Claims processing system investigation reveals areas of fraud risk for long-term care insurance provider

Our client’s need

One of the largest providers of long-term care insurance in the US, a public company listed on the New York Stock Exchange, became concerned when the relationship of insurance payments to the number of claims could not be analytically derived or explained.

Baker Tilly solution

Baker Tilly was engaged to perform a forensic analysis of their claims processing system. We focused on the possibility of misappropriations of claim payments through internal fraud, and developed testing procedures to identify areas where the claims process was susceptible to fraud, errors, and weaknesses in controls.

Results achieved

While specific incidences of fraud were not discovered, the forensic investigation process identified issues and methodologies that inherently exposed the company to improper (overpayment or underpayment) claim payments. The results of our investigation were communicated to the Board of Directors and the written report was used by another accounting firm for Sarbanes-Oxley compliance work.

For more information on this topic, or to learn how Baker Tilly forensic investigation specialists can help, contact our team.