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MEM goes on record in support of HB 1166

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Missouri Employers Mutual Insurance has expressed its full support of new anti-fraud legislation that would increase the penalty for workers' compensation fraud from a misdemeanor to a felony, according to a release from MEM.

MEM President and Chief Executive Officer Dennis Smith testified before the House Workers' Compensation and Employment Security Committee Jan. 26, expressing his company's support for the legislation, House Bill 1166, according to the MEM release. Currently, a person convicted of defrauding the Missouri's work comp system is charged with a Class A misdemeanor. The maximum penalty is one year in county jail and a $1,000 fine for individuals, according to MEM.

HB 1166, sponsored by Rep. Randall Relford (D-District 6), would give work comp fraud the full weight of a Class D felony, which has a maximum penalty of five years with the Division of Corrections and a $5,000 fine for individuals.

"We're either serious or we're not serious about fighting work comp fraud in this state," MEM's Smith stated. "We need to strengthen the fraud statutes. We need to put some teeth into them and give prosecutors something to run with."

It is hoped the tougher penalties would offer a strong deterrent for those who might commit fraud, the release stated.

According to the National Council on Compensation Insurance, work comp fraud drains the nation's economy of $2 billion to $8 billion annually, resulting in higher premiums and forced cutbacks in jobs and benefits by employers, MEM stated.In 1997, MEM was responsible for half of Missouri's work comp fraud convictions four out of eight. However, MEM's three full-time fraud fighters alone referred 119 fraud cases to the state in the last two years.

"Four convictions out of 119 referrals is unacceptable," Smith said in the release. "There are 115 allegedly fraudulent cases just sitting there. That's a lot of dollars for us dollars that translate into increased premiums for our policyholders."

MEM is lending its support to HB 1166 as opposed to another antifraud bill, HB 1154.

HB 1154, sponsored by Rep. Michael Gibbons (R-District 94), would penalize fraud offenders with a Class C felony. However, MEM stated, unlike HB 1166, it does not target all potential defrauders. HB 1166 includes all categories of work comp fraud: claimant, employer, insurance carrier, agent, medical provider and legal.

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