Regarding: 2012 Questionable Claim Referral Analysis for Palm Beach, Broward, and Miami-Dade Counties

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1 Date: Regarding: 212 Questionable Claim Referral Analysis for Palm Beach, Broward, and Miami-Dade Counties Prepared By: Kathy Novak, Senior Field Information Analyst (Public Dissemination) 212 Questionable Claim Referrals in Palm Beach, Broward, and Miami Dade Counties This ForeCAST (SM) is an analysis of the National Insurance Crime Bureau (NICB) Questionable Claim Referrals (QCs) as submitted by member companies in 212 with a loss state of Florida and a loss county of Palm Beach, Broward, or Miami-Dade Counties. The referral date is independent of the date of loss as 212 referrals may include claims from any date. These 3 counties were chosen as they are the coverage area of the NICB South Florida Major Medical Fraud Task Force (MFTF). For the purposes of this analysis; however, non-medical referrals were also included in those counties. QCs are claims that NICB member companies refer to NICB for closer review and investigation based on one or more indicators of possible fraud. A single QC may contain up to 7 referral reasons. Of note, ISO ClaimSearch is a multifaceted database where different insurance companies are continually inputting new information. Standards, procedures, or practices relating to the identification of fraud, the selection of referral reasons, and the submission of QCs in ISO ClaimSearch may not be completely uniform among the NICB member companies. This report is divided into the following sections: Section 1: Overview of all FL QCs submitted in 212 as compared to the submissions in the MFTF coverage area only Section 2: QCs by county Section 3: QCs by loss type Section 4: QCs by policy type Section 5: QCs by referral reasons Section 6: Conclusion

2 Page 2 SECTION 1: Total FL QCs in 212 In 212, a total of 1,693 QCs were submitted that listed Florida as the loss state. Of these, 5,214 QCs, or 49%, were submitted with a loss county of Palm Beach, Broward, or Miami-Dade Counties. 12, 212 Questionable Claims 1,693 1, 8, 6, 5,214 4, 2, All of FL Palm Beach, Broward, Miami-Dade Counties

3 Page 3 SECTION 2: QCs by County An analysis of the 5,214 QCs submitted in 212 with a loss state of FL and a loss county of Palm Beach, Broward, or Miami-Dade Counties revealed that Miami-Dade County had the most QC submissions with 3,53 QCs, or 68%. Broward County was second with 929 QCs, or 18%, followed by Palm Beach County with 755 QCs, or 14% of the QCs submitted. The following graph depicts 212 QCs by County. 4, 212 Questionable Claims by County 3,5 3,53 3, 2,5 2, 1,5 1, Miami-Dade Broward Palm Beach

4 Page 4 SECTION 3: QCs by Loss Type Analysis of loss types identified in the 5,214 QCs submitted in 212 with a loss state of FL and a loss county of Palm Beach, Broward, or Miami-Dade Counties, revealed the top 1 loss types out of 35 loss types identified. 1. PIP 2. Bodily Injury 3. Other Auto 4. Property Damage 5. Collision 6. Theft 7. Comprehensive 8. Vandalism & Malicious Mischief 9. Burglary 1. Other Perils The most frequently cited loss type, PIP, accounted for 2,534 QCs, or 49% of the QC submissions. The top 3 loss types, PIP, Bodily Injury, and Other Auto accounted for 3,96 QCs, or 76% of the QC submissions. The following graph depicts 212 QCs by loss type ,534 Top 1 Loss Types

5 Page 5 SECTION 4: QCs by Policy Type Analysis of policy types identified in the 5,214 QCs submitted in 212 with a loss state of FL and a loss county of Palm Beach, Broward, or Miami-Dade Counties, revealed the top 5 policy types out of 18 policy types identified. The following graph depicts 212 QCs by Policy Type. 1. Personal Auto 2. Commercial Auto 3. Homeowners 4. Other 5. General Liability The most frequently cited policy type, Personal Auto, accounted for 4,75 QCs, or 91% of the QC submissions. The following graph depicts 212 QCs by policy type. 5, 4,5 4,75 Top 5 Policy Types 4, 3,5 3, 2,5 2, 1,5 1, Personal Auto Commercial Auto Homeowners Other General Liability

6 Page 6 SECTION 5: QCs by Referral Reasons Analysis of referral reasons identified in the 5,214 QCs submitted in 212 with a loss state of FL and a loss county of Palm Beach, Broward, or Miami-Dade Counties, revealed that there were 13,181 1 referral reasons listed for these QC submissions. Analysis of the 13,181 referral reasons revealed the top 1 referral reasons as follows: 1. Faked/Exaggerated Injury 2. Medical Provider 3. Excessive Treatment 4. Billing for Services Not Rendered 5. Lack of Cooperation from Insured 6. Staged/Caused Accident 7. Prior Injuries 8. Inflated Billing 9. Organized Group/Ring Activity 1. Extensive Loss History The most cited referral reason, Faked/Exaggerated Injury, accounted for 1,44, or 11% of the referral reasons listed. In addition, Faked/Exaggerated Injury was identified in 1,44 of the 5,214 QCs or 28%. The top 1 referral reasons accounted for 9,155 or 69% of the referral reasons listed. The following graph depicts 212 QCs by referral reasons. 1,6 1,4 1,2 1, ,44 1,414 Top 1 Referral Reasons 1,328 1,157 1, A QC submission can list up to 7 referral reasons.

7 Page 7 Conclusion This analysis shows Palm Beach, Broward, and Miami-Dade Counties accounted for 49% of the total QCs submitted with a loss state of Florida in 212. Of those 3 counties, Miami-Dade County accounted for 68% of the QCs submissions. Personal Auto policies with PIP losses were the most referred claims in these counties in 212. Almost half of the QCs, 49%, were submitted as PIP losses in the 3 counties in 212. It is significant to note that even though both medical and non-medical QCs where analyzed for the 3 counties in 212, 7 out of the top 1 referral reasons were medical related. Although not designated as a medical related QC submission, the MFTF also investigates organized group/ring activity which was also identified in the top 1 referral reasons. Based upon this analysis, medical fraud in South Florida is still a significant problem facing NICB member companies. NICB will continue to work with member companies and Law Enforcement in 213 to combat medical fraud.