The results of the National Insurance Crime Bureau's (NICB) latest analysis of questionable claims (QC) referrals have arrived, and it will likely come as no surprise that nearly all categories posted increases.

Upon examining referrals for six categories—property, casualty, commercial, workers' compensation, vehicle and miscellaneous—for the third quarters of 2011, 2012, and 2013, the NICB observed a 24-percent uptick in the total number of QCs.

To put this information into perspective, QCs are claims that NICB member insurance companies refer to the Des Plaines, Ill. non-profit agency for closer review and investigation based on one or more indicators of possible fraud. A single claim may contain as many as seven referral reasons. The volume of QC referrals can increase or decrease over a given period of time and may be caused by a number of factors, including better reporting by the industry and fluctuations in fraudulent activity.

During the first three quarters of 2011, the NICB received 74,944 QCs. During the first three quarters of 2012, that number increased to 87,684, and it increased yet again during the first three quarters of 2013 to 93,053. Overall, comparing the first three quarters of 2011 to the same period in 2013, the numbers of QCs increased 24 percent.

As noted above, although most categories of QCs saw increases in the third quarter, only one, the commercial category, posted a decrease. Referrals for suspicious claims dropped 13 percent in the third quarter when compared to the previous quarter.

Overall, property QC referral reasons showed no significant change when the NICB compared 2012 totals to those in 2013. This is significant, the NICB says, because for the first three quarters of 2011 to the same period in 2012, property QC referral reasons increased overall by 41 percent. Moreover, in those three quarters in 2011 and in the first three quarters in 2012, all but one of the referral categories displayed an increase. For 2012 and 2013, two categories showed a negative percentage change. The highest surge was found in flood/water damage referrals, which rose 21 percent from the first three quarters of 2012 to the first three quarters of 2013.

Medical Referrals and Workers' Comp

One of the most dramatic fluctuations was evident in the workers' compensation disability area, for which QCs increased 58 percent during the first three quarters of 2013 compared to the same period the next year. Also showing double-digit increases were claims associated with false social security number (40 percent) and false mileage reimbursement (38 percent). Claimant fraud remains the largest workers' compensation referral reason by over two times the next highest referral reason.

There was good news, as duplicate billing QCs decreased a whopping 73 percent. Premium fraud and material misrepresentation on employment application also both declined 23 percent.

Overall, workers' compensation QCs reasons increased 4 percent when the NICB compared the first three quarters of 2012 to the same period in 2013.

Special Reports /

NICB: Q3 Questionable Claims Increase 24% from 2011

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