Texas Mutual Investigation Results
in Indictment of Houston-Area Crane Company
March 31, 2009 - Texas Mutual Insurance Company reported today that a Travis County grand jury indicted Gary C. Quintinsky and Ellynn A. Ogilvie of Houston on workers’ compensation premium fraud-related charges.
Quintinsky and Ogilvie operated United Crane Inc. and multiple related companies in Houston, Kyle and Fort Worth. The indictments allege that from August 16, 2000 to October 11, 2004, Quintinsky and Ogilvie concealed payroll and employees from Texas Mutual.
Because workers’ compensation insurance premium is based, in part, on payroll, Quintinsky and Ogilvie’s scheme allowed them to obtain a lower workers’ compensation insurance premium than United Crane Inc. actually owed.
By hiding payroll to pay a lower premium, a company can gain an unfair advantage over competitors.
The indictments follow a February 2007 Travis County jury verdict finding that Quintinsky committed civil fraud against Texas Mutual for conduct alleged in the criminal indictment. In that case, the civil jury awarded Texas Mutual more than $5 million in actual damages and $2.5 million in punitive damages.
It was the largest premium fraud verdict in Texas Mutual’s history.
Note: A grand jury indictment is a formal accusation – not a conviction – of criminal conduct.
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Mechanic Sentenced for Fraud Against Texas Mutual
March 25, 2009 - Texas Mutual Insurance Company reported today that a Travis County district court sentenced David John Beatty of Flower Mound, Texas on workers’ compensation fraud-related charges.
The court sentenced Beatty to five years’ probation and 100 hours of community service. It also ordered him to repay $5,074 to Texas Mutual.
Beatty reported a job-related injury while working as a mechanic for Crash Rescue Equipment Service of Dallas. He claimed he was unable to work as a result of the injury, and Texas Mutual began paying him income benefits.
Meanwhile, Texas Mutual uncovered evidence that Beatty was working in a warehouse for another company while receiving income benefits.
Investigators call this type of scam double-dipping because the claimant collects benefits for being too injured to work when he or she is, in fact, gainfully employed. Texas law requires claimants to contact their workers’ comp carrier when they return to work.
Left unchecked, double-dipping and other workers’ comp fraud can lead to higher premiums for all Texas employers.
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Texas Mutual Releases 2008 Fraud-Fighting Results
March 11, 2009 - Texas Mutual Insurance Company saved or recovered $4.1 million through its workers’ compensation fraud investigations in 2008. That number includes:
- Claimant fraud future savings of $2,185,170
- Restitution of $39,374 from claimants
- Restitution of $1,569,873 in premium fraud
- Prevention of $301,467 in health care provider fraud and abusive billing
Nationally, fraud across all lines of insurance costs consumers about $150 billion per year, according to the Texas Department of Insurance.
Tim Riley, vice president of special investigations at Texas Mutual, says that with that much money at stake, regulators, insurance carriers, employers and their employees have to work together to change the perception of fraud as a victimless crime.
“People tend to think fraud only hurts insurance carriers,” said Riley. “Unfortunately, that’s not true. When people cheat the system, premiums increase systemwide. When premiums increase, everyone pays, including honest employers.”
Riley heads up three teams of full-time fraud investigators. During the past three years, the group has secured 48 convictions and saved or recovered $26 million through the company’s zero tolerance for fraud program. The program offers potential cash rewards that lead to arrests or indictments.
To report suspected fraud in a Texas Mutual claim, visit the Fighting Fraud section at www.texasmutual.com. To report suspected fraud in claims being handled by other insurance carriers, contact the Texas Department of Insurance at www.tdi.state.tx.us/fraud/onlinereport.html or (888) 327-8818.
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Texas Mutual Announces Premium Fraud Indictment
February 19, 2009 - Texas Mutual Insurance Company announced today that a Travis County grand jury indicted Trans X Corp of Arlington and its owner-president, Cheryl Ann Bussey of Mansfield, Texas on workers’ compensation fraud-related charges.
Trans X Corp provided temporary drivers to other companies. Texas Mutual alleges that between February 24, 2005 and November 6, 2005, Bussey intentionally gave Texas Mutual false information about her workforce in her applications for coverage and provided incomplete payroll records.
Because workers’ compensation insurance premium is based, in part, on payroll, this type of scheme results in an employer being charged a lower premium than it actually owes. By hiding payroll, an employer can gain an unfair advantage over competitors.
Note: A grand jury indictment is a formal accusation – not a conviction – of criminal conduct.
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Texas Mutual Announces a Triple Scoop of Double-Dipping Convictions
February 13, 2009 - Texas Mutual Insurance Company announced that Travis County district courts have sentenced three claimants, in separate cases, on workers’ compensation fraud-related charges. All three were involved in double-dipping scams.
Double-dipping occurs when claimants collect workers’ comp benefits for being too injured to work when they are, in fact, gainfully employed. Texas law requires claimants to contact their workers’ comp carrier when they return to work.
Left unchecked, double-dipping and other workers’ comp fraud can lead to higher premiums for all Texas employers.
Sentenced - Gilbert Madrid of Odessa was ordered to repay $3,818 to Texas Mutual, serve five years’ probation, perform 200 hours of community service, and attend treatment and counseling.
Sentenced - Billy Morgan of Irving was ordered to repay $1,443 to Texas Mutual, pay a $500 fine and complete one year of deferred adjudication.
Sentenced - David Ercanbrack of Dallas was ordered to pay a $700 fine and complete 50 hours of community service.
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Texas Mutual Wins National Employee Wellness Award
February 10, 2009 - Texas Mutual Insurance Company is one of 10 employers across the country that have won UnitedHealthcare’s Well Deserved Award. The award recognizes employers who demonstrate a commitment to improving their employees’ health.
UnitedHealthcare provides health benefit plans and services to more than 26 million consumers, including more than half of the Fortune 100 companies. An external panel judged the award applicants. Criteria included executive support for the health program, the presence of wellness committees and/or champions, and health education and coaching.
Texas Mutual’s wellness program includes online health improvement tools, health risk assessments, wellness coaching, fitness centers at each of its five locations, on-site flu shots, yoga classes, a walking program, Weight Watchers at Work, and wellness incentives.
Ed Coates, employee benefits manager at Texas Mutual, said the program’s goal is similar to that of the safety services the company offers its policyholders: identify risks and provide resources to reduce or eliminate those risks. Coates added that the program has seen positive results, which have contributed to below-market increases in the company’s health plan expenses the last few years.
“Our program has had some great success stories, with employees losing significant amounts of weight participating in the Weight Watchers program,” said Coates. “The most recent statistics indicate that our employees are improving their overall health. They are reducing their risk for cancer, heart disease and diabetes, and they are improving their exercise and nutrition habits.
“More importantly, they are lowering their risk for serious complications later in life. Ultimately, we see the payoff in terms of a healthy, productive workforce.”
According to UnitedHealthcare, 50 percent to 70 percent of all diseases are preventable. Companies that commit to employee wellness can increase productivity, reduce health care costs and absenteeism, and promote employee satisfaction.
Texas Mutual Awards $300K in Safety Education Grants
February 3, 2009 - Texas Mutual Insurance Company has awarded a combined $300,000 in grants to Kilgore College, Midland College and College of the Mainland in Texas City.
The grants will fund free workplace safety courses for employers, employees and the general public.
Texas Mutual has awarded nearly $1 million in safety education grants since 1999.
“Safety is important to all companies, but in this economic crunch, training is often scaled back or cut from the budget,” said Dr. Jeff Oakley, director of the Gulf Coast Safety Institute at College of the Mainland.
“Texas Mutual has been very generous to our corporate community. More than 13,000 students have used these free classes to learn how to make their workplaces safer,” added Oakley.
In addition to the safety grants, Texas Mutual hosts free workers’ compensation workshops across the state. The workshops include a presentation by a Texas Mutual safety professional.
The grants and workshops are part of the company’s ongoing commitment to preventing workplace accidents.
“On-the-job injuries carry monetary and, most importantly, human costs,” said Russ Oliver, Texas Mutual president. “As the state’s leading provider of workers’ comp insurance, it is our responsibility to promote safe workplaces."
"Any time we have the opportunity to get that message to Texas employers, we consider it money well-spent,” said Oliver.
Texas Mutual Awards $100K Grant to Midland College
February 3, 2009 - Texas Mutual Insurance Company announced a $100,000 grant to the Midland College Risk Management Institute today. The workers’ compensation insurance carrier has issued $300,000 in grants to the institute since 2006.
The grants fund free workplace safety courses for employers, employees and the general public.
“Nearly 1,200 West Texans have come through our doors since we launched this program,” said Barry Horseman, director of workforce education at Midland College.
“Through some of our most popular classes, such as Accident Investigation, CPR/First Aid/Bloodborne Pathogens, Drug and Alcohol Awareness for Supervisors and Introduction to Safety Management, Midland College has given them the tools to make a safer workplace. That would not have been possible without generous funding from Texas Mutual,” added Horseman.
The courses cover general safety topics, as well as topics designed for the oil and gas industry. Students receive Occupational Safety and Health Administration certification for some courses and continuing education units for all courses.
For more information, visit midland.edu/ce/rmi/, or contact Tiffany Gunter at tgunter@midland.edu or (432) 681-6336.
Texas Mutual Insurance Company has given similar grants to Kilgore College and College of the Mainland in Texas City. The company also offers free workers’ comp workshops across the state. The workshops include a presentation by a Texas Mutual safety professional.
The grants and workshops are part of the company’s ongoing initiative to prevent workplace accidents.
“On-the-job injuries carry monetary and, most importantly, human costs,” said Russ Oliver, Texas Mutual Insurance Company president. “As the state’s leading provider of workers’ comp insurance, it is our responsibility to promote safe workplaces. Any time we have the opportunity to get that message to Texas employers, we consider it money well spent.”
Texas Mutual Gives $100K Grant to Kilgore College
February 3, 2009 - Texas Mutual Insurance Company announced a $100,000 grant to the Kilgore College Workforce Development Program today. The workers’ compensation insurer has issued $200,000 in grants to the program during the past two years.
The grants fund free health and safety courses for employers, employees and the general public.
“Many companies in the area have had to cut safety courses out of their budgets,” said Martha Woodruff, director of KC Workforce Development. “We are grateful to Texas Mutual for making this grant available so that we can offer free, high-quality employee training to help businesses keep their workers safe.”
The free courses cover industrywide safety topics, such as small-business safety and Spanish for safety supervisors, as well as topics designed for the construction, oil and gas, health care and nursing home industries. Participants receive certificates of completion and continuing education units for all courses.
For more information, visit www.kilgore.edu/risk_management.asp, or contact Eva McClellan at emcclellan@kilgore.edu or (903) 988-7426.
Texas Mutual Insurance Company has given similar grants to Midland College and College of the Mainland in Texas City. The company also offers free workers’ comp workshops across the state. The workshops include a presentation by a Texas Mutual safety professional.
The grants and workshops are part of the company’s ongoing initiative to prevent workplace accidents.
“On-the-job injuries carry monetary and, most importantly, human costs,” said Russ Oliver, Texas Mutual Insurance Company president. “As the state’s leading provider of workers’ comp insurance, it is our responsibility to promote safe workplaces. Any time we have the opportunity to get that message to Texas employers, we consider it money well spent.”
Texas Mutual Gives $100K Grant to College of the Mainland
February 3, 2009 - Texas Mutual Insurance Company announced a $100,000 grant to the College of the Mainland Gulf Coast Safety Institute in Texas City today.
The workers’ compensation insurer has issued $900,000 in grants to the institute since 2001.
The grants fund free workplace safety courses for employers, employees and the general public.
“Safety is obviously important to all companies, but in this economic crunch, safety training is often scaled back or cut from the budget,” said Dr. Jeff Oakley, director of the Gulf Coast Safety Institute. “Texas Mutual has been very generous to our corporate community. More than 13,000 students have used these free classes to learn how to work safely.”
Classes start February 20 and last throughout the year. Instructors cover general safety topics, as well as topics designed for the oil and gas industry. Students receive Occupational Safety and Health Administration certification for some courses and continuing education units for all courses.
For more information, visit com.edu/ce/riskmanagement_reg.cfm, or contact Dr. Jeff Oakley at joakley@com.edu or (888) 258-8859, extension 152.
Texas Mutual Insurance Company has given similar grants to Midland College and Kilgore College. The company also offers free workers’ comp workshops across the state. The workshops include a presentation by a Texas Mutual safety professional.
The grants and workshops are part of the company’s ongoing initiative to prevent workplace accidents.
“On-the-job injuries carry monetary and, most importantly, human costs,” said Russ Oliver, Texas Mutual Insurance Company president. “As the state’s leading provider of workers’ comp insurance, it is our responsibility to promote safe workplaces. Any time we have the opportunity to get that message to Texas employers, we consider it money well spent.”
Convenience Store Group Earns Second Texas Mutual Dividend
January 30, 2009 - Texas Mutual Insurance Company announced an $85,112 dividend to the Texas Petroleum Marketers and Convenience Store Association (TPCA) purchasing group today.
The group has earned more than $214,000 in workers’ compensation dividends during the past two years, largely by controlling its overall loss ratio.
In 2008, Texas Mutual paid a company-record $16.5 million in dividends to its qualifying purchasing groups. It paid nearly $150 million more in dividends to individual policyholders that had acceptable loss ratios, another company record.
Any licensed Texas agent can submit qualifying clients for TPCA group membership. In addition to potential dividends, TPCA members get a discount on their workers’ compensation premium and access to an industry-specific safety plan.
For more information, visit texasmutual.com/agents/pr_tpca.shtm.
Texas Mutual notes that past dividends are not a guarantee of future dividends. The Texas Department of Insurance must approve all dividends.
NFIB Members Earn $818K in Texas Mutual Dividends
January 22, 2009 - Two workers’ compensation purchasing groups offered through Texas Mutual Insurance Company and the National Federation of Independent Business (NFIB) have earned a combined $818,512 in dividends. The dividends were based largely on the groups’ overall loss ratios.
The NFIB construction purchasing group earned a $514,649 dividend, and the NFIB wholesale/retail purchasing group earned $303,863.
In November, a third NFIB/Texas Mutual purchasing group for the manufacturing industry earned a $446,998 dividend.
Small-business members of the three purchasing groups have shared in a combined $2.7 million in group dividends since 2003. Many have also qualified for a share of the more than $595 million in dividends that Texas Mutual has paid to individual policyholders during the past 10 years.
Texas Mutual notes that past dividends are not a guarantee of future dividends. The Texas Department of Insurance must approve all dividends.
Texas Mutual Gains Legal Ground in Oklahoma, Tennessee Cases
January 22, 2009 - Texas Mutual Insurance Company has secured legal victories in two workers' compensation cases that originated in Oklahoma and Tennessee.
On Jan. 16, 2009, Texas Mutual Insurance received a favorable ruling from U.S. Magistrate Andy Austin. This case involves a worker who was injured in Texas but sought benefits in the Oklahoma Workers' Compensation Court, which ultimately ordered the payment of benefits to the worker.
Wood Energy Group, the worker's employer, then requested a defense and indemnification from Texas Mutual. When Texas Mutual declined, Wood Energy threatened a bad-faith action. In this dispute, Judge Austin ruled that the policy covers Texas benefits only and that Texas Mutual is not liable for defense or indemnity. Judge Austin also recommended dismissal of all of Wood Energy's counterclaims.
Judge Austin's ruling is in the form of a recommendation to Judge Lee Yeakel of the U.S. District Court, Western District of Texas. If Judge Yeakel accepts the recommendation, Wood Energy can appeal the decision to the Fifth Circuit Court of Appeals.
Judge Austin's recommendation is particularly significant because it takes a different look at worker's compensation policies.
Judge Austin held that because it is a standard form mandated by a state regulatory agency, a workers' compensation policy should be interpreted through the "ordinary, everyday meaning of the words to the general public." Typically, insurance policy language is interpreted in a way that's most favorable to the insured.
"This court recognizes the significance of a state-mandated insurance form in a way that will be helpful in other policy coverage cases," Mary Nichols, senior vice president and general counsel of Texas Mutual, said.
In the Tennessee case, that state's Supreme Court dismissed Texas Mutual from a lawsuit involving the payment of benefits to an injured worker. This case involves an employee of a subcontractor of Texas Mutual policyholder Broadband Specialists Inc.
Lower courts in Tennessee had held that, under Tennessee law, Broadband Specialists was the "statutory employer" of the injured worker. Texas Mutual was ordered to pay part of the $127,190 that the worker was awarded for treatment of on-the-job injuries.
In its appeal, Texas Mutual argued that the trial court lacked personal jurisdiction over the insurance company, that the trial court erred in applying Tennessee's "statutory employer" rule to the Texas Mutual policy, and that Texas Mutual's policy did not cover subcontractors of Broadband Specialists.
In its Jan. 12, 2009, decision, the Tennessee Supreme Court ruled that the fact that Texas Mutual insures employees who may temporarily work out of state and the fact that Texas Mutual offers online insurance quotes were not enough to support general jurisdiction. The court ordered dismissal of all claims against Texas Mutual.
"This victory is important for this case, which had been a lengthy, expensive and pointless trip through the Tennessee courts," Nichols said. "The Tennessee Supreme Court has established a clear, solid precedent regarding jurisdiction over workers' compensation claims."
Texas Mutual, TRA Partnership Pays $3.2M Dividend
January 13, 2009 - Texas Mutual Insurance Company announced a $3,162,738 dividend to the Texas Restaurant Association (TRA) group discount program today. This marks the largest dividend in Texas Mutual’s history. It was based largely on TRA’s favorable loss history.
For TRA President Gerard Cace, who owns and operates Johnny Cace’s Seafood & Steak House in Longview, the dividend announcement was a welcome surprise in today’s troubled economy.
“Restaurants are the state’s leading private-sector employer. Nearly 1 million people work in our industry, and that number is expected to grow to 1.2 million by 2018,” said Cace. “These dividends will help our members continue to pay skilled food service professionals during difficult economic conditions.”
TRA is the state’s primary advocate for restaurateurs. It partners with Texas Mutual to offer a group discount program for its members. Restaurateurs who join the group get a premium discount on their workers’ compensation insurance, an industry-specific safety plan and potential dividends.
Any licensed Texas agent can submit qualifying clients for consideration in the TRA group discount program.
Texas Mutual notes that past dividends are not a guarantee of future dividends, and the Texas Department of Insurance must approve all dividends.
Busy Laborer Sentenced for Fraud
January 7, 2009 - Texas Mutual Insurance Company announced today that a Travis County district court sentenced Randy Alexander of Anahuac, Texas on workers’ compensation fraud-related charges.
The court sentenced Alexander to 30 days in jail, five years’ probation, 200 hours of community service and ordered him to repay $10,032 to Texas Mutual.
Alexander reported a job-related injury while working as a laborer for Channel Refractory Services Inc. in Channelview. He claimed he was unable to work as a result of the injury, and Texas Mutual began paying him income benefits.
Meanwhile, Texas Mutual uncovered evidence that Alexander was working as a laborer for nine different employers in Texas while receiving disability income benefits.
Investigators call this type of scam double-dipping because the claimant collects benefits for being too injured to work when he or she is gainfully employed.
Texas law requires claimants to contact their workers’ comp carrier when they return to work. Left unchecked, double-dipping can lead to higher premiums for all Texas employers.
For more information, visit the Fighting Fraud section at texasmutual.com.