7 Ways to Reduce Workers Comp Costs by Reducing Fraud

Fraud Is Everywhere, use all the tools in your arsenal

Not only is fraud everywhere, but sometimes the lengths people go to commit fraud is both amazing and amusing. However, that being said, it’s the employer’s job to jump on every single incident of fraud and take action. Make it very clear fraudulent workplace injuries and workers’ comp claims will not only not be tolerated, but also will be prosecuted. The least problem employees involved in fraud have is losing their jobs.

Fraud Discovery & Assessment Techniques

1. Fraud Endorsement Language

Use affirmative obligation language to notify employees they may be subject to civil or criminal penalties for failing to report earnings while collecting workers’ compensation.

Tip: Don’t send checks via direct-deposit.

2. Use Anonymous Toll-free Fraud Tip Lines & Posters

Obtain posters from TPA or insurance company.

Tip: Use phone or on-line tip reporting services.

3. Use Repeater Reports & Fraud Investigations

Get reports of employees who are not physically/medically able to safely perform the job.

Tip: Consider fraud profile investigations.

4. Use Surveillance & Security Cameras

You don’t know what you don’t know! Dig In!

Consider using store safety cameras.

Use a surveillance firm.

5. Use chair side visits for injured employees.

Understand process and find out where things start to get off track.

Tip: Sit chairside to learn about your claims, the adjusters and the process in general.

6. Use a Vendor Day to keep management and staff informed.

Learn all products, including those related to fraud control. Ask adjusters to join your cost containment team to brainstorm. Even pharmacy benefit programs can detect fraudulent claims, for example, employees getting multiple prescriptions in a variety of pharmacies in the surrounding area.

Tip: Integrate all selected products.

7. Use a medical doctor for a file review.

Do adjusters know medicalese? See if the degree of disability is disproportionate to the mechanism of injury. See if there is "medicalese" for a doctor to tell another doctor there is possible evidence of malingering?

Tip: Are medical resources timed properly? Are treatment and return to work appropriate?

Tip: Use Injury Duration Guidelines

The Story

At mid-year, the district attorney filed criminal charges against nine individuals in a sweep of insurance cheaters. The arrests followed a joint investigation involving four insurance companies, the U.S. Postal Inspector's Office, the National Insurance Crime Bureau, the State Insurance Department, the State Insurance Fund, and the New York State Workers’ Compensation Board.

“Alfred V.” claimed to the management of a supermarket where he worked as a night stock clerk he fell on a spill, cut his arm while falling and injured his wrist.

He submitted multiple medical bills for reimbursement to the Workers’ Compensation Board. In fact, a videotape in the store recorded him staging the fall by creating the spill and deliberately slashing his left arm with a box cutter. (workersxzcompxzkit)

The employee was charged with insurance fraud in the fourth degree and offering a false instrument for filing in the first degree.

Author Rebecca Shafer, Consultant/Attorney, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers’ Compensation costs, including airlines, healthcare, manufacturing, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. Contact her: RShafer@ReduceYourWorkersComp.com or 860-553-6604.

FREE WC IQ Test: http://www.workerscompkit.com/intro/
WC Books: http://www.reduceyourworkerscomp.com/workers-comp-books-manuals.php
WC Calculator: http://www.reduceyourworkerscomp.com/calculator.php
TD Calculator: http://www.reduceyourworkerscomp.com/transitional-duty-cost-calculator.php

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers' comp issues.