Another example of official misconduct

Author Subject: Another example of official misconduct
Del Posted At 17:09:52 05/09/2000
For Immediate Release:
February 4, 1999

Contact: Rep. Candy Ruff
(785) 296-7647

Legislator calls for supplementary audit on workers’ compensation fraud

(TOPEKA) -- Calling a recent post audit report unfairly biased against employees, Rep. Candy Ruff, D-Leavenworth, Ranking Democratic Member of the House Business Commerce & Labor committee, today requested a supplementary audit of the Division of Workers Compensation regarding the Division’s duty to investigate employer fraud. [See KSA 44-5120(b) (2)]

In a Post Audit Report to the Legislature on the Division of Worker’s Compensation earlier this week, the Legislative Division of Post Audit used a generic reference to fraud.

"It is impossible to determine if the remarks and recommendations made in the report are directed solely toward the Division’s duties to investigate employee fraud or if they are also directed to the Division’s responsibilities to investigate fraud by employers," Rep. Ruff said. "The report consistently uses the phrase ‘fraud’ without distinguishing the type of fraud being discussed."

According to the Division of Worker’s Compensation Compliance division statistics for 1998, at least 498 out of 2,778 employers surveyed in 1998 were in violation of the Act and were committing fraud by not providing worker’s compensation insurance to their employees.

"If employers’ fraud has been left out of this audit, as it appears, than the audit is not only incomplete, but biased against employees," Ruff said.


In Texas during 1996, nineteen insurance carriers investigated injured worker benefit fraud. It broke down to:
Workers: 4,077 cases (This is an overwhelming percentage)
Health care providers: 205 cases
Employer premium fraud: 343 cases
Attorney fraud: 19 cases

Of the 4,644 cases investigated by the nineteen carriers in 1996, only 28 resulted in a criminal conviction. This works out to 0.6029285099052541 or about SIX-TENTH OF ONE PERCENT.

Of course, nobody in the state investigated the insurance carriers.

This report concluded:

It also appears that most of the attention has been paid to investigating and prosecuting injured worker benefit fraud. While injured worker benefit fraud is the most often investigated form of workers’ compensation fraud, it is far from the most costly. In 1996, only 18 injured worker benefit fraud cases were referred to district attorneys for criminal prosecution by TWCC accounting for $134,351 worth of fraud (an average of $7,464 per case), compared to 46 health care provider cases which accounted for $1,200,952 in 1996 (an average of $26,108 per case). It is clear that more resources should be spent fighting the most expensive and overlooked types of workers’ compensation fraud: employer premium and health care provider fraud.

You'll notice that no mention is made of insurance company fraud.

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