Editor’s Note: This is the second in a week long series discussing workers’ compensation fraud. The first article in the series may be read here.

In the early years of World War II, brilliant mathematician Alan Turing and a team of top cryptographers toiled in secret trying to break the German war machine’s Enigma code. Enigma was thought by many to be unbreakable. It was generated by a specialized machine that converted plain text to encrypted “gibberish” that could only be deciphered by another Enigma machine with the proper decryption key. There were “159 million million million” possible keys, and the Nazi’s changed the key every night at midnight. For Turing and his team, it was the quintessential “Groundhog’s Day.” Every night at midnight, all the work they had done was made irrelevant, and every day they started anew. While they could eventually decipher some German messages, they were far past any relevance for the allies.

Britain and the allies were losing the war, and the British Isles were being slowly starved by the Nazi’s unrelenting U-boat campaigns which routinely sank supplies being shipped across the Atlantic. They had to break the Nazi code, and Turing realized that a “thinking machine” was the solution. The rudimentary computer he built, however, was still far too slow to accomplish the job in any timely fashion. But they eventually came upon a couple key ideas that turned the tide.

They realized that within Enigma, no letter in the encrypted messages ever represented itself. That recognition eliminated millions of potential keys. The real innovation came when they recognized that they just needed to identify a few common words they could be sure existed in every message. By focusing on just a few consistent words, their machine should be able to identify the encryption key with relative ease. The Germans, it turns out, issued a weather bulletin to their forces every morning at 6 AM. It always contained the word “weather.” It also ended with the same two words that every single encrypted Nazi message included: Heil Hitler. 

Silly Germans. Their relentless consistency was the ultimate key to Enigma’s downfall. The common data elements could be used to break the secrecy of their actions wide open.

What, you ask, does any of this have to do with workers’ compensation fraud? More than you might realize.

As discussed yesterday in the article To Fight Fraud, We Must First Recognize It, Shaddi Kamiabipour, Sr. Deputy DA for Orange County and Gordon Oard, Sr. Special Investigator for the Berkshire Hathaway Homestate Companies, held a session on fighting fraud at a recent WCIRB Conference. They focused on the challenges of combatting provider fraud in workers’ comp. It was Oard who provided the idea that blends so well with Turing’s experience. Common and consistent data elements can be the downfall for criminals in workers’ comp.

Kamiabipour and Oard were speaking about the sophistication of those who commit fraud in our industry. Kamiabipour told the group that often the medical clinics and DME firms that routinely steal from our industry are part of intelligent and organized crime groups. They open and close companies and clinics often, use different identities to keep ahead of the law, and routinely work to thwart easy identification of their activities. Oard said that these constantly changing variables made it difficult for insurance companies and employers to easily identify fraudulent activities, even when they were paying attention (sadly many do not). He also suggested that there was one data element, however, that doesn’t change nearly as often as others we’ve mentioned.

That element would be the billing phone number, which is often used by multiple entities run by these outfits. 

Oard indicated that, while they move around and change identities with relative ease, fraudulent billers are less willing to change that phone number, as that would make it more difficult to get paid. As he said, they want to be able to answer the phone and arrange to “get that check.” While a common phone number won’t always mean fraud, as some firms may use a common billing firm, it can be an excellent red flag to indicate where more scrutiny should be applied.

Turing and his men continued to work in absolute secrecy, even after breaking the Enigma code. They realized that the Nazi’s could never know they had been compromised, or they would have stopped using the system or changed their method of operation. Even most in the allied military community were never aware that their intelligence communities were listening in on German communications. In other words, there were no stupid bloggers telling the world about the Nazi’s Achilles Heel.  

Fortunately for you, those living the unethical high life on your dime probably are too busy enjoying their ill-gotten gains to notice this blog post. I expect our little secret will be safe. 

Regardless, this is potentially data that exists in your claims system today. A search of your records might end up revealing you have a problem for which you were previously unaware. If you find the same phone number being used for multiple clinics or DME providers, then that could be a strong clue that you may have been (and currently are) a victim of workers’ compensation fraud. And if further investigation reveals that to be the case, you should do something about it. Consult with your local District Attorney, or even the FBI. If the case is big enough, such as the Drobot case in Southern California, the Feds will have the appetite to pursue fraud where many local authorities will not. These crimes will not stop until people in our industry tune in and act on what they find.

Now, if could just make sure the punishment met the crime. We will discuss that next in “Restoring the Death Penalty and Other Reasonable Solutions to Workers’ Compensation Fraud.”

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