June 21, 2005 - The Travis County grand jury indicted Jerry Amaya of Cedar Creek on workers' compensation fraud-related charges.
Amaya filed a workers' compensation claim after he injured his head, chest, neck, right shoulder and arm while working as a truck driver. He claimed he was unable to work as a result of the injuries, and Texas Mutual Insurance Company began paying income benefits.
A Texas Mutual® investigation uncovered evidence that Amaya was working while he received income benefits. In fact, he was driving a truck for another company.
Investigators call this sort of scam "double-dipping" because the perpetrator, in effect, gets paid twice: once by his new employer for working and again by his previous employer's insurance company for being too injured to work. If allowed to continue, double-dipping scams can lead to a higher workers' comp insurance premium for the first employer when the company renews its coverage.
State law requires injured workers to contact their workers' compensation insurance company when they return to work. To help ensure injured workers understand their responsibilities under the law, Texas Mutual Insurance Company includes a note with every income benefit check reminding the injured worker to contact the adjuster as soon as he or she returns to work. Additionally, Texas Mutual® adjusters often contact claimants directly to determine their work status.
The Amaya investigation is part of the Texas Mutual® "Zero Tolerance for Fraud" policy. Texas Mutual Insurance Company maintains three teams of investigators permanently assigned to investigate every report of suspected fraud.
June 20, 2005 - Texas Mutual Insurance Company reports that, in unrelated cases, Texas grand juries indicted two former prison guards on workers’ compensation fraud-related charges. Both guards were allegedly "double-dipping," a term investigators use for claimants who collect income benefits by saying they are unable to work while they are actively employed.
A Dallas County grand jury indicted Ron L. Dawson for aggregated theft over $1,500. Dawson received temporary income benefits (TIBs) after telling Texas Mutual Insurance Company he was unable to work due to his 2001 workplace injury.
Dawson allegedly hurt his back while working as a security guard for a Dallas homeowners association. He said he was unable to work; however, a Texas Mutual® investigation discovered that he took a new job as a prison guard for Dawson State Jail from June 27, 2002, through February 13, 2003. During this time, he received over $6,300 in TIBs.
In Austin, a similar case played out when the 299th Judicial District grand jury indicted Lloyd Davis on fraud-related charges. Davis had applied for supplemental income benefits (SIBs) in December 2000, stating that he was not employed and was unable to work due to a workplace injury from his previous job.
Davis had received over $8,600 in SIBs when a claim reviewer noticed some irregularities in his file. The subsequent Texas Mutual® investigation discovered that Davis had worked since 1999—without any disability—as a prison guard at the T. Don Hutto Correctional Facility, a state jail operated by a private company.
Texas Mutual Insurance Company immediately disputed Davis’ entitlement to further benefits and presented its case to the Travis County District Attorney Office. On May 4, 2005, a grand jury indicted Davis. He was arrested on May 20 and held in custody pending his trial.
"Double-dipping" scams are so-called because the perpetrator, in effect, gets paid twice: once by his new employer for working and again by his previous employer’s insurance company for being too injured to work. If allowed to continue, double-dipping can lead to a higher workers’ comp insurance premium for the first employer when the company renews its coverage.
To help ensure injured workers understand their responsibilities under the law, Texas Mutual Insurance Company includes a statement with every income benefit check reminding the injured worker to contact the adjuster if he or she returns to work. Additionally, Texas Mutual® adjusters often contact claimants directly to determine their work status.
The Dawson and Davis investigations are part of the Texas Mutual® "Zero Tolerance for Fraud" policy. Texas Mutual Insurance Company maintains three teams of investigators permanently assigned to investigate every report of suspected fraud.
June 15, 2005 - Texas Mutual Insurance Company awarded the Emergency Service Organization (ESO) workers’ compensation Safety Group with an $80,474 group dividend today. To date, ESO has received over $260,000 of Texas Mutual® group dividends.
The group dividend is separate from the $50 million general dividend plan that the company announced last month. Some ESO members may receive part of both dividends.
“We’re very pleased with ESO’s safety efforts,” said Ken Lauber, Texas Mutual® vice president of field operations. “With continued focus on safe workplaces and accident prevention, as well as managed growth of the group, we’re optimistic that ESO can continue improving its overall loss ratio, increase its premium volume, and possibly earn future group dividends.”
A group’s volume and loss ratio are key components in determining whether it qualifies for a dividend. The greater the group’s volume and the lower its overall group loss ratio is, the higher its dividend percentage will be.
State law allows employers in similar businesses to form Safety Groups to help reduce their workers’ compensation insurance premiums. Each group member retains its own experience modifier, yet earns a premium discount based on the entire group’s premium. For example, if a small employer with a $2,000 premium joins a Safety Group with $500,000 in annual premium, the small employer will get the same premium discount as a large company with a $500,000 premium.
“We also give group members an industry-specific safety plan to adopt,” added Lauber. “And they have access to our expert claim and loss prevention services.”
Texas Mutual Insurance Company is the state’s leading writer of workers’ compensation safety groups. Last year, it awarded over $3.3 million in group dividends to qualifying Safety Groups.
May 25, 2005 - Approximately 32,000 Texas employers will receive a share of approximately $50 million in dividends from Texas Mutual Insurance Company. The Texas Mutual® board of directors unanimously approved the 2005 dividend plan, which includes an annual component and a retention component. The plan also includes a special dividend.
The annual component is for qualifying policyholders with policies that expired in 2004. The retention component rewards qualifying policyholders for up to five consecutive years of low claim loss experience, ending with the policy that expired last year. The special dividend is the result of exceptional financial results in 2004.
"These dividends will reward our loyal policyholders whose low claim losses have contributed to our success," said Texas Mutual® Chairman Martin Young Jr. "We hope these dividends will help contribute to their success, too."
Only Texas Mutual® policyholders with in-force policies on June 15, 2005 may qualify for the plan, which still requires Texas Department of Insurance approval. State law prohibits policyholders enrolled in the company’s insurer of last resort program from receiving dividends.
Mr. Young also noted that these dividends are separate from the company’s group purchase dividend program. Texas Mutual® Safety Groups received over $3 million in dividends last year.
Today’s announcement marked the seventh consecutive year for Texas Mutual Insurance Company to offer general dividends. Insurance companies cannot guarantee annual dividends; however, Mr. Young said, “Our philosophy is to share the company’s financial success with our good customers.”
May 18, 2005 — Texas Mutual Insurance Company announced a Safety Group dividend to the Texas Construction Association (TCA) today totaling $209,336.71.
The group dividend is separate from the $50 million in dividends that Texas Mutual Insurance Company paid to qualifying policyholders last year. Some TCA members may receive dividends under both programs.
The TCA Safety Group was designed by subcontractors to benefit subcontractors. By working with Texas Mutual Insurance Company, the state’s leading provider of workers’ compensation insurance, TCA group members receive a premium discount, based on an estimate of the group’s entire written premium.
Any Texas agent can place a qualifying client into the TCA Safety Group. Employers interested in TCA and other Texas Mutual® Safety Groups should ask their insurance agents for assistance, or click here.
Texas Mutual Insurance Company reminds employers that past dividends are not a guarantee of future dividends; however, when funds are available, the company believes in rewarding qualifying policyholders whose low claim losses and loyalty contribute to its success.
April 6, 2005 - Texas Mutual Insurance Company announced that Eric Scheffey’s Harris County Bone and Joint Clinic Association pleaded guilty yesterday to fraud-related charges. The guilty plea marks the end of a lengthy investigation by the Public Integrity Unit of the Travis County District Attorney’s Office in conjunction with Texas Mutual Insurance Company, the Texas Workers’ Compensation Commission, and other state agencies and associations.
The investigation uncovered evidence that Scheffey’s clinic fraudulently obtained payments from Texas Mutual Insurance Company and others for medical services that were not rendered. The plea agreement required the clinic to pay restitution of $24,599 to be divided among Texas Mutual Insurance Company, the Texas Municipal League, and the University of Texas. The clinic must also pay a $1,000 fine and court costs.
On February 4, the Texas Board of Medical Examiners revoked Scheffey’s medical license and assessed an administrative penalty of $845,000 and transcript costs of over $9,000. According to information provided by the Board, the action was based upon findings that Scheffey performed 29 unnecessary surgeries on 11 patients and also failed to report medical malpractice liability claims.
Texas Mutual Insurance Company maintains three teams of investigators permanently assigned to investigate every report of suspected fraud.