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New York State insurance Fund (NYSIF) Executive Director David P. Wehner today announced that NYSIF’s 2008 fraud prevention program accounted for more than $20 million in total savings, a record amount exceeding all prior yearly totals since NYSIF began the program.
“We are determined to continue an aggressive attack against workers’ compensation fraud in New York State,” Mr. Wehner said. “NYSIF has emerged as an industry leader in fighting fraud based on a methodical approach to building solid cases through the efforts of our policyholder, claims and investigative teams in cooperation with a number of other New York State agencies and law enforcement authorities.”
NYSIF’s Division of Confidential Investigations (DCI) completed a record year in 2008 with successful workers’ compensation fraud investigations leading to an estimated savings of $20.7 million.
The total savings includes cash restitution of approximate $1.6 million and estimated future savings of more than $19 million, resulting from additional premium, lower reserves and forfeiture of future payments on fraudulent claims.
Total savings for 2008 surpasses all prior yearly totals, as does the amount of cash restitution collected since NYSIF began reporting data on fraud arrests in 1994.
“This is a significant plus for NYSIF and for the State of New York at a time when every penny counts,” Mr. Wehner said. “Reducing fraud in the workers’ compensation system benefits all honest businesses, working people and consumers.”
NYSIF is an established state and national leader in the fight against workers’ compensation fraud. In 2008, NYSIF cases led to 148 arrests.
Going back to 1995, NYSIF anti-fraud efforts have accounted for a cumulative total of 1,228 arrests, representing estimated savings of $166.5 million for New York State.
NYSIF Executive Director Wehner said the numbers are “a credit to our program and the assistance we receive from outside agencies committed to the fight against workers’ compensation fraud.”
NYSIF DCI works in close cooperation with the New York State Insurance Department Frauds Bureau, the Workers’ Compensation Board Office of Fraud Inspector General, local and state police and district attorneys in counties throughout New York State.
“The Workers’ Compensation Board has been proud to partner with NYSIF and the Insurance Department to fight and prevent fraud,” Workers’ Compensation Board Chair Zachary S. Weiss said. “This cooperation is smart government and will lead to further savings and confidence in the system as a whole.”
New York State Insurance Superintendent Eric Dinallo said: “Workers’ compensation fraud is a serious crime victimizing hundreds of thousands of honest New York taxpayers and businesses forced to shoulder the burden of higher premiums. The Insurance Department’s Frauds Bureau is committed to continuing its aggressive anti-fraud efforts and working with the Insurance Fund and the Workers’ Compensation Board Fraud Inspector General in a determined effort to combat all forms of workers’ comp fraud. Strong anti-fraud activities complement the state’s ongoing work to drive down the cost of workers’ compensation insurance."
NYSIF DCI Director Laurence LaPointe, who has headed NYSIF’s special investigations unit since 1998, said 2008 arrest and savings totals included investigations of a number of major cases of premium fraud as well as claims and medical provider fraud.
“Our successes in this area included prosecutions of roofing, masonry and general construction contractors, home improvement contractors and a house moving company,” Director LaPointe stated. “These companies had an unfair competitive advantage over honest businesses because they were not paying their fair share of the cost of taking care of injured workers. We are working closely with state and local law enforcement to ensure a level playing field for all New York businesses.”
NYSIF 2008 anti-fraud program totals: arrests 148; cash restitution $1,598,232.37; estimated future savings $19,053,200.41; estimated total savings $20,651,432.78.
NYSIF is a non-profit agency of the State of New York that was created as part of the Workers’ Compensation Law of 1914. By law, NYSIF is a competitive insurance carrier that sells workers’ compensation and disability benefits to any employer doing business in New York State. Approximately 188,000 employers hold NYSIF workers’ compensation insurance policies (approximately 37 percent of the market), while nearly 61,000 have active disability benefits policies.