Insurance fraud is an unfortunate reality in the industry. When these scams are successful, they not only harm insurers, but also the policyholders who get caught up in them.
In response to an increase in insurance fraud, Central has created a Special Investigations Unit responsible for identifying potential scams before they happen, stopping ongoing insurance fraud, and developing technology to deter would-be scammers from targeting Central.
Within the Special Investigations Unit there is a specialist team investigating some of our largest potential and active fraud cases. This group is known as the Large case unit.
Developing this niche and highly skilled team is just another way Central has validated our commitment to protecting our policyholders and delivering on our promise to deliver integrity and excellence on every opportunity.
We had the opportunity to sit down with some of the core members of Central’s Major Case Unit 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 Fraud Prevention and Recovery at Central): “About a year ago we discovered that Central was receiving medical bills that did not match the services provided. We received exorbitant bills for simple procedures. For example, what should have been a $10,000 epidural injection was billed at $500,000.
When we looked around more closely, we found that many vendors behind these bills had thousands of fraud recommendations in the system. That doesn’t necessarily make everything a legitimate scam, but it does raise some red flags. As we began peeling away the layers, we quickly realized that we were dealing with more than just a single incident. Our Major Case Unit was created in response to this discovery.”
What types of major insurance fraud cases does the team investigate?
Tobi Haynes (Principal Investigator at Central): “There are two types of serious cases investigated by Central: multiple carrier cases and multiple claim cases.
“A major case is typically considered multicarrier when multiple insurers are investigating the same company or provider. For example, multiple people and claimants may be involved in staged accidents or ring activity, resulting in multiple carriers conducting investigations.
“A multi-claim exists when a unit is involved in many claims. Another version is organized ring activities involving multiple parties.”
What are the most common types of insurance fraud?
Haynes: “Attempts at fraud fall into a broad spectrum. Whenever a person can be treated, someone will try to take advantage of the situation.
“Medicines tend to be a big dollar amount, so we focus a lot of our time and energy on that. Typically, these range from car accidents to slip and fall incidents to work-related accidents. Chiropractors are another group frequently involved in fraud, often by accident. When they’re newly licensed, they get calls from attorneys who know these chiropractors have student loans and debt to pay off. The lawyers offer to send some clients their way and before they know it they owe the lawyers hundreds of thousands of dollars and don’t know how to get out of this situation.”
Mark Young (Big Case Investigator at Central): “We also saw how tree care and towing companies tried to position themselves as united heroes against the insurance companies. They come in and help people affected by CAT storms or other emergencies, but on the other hand they file exorbitant bills that end up costing the people they claim to represent.”
Learn more: Contractor Fraud: What It Is and How to Avoid It
For those not in the insurance industry, can you explain why the work of the Major Case Unit is so important?
Haynes: “Our work serves to protect our policyholders. Every dollar paid out on a fraudulent claim comes out of the policyholder’s pocket. It’s frustrating when you’re involved in a minor car accident and later discover the plaintiff has an attorney demanding $75,000 in damages that doesn’t exist. Our job is to identify and prevent these things on behalf of those who put their trust in us.”
What made Central an industry leader in insurance fraud detection and investigation?
Young: “The development of our major case program is the epitome of synergy. From claims and underwriting to legal issues, we have the support and resources to push back bad guys and machinations. It’s amazing how much help and support we get from different teams and departments. Our internal relationships and ability to work closely together enhances our ability to get answers to questions so we can move forward. We don’t struggle with internal bureaucracy like many of the larger transport companies. Central is the only airline I’ve worked for that allows us to work with underwriters and agents and educate them on what to look for as the first line of defense against fraud. When our frontline workers and first point of contact know what to look out for and feel empowered to speak up when something feels uncomfortable, that makes all the difference.”
Dear man: “The approval of our leadership team was crucial. If we didn’t have that, we couldn’t be successful in what we do. The C-level and senior-level support we get developing, designing and creating allows us to keep getting better and that’s what this journey is really about. We have evolved from building and designing to something that helps the business, our policyholders and agents, and we have raised the bar by setting new standards for best-in-class in the industry.”
Can you tell us more about how the Major Case Unit stopped insurance fraud?
Dear man: “Our zero tolerance for fraud also sends out a message that will deter anyone who might think Central is an easy target. We’ve seen a change in behavior since the inception of this group, and I attribute this directly to our stronger anti-fraud messaging and investigative capabilities. Fraudsters learn that if they submit a questionable claim to Central, between our knowledgeable subject matter experts and advanced analytical capabilities, there is a high probability that it will be flagged for investigation.”
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Haynes: “Since launching our SIU two years ago, we’ve directly impacted behavior for the better. I’ve seen a drastic change in billing for roofers and public surveyors who have been known to send out outrageous bills. We’re also seeing improvements on the medical side, although it can be a little slower to develop as the lawyers involved tend to be quite stubborn. However, in one of the medical cases I’m investigating, a medical provider went from $25,000-$40,000 per treatment to more than $10,000 per treatment. That is progress.”
Dear man: “In 2022 alone, we will conduct nearly 2,000 fraud investigations for the year. Before we had these skills, there was zero. When I joined in 2019 I was the first and only person to focus on cheating. In just three years our team has grown to 10 people which has given us the strength and ability to fight and contain fraud on behalf of Central.”
What’s next for the Major Case Unit?
Dear man: “Three words I aspire to are unique, innovative and creative. By embracing this way of thinking, you can do some amazing 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. We are currently creating Third-party data interfaces No other company or airline has done that before – and that’s just part of what’s to come.”