State Regulators Call for Increased Funding for WC Fraud Prosecutions

The restructuring of Texas Mutual Insurance Company’s arrangement to support fraud prosecutions through the Travis County District Attorney’s office has caused state regulators to call for increased funding to take up the slack. State Commissioner of Insurance, David Mattax, and Texas Commissioner of Workers’ Compensation, Ryan Brannan, told the Senate Insurance Committee on March 30, 2016, that their agencies do not currently have the staffing or budgets to take on the fraud prosecutions resulting from Texas Mutual’s investigative recommendations.

Testifying before the committee at the Capitol Wednesday, state regulators said a fix would also require financial help from state lawmakers, who convene in regular session early next year. Already, the Texas Department of Insurance’s Division of Workers’ Compensation doesn’t have enough resources to investigate all of the fraud referrals it gets from other workers’ compensation insurers, they said.

Division head Ryan Brannan pointed out that it only had five allocated investigators pursuing workers’ compensation fraud cases. By contrast, he said Texas Mutual had over 20 investigators and support staff looking into fraud perpetrated against the company.

“If there’s an option secured by the Legislature and the contract is allowed to expire then the Texas Department of Insurance would be unable to handle the additional caseload of fraud referrals from Texas Mutual,” Brannan said. “We do not currently have the resources to take on 40 percent of the marketplace.”