Regarding Fraud: Know Thy Enemy as They Know You

Editor's Note: This is the fourth and final article in a week long series discussing workers' compensation fraud. The first article in the series may be read here.

There is a scene in the movie Patton that highlights the importance of understanding your enemy. General George Patton had assembled his forces in a North African desert, positioning them around a valley in anticipation of expected movement of Nazi troops. As Patton viewed the advancing Nazi tanks into the valley as he had expected, he muttered, “Rommel, you magnificent bastard, I read your book.” He was referring to Nazi General and war strategist, Erwin Rommel, aka The Desert Fox, who had previously written a book called “Infanterie greift an” (Infantry Attacks). In that book, Rommel had outlined his plans and ideas regarding how to fight and win a war.

Patton was simply stating that he knew and understood how his enemy thought. With that knowledge he could successfully predict his next move.

In the WCIRB “speed networking” session discussing fraud that we have been writing about all week, one of the salient points made was how sophisticated and smart the medical providers are who defraud the workers’ compensation industry. It was pointed out that they know your system and your policies. They know what adjusters pay easily and which ones don’t. They even can determine the levels of permission the adjuster has before additional approval is needed.

To that latter point, an example was provided on how a provider may submit a bill to the carrier or employer for $200. This might be for miscoded services or services that were never provided at all. If they receive payment, the next bill will be $300. The subsequent bills will all gradually increase until they hit an objection or question regarding the bill. For example, a $950 bill might be paid without question, but a $1,000 bill gets flagged for review. Your company has just broadcast that the adjuster’s level of payment approval is under $1,000. The bills henceforth will be in the area of $998. Problem solved.

It is important for the industry to know how these people think and operate. How else will we truly understand how to combat their efforts?

It seems to me that training of the adjuster would be a primary first step in countering the fraudulent methods used to separate firms from their hard-earned dollars. They are the front line in this war, and they should know what to look for, what questions to ask and what response is in order when they suspect fraudulent activity. Companies could incentivize this behavior by providing financial incentives to ferreting out and successfully blocking such activity. But the key to all of it is understanding that your operation has been probed and studied, and the criminals have identified and will exploit your weaknesses. 

This entire article series has really been about doing the same to them.

There are other steps that are helpful in this arena. This past Tuesday, in response to a tweet announcing the article “Breaking the Enigma Code of Workers' Comp Provider Fraud,” Michael Marsh, principal of Midland Claims Services of Billings, MT, replied with the following comment:

Beyond data, organizations should do physical visitation to the clinics & locations allegedly providing services. Trust but verify. And if the facility is legit, a strong positive relationship can be built to allow both to focus on the care and well being of the recovering worker.

He is absolutely correct with that comment. And his point can be more broadly applied to the concept of “know thy enemy.” It really is a sounder concept of “know thy provider.” In that context, fraud would be easily identified, and strong legitimate relationships could be built. 

Know your enemies and know your friends. It is an idea that our cubicle centric and overly insular industry would be wise to heed. The choice is ours; we can learn to combat those who are stealing from us and those we represent, or we can ignore the reality and hope for the best.  

The people looking to defraud us probably already know the decision we will make.

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