Tips for Spotting Workers’ Compensation Fraud

Workers' compensation was designed to assist those who encounter on-the-job injuries. This is done through payments to cover the medical expenses and lost wages. However, workers' compensation fraud has become a severe issue. There have been individuals who faked an injury while on the job in efforts to receive the payments, organized crime involving physicians and attorneys, as well as patients who submitted false and/or exaggerated medical claims. We all pay the price for these crimes, and it is crucial that we learn to identify these scams. Business leaders should be well versed in occupational health and safety terminology and all the red flags of workers' compensation fraud.

Types of Workers’ Compensation Fraud

Some businesses are fronts for insurance fraud, where medical professionals, attorneys, or insurance representatives encourage people to report or exaggerate injuries. First, it is helpful to be aware of the different angles that these criminals take.  Categories of workers’ compensation fraud:

False claims

The alleged injury or accident is either simply not true or did not occur at work.

Working and collecting benefits

A claim that they are unable to work so they can collect benefits while working at another job.

Exaggerating

The severity of the injury is exaggerated to collect compensation.

The Signs of Fraudulent Claims

Business owners are often concerned that an employee will fake or exaggerate an injury to claim workers' compensation benefits. It is helpful to keep an eye out for a pattern of events or multiple indicators that something does not seem right. Here are some workers' compensation fraud indicators:

• The claim is made at the beginning of a shift.
• Delays reporting a claim without a good explanation.
• The claim comes in just before termination, layoff, end of a large project, or finishing seasonal work.
• Use of medical providers or legal consultants with a history of handling suspicious claims.
• No witnesses to the accident.
• The description of the incident does not align with the injury report.
• A claimant who has a history of making suspicious claims.
• Declining diagnostic procedures to confirm the injury’s nature and severity.
• An employee who is difficult to reach.
• Pre-existing conditions that are similar to on-the-job injury.

With more than one red flag present in a workers’ compensation claim, it is likely to be fraudulent. If you suspect fraud, be quick to notify law enforcement and the insurance carrier. Have your information ready to support this suspicion, such as misstatements and witness statements.

How to be Proactive in Preventing Workers’ Compensation Fraud

Workers' compensation fraud can become financially devastating for businesses and damage the communication between employers and honest workers who are legitimately injured on the job. Some business owners use surveillance cameras to monitor employees, but this is not always sufficient in preventing worker's compensation fraud. Establishing a zero-tolerance policy for fraud and communicating these expectations through written policies is advised. Create a safety plan that will ensure employees understand policies and procedures. Hold safety meetings regularly to ensure the importance of mitigating potential health and safety risks is understood. Also, it is helpful to conduct background checks when hiring to help reveal previous possible fraudulent claims.

About David G. Sayles Insurance Services

At David G. Sayles Insurance Services, we help our clients decide which of these options is best for them based on their current situation and risk factors.  Contact us at 1-855-977-1842 or insureme@dsayles.mysites.io for a consultation!