The Alleged Claim of Fraud

Edward notifies Michael he’s placing a claim with the workers’ compensation system, (WCB) He retains a work comp attorney, Kevin Davis and files “Employee’s account to injury”.

Michael notifies his workers’ compensation insurance carrier, National-Sentry Insurance Company (Sentry) and files his “Employer’s account to injury”. Michael states on his form, he caused and witnessed the injury.

Sentry calls Edward and demands an oral statement to the accident, or risks losing his benefits. Edward refuses stating he is represented by attorney Davis and provides his phone number. Sentry threatens Edward that if he doesn’t provide a statement, they will deny the claim. Edward hangs the phone up.

At the beginning, Sentry files a claim stating Ed’s injury never happened, as it was preexisting. It will take 11-months for the WCB to rule on his claim. Meanwhile, Sentry refuses to pay Ed lost-wage benefits and refuses to authorize any medical treatments. As a result, Ed’s finances dwindle and becomes penniless, homeless and ends up living in his Jeep with his dog.

After several court hearings during the 11-months, the WCB rules the claimant’s injury is compensable and orders Sentry to pay all benefits retroactively. Sentry has alleged fraud by Edward several times since his initial filing, however the WCB concluded no fraud had occurred to each claim. It was a stall tactic by Sentry, while playing the float.

While still going through to physical-therapy, Ed moves back to California to be closer to family. Edward receives a referral to a local doctor, Dr. David Reynolds. Edward’s two doctors collaborate to his medical needs and he starts medical treatments while continuing physical therapy.

Sentry calls and insists Ed sees one of their doctors, Dr. Leo Henderson, a Neurosurgeon for a medical evaluation to determine if surgery is a viable option. On January 27th, Ed meets with Dr. Henderson and provides him with a CD containing all his medical records. The consultation takes 8-minutes.

On February 1st, Ed receives a 7-page report from Dr. Henderson. The report concludes with treating Ed first with Epidural Steroid Injections (ESI), prior to the consideration for surgery. Ed meets with Andy, a work acquaintance. Andy, asks if he could redesign a business card and add a new address. He was told it pays $80.00.

At 4:48pm, Ed calls his attorney and leaves a message on his voice mail. The message stated, he received the report from doctor Henderson, he was asked to redesign a business card and asked him to call back as soon as possible. The call lasts 4-minutes.

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Playing the Float

Playing the Float is the lag between the time that an insurer establishes a reserve for a claim that has occurred and the time that the claim is fully paid and closed. In a workers’ compensation industry, it’s the opportunity to earn increased investment income as the lag between the filing of a claim and payment of a claim increases, thus insurers have an incentive to delay or even deny claims. The use of fraudulent tactics to delay payment on a claim, increases with each day passing. As in the hypothetical case presented in this case, that “lag” extended over 7-years.

Dr. Leo Henderson, a Neurosurgeon is the doctor requested by Sentry