NU Online News Service, May 6, 2:50 p.m.EDT--Orlando, Fla.--Efforts to fightworkers' compensation fraud are being helped by new laws and apositive legislative climate, but hindered by financial constraintsand an apathetic judiciary, the head of an anti-fraud groupsaid.

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The commentary by Dennis Jay, executive director of theWashington-based Coalition Against Insurance Fraud, was deliveredat the National Council on Compensation Insurance's annual meetingheld here this week. His observations included results from acoalition survey of 12 states with law enforcement units devotedexclusively to combating comp fraud.

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Mr. Jay's talk, titled "Fraud Trends In Workers' CompensationFraud--Are We Winning The Battle?" included a rundown on what hesaid were the strengths, weaknesses, opportunities and threats toefforts to combat comp fraud.

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He said the coalition survey of state comp fraud bureaus foundthat the average personnel count dwindled from 17 to a currentlevel of about 12. The average funding level was reported to beunder $800,000. Case referrals, which averaged 800 in 2003,increased to more than 1,000 in 2004.

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Mr. Jay said that rates of conviction, which averaged about 40in 2002, are currently about 15. He said this was due to the factthat bureaus are "not going after just the easy cases" or the "lowhanging fruit." At the same time, there has been a dramaticincrease in the filing of civil actions.

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Comp fraud bureaus, Mr. Jay noted, are hampered by the fact thatonly three of the 12 are equipped with police powers to issuesubpoenas and make arrests. Targets of investigations, Mr. Jaysuggested, are far more cooperative if the bureau staff askingquestions "are wearing a gun."

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He noted that only eight of the 12 comp fraud bureaus have theauthority to file civil actions and only seven do tracking ofrestitution. Mr. Jay said that in 2003 the survey found that thebureaus had a total of $720,000 in restitution ordered. The amount,he said, indicates they may be pursuing too many small cases.

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The survey, Mr. Jay reported, found that bureau managers feelhampered by a lack of resources and a judiciary that lets manyoffenders off with light punishment. Prosecution of such cases, hecontinued, is often constrained by a short statute of limitations.In addition to prosecuting outright fraud, fraud bureaus are oftenburdened with the job of pursuing employers who operate withoutcomp insurance.

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Mr. Jay said that strengths for the anti-fraud programs includethe fact that there is legal infrastructure in place to go afterfraud and that additional fraud statutes are being passed all thetime. He added that publicity campaigns have created a growingpublic awareness of the problem.

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Outlining weaknesses in the anti-fraud effort, Mr. Jay saidthere is a lack of a national strategy to combat fraud and there isan inconsistent focus from state to state. He also said that thecomplexity of some schemes is more than individual insurers, andstate bureaus, are equipped to combat. He added that many insurersfail to spend what they need to deal with fraud.

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Mr. Jay said he believes 2005 is a good year for the passage ofanti-fraud legislation because more State Houses are controlled byRepublicans, which he described as generally more friendly towardlaw enforcement measures.

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Among threats to the system, he observed, is the possibility ofa decline in the economy, which traditionally leads to an increasein claims. Other problems noted by Mr. Jay included a lack of gooddata on the extent of fraud and consumer privacy restrictions.

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