Identity Resolution Featured in IAIABC Journal
If you’re not familiar with the International Association of Industrial Accident Boards & Commissions (IAIABC), it’s a very active non-profit organization of government agencies that administer workers’ compensation programs in the U.S., Canada, and other countries. In addition to sponsoring a large number of industry events including conferences and training seminars, they publish an excellent journal twice yearly that provides educational articles about education, research, and management of workers’ compensation issues.
The April issue of IAIABC Journal includes an article authored by Infoglide’s Charles Clendenen. “Introducing Identity Resolution: A New Approach to Workers’ Compensation Fraud” discusses three types of workers’ compensation fraud and how identity resolution (aka entity analytics or entity resolution) is being applied to make the process of finding potential employer fraud easier and more cost-effective.
While medical fraud and employee fraud are significant problems, “employer premium fraud, while less publicized, can involve millions of dollars in unpaid or underpaid premiums and can cause much more damage to the insuring agency.”
Employer premium fraud can take several forms. In order to avoid paying premiums, a company’s owners may illegally classify permanent employees as contractors. Alternately, they may operate for some time without paying their premiums, and then when the insurer is about to take action, they simply shut down the company on paper and reconstitute it under another name. Companies also use this “going out of business” ploy in cases where their experience (or modification) rating has gone up due to multiple injuries, thereby resulting in higher premiums. By reopening as another company, they can effectively reset their experience rating.
Clendenen goes on to introduce identity resolution technology and discuss its origins, then talks about how it can be applied to solve workers’ comp employer fraud.
While identity resolution technologies can be applied to employee and provider fraud, they are particularly effective at uncovering employer premium fraud. Finding companies who are not registered for workers’ compensation involves comparing databases where companies are advertising themselves as open for business to lists of businesses registered with state workers’ compensation programs. The results can highlight companies who have not registered or are not paying premiums, companies who have changed their name often, and companies involved in hidden contractor/ subcontractor relationships.
The rest of the article talks in more detail about how identity resolution can be applied and the potential return on investment (ROI) agencies can expect.
Click here to read the full article, and to learn more about IAIABC, check out their web site.
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