Workers’ compensation fraud creates a financial and administrative burden for employers, while increasing hardship for injured workers with legitimate claims. The early identification of potential fraudulent cases and quick action by workers’ compensation third party administrators can help make sure workers’ compensation programs run as efficiently as possible in providing needed help for injured workers.
The following are some best practices employers can implement to reduce fraud, as well as guidance on what to do if a claim is “not quite right”:
Identify Questionable Claims
Here are some of the “red flags” that may help identify fraudulent claims:
- The employee does not immediately report the injury to his/her supervisor.
- Information indicates the employee was injured somewhere else (auto accident, playing sports, etc.).
- The facts of the injury do not align with the type of injury or disability.
- The employee misses doctor appointments related to the claim.
Follow the Process
Even if an employer suspects a claim could be fraudulent, the employer must still follow the process to ensure the claim is submitted appropriately and the worker obtains medical treatment.
- The employee still must complete a Claim Form (DWC-1).
- The employer still must provide medical treatment within one day of notice of injury.
- The administrator has 14 days to issue a delay letter, during which no temporary disability will be paid.
- The administrator then has 90 days to either accept or reject the claim, during which time the administrator may solicit additional information.
Once a potential fraudulent claim is identified, it is imperative that investigations are initiated promptly. Investigations should be thorough, impartial and preventative. Using an outside party that specializes in workers’ compensation fraud investigation will ensure that the case is handled in accordance with all regulations and will hold up in court if there is a trial. Remember, only a court of law can determine fraud – not the examiner or the employer. These investigations can include:
- Interviews with the injured worker
- Interviews with coworkers
- Witness interviews
- Manager/supervisor interviews
- Surveillance of injured worker
Upon the conclusion of the investigation, any relevant findings and evidence should be presented to the district attorney’s office as well as the Department of Insurance.
One of the best tools for fraud prevention is to let employees know that false claims will not be tolerated and that there are stiff penalties. It also helps to provide employees with easy ways to report any potential fraud that they see.
- Post the penalties for filing false claims on your new hire pamphlet.
- Hang a poster in the break room letting employees know how to report fraud anonymously.
- Share stories about fraud convictions to deter abuse.
One recent example of identifying, investigating and prosecuting a fraudulent claim was in the conviction of a school bus driver in San Mateo County in California in July. The claims examiner identified numerous inconsistencies in the medical reports versus the statements provided by the employee. There were alleged migraines and double vision, but tests did not support these symptoms, and it appeared that they were exaggerated. Investigations were initiated, and the employee was observed participating in activities that were not consistent with any claimed injury.
The investigative evidence was forwarded to the San Mateo County district attorney’s office, which obtained a conviction; the defendant was ordered to serve 60 days in the county jail and pay restitution of $60,000 to his employer.
See also: Workers’ Comp Issues to Watch in 2019
Organizations must implement a comprehensive strategy to curb fraud. Vigilant fraud prevention programs and investigative efforts can save a company hundreds of thousands of dollars by preventing the filing of fraudulent claims and prosecuting those who take advantage of the system.