Frasco Investigative Services Tracks Down Insurance Fraud

By Nicole Zaro Stahl, Hacienda Network Staff Writer

Headquartered in Burbank, Frasco Inc. has been providing insurance investigation services throughout the western United States since 1964. A recent strategic partnership with another leader in the field, Falls Church, Virginia-based USIS, a major supplier to the federal government, now gives the combined organizations the ability to offer nationwide, end-to-end solutions in support of fraud detection, regulatory, and monitoring needs.

The company consists of three divisions, the largest of which is Frasco Investigative Services, primarily focused on workers' compensation, auto accident, and liability investigations. Frasco Profiles is the pre-employment background division, providing screening and drug testing on a nationwide basis. Frasco Workplace Investigations provides investigative services to assist in the evaluation of workplace misconduct allegations. Frasco also offers periodic sexual harassment prevention training to California companies with 50 or more employees, as mandated by state statute.

Steven Schulmeister is the branch manager of the Bay Area California office of the Frasco Investigative Services, at 4637 Chabot Drive. "Our forte is all avenues of insurance investigation," he comments. Most of the branch's activity relates to workers' compensation, automobile liability, and general liability cases - for example, slip-and-falls at retail stores.

The investigator's job is to collect information for what the industry calls AOE/COE statements, referring either to an incident that arose out of employment or occurred during the course of employment, respectively. Interviews with the injured party, supervisors, and possibly coworkers or witnesses are part of the process. "This gives us an outline of what all has occurred during the course of the injury at work. We want to do this early on when thoughts are fresh, compared to six months down the road when details get forgotten," Schulmeister notes.

Throughout the process Frasco investigators are looking for inconsistencies or contradictions - an injury that happened on a date the employee was not working, or a history of disciplinary actions for not wearing appropriate safety gear, for example. "Add-on" injuries seem to be on the rise. "We used to see more incidents that were cut and dried, like a back injury where a person can no longer bend over. Now we are seeing claims for more than one injury: someone hurt his back and right shoulder and also incurred a psychological injury, which is a little more difficult to document," Schulmeister relates. A claim of stress might have causes beyond the workplace, and through interviews with the employer or coworkers, investigators might uncover factors like a recent divorce, financial hardship, or a family illness.

"There is a long equation to determine if someone has become disabled and to what extent," Schulmeister says. "There are depositions with attorneys, medical reviews, doctors' appointments, and surveillance, along with the interview with the claimant. We provide just one variable of the whole equation."

Schulmeister points out that California is quite progressive when it comes to insurance fraud. "We were one of the first states to actually consider insurance fraud a felony. People can go to jail, or pay restitution in the hundreds of thousands of dollars. It's a good deterrent," he allows, concluding, "it is still important for the insurance company to investigate claims and make sure they are justified."

For more information, visit www.frasco.com.

Photo: Frasco's Steven Schulmeister is sometimes called upon to surveil suspected fraudsters.

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