WHAT'S OLD IS NEW AGAIN. PROSECUTING WORKERS' COMPENSATION FRAUD UNDER THE 2011 AMENDMENTS
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
WHAT’S OLD IS NEW AGAIN.
PROSECUTING WORKERS’
COMPENSATION FRAUD UNDER
THE 2011 AMENDMENTS
Presented and Prepared by:
William M. Blumthal, Jr.
Supervisor, Workers' Compensation Fraud Unit
Illinois Department of Insurance
Heyl, Royster, Voelker & Allen
PEORIA • SPRINGFIELD • URBANA • ROCKFORD • EDWARDSVILLE • CHICAGO
© 2012 Heyl, Royster, Voelker & Allen
G-1New Tools for Combating
Workers’ Compensation Fraud
Enhanced Enforcement Efforts Under
the Recent Reforms
William M. Blumthal, Jr.
Deputy Director
Illinois Department of Insurance
Workers’ Compensation Fraud
Overview
• New Offense
• Enhanced Sentencing Provisions
• Enhanced Subpoena Power
• Changes to Notice Requirements
• Removal of 120 Day Requirement
FRAUD BY MEDICAL PROVIDERS
Billing for services NOT rendered
G-2820 ILCS 305/25.5(a)(9)
(a) It is unlawful for any person, company,
corporation, insurance carrier, healthcare
provider, or other entity to:
(9) Intentionally present a bill or statement for
the payment of medical services that were not
provided.
820 ILCS 305/25.5(a)(9)
What this means . . . What this does not mean . . .
• Medical providers who bill • Medical providers who bill a
for services that are not service at more than the
provided can be charged statutory guidelines allow
under
d SSection
ti 25
25.55 f can b
for be charged
h d under
d
Section 25.5
• Medical providers who bill a
service at more than the
usual and customary rate
can be charged under
Section 25.5
ENHANCED SENTENCING PROVISIONS
820 ILCS 305/25.5(b)
G-3Pre‐Reform Sentencing Under
820 ILCS 305/25.5(b)
(b) Any person violating subsection (a) is guilty
of a Class 4 felony. Any person convicted of
any violation of this Section shall be ordered
to pay complete restitution any person or
entity so defrauded in addition to any fine or
sentence imposed as a result of the
conviction.
Enhanced Sentencing Under
820 ILCS 305/25.5(b)
(b) Sentences for violations for subsection (a) are as follows:
(1) A violation in which the value of the property obtained
or attempted to be obtained is $300 or less is a Class A
misdemeanor.
(2) A violation in which the value of the property obtained
or attempted to be obtained is more than $300 but not
more than $10,000 is a Class 3 felony.
(3) A violation in which the value of the property obtained
or attempted to be obtained is more than $10,000 but not
more than $100,000 is a Class 2 felony.
(4) A violation in which the value of the property obtained
or attempted to be obtained is more than $100,000 is a
Class 1 felony.
Enhanced Sentencing Under
820 ILCS 305/25.5(b)
(b) Sentences for violations for subsection (a) are as follows:
(5) A person convicted under this Section shall be ordered
to pay monetary restitution to the insurance company or
self‐insured entity or any other person for any financial loss
sustained as a result of a violation of this Section,
Section including
any court costs and attorney fees. An order of restitution
also includes expenses incurred and paid by the State of
Illinois or an insurance company or self‐insured entity in
connection with any medical evaluation or treatment
services.
G-4Illinois Sentencing Generally
(730 ILCS 5/5‐4.5‐10)
Misdemeanors: Felonies:
Class A Murder
Class B Class X
Class C Class 1
Class 2
Class 3
Class 4
Relevant Sentencing Provisions
(730 ILCS 5/5‐4.5‐15 et. seq.)
• Class 4 Felony
• Previously imposed for all violations of subsection (a)
• Punishable by:
1‐3 years in prison
Periodic Imprisonment
Impact Incarceration (Boot Camp)
Probation / Conditional Discharge
Fine up to $25,000
Relevant Sentencing Provisions
• Class A Misdemeanor
• Now possible for violations of subsection (a) in which
the value is less than $300
• Punishable by:
Up to one (1) year in jail
Impact Incarceration (Boot Camp)
Periodic Imprisonment
Electronic Home Detention
Probation / Conditional Discharge
Supervision
Fine up to $2,500
G-5Relevant Sentencing Provisions
• Class 3 Felony
• Now possible for violations of subsection (a) in which
the value is $300 ‐ $10,000
• Punishable by:
2‐5 years in prison
Periodic Imprisonment
Impact Incarceration (Boot Camp)
Probation / Conditional Discharge
Fine up to $25,000
• Forgery is also a Class 3 felony
Relevant Sentencing Provisions
• Class 2 Felony
• Now possible for violations of subsection (a) in which
the value is $10,000 ‐ $100,000
• Punishable by:
3‐7 years in prison
Periodic Imprisonment
Impact Incarceration (Boot Camp)
Probation / Conditional Discharge
Fine up to $25,000
Relevant Sentencing Provisions
• Class 1 Felony
• Now possible for violations of subsection (a) in which
the value is more than $100,000
• Punishable by:
4‐15 years in prison
Periodic Imprisonment
Impact Incarceration (Boot Camp)
Probation / Conditional Discharge
Fine up to $25,000
G-6Relevant Sentencing Provisions
• Class X Felony
• Not specifically mentioned in 25.5(b)
• Possible for offenders who are sentenced for a Class 1 or
Class 2 felony violation of subsection (a) AND the offender
has 2 prior Class 2 or greater felonies in his or her
background
• Punishable by:
6‐30 years in prison
Fine up to $25,000
* This will likely be exceedingly rare, as employers are not
generally hiring people with 2 prior Class 2 or greater
felonies
How do the new sentencing guidelines
help?
• Attempt = Completed Offense
• Restitution explicitly includes Court Costs, Attorney
Fees and Medical Costs for Evaluation or Treatment
• Stiffer Penalties
• Greater interest from Prosecutors
ENHANCED SUBPOENA POWER
820 ILCS 305/25.5(c) and 735 ILCS 5/8‐802
G-7Enhanced Subpoena Power Under
820 ILCS 305/25.5(c)
(c) . . . With respect to the subject of any
investigation being conducted, the fraud and
insurance non‐compliance unit shall have the
general power of subpoena of the
Department of Insurance, including the
authority to issue a subpoena to a medical
provider, pursuant to section 8‐802 of the
Code of Civil Procedure.
Physician and Patient Privilege
735 ILCS 5/8‐802
§ 8‐802. Physician and patient. No physician or surgeon shall be permitted to disclose any information
he or she may have acquired in attending any patient in a professional character, necessary to enable
him or her professionally to serve the patient, except only (1) in trials for homicide when the disclosure
relates directly to the fact or immediate circumstances of the homicide, (2) in actions, civil or criminal,
against the physician for malpractice, (3) with the expressed consent of the patient, or in case of his or
her death or disability, of his or her personal representative or other person authorized to sue for
personal injury or of the beneficiary of an insurance policy on his or her life, health, or physical
condition, or as authorized by Section 8‐2001.5, (4) in all actions brought by or against the patient, his
or her personal representative, a beneficiary under a policy of insurance, or the executor or
administrator of his or her estate wherein the patient's
patient s physical or mental condition is an issue, (5) upon
an issue as to the validity of a document as a will of the patient, (6) in any criminal action where the
charge is either first degree murder by abortion, attempted abortion or abortion, (7) in actions, civil or
criminal, arising from the filing of a report in compliance with the Abused and Neglected Child
Reporting Act, (8) to any department, agency, institution or facility which has custody of the patient
pursuant to State statute or any court order of commitment, (9) in prosecutions where written results of
blood alcohol tests are admissible pursuant to Section 11‐501.4 of the Illinois Vehicle Code, (10) in
prosecutions where written results of blood alcohol tests are admissible under Section 5‐11a of the
Boat Registration and Safety Act, (11) in criminal actions arising from the filing of a report of suspected
terrorist offense in compliance with Section 29D‐10(p)(7) of the Criminal Code of 1961, or (12) upon the
issuance of a subpoena pursuant to Section 38 of the Medical Practice Act of 1987; the issuance of a
subpoena pursuant to Section 25.1 of the Illinois Dental Practice Act; the issuance of a subpoena
pursuant to Section 22 of the Nursing Home Administrators Licensing and Disciplinary Act; or the
issuance of a subpoena pursuant to Section 25.5 of the Workers' Compensation Act.
Physician and Patient Privilege
735 ILCS 5/8‐802
§ 8‐802. Physician and patient. No physician or surgeon shall be permitted to disclose any information
he or she may have acquired in attending any patient in a professional character, necessary to enable
him or her professionally to serve the patient, except only (1) in trials for homicide when the disclosure
relates directly to the fact or immediate circumstances of the homicide, (2) in actions, civil or criminal,
against the physician for malpractice, (3) with the expressed consent of the patient, or in case of his or
her death or disability, of his or her personal representative or other person authorized to sue for
personal injury or of the beneficiary of an insurance policy on his or her life, health, or physical
condition, or as authorized by Section 8‐2001.5, (4) in all actions brought by or against the patient, his
or her personal representative, a beneficiary under a policy of insurance, or the executor or
administrator of his or her estate wherein the patient's
patient s physical or mental condition is an issue, (5) upon
an issue as to the validity of a document as a will of the patient, (6) in any criminal action where the
charge is either first degree murder by abortion, attempted abortion or abortion, (7) in actions, civil or
criminal, arising from the filing of a report in compliance with the Abused and Neglected Child
Reporting Act, (8) to any department, agency, institution or facility which has custody of the patient
pursuant to State statute or any court order of commitment, (9) in prosecutions where written results of
blood alcohol tests are admissible pursuant to Section 11‐501.4 of the Illinois Vehicle Code, (10) in
prosecutions where written results of blood alcohol tests are admissible under Section 5‐11a of the
Boat Registration and Safety Act, (11) in criminal actions arising from the filing of a report of suspected
terrorist offense in compliance with Section 29D‐10(p)(7) of the Criminal Code of 1961, or (12) upon the
issuance of a subpoena pursuant to Section 38 of the Medical Practice Act of 1987; the issuance of a
subpoena pursuant to Section 25.1 of the Illinois Dental Practice Act; the issuance of a subpoena
pursuant to Section 22 of the Nursing Home Administrators Licensing and Disciplinary Act; or the
issuance of a subpoena pursuant to Section 25.5 of the Workers' Compensation Act.
G-8What does that mean for us?
§ 8‐802. Physician and patient. No physician or surgeon
shall be permitted to disclose any information he or she
may have acquired in attending any patient in a
professional character, necessary to enable him or her
professionally to serve the patient, except . . . [upon]
the issuance of a subpoena pursuant to Section 25.5 of
the Workers' Compensation Act.
REMOVAL OF THE NOTICE REQUIREMENT
Dear Mr. Smith,
The Department of Insurance’s Workers’ Compensation Fraud Unit has
received a complaint from Michael Jones of 100 Main Street, Lombard, Illinois,
alleging that you have committed workers’ compensation fraud . . .
Notice of Investigation
• Prior to the recent amendments, employers and
employees whose conduct was referred to the
WCFU for investigation were entitled to notice of
the referral
(e) . . . Upon receipt of a report of fraud, the
employee or employer shall receive immediate
notice of the reported conduct, including the
verified name and address of the complainant if
that complainant is connected to the case and
the nature of the reported conduct.
G-9Notice of Investigation
• Prior to the recent amendments, employers and
employees whose conduct was referred to the
WCFU for investigation were entitled to notice of
the referral
(e) . . . Upon receipt of a report of fraud, the
employee or employer shall receive immediate
notice of the reported conduct, including the
verified name and address of the complainant if
that complainant is connected to the case and
the nature of the reported conduct.
Practical Effects / Problems of Notice
• Potential targets were informed that an
investigation was underway
• Surveillance was all but eliminated as an
option in cases involving employee fraud
• The name and address of the person making
the referral were made known to the target
Removal of the Notice Requirement
• Allows for the person reporting the alleged
fraud to remain unidentified unless and until a
criminal prosecution is commenced
• Allows for the p
possibilityy of surveillance byy
insurance companies, SIUs, TPAs, and the
WCFU
• Allows the WCFU to conduct an investigation
without the target being made aware that a
complaint has been filed
G-10REMOVAL OF 120 DAY REQUIREMENT
Time’s up . . . turn in your report
Investigation Deadline
• Prior to the recent
amendments,
investigations were to
be commenced and
completed within 120
days of receipt of a
complaint
Reality of the 120 Day Requirement
• Clock started to run before the complaint was
assigned for investigation
• Not all investigations are the same
• Many investigations simply cannot be completed that
quickly
• Subpoena compliance took a significant portion of
the 120 days allotted for investigation
• The number of cases referred to the WCFU made
compliance with the 120 day requirement impossible
• Cases were not reviewed until they could be
investigated in order to comply with the law
G-11Removal of the 120 Day Requirement
• Allows for more thorough investigations
• Allows for collection of all the relevant records
• Allows for better report writing
• Allows for more investigations to be open at any
given time
• Gives us a better chance at a successful referral and
prosecution
HOW DOES THIS AFFECT ALL OF US?
Curbing workers’ compensation fraud
Empowerment
• Improves the likelihood that the general public
will actually file a complaint
+
• Provided investigators with more tools and
removed limitations that hampered investigations
+
• Provided prosecutors with more reason to charge
cases involving workers’ compensation fraud, and
gives them more leverage with regard to
resolving cases arising under the Act
G-12What does this add up to?
• Convictions
• Fines
• Restitution
• Prison Sentences
Chilling Effect
WHAT DO WE NEED FROM YOU?
Referring a case for investigation
Workers’ Compensation Fraud Unit
Mailing Address:
100 W. Randolph St.
Suite 9‐301
Chicago, IL 60601
Hotline: (877) 923‐8648
E‐mail: DOI.WorkCompFraud@illinois.gov
Web Site: http://insurance.illinois.gov/WCFU
G-13William M. Blumthal, Jr.
Supervisor, Workers' Compensation Fraud Unit
Illinois Department of Insurance
Mr. Blumthal graduated from the University of Illinois
in Urbana-Champaign in 2000 with a BA degree in
Liberal Arts and Sciences. He went on to attend
DePaul University's College of Law, graduating in 2003
with a Juris Doctor degree and a certificate in criminal
law. After graduation, Mr. Blumthal began working for
the Cook County State's Attorney's Office as an
Assistant State's Attorney. During his time at the
State's Attorney's Office, Mr. Blumthal worked in a
number of different divisions, including Criminal
Appeals, Traffic, Felony Review, Grand Jury, and the
Felony Trial Division. In June of 2011, after nearly eight
years with the Cook County State's Attorney's Office,
Mr. Blumthal left to assume his current position at the
Illinois Department of Insurance as Supervisor of the
Workers' Compensation Fraud Unit.
G-14You can also read
