Philadelphia Transit Agency Tries to Track Down Phony Accidents : Mass Transit Agency Tracks Down Fraud

In this city, where favorable laws, lawyers and cooperative doctors can make insurance fraud a popular sport, Douglas Collins’ story is typical. To a point.

On Jan. 20, 1984, Collins crawled up the steps of his South Philadelphia home in obvious pain. He told his wife he had been hurt as he pushed a woman’s car out of the snow and wooden blocks under the tires shot out and hit him.

That part was true. Doctors treated him for fractures in his neck and legs and gave him a neck collar and crutches.

The next day, Collins left the crutches and collar at home, got on a bus and at one of the stops, threw himself out the door. At the hospital, he laughed as he told his wife he was a “good actor,” she later recalled.

He sued the Southeastern Pennsylvania Transportation Authority, which agreed to a $25,000 settlement.

Then his wife, by now estranged, called SEPTA with the real story.

Last month, Collins was sentenced to 18 months in federal prison--a kind of poster child for SEPTA’s full-court press against fraud.

“They think they can make a living this way. Everyone--the claimant, the doctors, the lawyers, everyone,” said Eileen Katz, deputy counsel for SEPTA. “And the culture, the fabric and makeup of Philadelphia, supports it.”

SEPTA, which runs the city’s trains, buses and trolleys, charges a base fare of $1.50, the highest in the country.

It paid $47 million in claims in fiscal 1990, or 17.7% of the amount collected in fares, a percentage well above other big-city rates.

“We are, if not the worst area, one of the worst in the country” for insurance fraud, said James Kilcur, SEPTA’s chief counsel.

Pennsylvania law puts few obstacles in the way of someone who wants to make a claim, and all claims under $25,000 go before an arbitration panel within eight months.

“It’s a good system for moving cases, but it’s also a system that makes it easy for the people who make claims,” Kilcur said.

So SEPTA is fighting back.

* Earlier this month, SEPTA won a state Supreme Court case challenging a state law that limits liability to $250,000 per person or $1 million per accident.

* “Guess who’s stealing part of your fare?” asks one of the billboards erected as part of the agency’s anti-fraud campaign, started in 1989. It shows a man in a neck brace carrying a sack of money. “File a false claim and you could go to jail,” says another.

* The authority has built an elaborate system to ferret out fraud. A line has been set up for phone tips, computers check for repeat claimants, and video surveillance is used to see if alleged victims are really injured.

SEPTA tells its investigators to look for telltale signs of fraud--a bus or train crash that makes the news usually means a rush of shaky claims; unemployed men between 22 and 35 are most likely to file false claims.

Someone who is vague or wrong on details--like the woman who had a train going the wrong way--is eyed suspiciously. In one case, when a car crashed into a bus with no passengers, 11 people filed suit claiming injury.

After an accident, SEPTA sends its investigators out quickly to record the names of the injured. A subway crash in April that killed four has attracted 278 claims, far more than the number of people SEPTA says were on board. Some of the claims were filed about five months after the crash.

About 40% of all claims are closed without payment.

SEPTA says new claims dropped from 13,005 in fiscal 1989 to 10,355 in fiscal 1990. Eight people have been convicted of fraud in the last two years; most got fines and probation, though a doctor who submitted fake medical reports was sentenced to prison.

Edward S. Chacker, a lawyer and vice president of the Philadelphia Trial Lawyers Assn., insists that the vast majority of claims are legitimate.

Chacker and Katz said SEPTA and the association are working together to fight bad claims. SEPTA says it will establish a phone line, for instance, so lawyers can call to see if a client is listed by SEPTA as having been on a certain bus or train.