State not cracking down on fraud, officials say
By: Alan Suderman
Examiner Staff Writer
October 7, 2009
Maryland is doing little to address the large number of fraudulent workers' compensation claims made each year, according to Montgomery County officials.
The Maryland Workers' Compensation Commission, a state agency that decides worker's compensation cases, has referred 98 allegations of fraud to the Maryland Insurance Administration from fiscal 2005 to 2008. Some allegations came out of cases heard by the commission, while others were from mostly anonymous tipsters.
The commission held more than160,000 hearing on workers' compensation claims during that time.
"That points potentially to a serious issue of undetected and unaddressed fraud in the system," said County Attorney Leon Rodriguez.
In fiscal 2008, the Maryland Insurance Administration "actively investigated" at least two out of the 10 cases referred to it, according to a compensation commission report.
The insurance administration did not request a single copy of a hearing transcript from the Workers' Compensation Commission during fiscal 2007.
That's because the agency lacks the expertise or motivation to pursue workers' compensation-related fraud cases, said Terry Fleming, head of Montgomery County's Risk Management Division.
"They're clearly not ready to take on workers' comp," Fleming said.
In 2004, the Maryland General Assembly enacted a law ordering the Workers' Compensation Commission to refer to the insurance administration any case in which there is "a preponderance of evidence" that a person tried to commit fraud.
A legislative analysis in 2004 showed that the Workers' Compensation Commission said "at least one case each day contains overpayment of benefits" but did not estimate how many of those cases were likely fraudulent.
