Workers Comp Fraud Ring Busted, Millions of Dollars Seized

 

Investigators in Florida recently reported that they brought down a workers compensation fraud ring in Broward County.
 
According to officials with the state’s division of insurance fraud and Broward County deputies, the investigation known as “Operation Dirty Money” led to the seizing of a million dollars.
 
In all, eight individuals are facing charges of workers comp fraud and money laundering. They’re accused of being involved in a check cashing scheme to avoid the cost of workers comp coverage.
 
Workers compensation premiums are based on the number of employees you report and your amount of payroll.  What these folks do is they intentionally go out and set up a company that is just on paper and insure it for the smallest workers comp they’re able to obtain,” Major Geoffrey Branch of the Florida Division of Insurance Fraud remarked.
 
In this matter, investigators say the fraud involved a construction company. According to investigators, Hugo Rodriguez was the ringleader and allegedly funneled more than $70 million through shell companies to avoid paying workers comp coverage. In court, his bond was set at more than half a million dollars.
 
Florida Chief Financial Officer Jeff Atwater noted that this kind of fraud takes a billion dollars a year out of Florida’s economy.
 
The Workers Compensation Fraud Task Force is a joint venture involving the state and Broward County aimed at stopping workers comp fraud.
 
 

Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher.  www.reduceyourworkerscomp.com Contact mstack@reduceyourworkerscomp.com

 

 


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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

Florida Utility Contractor Cited Following Death of Worker

The U.S. Department of Labor's Occupational Safety and Health Administration recently cited Callaway Contracting Inc. of Jacksonville for 13 safety violations. According to a report from OSHA, it opened an inspection in May following the death of a worker who was electrocuted while unloading steel from a tractor trailer for a roadway rehabilitation project on Normandy Boulevard. The inspection also was expanded to include the company's main office on New Berlin Road.

"This fatality could have been prevented. Management knew about the hazards associated with unloading the truck near power lines, but rushed to get the truck unloaded and failed to take the proper precautions," said Brian Sturtecky, OSHA's area director in Jacksonville. (WCxKit)

Callaway, an underground utility contractor, was cited for one willful violation related to the fatality for failing to prevent the load line from contacting the energized overhead power lines. Three other willful violations involve failing to have a qualified person inspect the crane annually and exposing workers to being caught in a rotating superstructure, as well as "struck by" hazards. A willful violation is one committed with intentional knowing or voluntary disregard for the law's requirements, or with plain indifference to worker safety and health.

Eight serious violations involve failing to train employees on procedures to be followed in the event the crane makes contact with power lines, failing to conduct daily inspections of the crane prior to its use, ensuring that the crane's operating manual is readily available inside the cab, adequately training the crane operator, training and designating a signal person, and bolting the drill press to the floor. The employer was cited for exposing employees to flying chips of metal, electrical shocks and being drawn into the point-of-operation of equipment. A serious violation occurs when there is substantial probability that death or serious physical harm could result from a hazard about which the employer knew or should have known.

One other-than-serious violation was cited, with no monetary penalty, for exposed electrical wires. An other-than-serious violation is one that has a direct relationship to job safety and health, but probably would not cause death or serious physical harm.

Proposed penalties total $208,670. Callaway has 15 business days from receipt of the citations and proposed penalties to comply, request a conference with OSHA's area director or contest the findings before the independent Occupational Safety and Health Review Commission.

OSHA has placed Callaway in its Severe Violator Enforcement Program, which mandates targeted follow-up inspections to ensure compliance with the law. Initiated in June 2010, the program focuses on recalcitrant employers that endanger workers by committing willful, repeat or failure-to-abate violations. 

 
Author Robert Elliott, executive vice president, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com.
 

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact

Florida Workers Compensation Basics 101

 
In Florida, every employer who has four or more employees, whether full time or part time, is required to carry workers compensation insurance. Corporate officers who have elected to exempt themselves from work comp coverage do not count as an employee, however. There are a couple of exceptions to this rule.
 
 
If you are in the construction industry and have one or more employees, you are required to have work comp coverage. Florida farmers who have more than five regular employees, or twelve or more seasonal workers who are employed for 30 days or more, are required to have work comp coverage.(WCxKit)
 
 
4 Ways to Obtain Coverage:
To obtain workers compensation coverage in Florida, the employer has several options including:

1.     
Purchasing a workers compensation insurance policy from a state-approved insurance company.

2.     
Qualifying as an approved self-insured employer.

3.     
Contracting with a professional employer organization (employee leasing) that has a group workers compensation policy.

4.     
Purchasing a workers compensation insurance policy from the Joint Underwriting Association, a Florida state agency that sales workers compensation insurance coverage to employers who are unable to obtain coverage in the open market.
 
 
Claim Reporting:
The employee must report the injury to the employer within 30 days of the occurrence. If the injury is not reported in a timely manner, the insurance carrier has the option to deny the claim. The employer is under a strict time limit of seven days to report the claim to the insurance carrier. The insurance company then has three days to send an informational brochure to the employee outlining the employee's rights and responsibilities under the workers compensation statutes.
 
 
Medical Benefits:
The employer selects and authorizes the initial medical provider. All subsequent medical treatment must be at a medical provider approved and authorized by the workers compensation insurance carrier. All authorized medical care and associated expenses (prescriptions, prostheses, mileage reimbursements) are covered by workers compensation.
 
 
Temporary Total Disability Benefits:
The temporary total disability (TTD) benefits are calculated as two-thirds of the employee's average weekly wage over the 13 weeks prior to the injury, not counting the week the injury occurred. The maximum amount of TTD benefits that can be paid weekly changes every Jan. 1. The maximum TTD benefits per week for accidents occurring in 2010, was $772. The maximum TTD benefits per week for 2011 is $782. The state minimum weekly benefit is $20, which has not changed since 1972.
 
 
The first 7 days of disability (the waiting period) is not paid to the injured employee unless the employee is disabled for more than 21 days. TTD benefits can be paid for a maximum of 104 weeks. There is no provision in Florida law that requires the employer to hold open a job for an employee who is unable to work. (Holding the position for the employee is the smart thing for the employer to do in most cases.)
 
 
Temporary Partial Disability Benefits:
Florida work comp also provided for temporary partial disability (TPD). An employee will receive TPD if the medical provider releases the employee to work with restrictions on the number of hours the employee can work. If the employee is unable to earn 80 percent of his wages prior to the injury, the insurance carrier will pay TPD benefits on the hours the employee is unable to work per week.
 
 
This is when the employee has been released by the authorized treating physician to return to work in any capacity. The payment is then 80 percent of the difference between 80 percent of the employee's AWW and earnings. This is referred to as the 80/80 formula. If work is available within the employee's restrictions and the employee does not return to work then no benefits are payable.
 
 
Impairment Benefits:
When an employee reaches maximum medical improvement, the medical provider will determine whether or not the employee has any permanent partial disability. If the employee receives a permanent impairment rating, a scale is used to establish the number of weeks of compensation the employee is entitled to.
 
 
The employee will receive:
1.      Two weeks for each percentage point of impairment from 1 percent through 10 percent
2.      Three weeks for each percentage point of impairment from 11 percent through 15 percent
3.      Four weeks for each percentage point of impairment from 16 percent through 20 percent
4.      Six weeks for each percentage point of impairment from 21 percent and up.
 
 
If the employee is earning the pre-injury wage or higher, the benefits are reduced by 50 percent.
 
 
Permanent Total Disability Benefits:
Florida has a unique way of determining if an employee who has reached maximum medical improvement has a permanent total disability (PTD). If the employee can be placed in a sedentary job within 50 miles of his residence, the employee is not PTD, unless he has a severe injury as defined by the Florida work comp statutes.
 
 
Some of the severe injuries include spinal cord injuries that involve paralysis of an arm, leg or the trunk; amputation of a hand, arm, foot, or leg; severe brain injury; and, second or third degree burns over 25 percent of more of the body. If the employee is classified by the Division of Workers Compensation as PTD, the employee will receive PTD benefits which are the same as TTD benefits until the age of 75. If an employee is drawing social security benefits, the PTD benefits are reduced to the point where the social security benefit plus the PTD benefit equals 80 percent of the average weekly wage earned prior to the injury.
 
 
Death Benefits:
If an employee dies as a result of an on-the-job accident within one year of the date of the accident, or if the employee dies as a result of an on-the-job accident within five years with continuous disability, funeral expenses up to $7,500 is covered by workers compensation. The spouse is entitled to 50 percent of the average weekly wage, not to exceed $782.00 (for calendar year 2011).
 
 
The spouse plus one child is entitled to two-thirds of the average weekly wage, not to exceed $782 (year 2011). If the employee leaves behind one child as the only beneficiary of death benefits, the child receives one-third of the average weekly wage, not to exceed $782 (year 2011). There is no time limit on how long benefits can be paid, but the maximum amount of death benefits is $150,000 (not including funeral expenses). If the spouse remarries, the spouse receives a lump sum payment of 26 weeks as long as the $150,000 cap is not exceeded. The spouse is also eligible for tuition benefits at a vocational technical center or community college.(WCxKit)
 
 
Vocational Benefits:
If, due to the employee's on-the-job injury, the employee is unable to return to work because of permanent work restrictions, the employee is entitled to assistance from the Workers Compensation Vocational Rehabilitation Section of the Florida Department of Education. At no cost to the employee, the employee can receive vocational counseling, transferable skill analysis, training on job-seeking skills, job placement, on-the-job training, and formal retraining.

Author Rebecca Shafer
, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.
 
 

 
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.

Florida’s Physician Dispensing Found to Drive Workers Comp Costs Higher

img1The Workers Compensation Research Institute (WCRI) reports this week in Prescription Benchmarks for Florida – 2nd Edition that physician dispensing is driving up prescription costs in Florida.

 

 

The study looked at the costs, prices, and distribution of drugs in the state and took a closer look at doctors dispensing medicine there. Findings showed the average payment per claim for prescription drugs in Florida’s workers compensation system was $536. This is 45 percent higher than the median of the states in the study making it number two out of 17 states. The last two years of the study showed an increase of 14 percent in average cost per claim though they were stable in other states in the study.

 

 

Legislation regarding physician dispensing was vetoed in 2010. Advocates of physician dispensing say it saves money because doctors are more likely to prescribe generics. Advocates also say that patient compliance, and, therefore, positive outcomes are more likely when doctors are doing the drug dispensing.

 

 

But the study showed this was not the case – generics were prescribed equally from both doctors and pharmacies. Further, even when using generics, the cost per pill was higher at the doctor’s office.

 

 

Higher and growing costs of prescription drugs in Florida were largely due to more frequent and higher-priced physician dispensing, the study indicates. “Physician-dispensing in Florida’s workers’ compensation system has been taking an increasingly larger share of prescription payments. The percentage of prescription payments for physician-dispensed prescriptions in Florida increased from 17 to 46 percent over a four year period,” according to the WCRI report.

 

WCRI’s 17-state study also provides some evidence that helps address concerns about legislation (H.B. 5603), passed in 2010, but later vetoed, that would limit reimbursement rates for physician-dispensed prescriptions to the same level as pharmacies for the same medications.

 

 

Other findings include:

  1. Physician-dispensers received 46 percent of prescription payments in the state.
  2. Average price paid to Florida pharmacies increased by 3 percent over the course of the study.
  3. California passed legislation regulating doctor dispensing and saw a large drop in cost per pill of physician-prescribed muscle relaxants. And physicians prescribed more non-repackaged drugs.

 

 

The 17 states included in this study are California, Florida, Illinois, Indiana, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, Tennessee, Texas, and Wisconsin.(WCxKit)

 

 

WCRI is based in Cambridge, MA and is a nonpartisan, not-for-profit membership organization supported in its public policy research by employers, insurers, insurance regulators and state regulatory agencies, as well as several state labor organizations.


Author Rebecca Shafer
, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information.
Contact: RShafer@ReduceYourWorkersComp.com.

 

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.

 

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