How to Spot Workers Compensation Fraud
65Workers' Compensation Fraud
Experts say
between 10 and 20 percent of workers'
compensation claims are at least semi-fraudulent.
According to the National
Insurance Crime Bureau, 10 cents of every dollar is wasted on fraud, including workers’ compensation insurance fraud.
Here are several red flags for fraudulent claims. Note that not all of these alone mean that an employee is trying to cheat the system, but they are still good to watch out for.
- The timing of the claim: Be careful of claims that come in on a Monday morning: Some workers will try to make a weekend injury look job-related so they can get their treatment paid for by your company. Equally important are injuries that are reported immediately after the employee receives corrective action (discipline) or right before an employee knows that layoffs are coming.
- Claims for injuries that are hard to verify: Stress and carpal tunnel syndrome can be legitimate but hard to prove. Unscrupulous workers know this.
- Frequently changing doctors: Workers often use one who is a family friend or one who will go along with their scam. If you receive a note from a different doctor each time a return to work has been issued, that could be a warning sign of workers’ compensation fraud. With each physician change, an employee has a new opportunity to lie about their pain levels and date of original injury.
- Refusing physical therapy: This could be a sign that the employee does not want to get better. The employee is not making a good-faith effort to heal and get back to work. You can deny a workers’ compensation claim (or suspend benefits) if a worker refuses medically necessary treatments or skips scheduled physician visits.
- Not providing a physical address: Providing only a post office box ensures you will not have the employee’s real address when he or she does not return your phone calls.
- An un-witnessed accident: Be careful with this one. An accident does not have to be witnessed to be legitimate. However, this is something to watch for if any other red flags are present.
- Poor performance reviews: If an
employee thinks his job is at risk, he may milk the system to get whatever
he can before the employer dismisses him. Some workers know that it can be
hard to terminate an employee who is on workers’ compensation without it looking like retaliation.
The more you know and understand about workers' compensation fraud the better prepared you will be to fight it. Fraud can cost your business thousands of dollars in higher workers compensation rates.
Another big issue that you may be unaware of is that fraud is not just confined to employees. Insurance companies are notorious for overcharging employers. Now they won't call it fraud but in reality you probably are overpaying by 10-15% due to frequent mistakes and errors made by carriers.
