Anti-Fraud Warnings Evaluated

Author Subject: Anti-Fraud Warnings Evaluated
Advocate Posted At 08:50:15 03/21/2000

Jan. 4, 1999

Anti-Fraud Warnings Evaluated

States that may be considering laws for printing anti-fraud warnings on the back of insurer-paid benefit checks should delay any action, according to the Workers Compensation Task Force of the Washington-based Coalition Against Insurance Fraud. Six states require the use of anti-fraud warnings on workers' compensation benefit checks. Mandatory wording is required in Delaware, New York and Rhode Island, while more permissive wording is allowed in Arkansas, Tennessee and Utah. As the practice has grown, inconsistent and verbose warnings' caused problems for insurers and raised questions about the warnings effectiveness and fairness. Now the coalition is asking states "to hold off on any further requirements on warnings on benefit checks" until the coalition completes a survey of insurer experiences.

The coalition's government affairs committee, which is overseeing the survey, is seeking objective data on the effectiveness of anti-fraud warnings. Insurers especially are concerned because the growth in the use of anti-fraud warnings has led to inconsistent mandates that increase insurers' administrative burdens and costs. In addition, the lack of uniformity among state-mandated warnings means a typical insurer must tailor its centralized benefit check printing operation to produce state-specific warnings. That administrative requirement also may interfere with insurers' ability to comply with Year 2000 requirements, the coalition says.

The coalition also is concerned about the impact of the warnings on legitimately injured claimants. Jim Ellenberger, assistant director of the AFL-CIO's department of occupational safety and health, said he considers fraud warnings on the back of benefit checks to be "highly objectionable." Such a practice "unavoidably adds to the stigmatization of workers comp recipients as frauds, cheats and malingerers," he says.

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