Fraud Identification and Mitigation Flashcards
7 cards from real CU practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Fraud Identification and Mitigation flashcards as text
A medical provider billing an insurer for treatments using a deceased physician's NPI number is an example of:
Answer: Phantom billing using a stolen provider identity
Billing for services using a deceased physician's NPI constitutes phantom billing combined with identity theft, as no legitimate provider rendered the billed services.
Which anti-fraud tool allows insurers to cross-reference policy and claims data across multiple carriers to detect duplicate claims?
Answer: ISO ClaimSearch database
ISO ClaimSearch is an industry-wide database that allows insurers to identify whether a claimant has filed similar claims with other carriers, detecting duplicate or coordinated fraud.
An insurance agent who issues a policy without the applicant's knowledge and then forges the insured's signature on the application is committing:
Answer: Agent-produced fraud
When an agent issues a policy without the applicant's knowledge and forges signatures, this is agent-produced fraud, a serious violation that exposes both the agent and potentially the insurer to liability.
The concept of 'red-flag rules' in underwriting fraud detection requires underwriters to:
Answer: Document and escalate suspicious indicators for further review
Red-flag rules require underwriters to document suspicious indicators and escalate them for SIU or management review rather than making unilateral denial decisions.
Which of the following best describes 'fronting' in the context of insurance fraud?
Answer: A high-risk driver using a low-risk driver as the named insured to obtain lower premiums
Fronting occurs when a high-risk driver (typically excluded or uninsurable) uses another person as the named insured to fraudulently obtain lower auto insurance premiums.
Under NAIC guidelines, when must an insurer's SIU refer a case to law enforcement?
Answer: When there is sufficient evidence to believe a crime has been committed
NAIC guidelines require SIUs to refer cases to law enforcement when there is sufficient evidence to reasonably believe criminal fraud has occurred, regardless of dollar thresholds.
A pharmacy billing an insurer for brand-name drugs but dispensing generic equivalents to patients is an example of:
Answer: Substitution fraud
Substitution fraud occurs when a provider bills for a more expensive product (brand-name drug) while providing a cheaper alternative (generic), pocketing the price difference.