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Insurance Companies Winning The Game Of Fraud Arbitrage

When they're not praying for hurricanes, some insurance companies are apparently living in mortal fear of additional paperwork. The insurance lobby in the IOU state scored a major victory when they talked down state lawmakers from proceeding with legislation designed to combat insurance fraud in workers' comp cases. While the idea of sending out notices to injured workers to verify that they actually received the services billed may have looked good on paper to some, the massive impediment from the postage involved was too much for insurance companies to take.

Sending out notices is "prohibitively expensive" and would confuse injured workers, said Steven Suchil, an attorney with the American Insurance Assn.

It would be a real shame if insurance companies took the risk that injured workers might understand whether or not they had their arm reattached and lose some of their ability to cite fraud as a primary reason for raising rates.
Crackdown on workers' comp billing fraud is dealt a setback [LA Times]