A Fast, Down And Dirty Way To Detect Fraud To Reduce Workers Compensation Costs
Workers compensation fraud costs the insurance industry approximately $5 billion each year, according to the National Insurance Crime Bureau, and it is partly blamed for a rise in insurance premiums for businesses across the board. Whether caused by workers, employers, or medical networks, workers’ compensation fraud is a rampant problem that has been worsened by a weakened economy. Unfortunately for companies around the country, workers’ compensation fraud is just one more consideration when conducting business in the current economic climate.
Fraudulent claims are filed by employees who are seeking workers compensation benefits for non-existent conditions or for conditions that are not work-related. Employees seldom stage work-related injuries. That being said, it is more common to find employees who were actually injured off the job and who claim that their injuries occurred at work. As an example, an employee may injure his back while doing yard work over the weekend and wait until the next workday to file the claim as work-related. Fraudulent claim reporting may also occur during plant shutdowns or layoffs, or situations that may create a high degree of employee discontent. The good news is that by identifying the fraudulent claims early you have a good chance of successfully defending them.
One of the key indicators of potential employee fraud is when the employee reports the injury late. This should be a “red flag” and should always service careful review. While in most cases there may be a plausible story behind the delay, it is the employee’s responsibility to report the injury promptly and the employer deserves the right to know why it was reported late.
Another way to quickly detect employee fraud is to compare the facts presented in the following documents: (1) the accident investigation report, (2) the employee’s written or verbal statement, (3) the statement of witnesses to the injury, and (4) the written report from the treating physician. Each of these documents should ideally be obtained in the first 48-hours. If there is a major variance between the facts presented in these documents this should also be a “red flag” and deserve careful review.
It has been my experience that the vast number of fraudulent worker injury claims can be identified using basic, tried and true principles. The patent-pending CompEraser system provides, on-line 24/7, the tools and processes to help your organization respond promptly to a worker injury and, in the process, systematically identify potential fraudulent claims. Resources also include the formalization of your safety team, injury prevention, OSHA compliance, safety training, workers compensation disability management, plus more. These resources are available 24/7 and used irrespective of which workers compensation carrier you select. Its patent-pending technology also provides unique financial reports for monitoring the effectiveness of your safety and health program on an on-going basis. For more information visit our website at www.CompEraser.com.
Posted by: T. Whitley on Wednesday, July 2, 2008
More often than employee fraud I see employer fraud. I have practiced worker's compensation law for almost thirty years and been an Administrative Law Judge for seven of those years. The small employers usually discourage workers from filing a claim, refuse to provide the name of their carrier and policy number and do not allow the worker to seek medical care. Also the bigger employers discourage reporting by providing bonus $ for no reportable injuries. They also reduce management bonuses by claims made. This all promotes delay and deceit by employers. Make sure the claims personnel look into this also.