

Rep. Jack Kingston, a Georgia conservative, said “they need to drop that clause” from the policy or find a new one.

“From a philosophical standpoint, it’s inconsistent,” Kingston said. “It makes me think someone isn’t scrutinizing the purchases.”

Cigna spokesman Chris Curran declined to discuss the specifics of the RNC’s plan, saying it’s against company policy to reveal even the identities of its insured. But he said that Cigna’s products “are designed to meet the requirements of our individual employer clients. Employer clients are informed of the services covered and it is their choice to decide which benefits meet their needs.”

There is no indication that any RNC employee used the abortion coverage, but Planned Parenthood President Cecile Richards said it’s “no surprise” that the RNC had been offering it.

“It’s an employer that wants to provide standard health benefits for its employees,” she said. “That’s why the Stupak amendment goes too far in taking away benefits that women have today, and that’s why women won’t allow the Stupak amendment to become law.”

The Stupak amendment, named for sponsor Bart Stupak (D-Mich.), was adopted by the House before it passed the health care bill on Saturday night. It prohibits a government-backed health care plan from offering abortion services and bans the use of federal subsidies for individuals to buy into health care plans that provide abortion coverage.

Rep. John Shadegg of Arizona was the only House Republican who did not vote in favor of the amendment. He voted “present.”

While 64 Democrats voted for the amendment, the majority did not – and the Democratic Party’s 2008 platform says the party “unequivocally supports Roe v. Wade and a woman’s right to choose a safe and legal abortion, regardless of ability to pay.” The Democratic National Committee provides abortion coverage to its employees, the committee said.

DWC’s Amended Health Care Organization Regulations Approved By Office of Administrative Law

OAKLAND, CA – The Division of Workers' Compensation (DWC) has amended its regulations on health care organizations (HCOs) as another part of its 12-point plan to control medical costs in California ’s workers’ compensation system. The 12-point plan includes regulations recently enacted, regulations underway, and a set of proposals to be implemented in 2010. The revisions to the HCO regulations make HCOs more competitive with medical provider networks, providing a viable network option for workers’ compensation care. Studies have shown that network care is associated with lower costs for employers and better return to work outcomes for injured workers.

The final HCO regulations were filed with the secretary of state on Nov. 4, 2009 and become effective Jan. 1, 2010. The revised regulations reduce HCO fees and eliminate duplicative HCO reporting requirements.

The regulations, found in the California Code of Regulations, Title 8, sections 9771 through 9779.9, are authorized by Labor Code sections 133, 4600.3, 4600.5, 4600.7, 4603.5, and 5307.3.

The amendments include:

• The application for certification of an entity not licensed under the Knox-Keene Health Care Service Plan Act will be reduced from $20,000 to $2,500.
• The application for certification of an entity licensed under the Knox-Keene Health Care Service Plan Act will be reduced from $10,000 to $1,000.
• The recertification fee will be reduced from $10,000 to $1,000.
• The annual assessment fee will be reduced from $1.00 per enrollee to $250.00 for 0 to 1000 enrollees, $350 for 1001 to 5000 enrollees, and $500 for 5001 or more enrollees.
• The loan repayment surcharge in section 9779.5(a)(2) will be removed as the repayment period has now ended.
• The late payment fee in section 9779 will be repealed.
• Information collected by the Workers’ Compensation Information System (WCIS) will not be required to be resubmitted to DWC by HCOs.

The approved regulations, as filed with the secretary of state, can be found on the DWC Web site.

The final statement of reasons for the rulemaking, a summary of public comments made during the rulemaking, and the division’s responses to those comments are also available on the DWC Web site.

Fraud Isnt A Small Matter for Small Businesses

Found @

A small business in Waco suffered four workers’ compensation claims in one year. The claims were so costly that the owner feared for her business. Desperate, she spied on her injured employees outside their chiropractor’s office to see if they were committing workers’ compensation fraud.

Did she over-react? Small business owners watching their bottom lines would probably say “no.” Every year, workers’ compensation fraud costs the system millions of dollars. Those costs trickle down to all employers in the form of higher premiums.

Fortunately, employers don’t have to lurk in dark alleys with a camcorder to keep their businesses from becoming victims of workers’ compensation fraud. They can learn to identify fraud and take a proactive approach to fighting it.

What Is Workers' Compensation Fraud

Claimant fraud is the most talked about kind of fraud. It is also the type that employers are in the best position to help uncover. Claimant fraud happens when employees knowingly lie to collect benefits. They may claim an injury was work-related when it wasn’t, exaggerate an injury, or secretly continue working while collecting benefits.

What Workers' Compensation Fraud Is Not

Collecting benefits for a work-related injury is not fraud. Many employers feel that the longer an employee stays off work and collects benefits, the more likely the claim is fraudulent. Under state law, injured employees don’t have to get back on the job until the doctor releases them to work.

Red Flags for Workers' Compensation Fraud

There is no sure-fire way to identify fraud without proof, but there are red flags. Employers should call their carriers immediately if they identify two or more of these flags.

Disgruntled employee. The employee has a motive to fabricate the claim. Perhaps he or she was denied vacation time, demoted or fired.

Employee is hard to contact. The employee may be working another job while collecting benefits. This practice, called “double-dipping,” constitutes fraud.

New employee. Statistically, the newer the employee is, the more likely the claim is fraudulent, especially if other red flags appear.

No witnesses. Make note of alleged accidents with no witnesses, especially if the employee’s duties rarely call for him or her to work alone.

Varying accounts of accident. The injured worker may describe the accident differently to the employer and the doctor, or witnesses’ accounts may differ from the injured worker’s account.

Accidents on Fridays or Mondays. Accidents that occur on Fridays or Mondays should raise suspicion, especially if other red flags appear.

Be proactive

It is easier to prevent workers compensation fraud than it is to prove it. Employers should make sure new hires have the skills and the character they want in their employees. A sound hiring policy is the best place to start.Hire wisely. Conduct background checks on applicants, and verify references.

Focus on safety. Making the workplace safer reduces the chance of accidents and the opportunity for someone to fake an injury.

Develop a return-to-work policy. Tell job candidates that if they get injured on the job, the company will work with the doctor to help them return to work as soon as medically reasonable.

Educate, don’t threaten. Explain that workers compensation fraud hurts everyone, not just the insurance carrier. Let employees know that fraudulent claims can force employers to decrease benefits, lay off employees, or go out of business.

Adopt a zero-tolerance policy. Make it clear that fraud can carry serious consequences, including termination and prosecution.

Stay in touch. Keep regular contact with employees who are off work due to an injury. Document each contact or attempted contact. Injured workers who are difficult to contact or who are belligerent may be committing workers compensation fraud.

Historic Healthcare Overhaul Passes House!!

L.A TIMES

Reporting from Washington - The House of Representatives on Saturday approved the most sweeping healthcare legislation since the creation of Medicare 44 years ago, giving a boost to President Obama's campaign to guarantee health coverage to almost all Americans.

The gargantuan Democratic measure passed 220 to 215, with a single Republican vote, capping a contentious daylong debate that underscored the ideological divide separating the two parties over healthcare.

The narrow Democratic victory underscored the difficult road ahead as the issue moves on to the Senate. But it also meant that the party had reached a historic landmark: It has been trying since the Depression to win a vote to extend the government's social safety net to include healthcare.

The House plan would cover an additional 36 million people by 2019, leaving 4% of the nation without coverage, compared with the estimated 17% who do not have insurance now, according to the nonpartisan Congressional Budget Office.

"For generations, the American people have called for affordable, quality healthcare for their families. Today, the call will be answered," said House Speaker Nancy Pelosi (D-San Francisco), who rallied her members behind the legislation after weeks of cajoling and deal-making.

The Democratic side of the House cheered loudly when the vote count reached 218, a majority. Like a crowd waiting for the final gun at a football game, they counted down the final seconds of the voting period in unison, and roared their approval when Pelosi went to the speaker's chair, grabbed the gavel and declared, "The bill is passed."

President Obama hailed the vote in a statement from Camp David, saying: "Thanks to the hard work of the House, we are just two steps away from achieving health insurance reform in America. Now the United States Senate must follow suit and pass its version of the legislation. I am absolutely confident it will, and I look forward to signing comprehensive health insurance reform into law by the end of the year."

Republicans, who have fought Obama's healthcare campaign for most of the year, charged Democrats with pushing the nation toward government-run healthcare and threatening to bankrupt the treasury at a time when the deficit is skyrocketing.

"People have a grave concern about what Washington is doing to them, not for them," Rep. Eric Cantor of Virginia, the No. 2 House Republican, said Saturday, citing last week's GOP electoral victories in Virginia and New Jersey.

Louisiana Rep. Anh "Joseph" Cao was the only Republican to cross the aisle and vote for the bill. Thirty-nine Democrats voted against it.

The legislation -- which includes more than $1 trillion in new healthcare spending over the next decade while also reducing the deficit by an estimated $106 billion -- will ultimately have to be reconciled with the Senate bill.

Senate Majority Leader Harry Reid (D-Nev.) is working to unite his members in time to hold a vote on the Senate bill before Christmas.

With the unemployment rate continuing to rise and the public increasingly jittery about Obama's healthcare campaign, Democrats are racing to push through an overhaul before what many see as a historic opportunity slips away.

Pelosi had hoped to get a bill through the House sooner than November. But she and her lieutenants had to spend months hammering out a series of difficult compromises to satisfy the liberal and conservative wings of the party.

New requirements on businesses and insurance companies have alienated major industry groups, many of which actively fought the House bill, charging that it would actually make healthcare less affordable.

"The healthcare reform bill just passed by the House of Representatives fails the crucial test of reducing the soaring cost of health coverage for businesses or individuals," U.S. Chamber of Commerce Executive Vice President Bruce Josten said after the vote.

But even as opposition to the bill stiffened, Democratic leaders managed to defuse major disagreements over the shape of a new government insurance plan and the scope of new income taxes on wealthy Americans.

They picked up major endorsements from AARP and the American Medical Assn., which joined a collection of leading consumer and patient groups and labor unions that have backed the healthcare campaign all year.

And facing the possible collapse of the legislation late Friday night, Democratic leaders brokered a deal to settle a debate within party ranks over abortion.

Under pressure from a group of socially conservative Democrats and the U.S. Conference of Catholic Bishops, Pelosi and other lawmakers who favor abortion rights were forced to accept a last-minute compromise that placed tight restrictions on federal funding for abortion services.

The amendment was added to the bill Saturday by a coalition of 240 Republicans and conservative Democrats; 194 Democrats voted against the amendment.

The move outraged many liberals. But in the end, just enough rallied behind the bill after a furious several days of lobbying by party leaders, including the president.

"There comes a time [when] men must act according to the dictates of their conscience and not according to political expediency," Rep. John Lewis (D-Ga.) said on the House floor. "We have a moral obligation to lead this nation into a new era where healthcare is a right and not a privilege."

Obama, too, called on lawmakers to seize the moment, reminding them during a midday visit to Capitol Hill of the party's successful fights to create Social Security and Medicare.

"If we do not get it done this year, we will not get it done any time soon," the president said at a closed-door meeting, according to a senior Democratic aide who was in the room.

The more than 2,000-page legislation is designed to largely preserve the employer-based healthcare system in which most Americans get insurance through work. But the bill would also dramatically expand federal regulation of healthcare and provide more than $1 trillion in new aid to poor and middle-class citizens.

Federal law would for the first time require insurance companies to cover all Americans, regardless of their health status, and would prohibit insurers from denying coverage to people who become sick.

Individuals would be required to buy insurance. And large employers would have to provide employees with health benefits or face a penalty.

The bill would open the nation's 44-year-old Medicaid insurance program for the poor to all Americans making less than 150% of the federal poverty line -- $16,245 for an individual or $33,075 for a family of four.

The government would also create new insurance marketplaces for millions of Americans who do not get coverage through work.

Commercial insurers, as well as the government, would offer plans in these marketplaces, or exchanges, and be required to provide a minimum set of benefits, including mental health services, maternity care and preventive care.

The most expensive feature is a commitment by the federal government to provide nearly $600 billion in subsidies over the next decade to help millions of low- and moderate-income Americans buy insurance in an exchange.

The bill is also designed to give relief to small businesses, providing about $25 billion in tax subsidies to help them offset the cost of offering their employees health benefits.

And the legislation would make prescriptions more affordable by closing the Medicare drug coverage gap, known as the "doughnut hole."

The major expansion in federal assistance to tens of millions of Americans is not without a cost.

To pay for their legislation, Democrats approved a 5.4% surtax on individuals who make more than $500,000 a year and couples that make more than $1 million.

The bill would also cut more than $400 billion from Medicare payments to hospitals, nursing homes and insurance companies that provide Medicare Advantage plans, a provision that proponents hope will ultimately help make the system more efficient.

Republicans contend that many seniors will lose benefits, and they more broadly attacked the bill as a costly government invasion of the medical system.

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