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LOUISIANA HEALTH CARE COMMISSION

LOUISIANA HEALTH CARE COMMISSION. THE LOUISIANA DEPARTMENT OF INSURANCE (LDI) FRAUD SECTION PROCEDURES October 13, 2011 Presented by: Paul Boudreaux, Jr. Director, Insurance Fraud Section. LOUISIANA HEALTH CARE COMMISSION. WHAT IS THE LDI FRAUD SECTION

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LOUISIANA HEALTH CARE COMMISSION

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  1. LOUISIANA HEALTH CARE COMMISSION THE LOUISIANA DEPARTMENT OF INSURANCE (LDI) FRAUD SECTION PROCEDURES October 13, 2011 Presented by: Paul Boudreaux, Jr. Director, Insurance Fraud Section

  2. LOUISIANA HEALTH CARE COMMISSION WHAT IS THE LDI FRAUD SECTION • The FRAUD Section was established by statute in 1993- LSA-R.S. 22: 1921, et seq, as an INVESTIGATORY BODY. We do not have any arrest or prosecutorial authority. • The FRAUD Section is part of a three-agency Insurance Fraud Task Force that was established in 1999 to begin Jan 1, 2000, which includes the Louisiana State Police Insurance Fraud/Auto Theft Unit and the Louisiana Department of Justice (Attorney General) Fraud Unit

  3. LOUISIANA HEALTH CARE COMMISSION • Because of the sensitive nature of fraud reports and investigations, all fraud complaints are Confidential. • The FRAUD Section records are exempt from public inspection, and FRAUD Section records and personnel are exempt from subpoena in all civil proceedings. LSA-R.S. 22:1927 & 1929. • Criminal background information is confidential and shall not be disclosed outside the FRAUD Section Office. LSA-R.S. 22:1929.

  4. LOUISIANA HEALTH CARE COMMISSION THE FRAUD SECTION PERSONNEL • The FRAUD Section is a part of the Legal Division of the Louisiana Department of Insurance. • The FRAUD Section consists of a Director, Assistant Director, a Senior Investigator, Seven (7) Investigators, and two Student Workers

  5. LOUISIANA HEALTH CARE COMMISSION MANDATORY REPORTS OF SUSPECTED FRAUD BY LICENSED ENTITIES • LSA-R.S. 22: 1926 & LSA-R.S. 40:1424 • Any person, company or legal entity involved in the business of insurance • Within 60 days of receipt of a suspected fraudulent claim • Must report the suspected fraud to the FRAUD Section

  6. LOUISIANA HEALTH CARE COMMISSION • LSA-R.S. 22:1928 & LSA-R.S. 40:1425 • Civil Immunity from lawsuit for insurers, employees and agents for libel, slander (defamation of character) or other relevant tort • All persons (licensed entities) covered by LSA-R.S. 22: 1926 can recover attorney’s fees andcosts if sued and the suit is determined to be without substantial justification.

  7. LOUISIANA HEALTH CARE COMMISSION THE BUSINESS OF THE FRAUD SECTION • ANSWERS ALL QUESTIONS RELATIVE TO SUSPECTED FRAUD • The FRAUD Section responds to QUESTIONS as to whether a certain activity may constitute fraud and, if applicable, how to file a formal fraud complaint.

  8. LOUISIANA HEALTH CARE COMMISSION • The FRAUD Section responds to suspected fraud reports from individuals. GENERAL PUBLIC FRAUD COMPLAINT. It can be filled anonymously or by an identified person. • The FRAUD Section conducts investigations of suspected fraud reports from insurance companies, producers, agents, adjusters and bail bondsmen. DETAILED INDUSTRY FRAUD COMPLAINT. • Both forms are on the LDI Webpage under “Report Insurance Fraud.

  9. LOUISIANA HEALTH CARE COMMISSION PROCEDURE UPON RECEIPT OF SUSPECTED FRAUD REPORT • Be sure to be specific as to why this is fraudulent and the amount of money involved, even if the claim was denied. Attach or send to FRAUD Section ASAP the file’s summary or outline and any documents that support the allegations of suspected fraud.

  10. LOUISIANA HEALTH CARE COMMISSION • The FRAUD Section reviews the suspected fraud report and all supporting documents. • After review of the documents and investigation thru our data bases, a decision is made whether to: • Refer for “criminal” investigation and prosecution, or • Retain in “inactive” folder pending additional information.

  11. LOUISIANA HEALTH CARE COMMISSION • Referred for Criminal Investigation and Prosecution • Regular meetings with the : • Louisiana State Police (LSP) • Department of Justice (DOJ) • National Information Crime Bureau (NICB) • The files are accepted for criminal referral, rejected for criminal referral, or deferred.

  12. LOUISIANA HEALTH CARE COMMISSION ISSUANCE OF CEASE & DESIST ORDER WITH CIVIL FINE • If fraud, crime or unauthorized activity is determined to have occurred BY A LICENSED ENTITY, (or an unlicensed entity that it attempting to sell insurance) then the LDI may issue a CEASE & DESIST ORDER, accompanied with an appropriated CIVILFINE. • LSA-R.S. 22:1969.

  13. LOUISIANA HEALTH CARE COMMISSION A CEASE AND DESIST ORDER AND FINE CAN BE SERVED ON A LICENSED ENTITY (OR AN UNLICENSED ENTITY ENGAGED IN INSURANCE BUSINESS) • Not all C&D’s stop the insurance business • For a Summary Suspension, we must show that the public health, safety, or welfareimperatively requires emergency action to immediately stop the alleged activity • LSA-R.S. 49:961 & LSA-R.S. 22:1969 & 1970 • Most C&D’s are served with a Notice of: CIVILFINE LICENSE SUSPENSION and/or LICENSE REVOCATION • All C&D’s are served with information as to how to request a HEARING TO APPEAL the action of the LDI

  14. LOUISIANA HEALTH CARE COMMISSION NUMBER OF SUSPECTED FRAUD COMPLAINTS • In 2005 2,384 • In 2006 1,466 • In 2007 1,328 • In 2008 1,427 • In 2009 1,729 • In 2010 2,944 • In 2011 2,135 (thru September 30, 2011)

  15. LOUISIANA HEALTH CARE COMMISSION INVESTIGATES APPLICATIONS FOR 18 USC SEC. 1033 CONSENT • The FRAUD Section conducts investigations into applications for consent under 18 USC SECTION 1033. This federal statute provides a means for a person with a felony conviction involving dishonesty or breach of trust or who has been convicted under that section to apply for a consent from 18 USC SECTION 1033 prohibition from working in the business of insurance.

  16. LOUISIANA HEALTH CARE COMMISSION INVESTIGATES COMPANIES AND PERSONS SEEKING A LOUISIANA INSURANCE LICENSE • The FRAUD Section investigates criminal backgrounds and administrative actions against persons and companies applying for a license or license renewal. • The FRAUD Section conducts investigations of BIOGRAPHICAL AFFIDAVITS for Company and Third Party Administrator Licensing. Any company which applies for a license to sell insurance or manage insurance in Louisiana has to provide Biographical Affidavits for each OFFICER, DIRECTOR and OWNER of 10% or more of the ownership of the company.

  17. LOUISIANA HEALTH CARE COMMISSION INVESTIGATES COMPANIES SEEKING TO REGISTER TO DO BUSINESS IN LOUISIANA • The FRAUD Section conducts investigations of Risk Purchasing Groups, Risk Retention Groups and Discount Medical Plans desiring to REGISTER its company to do business in Louisiana. • The FRAUD Section examines and investigates the affidavit of each person, conducts a background check and recommends an APPROVAL or DISAPPROVAL.

  18. LOUISIANA HEALTH CARE COMMISSION INVESTIGATES “YES” FILES • License applications or notices that reveal criminal or administrative activity , securities violations, Louisiana income tax debt or child support arrearage. • Recommends Approval or Disapproval.

  19. LOUISIANA HEALTH CARE COMMISSION HOW CAN SOMEONE CONTACT THE LDI FRAUD SECTION? • By WEBSITE: www.ldi.state.la.us Click on the “Report Insurance Fraud” Link Click on the “General Public Fraud Report Form”   Or, the “Detailed Industry Fraud Report Form”

  20. LOUISIANA HEALTH CARE COMMISSION • By FACSIMILE: (225) 342-7393 • By U. S. MAIL: Louisiana Department of Insurance FRAUD SECTION P.O. Box 3096 Baton Rouge, LA 70821

  21. LOUISIANA HEALTH CARE COMMISSION • By HANDDELIVERY OR PAID COURIER: Louisiana Department of Insurance Poydras Building 1702 N. Third Street Baton Rouge, LA 70802 ATTENTION: FRAUD SECTION • By TELEPHONE: (225) 342-4956 (800) 259-5300 or 5301 (Toll free only in Louisiana)

  22. LOUISIANA HEALTH CARE COMMISSION • QUESTIONS!

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