Fairfield County employer admits to faking workers’ comp coverage

newellLANCASTER – The owner of a Fairfield County excavating company has admitted to falsifying his workers’ compensation insurance coverage certificate in order to submit bid proposals to the city of Lancaster. William Newell, of Pleasantville, pleaded guilty to workers’ compensation fraud and must repay more than $5,000 to the Ohio Bureau of Workers’ Compensation (BWC).

“Businesses in Ohio are required to maintain workers’ compensation coverage to protect their employees and care for them if injuries occur,” said BWC Administrator/CEO Steve Buehrer. “Falsifying a coverage certificate is not only against the law, it’s unfair to honest employers that are placed at a competitive disadvantage.”

BWC’s Special Investigations Department opened an investigation into Newell after receiving a tip that he submitted an altered BWC certificate of coverage for his business, Bill Newell Excavating, as part of a bid proposal to the city of Lancaster. After the city notified him he needed to obtain coverage in order to submit bids, Newell submitted all outstanding payroll reports to BWC indicating he did not have any employees or payroll. He also paid past due premiums and fees in order to become compliant and receive a valid certificate of coverage.

Through the investigation, BWC’s employer fraud team obtained three additional false certificates that Newell submitted in bid packets during recent years. When interviewed, Newell initially denied having any knowledge of the false certificates but later admitted creating and submitting them. During the interview Newell stated that he always had employees, but later stated he did not have employees and hired sub-contractors.

The investigation ultimately found that Newell did have employees and that he underreported his payroll in order to avoid paying premiums.

Newell entered a guilty plea to one fifth-degree felony count of workers’ compensation fraud on Nov. 17 in the Fairfield County Court of Common Pleas. He was sentenced to a six month prison term, suspended for three years of community control. The conditions of his community control include a restitution payment of $5,404.90 to BWC, and a continuing obligation to provide the court proof of his premium payments.

To report suspected workers’ compensation fraud, call 1-800-644-6292 or visit bwc.ohio.gov. Check out our latest cases at ohiobwcfraud.wordpress.com, follow Fraud Fridays on Twitter @OhioBWCFraud, or join in the conversation at facebook.com/ohiobwcfraud. View and share BWC’s workers’ comp fraud awareness video on our YouTube channel.

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Putting our data to use

As the sole provider of workers’ compensation insurance coverage in the state, BWC possesses a comprehensive set of data not available in many other states. Putting this data to use can offer insight into a number of issues that challenge the entire workers’ compensation industry and offer guidance on improving care for injured workers.

That’s why BWC contributes to research and participates in studies that can be instructive to us here in Ohio, as well as our counterparts across the nation.

Lumbar Diskography and Failed Back Syndrome in Patients Receiving Workers’ Compensation is one recent example.

The findings of another study, Chronic Opioid Therapy after Lumbar Fusion Surgery for Degenerative Disc Disease in a Workers’ Compensation Setting, were used in updating recommendations in the Official Disability Guidelines, which is widely utilized across the workers’ comp industry.

“We appreciate the support and collaboration of Ohio BWC in continuing to refine the ODG guidelines to most accurately reflect the ever-growing evidence base regarding potential therapies for workers’ compensation and general health populations,” said Phil Denniston, President of the Work Loss Data Institute, which publishes ODG.

Keeping employees safe at work is all about reducing risk

By Glenn McGinley, Director,PERRP picture Ohio Public Employment Risk Reduction Program

Risk is something that each of us is exposed to every day of our lives and it intrudes on us as soon as we wake up in the morning. We head to the kitchen, put on a pot of coffee and assume the risk of using the electrical outlet or range, the coffee pot, the coffee itself and even the water coming out of the tap. We make an unconscious assumption that each component is “safe” and that our contact with each of them will not result in death or serious physical harm.

Behind the scenes, though, engineers, manufacturers, and others have identified risks associated with each element of our morning coffee (e.g., contaminants, equipment design and installation) and attempted to implement appropriate controls to keep us safe. But, controls do not just magically appear; hard work and diligence go into their identification and implementation.

In the same way, employees go to work every day and fully expect at the end of the working day they will return home unharmed. Those employees have a right to expect that the risks associated with their day have been assessed and that appropriate controls have been identified and implemented to keep them safe.

In the workplace, the identification of risks and hazard controls are an important responsibility that primarily falls on the employer. A safe workplace isn’t achieved by luck. It requires commitment, planning, training and involvement from each and every person.

A recent article (infographic) in EHS Today identified the “world’s most dangerous jobs” and asked the question: “Are they worth it?”

As I looked over the EHS Today infographic, I was struck by the similarity behind the tasks each of those professions performs and those performed by public employees (state, county and local government agencies).

Public employees build and maintain buildings, roads and bridges (construction workers); use farm machinery, manage livestock and apply pesticides (agricultural workers); drive small and large trucks to carry cargo (truck drivers); install and maintain the electrical power lines (power workers); collect trash (refuse collectors); inspect mining and drilling operations (mining); install and maintain roofs on public buildings (roofers); fly airplanes and jets (aircraft pilots and flight engineers); operate and maintain fisheries, hatcheries and associated research facilities (fishers and related fishing workers); trim, fell, haul trees and chip brush (logging workers).

Public employees are exposed to very hazardous conditions as they work behind the scenes every day in communities across Ohio to manage programs and provide services to keep each and every one of us safe.

I manage the BWC Public Employment Risk Reduction Program (PERRP), which helps Ohio public employers identify risks in their workplaces and determine reasonable methods of reducing those risks. PERRP’s role is to ensure safe working conditions for Ohio’s public employees by adopting and enforcing standards, and providing training, education and assistance. We are here to help, just ask!

To ask questions, obtain compliance assistance, file a complaint, or report workplace multiple hospitalization accidents, fatalities or situations posing imminent danger to public employees, call PERRP’s toll-free hotline at 800-671-6858 or send us an email at PERRPRequests@bwc.state.oh.us.

Blogger panel inspires discussion on weighty workers’ comp issues

kendraKendra DePaul, Special Assistant to the BWC Administrator

It only makes sense that BWC’s blog would feature a post about the National Workers’ Compensation and Disability Conference’s annual bloggers’ panel. Every year, this is a favorite event of the week, where the best-known bloggers in workers’ compensation share their perspectives and reflections on the future of the industry.

Blogger PanelThis year’s panel included David DePaolo, J.D., President and CEO of WorkCompCentral.com and author of DePaolo’s Work Comp World blog; Joseph Paduda, Principal at Health Strategy Associates and author of Managed Care Matters blog; Rebecca Shafer J.D., President, Amaxx Risk Solutions Inc. and author of ReduceYourWorkersComp.com blog; and Robert Wilson, President and CEO, WorkersCompensation.com and author of the From Bob’s Cluttered Desk blog. The panel was moderated by Mark Walls, VP Communication & Strategic Analysis for Safety National.

The group is a diverse one in terms of expertise and perspective, which lead to a lively and interesting discussion.

Not surprisingly, the first issue to come up was the “Grand Bargain” of workers’ compensation and the on-going discussion about whether the system is working as it should.

Here in Ohio, BWC was established in the Ohio Constitution in 1912 and has been providing workers’ compensation to Ohio employers and employees for over 100 years. The Ohio Constitution clearly defines the purpose of BWC:  to provide “compensation to workmen and their dependents, for death, injuries or occupational disease, occasioned in the course of such workmen’s employment.” And on the employer side, it was established that any employer who pays into the system “shall not be liable to respond in damages at common law or by statue for such death, injuries or occupational disease.” It set up the very fundamentals of the “Grand Bargain.”

Over the past 100 years, BWC has evolved but it is safe to say the employees of BWC still work each and every day to assure that injured workers are properly care for and that employers are getting valuable protection for the premiums they pay.

The overall thoughts of the panel on this subject were that there are always improvements to be made to the system, and that we should get mad when errors are made, but overall, most people in the system are trying to do the right thing. This could be evident in the fact that over 2,000 people gathered at the conference to think and learn about ways to improve the system.

And here in Ohio, it is not any different. We are constantly looking for ways to better serve our customers, the employers and injured workers of Ohio.

In that same vein, the conversation then turned to where the bloggers thought the industry would be in 10 years. I think everyone in the workers’ compensation industry, including BWC, has realized that the market is changing and we have to be aware of what is on the horizon.

Earlier this year, BWC managers and supervisors heard from Karen Furtado from Strategy Meets Action about the technology changes that are in our future. Thinking about the fact that 10 years ago, there were no smart phones, makes you wonder what kind of technology will be around in 2025. She talked about how wearable devices, new payment technology and drones could change the industry in the future.

The bloggers talked about similar changes. Bob Wilson said that robots and automation will change the types of claims we will have going forward. And that he is already seeing changes in how we use technology to monitor the health of an individual.

David DePaolo talked about the changes surrounding independent contractors, such as Uber drivers, and about the need to protect these people as well. As industry forces change the way we define employees, he believes the industry is well-suited to provide solutions to all sorts of employment relationships.

Another common theme was the blurring of lines between healthcare and workers’ compensation. The data has shown that you cannot simply ignore other conditions of an injured worker outside of workers’ compensation. We know those conditions affect the outcome of a claim and we need to challenge ourselves to find ways to improve the general health of the customers we serve. BWC is already looking at some of these issues through its Enhanced Care Pilot.

You know, when I tell people I work in workers’ compensation, I know they probably think it is the most boring job in the world. But it’s not. It is a dynamic, challenging landscape, where you have the ability to help real people. Is there a better way to spend our days?

Massillon woman bets wrong; fraud scheme ends up a bust

Brenda Pumphrey of Massillon (Stark County) claimed a workplace injury caused her to lose use of each hand, one arm and one leg. After surveillance at a West Virginia casino showed no limp and full use of her arms, Pumphrey’s luck ran out and she ended up pleading guilty to workers’ compensation fraud.

An investigation into Pumphrey’s claim started with a speeding ticket. SID received an allegation from a BWC Customer Service Specialist that Pumphrey was issued a speeding ticket in Stark County on a date following her claimed loss of her ability to use her upper extremities.

A case was opened and a review of the claim showed that Pumphrey’s physician of record had continuously advised that she was unable to use her extremities but was reluctant to obtain some treatment that was advised.

Agents conducted surveillance of Pumphrey visiting her doctor’s office. Additionally, Pumphrey’s bank records showed a high volume of ATM and debit card activity at the Mountaineer Casino, located in Chester, West Virginia. Video from the casino showed Pumphrey walking with no noticeable limp and with full use and range of motion of both arms.

The physician concluded after seeing the casino video that it appeared Pumphrey had intentionally deceived him. The Ohio Industrial Commission terminated her Permanent Total Disability benefits.

On Friday, Oct. 16, Brenda Pumphrey was sentenced on her previously entered guilty plea to a felony count of workers’ compensation fraud. She was placed on community control for three years and ordered to pay restitution of $9,192.75. Pumphrey will serve six months in jail if she violates the terms of community control.

BWC SID: Our Journey to Excellence – Part 3 of 3

By Jeff Baker, Program Administrator, BWC Special Investigations Department

In our constant quest for improvement, all members of the Bureau of Workers’ Compensation Special Investigations Department (SID) annually complete in-service training. The theme of this year’s training event was “Our Journey to Excellence: Past, Present and Future.” On October 22, by SID Director James Wernecke, we shared investigative successes and presented awards to teams and individuals.

Preparations: In September, all 123 SID employees had been invited to nominate a peer to receive an individual award. A management committee furnished behavioral characteristics for use by SID employees when submitting written justifications for any peer nomination. These characteristics varied according to the type of award: Star; Excellence in Service; and Leadership. In reviewing all nominations, the committee members found that several nominees were nominated by multiple colleagues. Ultimately, the committee selected eight most-worthy SID employees.

Presentations: These talented and dedicated professionals received their awards at the culmination of the October 22 event.

fraud part 3 pic 1Two employees received Star awards, including Karen McMahan (pictured at right), a Registered Nurse with the Health Care Provider Team (HCPT). They met five criteria including: approaching new challenges with a “can do” attitude; involving themselves above and beyond in community outreach and/or volunteerism; and encouraging and mentoring peers and co-workers.

Fraud part 3 pic 2 Four employees earned Excellence in Service awards, including T. Michael Hostin (pictured at left), an investigator with the Safety Violations Investigation Unit (SVIU); and Pam Hunnicutt (pictured below), an administrative professional with SVIU.

They met four standards including: fraud part 3 pic 3
demonstrating extraordinary commitment by continuously providing excellent service to internal and external customers; and demonstrating a positive attitude, using strong judgment and good communication skills while promoting teamwork.

Two other employees received Leadership awards. They satisfied six criteria, including: setting a high standard of integrity; leading by example and maintaining high personal standards; inspiring a high level of commitment from others when taking on new initiatives; and sharing responsibility, authority, information, and credit when working towards the achievement of a goal.

Please, join us in thanking and congratulating each of the SID award nominees and recipients. They are the reason we are able to confidently strive towards excellence.

You can read the first article about our October 22 event here, the second article about the event here, and our most recent annual report here.

Fraud, integrity the focus of recent conference

By Jeff Baker, Program Administrator, BWC Special Investigations Department

fraud badge 2 2015Two fraud analysts and a special agent from the Ohio Bureau of Workers’ Compensation’s Special Investigations Department (SID) attended the two-day Targeting Fraud: Safeguarding Integrity conference in Columbus. During the conference, they gleaned ideas from the latest information on specialized investigative topics, such as cybercrime, ethics laws, surveillance, social media and the investigative use of geocoded photo metadata.

The SID employees will share what they’ve learned with their colleagues, and use those strategies while conducting joint investigations with other law enforcement professionals, some of whom also attended the conference on November 4 and 5.

Ultimately, using what they learned at this and other training seminars, SID professionals seek to secure even more results than the $60.5 million in savings they identified last year, as outlined in our FY 2015 annual report.

For more articles from our blog, please visit ohiobwcfraud.wordpress.com.

The big business of health care provider fraud

As you can see from reading this blog, we take all types of fraud seriously and fraud committed by health care providers is no different.

In fact, in 1994 we created the Health Care Provider Team (HCPT) to exclusively investigate this type of fraud.

This past fiscal year HCPT closed 64 cases, identified $19M in savings, made 11 criminal prosecution referrals, and obtained 3 convictions.

Just to give you an idea of the types of fraud committed by health care providers, here are a few of our most notable, recent cases.

Lawanna Porter, of Shaker Heights, who operated Palladium Healthcare, a home healthcare agency with more than 100 employees, failed to report having employees to various state agencies or to secure workers’ compensation, and failed to report her payroll to BWC. SID conducted this joint investigation with the Ohio Attorney General’s Office, Medicaid Fraud Control Unit. In addition to restitution, Porter was ordered to pay BWC $15,000 in investigative costs, for a total of $139,573. She was also sentenced to five years of community control. If she violates the terms of her sentencing, Porter could be sent to prison for 11.5 years.

Nelsonville chiropractor Michael L. Brown, D.C., whose patients were not at his office on days that he billed BWC for treating them, including dates his office was closed, and who fabricated the amount of treatment he provided to patients to receive a higher payment for services. Brown was ordered to pay $394,021 in restitution, which includes approximately $60,000 in investigative costs. He was sentenced to five years of probation. If he fails to comply with the terms of his probation, Brown could be sentenced to serve nine months in jail. Brown voluntarily decertified himself as a BWC health care provider.

Jeffrey Stychno, D.C., an Ohio chiropractor was sentenced to pay $89,000 in combined restitution to Medicaid and the Bureau of Workers’ Compensation (BWC). Stychno was ordered to pay $69,781 to BWC and $19,715 to Medicaid after he was convicted of fraudulent billing practices during his time as co-owner of Integrated Health in Warren, Ohio.

Joseph J. Yurigan, D.C., a chiropractor who formerly practiced in Weirton and Wheeling West Virginia was sentenced for health care fraud and tax evasion. Our investigation revealed Yurigan was routinely and consistently billing for services that he never provided to undercover operatives. The Federal Bureau of Investigations, the West Virginia Department of Insurance Commission, United States Treasury Department and the United States Attorney’s Office became involved in the investigation and executed a search warrant. Yurigan pleaded guilty and yesterday was ordered to make restitution totaling $836,066.

After reading these cases you have most likely come to the same conclusion…this big business is just not worth it!

Safety consultants: a resource you should use

By Daniel Feeney, BWC Technical Resource Consultant

Over my career as a BWC Safety Consultant I have met with many employers regarding occupational safety and health.  All of them wanted a safe workplace and none of them wanted anyone hurt at work. Some were more advanced in accident prevention; some were at a basic level of safety compliance.

As an employer, maybe you are asking, “what does a BWC safety consultant do?”  Well, in a nut shell we help employers and employees identify workplace conditions that may be hazardous or cause injuries. As consultants, we look for solutions.

Employers are faced with many tasks. Take for example an excavation company that has been contracted to install a concrete pipe storm sewer.  They know how to operate the back hoe, they know how deep the pipe has to be, and they know how to construct a manhole. They probably have the experience to identify the soil type and select  an appropriate protective system to prevent injuries from soil collapse.

I made contact with just such an employer a few years ago. I began working with them conducting jobsite safety observations. We identified some concerns, items covered in the Ohio Administrative Code and/or OSHA: a defective ladder, spent fire extinguishers. These were corrected right away. I asked about the progression of the job, they had advanced to the finishing stage. One of the tasks was to place the covers of the manholes. I had worked with other excavation employers and one had experienced a back injury when an employee was placing manhole covers manually.  I recognized the potential for this employer to be exposed to the same kind of injury and helped them brainstorm solutions.   They came up with the idea to use a magnet attached to a skid steer loader to mechanically lift the sewer lids in place, avoiding the potential injury.

Is your safety process effective? Do your employees have safety concerns you’re not sure how to address?  Could you benefit from a review of your safety programs?  We can help.

This is just one example. As BWC Safety Consultants, we can help with all types of safety issues, from very specific things like confined spaces and machine guarding, to conducting a comprehensive assessment of an employer’s safety program. We are able to provide these services at no charge to Ohio employers as part of their BWC premium. 

Another type of BWC certificate: Showing our appreciation to yet another source

By Jeff Baker, Program Administrator, BWC Special Investigations Department

Normally, when our readers think of the words “BWC” and “certificate”, they think of the BWC Certificate of Coverage. This makes sense. The certificate is widely seen and easily recognized. It is the official document employers often frame to display within their business.

Understandably, the law-abiding business owner wants every employee and customer to see that they have secured workers’ compensation coverage from our agency. They know that others see it as proof of the business’s legitimacy and a sign of the owner’s prudence.

TCertificate fraudhat might explain why Shelly Young, the co-founder and co-owner of a Cambridge business, Acute Nursing Care LLC, was surprised when we contacted her, asking to present her with another type of BWC certificate: a Certificate of Appreciation.

Scott Lape, a Special Agent in Charge with the Special Investigations Department (SID), explained to Mrs. Long that the certificate acknowledges the business owner’s referral of a fraud allegation to BWC – a referral that had resulted in the successful prosecution of the subject.

Signed by SID Director Jim Wernecke, the framed certificate is a simple way to demonstrate our thanks to Shelly Long and others who are our partners in combating fraud.

Significantly, Mrs. Long will receive her Certificate of Appreciation during International Fraud Awareness Week (IFAW) 2015. Sponsored annually by the Association of Certified Fraud Examiners, IFAW is dedicated to the prevention, identification and investigation of fraud – wherever it might occur throughout the world.

Just like Shelly Long, you are our eyes and ears in Ohio! Thank you for your help in stamping out fraud, and please, keep those tips coming. To report workers’ comp fraud to BWC, click here or call our fraud hotline at 1-800-644-6292.