An Ignored Cause of Workers' Comp Fraud

Everyone wants to close a workers' comp claim quickly. That can save money -- but works against attempts to head off fraud.

If you are involved with workers' comp claims in any way, you undoubtedly have a stable of great stories to tell. Maybe you've seen the guy who claims he can barely walk yet finds the strength to run in a marathon. Or maybe you’ve seen the claimant who says he has never had any prior workers' compensation claims yet knows the workers' comp procedures better than most attorneys.

Watch Out for Those Sprinklers

Sheyla White, an office worker from Florida, alleged a sprinkler hit her in the head in October 2015. Unfortunately for her, the entire “injury” was captured on video. The video shows White sitting at her desk as a sprinkler part falls from the ceiling onto her desk, missing her. She pauses for a moment, looks around the room and picks up the device, slamming herself in the head with it. You can watch the edited video yourself here.

See also: Why So Soft on Workers Comp Fraud?  

White was convicted of workers' compensation fraud in May 2017 after the employer turned the video over to the Florida Division of Investigative and Forensic Services. Legend has it that a young Isaac Newton was sitting under an apple tree when he was bonked on the head by a falling piece of fruit -- a 17th-century “aha moment” that prompted him to come up with his law of gravity. In retrospect, White would be a happier woman today if the revelation she received following her self-inflicted hit on the head was: “Don’t commit workers' comp fraud.” Hindsight is always 20/20; for White, foresight would have avoided three to five in the slammer.

Workers' Comp Fraud Is Serious

Despite the fun one can have while watching White’s viral video premier, workers' comp fraud is serious business. It drives up costs to employers, adds to the backlog of pending claims and creates an atmosphere where even legitimate claims are often scrutinized. According to a recent study by Business Wire Magazine:

  • More than one in 10 small-business owners are concerned an employee will fake an injury or illness to steal workers' compensation benefits;
  • Nearly one in four owners also installed surveillance cameras to monitor employees on the job;
  • One in five owners feel unsure how to identify workers' compensation scams; and
  • More than half of business owners agree these are fraud flags: Employee has a history of claims (58%); no witnesses to the incident (52%); employee didn’t report the injury or illness in a timely manner (52%); and the injury coincides with a change in employment status (51%).

Most states have agencies devoted to workers' compensation fraud. These agencies investigate both fraudulent claimants (trying to steal workers' compensation benefits) as well as employers who refuse to pay lawfully owed benefits to injured workers.

Why Is Workers Comp Fraud Rarely Prosecuted?

Sheyla White was caught and convicted, but this is truly the exception rather than the rule. I’ll admit that, from my jaded perspective as a workers' comp defense attorney, I see a lot of fraudulent claimants who go unpunished. If you have spent any amount of time in the trenches, you’ll probably agree with me.

Here's the problem: When claims are pending, what is the desire of almost every employer and insurance carrier? It's: How quickly can we close the file? While this perspective is usually effective in reducing the cost of an open claim, it is not effective in prosecuting fraud. Why? The easiest way to close a claim quickly is to present evidence of fraud to the claimant’s attorney for the purpose of reaching a quick and reasonably priced settlement. Claim over. Done. Time to move on to the next claim. And yet, doesn’t this process simply encourage more fraud and abuse? If my daughter wrecks my car and tries to hide it from me, do I “punish” her with bags of money? Claimants are often rewarded for their bad behavior, not punished, and once the bragging on social media begins others, too, are encouraged to start their own fraud journey.

See also: Workers Comp Ensnares the Undocumented  

The other problem is the level of proof that is often required by state agencies to prosecute workers' comp fraud. Sure, it was easy to go after Sheyla White because there was video that couldn’t have been better staged by Steven Spielberg himself. But what about the thousands of claims where sexy video is not available to guarantee a quick and easy prosecution? Un-prosecuted fraud, like rabbits in spring, simply creates more of its own kind. The benefits, though, of a significant reduction in workers' comp fraud would be like manna falling from heaven. Now that I think about it, a metaphor based on objects falling from the sky is probably not the best way to end this.

J. Bradley Young

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J. Bradley Young

J. Bradley Young is a partner with the St. Louis law firm of Harris, Dowell, Fisher & Harris, where he is the manager of the workers' compensation defense group and represents self-insured companies and insurance carriers in the defense of workers’ compensation claims in both Missouri and Illinois.


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