WorkCompCentral reported [sub req] this morning that a Pennsylvania County was defrauded by its risk manager to the tune of $490,000. The County’s TPA (Inservco, owned by Penn National) paid $490,000 for fraudulent bills approved by Dauphin County’s risk manager. The County discovered the scam when the risk manager, Garry Esworthy retired and the county reviewed the bills and payments to a company he’d set up in his wife’s name.
While there’s plenty of embarrassment to go around, it appears that the scam was easy to perpetrate. As the risk manager, Esworthy had the ability and authority to approve payments for bills processed by Inservco. He set up a company in his wife’s name, and submitted bills to Inservco. The TPA processed the bills, then sent them to Esworthy for approval. Once he signed off, the checks were cut and sent to his account.
The scam was discovered after he retired and a County official looked into some of the bills and became suspicious.
Evidently Inservco is not to blame in this case. WorkCompCentral’s Mike Whiteley reported that earlier this year Inservco “came under fire from New Jersey State Comptroller Matthew Boxer, who said the company failed to disclose “side agreements” with bill repricing vendors it hired as TPA for the New Jersey Sports and Exposition Authority and for a city, county, and school district in New Jersey.” (the NJ Sports and Exposition Authority is a former HSA consulting client)
Boxer released an alert indicating “New Jersey governments could be wasting taxpayer dollars if they don’t closely monitor companies they hire to administer workers’ compensation claims…”
Tragically, I am not the slightest bit surprised. I have many great friends that are loyal and dedicated public sector employees. That said, the public sector has long suffered from a disconnect between revenue and expenses. This results (often) in easily exploitable controls. My question: where was the comptroller?
As a taxpayer-resident of the defrauded County of Dauphin in Pennsylvania, I am nothing short of #/@%*! P-O’d that Mr. Esworthy has reached into my wallet and all my neighbors’ wallets, against our collective wills, to pad his own. Sadly, I am no longer shocked by human greed like this. That said, checks and balances are obviously sorely lacking at the County level, which is where the root of the problem lies. However, since this kind of thing could be perpetrated against any TPA customer by any health care provider, especially those customers who are disconnected from the claims function, wouldn’t it behoove Inservco and other TPAs to bundle (transparently of course) some additional fraud controls in with their offering of services? Pie in the sky, perhaps.