Private insurer will no longer fund fraud prosecutions

Thanks to new money and oversight from the Texas Legislature, the state can now pursue workers’ compensation fraud cases without relying on an unusual and much-criticized funding deal between a private insurance company and the Travis County district attorney’s office.

The fix comes nearly two years after The Texas Tribune and the Austin American-Statesman revealed the controversial relationship between Texas Mutual Insurance, the largest provider of workers' compensation insurance in Texas, and government prosecutors in Austin. Under the exclusive funding deal, which stretched back at least to the early 2000s, the giant insurer paid millions to fund a four-person team to investigate and prosecute alleged “crimes committed against the company.”

The joint Tribune/Statesman series sparked widespread criticism and prompted Travis County authorities to adopt changes in an interim contract with Texas Mutual. That deal allowed other insurance companies to have their cases heard while routing all referrals through the Texas Department of Insurance. But Texas Mutual agreed to keep funding the unit until Sept. 1 of this year — just enough time for state lawmakers to come up with a new source of money during the 2017 session.

Now, under a provision quietly tacked onto the budget adopted by the Legislature late last month, the state will fund the prosecutorial unit with a two-year, $675,000 appropriation. The money will come from the maintenance tax collected from workers' compensation insurers.

Read more: https://www.texastribune.org/2017/06/06/private-insurer-will-no-longer-fund-fraud-prosecutions/