"Twenty years ago my division was primarily involved in inspecting claims made on house fires and auto fires," said Goldie Rhodes, special investigations unit team manager for State Farm Insurance, West Virginia. "Today, a large portion of my unit's claims are related to billing fraud in the medical industry."
Rhodes' unit at State Farm Insurance performs the initial investigation of claims to determine if fraud is suspected and if there's a motive for fraud.
Over the years, he has seen many multi-claim investigations involving staged accidents where multiple people cite injuries and file claims. For some, it's a family affair. Rhodes has worked cases where groups of families have filed numerous claims over time to fraudulently recover damage. In investigating these situations, Rhodes and his team rely on databases to track fraud claims through history. They can look for groups of family members trying to file separate claims and can also pull bank and credit card records. The unit uses software predictive modeling to analyze data and determine whether fraud has been committed.
One of the most famous cases Rhodes' team worked on involved four chiropractors: Ronald L. Halstead, William C. Filcheck, Jr., Scott G. Taylor and Robert B. Burns, Jr. The men were found guilty in 2003 of varying crimes including conspiracy to commit mail fraud, health fraud and money laundering.
The case was based on patient billing, manipulation of codes used by health insurance companies to determine reimbursement, basis for treatment and forged medical billing records that made it appear that doctors had signed off on the treatments recommended by chiropractors.
According to Rhodes, over $800,000 was found buried under a fence post on Halstead's farm in Arizona, and the United States of America v. Ronald L. Halstead found that roughly $1.3 million in fraudulent billing was billed to health care providers and insurance companies during the health fraud scheme that occurred in Morgantown, W.Va.
Unfortunately, the insurance industry isn't alone. Internationally, companies are experiencing ongoing issues with employee theft, white-collar crime, management fraud and embezzlement. In 2010 the Association of Certified Fraud Examiners reported that between January 2008 and December 2009, organizations around the world lost an estimated 5 percent of revenue due to fraud.
In response to the demand for fraud investigation, Mountain State University's School of Business and Technology now offers new degree concentrations in forensic accounting and fraud examination, online and at the Beckley campus.
The concentration in forensic accounting and fraud examination is an option available for those pursuing the Bachelor of Science in accounting. The fraud examination concentration is an option for students in the Bachelor of Science in business administration program or the Associate of Science in accounting program. Students pursuing these concentrations are also eligible to work toward the Certified Fraud Examiner credential.
Though forensic accounting and fraud examination are different fields, the practices are related. A forensic accountant works to detect fraud, while a fraud examiner is consulted if fraud is suspected. Employees working in forensic accounting and fraud examination are often considered financial detectives and are expected to be able to effectively conduct interviews and analyze data to assist prosecuting attorneys.
MSU's new programs teach students to identify "red flags" of fraud, comply with current regulations and develop and implement effective preventative measures.
"Now is the perfect time to get involved," Rhodes issued praise for MSU's new concentrations in fraud examination and forensic accounting. "Most effective investigations now will hinge on data. We need more experienced people to do data analysis. Many companies are going outside of their organization to hire people that can do in-depth data analysis."
To learn more about the forensic accounting and fraud examination degree concentrations at MSU, call 866-367-6781.