When an employee commits workers compensation insurance fraud, they are stealing direct from the employer. While the insurance carrier or the self-insurance program may write the check, the cost of workers comp fraud comes right out of the employer’s pocket. The fraudulent workers comp claim is included in the calculation of the insurance premium, the same as legitimate workers comp injuries.
Per the Coalition against Insurance Fraud, bogus claims cost employers $6 billion a year. It is estimated that nearly 25% of the workers comp claims contain some element of fraud, whether it is the outright bogus claim or the employee who stays off work when he knows he could be working light duty. [WCx]
The employer should know the indicators of fraud, often referred to as the red flags. Something unusual about the claim does not indicate fraud, but unusual things can point to the possibility of fraud. When any of the following exist, consider a fraud investigation:
- Late reporting of the injury: real injuries get reported quickly.
- Accident details that do not fit: the accident details are sketchy or vague, the employee has difficulty describing what happened, and the employee gives more than one version of what happened.
- Witnesses: there are no witnesses, especially when the employee normally works around other employees, or the witnesses’ version differs from the employee’s version of the accident.
- Disgruntled employee: the employee has previous express dissatisfaction with supervision or management, the employee did not get a promotion she wanted, the employee is on "positive improvement needed" status, the union has announced an impending strike; the factory is closing, etc.
- Medical care: the injuries are subjective, i.e., low back pain, complaints of pain out of proportion to diagnostic findings, the employee changes doctors, the employee attempts to add additional body parts to the medical treatment.
- Monday morning claims: the injury, usually with no witnesses, occurs early Monday morning shortly after the employee gets to work (the injury occurred over the weekend while the employee was away from work). [WCx]
Unfortunately, when it comes to workers comp fraud, some employers take the defeated approach with “there is nothing we can do about it” line of thinking. There are many approaches the employer can follow to reduce and/or eliminate fraud including:
1. Having an established practice of investigating every workers comp claim. If the employees know it will not be easy to commit fraud, they are less likely to try it.
2. A required transitional duty program that all employees know about will prevent the employee who wants to “take a vacation on comp” or to work another job while collecting workers comp benefits.
3. Make sure all employees are aware that workers comp fraud is a crime and you strongly prosecute insurance fraud.
4. Make fraud beneficial to the employee who reports it. Have a published policy of paying a reward to the employee who provides information leading to the conviction of the criminal committing the fraud.
5. Report ALL questionable claims to the Special Investigative Unit of the insurer or third party administrator.
6. Have a strong safety program which will remove many of the scenarios the fraud prone employee can use to create a bogus claim.
7. Avoid hiring people of questionable ethics. Complete a thorough background check including criminal history and credit score (the lower the credit score, the higher the probability of a questionable workers comp claim). If you do not have the time to do an in-depth background check, consider a member of the National Association of Professional Background Screeners, www.napbs.com.
Fraud should never be tolerated and should be fought any time it occurs. As the employer, you should learn as much as possible about defeating workers comp insurance fraud. Our 2012 Manage Your Workers Compensation: Reduce Costs 20% to 50% has an entire chapter on Fighting Fraud and Abuse. It will show you many additional steps you can take as the employer to combat workers compensation fraud.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Manage Your Workers Compensation: Reduce Costs 20% to 50% www.WCManual.com.
Contact: RShafer@ReduceYourWorkersComp.com.
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.
© 2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact
From time to time employers are confronted with the dilemma of how to deal with a small, but fraudulent, workers compensation claim. The employer knows the claim is fraudulent. However the cost of contesting the claim, and the extra time that will be required of the risk manager or workers comp coordinator, makes it seem like a good idea to let the employee ‘get away with it’. Why spend $5,000 in legal fees on the workers comp claim, complete the investigation needed to defeat the claim, and risk a wrongful discharge claim, when the employee will be back at work in a couple of weeks?
If the ‘little fraud” is not contested, there will undoubtedly be more little frauds. And as the word spreads that the employer is an easy mark, employees will push the envelope with larger fraudulent claims. When the employer lets the minor, clearly fraudulent claim run its course, the other employees notice what is occurring. [WCx]
The workplace grapevine quickly shares the news that ‘good ole Joe’ is going to claim he hurt his back, so he can take his family on that extended vacation that he has promised them for years. When everyone in the shop knows that he is going to make a fraudulent workers comp claim, they all watch to see what develops. ‘Good ole Joe’s’ bogus workers comp claim is often the subject of discussion at lunch, or during breaks. The employees will wait and see if he gets away with it. When Joe stays off work for a month then returns to the job like nothing has happened, the dishonest employees may also plan “vacation on comp.”
The honest employees will continue to be honest, regardless of whether or not some co-workers get away with fraud. But, the favorable impression of the employer is diminished, as the employer should have done more to prevent the fraud. Plus, when the fraudulent employee gets light duty or a cushy job, while the honest employees have to pick up the fraudulent employee’s heavier tasks, resentment builds. This is not just towards bogus ‘good ole Joe’, but also at the employer for giving the honest employees an unfair share of the work. Morale declines among all the honest and good employees.
While management may be frustrated by a bogus workers comp claim, when nothing is done about it, the employees do not perceive it that way. The impression the employees will get is that management does not care about a little time off on comp. And, most employees think that workers' compensation is paid for by the insurance company, not their employer. Besides it is the big, rich insurance company that is paying for it, not the employer (in the mind of the dishonest employee). Hence, since management will turn a blind eye to the fraud, the discontents, the gripers, the poor performers and the troublemakers all see this as a turn to get something for nothing. The number of bogus claims then increases.
Many of the bogus claims will run a course in a month or two. However, for some employees the bogus claim is the solution to a long-term ailment. The pre-existing slip disc in the neck, or the torn knee ligament, can now be paid for by workers compensation. The employees saw that management took no action on ‘good ole Joe’s” claim; therefore, management does not care if the employees “fudge” a little bit, and claim the medical problem is related to work, when it is not.
The employee who turns in the bogus claim for a major medical problem does not think about the cost differential between his workers comp claim and ‘good ole Joe’ who just took some paid time off. Also, the bogus employee may be a little concerned that he will get caught in the fraud. The employee committing fraud is much more likely than the honest employee with a legitimate injury to hide behind the curtain of protection of a personal injury lawyer (who does not care if the workers compensation claim is bogus, as long as he gets his fee).
The culture of fraud will grow from the minor claims to major claims, plus the number of bogus workers compensation claims will increase significantly, all because management allowed “a little fraud” to save the cost of fighting it. [WCx]
The employer can prevent the bogus / fraudulent claims from spiraling out of control. The employees should know that every workers compensation claim is investigated thoroughly, and all questionable claims are vigorously defended. In addition, any proven case of fraud should be turned over to local law enforcement for prosecution. Every employee should know that the employer pays for all workers comp claims through the insurance premium, and that bogus claims are theft from the company. A culture where every legitimate claim gets prompt medical care and every questionable claim is contested will go a long ways toward preventing the ‘it is only a little fraud’ mentality.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.
WORKERS COMP MANAGEMENT MANUAL: www.WCManual.com
MODIFIED DUTY CALCULATOR: www.LowerWC.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.
©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.
Morale hazard is loosely defined as the presence of an outside item or system that affects typical behavior. I like to use an example of SUV-type vehicles. Because of added safety features and the enormity of the vehicle, drivers report feeling safer and often take more risks then when driving smaller, less-safe vehicles. For example, an SUV driver may be more aggressive during dangerous snowy conditions, or drive more aggressively in general simply because she feels safer. WCxKit
To put this in a Workers Compensation context, the morale hazard is the comp system itself. The system’s rules and laws make people behave differently than if they were presented with the same injury and medical scenario outside of the work comp atmosphere. We further discuss these scenarios below:
1. Increased pain behavior
Within the WC world, adjusters often complain about claimants overreacting to pain and complaining about the presence of pain with even the most trivial injury. This is thought to happen due to the nature of the claimant feeling that they have to prove their injury to the doctor and to the carrier. Even though, as adjusters, we understand injuries occur and most times they do indeed hurt, the need presents itself for the claimant to feel as if they have to be sure to state how unbearable this particular injury is, in order to make the injury seem more believable.
If you take WC presence away, when a similar strain injury occurs, outside of the workplace, for example, the reaction may be wildly different. Claimants may shrug off the pain as “age-related” or due to overdoing it instead of feeling the need to play up the pain to their doctor, as is often the case in workers compensation claims. Adjusters will rely on physicians using the “Waddell’s signs” to evaluate pain behaviors in relation to the severity of injury. As you see, the mere presence of the work comp system can provide the means to making claimants overplay pain as much as possible to make their case more concrete or believable.
2. Increased drug-seeking behavior
Minor strain injuries generally resolve with modified activity and time. But when a work comp case is present, some claimants feel the need to seek out certain types of medications, typically opiate in nature, to cement the legitimacy of their injury. The thought process is, “If I did not have a bad injury, why would I need these stronger medications? Therefore, my claim must be legitimate.”
One factor muddling this is physicians who are quick to prescribe opiate medication even when the clinical need is not present. Strain type injuries can heal with assistance from anti-inflammatory medication, not necessarily stronger opiate classifications of prescriptions. Many resolve with hot/cold compresses, several special deep knee bend type exercises, rest and 1-2 chiropractic treatments. I speak from experience.
Removing the comp system again can show the normal behavior. If a person injures themselves mowing their lawn, if they do not like going to the doctor in general, they may take over the counter medications and feel just as good the next day as if they did indeed take a stronger medication prescribed to them by their physician. So you see, drug-seeking behavior is rampant in work comp cases due to the need for the claimant to seek approval from their comp carrier for that injury.
3. Poor work quality in light duty work classification
If you have the capability for light duty at your factory, when claimants get injured and have work restrictions, proactive employers place them in lighter duty jobs until they get released by their doctor to full duty. A common situation in comp is the worker complaining even the light duty work makes their pain worse. This can happen even when it seems impossible the light work could cause pain. This is due to the presence of workers compensation. Had the worker not been injured, and you placed them in this light-duty job, it is doubtful they would be making the same complaints.
4. Increased work absences due to pain
Similarly, employers may see an increase in work absences due to alleged pain complaints. Workers will say, no matter what job they do, they just cannot get out of bed and back to work due to injury pain. In the example of the lawn-mowing injury – when the comp system is removed, it is probable this worker will show up as scheduled and ready to work as if it were any other day. This again may be due to the claimant feeling the need to legitimize their claim to the carrier. True, sometimes it's not.
5. General avoidance with the employer
Sometimes outright avoidance becomes apparent. Missed phone calls, voicemails not returned, and an employee not bringing in medical slips to the HR department as instructed may start to happen. Remove the comp system and injury, and this wouldn’t happen. A responsible worker injured outside of work keeps the HR department up to date with medication restriction slips. Once you introduce the work comp system to this same scenario, avoidance behavior may come to fruition. WCxKit
To review, morale hazard is the presence of a particular system or entity that can affect a person’s behavior negatively. This is made clear within the presence of workers compensation. Adjusters see these behaviors day in and day out. What the employer calls a “great, dependable employee” could be to the adjuster a claimant who exaggerates pain, has drug-seeking behavior, and exhibits typical avoidance maneuvers in general. This all negatively impacts the claim, and actually makes it more difficult in the long run. From the workers point of view, these behaviors make their claim more legit — just the opposite occurs.
Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.
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.
©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.
A South Los Angeles grocer accused of buying EBT cards from welfare recipients at a cut rate, then using the cards to purchase items from other markets to stock his shelves and resell merchandise for higher prices was charged with fraud, the Los Angeles County District Attorney’s office announced recently.
Sabino Reynoso Cedano, 59, is charged in case No. BA387794 with four felony counts: food and nutrition benefits fraud, computer access fraud, access card benefits theft and multiple access card theft. The complaint alleged the crimes occurred over the past year.(WCxKit)
Cedano was arrested by investigators with the District Attorney’s Bureau of Investigation when a search warrant was served at his two stores on South Normandie Avenue and his home in Inglewood. He was freed on $20,000 bail. The case against him was filed by Deputy District Attorney William Clark of the Public Assistance Fraud Division.
Investigators said Cedano purchased Electronic Benefit Transfer (EBT) cards and the welfare recipient’s PIN number at less than the card actually was worth. He used the cards to purchase items such as sodas, chips and candy, which he resold at higher prices at his South Los Angeles markets, investigators added.
The EBT cards are issued to those who apply for aid through the Department of Social Services (DPSS) and the amount placed on the cards is to be used only by the recipient to purchase food. They are not to be sold or used by anyone other than the recipient.
Investigators with the DPSS and the U.S. Department of Agriculture are participating in the case.(WCxKit)
If convicted as charged, Cedano faces a possible maximum state prison term of five years.
Author Robert Elliott, executive vice president, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com.
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.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
Recently addressing a group of 40 fraud directors from around the country, Massachusetts Attorney General Martha Coakley highlighted the importance of collaboration among law enforcement, employers, employees, and local fraud bureaus to prevent and prosecute cases of fraud across a variety of industries, according to a report from her office.
“The cost of corruption on businesses and taxpayers is significant,” AG Coakley said. “It undermines the level playing field for businesses, distorts the competitive marketplace, and costs taxpayers at a time when every dollar is crucial. It is in everyone’s interest – in both the public and private sector – to deter and prosecute cases of fraud, and we must all work together to do that effectively.” (WCxKit)
The Fraud Directors Conference, held in Chatham, was sponsored by the Insurance Fraud Bureau of Massachusetts. The Attorney General discussed the types of cases prosecuted by her office ranging from public corruption and Medicaid fraud matters to workers compensation and auto insurance schemes.
She highlighted examples in which public and private cooperation proved key factors in deterring cases of fraud. For instance, when the state was confronted with an uptick of cases of auto insurance fraud schemes, a collaborative effort between the Massachusetts Insurance Fraud Bureau, District Attorneys, federal and state law enforcement, and private insurance companies worked to combat these crimes and build strong criminal cases.
Coakley’s office has made the investigation and prosecution of cases of fraud and corruption a priority. For instance, in the last fiscal year, the Attorney General’s Office recovered $69 million in Medicaid fraud. (WCxKit)
Recently, she reported the indictments against 10 people in connection with four Medicaid Fraud cases.
Author Robert Elliott, executive vice president, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com
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.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact
Most workers compensation claims are legitimate. Unfortunately, there will be times when an employee will try to take advantage of the workers comp system. When an employee has a workers comp claim with the following characteristics, it is time to be extra diligent in your approach to the claim.
1. The Monday Morning Claim
When an employee reports an injury within the first few minutes of being on the job on Monday morning, there is a good chance the accident did not happen within those first few minutes but over the weekend while the employee was doing household chores or participating in a sporting activity or other physical exertion. This is especially true if the employee, who does not normally come in early, gets in and gets hurt before anyone else arrives on the job.(WCxKit)
2. The Unwitnessed Accident
A disproportionate share of back injuries, neck injuries, and other musculoskeletal injuries seem to occur when no other employees are in the immediate area. Often these unwitnessed injuries occur to people who have degenerative disc disease, arthritis, or other musculoskeletal issues bothering them before the unwitnessed accident occurs. If your “injured” employee normally works around other employees, and the employee is in an area where the employee normally does not work, when the unwitnessed accident occurs, an in-depth investigation will be needed.
3. The Late Report of Injury
When an employee is injured on the job, unless there is some really compelling reason to not report the injury, the accident will be reported the same day it occurred or at the latest the following day. When the employee reports an “accident” that occurred last week, last month, or longer, it most likely did not occur at work.
4. I Forgot the Details
When the employee tells the employer that the back injury happened carrying a box of parts, and then tells the emergency room doctor the injury occurred picking up a heavy piece of equipment, and then the lawyer claims the back injury happened while the worker was using a jackhammer, which version of the accident do you believe? If the accident version varies from medical report to medical report, most likely none of the accident versions are correct. The employee who forgets the details of the accident is most likely having workers comp take care of the aching back or other body part when the worker should be paying and submitting bills to the worker's own health insurance.
5. The Unhappy Employee
Workers compensation is often abused by an unhappy employee. Sometimes employees may use a workers comp claim to keep from being laid off following a disciplinary action, or to maintain a source of income when the union calls a strike, or when the factory is closing, or at the end of seasonal employment. When an employee is disgruntled about some aspect of the job, workers comp is often seen as a paid vacation.
6. The Cheat
While some of the fraudulent workers comp claims are for the purpose of having workers comp pay for a real, but not work-related injury, many fraudulent claims are based solely on greed. For example: The employee is offered a temporary “under-the-table job” paying cash. Claiming workers comp indemnity benefits while working under-the-table is a good way of getting additional income while maintaining a job to go back to when the temporary work ends. Other variations of the cheat is the employee who has been working two jobs, but is ready to give the second job up. A workers comp claim drawing indemnity benefits from two jobs greater than what is made on only one job provides the excuse needed to make a phony claim.
7. The Migrating Injury
The migrating injury claim is often missed by an employer or adjuster. The employee starts out with a very real, very well-documented injury such as a falling object breaking a foot bone. The employee gets acquainted with the doctor and after several visits advises the doctor there is wrist pain. The doctor starts treating the wrist for carpal tunnel syndrome. When the doctor starts treating a body part that was not injured on the day of the accident, the additional medical treatment needs to be promptly identified and denied.(WCxKit)
Any time you feel there is something just not right about an employee’s workers comp claim, your instinct is often correct. Any time a questionable claim is reported, do not just accept it. Report it to the claims office as questionable and explain why you think so. Ask for a complete investigation and involvement of the SIU (Special Investigation Unit) in the claim. Defeating the questionable claim will have a positive impact on your workers compensation costs.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. RShafer@ReduceYourWorkersComp.com.
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.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
California Insurance Commissioner Dave Jones announced $32 million in Workers Compensation Insurance Fraud grants statewide to aid district attorneys in investigation and prosecution efforts, according to agency.
"Workers compensation insurance fraud is a costly problem in California," Jones said. "As the economy struggles to recover, fraud of this type creates an additional strain on the system. We must protect those injured workers who need care and compensation so they can return to work in a timely manner and bring to justice those who seek to cheat the system."(WCxKit)
The grant funding is the result of assessments on California employers that are determined annually by the Fraud Assessment Commission. Counties submit applications to the department, which convenes the Workers Compensation Grant Review Panel that then reviews and makes grant funding recommendations based on multiple criteria including previous-year performance.
The panel then forwards a recommendation to the insurance commissioner who either accepts or amends the panel's recommendation. Once completed, the commissioner's recommendation is submitted to the Fraud Assessment Commission for their advice and consent.
The Fraud Assessment Commission agreed with the commissioner's recommendations in their meeting last month, ratifying the grant allocations.(WCxKit)
A List of California WC Fraud-Fighting Funding:
|
By county
|
Dollars
|
By county
|
Dollars
|
|
Alameda
|
$1,400,000
|
Sacramento
|
$ 900,000
|
|
Amador
|
$ 431,569
|
San Bernardino
|
$2,321,853
|
|
Butte
|
$ 200,000
|
San Diego
|
$4,861,584
|
|
Contra Costa
|
$ 575,000
|
San Francisco
|
$4,739,200
|
|
El Dorado
|
$ 330,000
|
San Joaquin
|
$ 608,808
|
|
Fresno
|
$1,240,529
|
San Luis Obispo
|
$ 65,000
|
|
Humboldt
|
$ 175,000
|
San Mateo
|
$ 650,000
|
|
Imperial
|
$ 51,200
|
Santa Barbara
|
$ 290,000
|
|
Kerns
|
$ 760,000
|
Santa Clara
|
$2,321,853
|
|
King
|
$ 275,297
|
Santa Cruz
|
$ 120,000
|
|
Los Angeles
|
$5,700,000
|
Shasta
|
$ 175,000
|
|
Marin
|
$ 238,000
|
Siskiyou
|
$ 37,428
|
|
Merced
|
$ 140,000
|
Solano
|
$ 175,000
|
|
Monterey
|
$ 520,000
|
Sonoma
|
$ 98,735
|
|
Napa
|
$ 119,000
|
Tehama
|
$ 88,950
|
|
Orange
|
$3,500,000
|
Tulare
|
$ 362,221
|
|
Plumas
|
$ 6,000
|
Ventura
|
$ 735,913
|
|
Riverside
|
$1,463,732
|
Yolo
|
$ 245,960
|
|
|
|
TOTAL
|
$31,774,392
|
Author Robert Elliott, executive vice president, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com.
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.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
An employer will always know a lot about her employees. Depending on the size of your shop, the boss sees her workers every workday. She talks to them about their weekends. She asks about their kids and families. Over time one really can find out a lot about employees.
You may think it is only the “bad” employees who get injured or complain about being injured at work — that they are the ones filing the claims and making a big deal about being sore at the end of the day – you are probably wrong. The complainers aren’t always the ones to watch out for.(WCxKit)
Not exactly. An adjuster will tell you often it is “good” employees who can pull off a bad claim and make it stick. After all, they know exactly what to say, who to say it to, and what to do after alleging an injury. Most often a “good” employee is the one who knows how to work the system. So, the lesson here is to watch out for ALL injuries. Here are some ways employees can fool you and the adjuster:
1. They know what symptoms to report:
Any employee of more than a year can pose a threat. They have been around long enough to see a other employees get hurt, make a claim, get some time off, and try to get their claim accepted. Most often, going on work comp is not as glamorous as it seems. It can really be more bothersome to a person’s daily routine. After all, you get less money, you miss time from work, you lose out on personal time as you go from doctor to doctor, and from therapy appointment to therapy appointment. It is really no fun at all.
But, if a long-term employee wants to make a work injury claim, it can probably be done. Any repetitive job has the exposure to start an injury off on the “right” foot. If you do the same job, on the same machine, day after day, then, of course, it makes sense that you could potentially become injured. A lot of the time these claims are for tendonitis. Shoulders get sore, elbows hurt, and it gets harder and harder to work all those hours every week in that same job.
On paper, when adjusters receive a new claim they look at the type of injury, then they look at the person’s date of hire. It can make perfect sense that a five-year employee can get tendonitis from work duties. And, if the medical evidence is there, adjusters lose ammo to fight the claim. These claims are accepted all the time. It is later down the road, when these people do not get any better four months after they reported their injury, that the adjuster really digs in to see what is going on.
Maybe the injury is a combination of work and arthritis. Then the correlation has to be made between what is work related, and what is there due to normal arthritis. Maybe none of this was actually work related, and it is all a worsening of a person’s arthritic condition. The adjuster will find out in the end, but it takes some time to get to this diagnosis and proclamation.
2. They know who to tell:
New employees will run to their supervisor right away and start talking about how something job-related is hurting them. Some of these new employees wait a few months to see if the condition will go away. A lot of times these claims can be based on new job duties, since maybe the worker was unemployed for two years prior to coming to your workplace and they are just out of shape. I do not come across too many employees who have worked somewhere for two weeks, and immediately make a repetitive injury claim. The claim that has the most merit is a traumatic injury claim from a laceration, or a contusion from falling down or being hit by something.
But older employees will play their cards differently. They start off by telling some coworkers about their pain. Then maybe they go to some other supervisors and talk about a job task that is bothering their shoulder. Then finally they make their way to the HR office to actually file the claim. Now, the worker has the backup of all of these other employees supporting their story of ongoing pain over the last few months. This helps them legitimize their story, and it makes it seem less fraudulent. And in some cases they may be right, but that does not mean that their injury is actually caused by work duties. That is for the adjuster to decide.
3. They know what to tell the doctor:
The occupational physician will ask the employee what the job consists of, and what is done on an average day. Workers who have repetitive jobs will sometimes inflate duties to come off as more credible. But physicians will also ask how long they have been there, and how often per day they are doing these tasks. The long-term employee again thinks seniority is on their side and they have more evidence to add to their claim. And, again, that may be true, but it is for the adjuster to decide what is compensable and what is not based on the medical evidence.
One thing seen in medical reports is employees telling doctors they have never had pain like this before in 15 years of work. That is all well and good, if it is true. Chances are it is not. The statements that employees make to their doctors do not hold a lot of weight in the adjuster’s world. Adjusters look at medical evidence, and causal relation. They get job descriptions from the employer, to see if it matches up with the employee statements. And if they do not, that is one red flag raised to show something else is going on with the claim.
3. They think they can fly under the radar:
Good, long-term employees think they have seniority to fly under the radar. Especially true again with subjective, repetitive injury claims. In the mind of the worker, they may think years on the job are all the evidence they need to pull off a claim. Even more so if they have no prior claims filed with this employer. But, again, this is not always the case. It does not matter how long you have been there, congenital issues can contribute to any injury.
It is just a matter of when that shoulder finally gives out. It very well could be at work, but that does not mean that work actually caused the injury. Just because you are at work when something happens, that does not mean it is actually work-related, and the cause of your issues are 100 percent due to actual work.
4. They think adjusters only bust the bad guys:
Finally, the good long-term employees think they can file a claim with no problems. They think they are great employees, with good work histories. They do not complain a lot, they work hard every day. So why was their claim denied? The answer is a combination of all of the above. Congenital issues contribute to every claim.
A subjective claim is an uphill battle. The worker has to show that despite arthritis, the non-occupational shoulder surgery they had five years ago, their medical leave for some other kind of surgery, despite the fact that they are a two-pack a day smoker, despite the fact they are 90 pounds overweight — their claim is legit because they are a good guy. Chances are, things are not going to turn out the way they hope with that claim they filed. Even if you as the owner of a company believe 100 percent that this claim is probably work related, the adjuster may just have a different point of view. (WCxKit)
You may think that long-term workers get a free pass when filing a claim, based on the factors listed above. But the world of insurance is a nitpicky, finicky world, going over everything with a fine-tooth comb. And those claims you would think would be accepted, sometimes get denied. It does not matter that you are a hard worker and a long-term employee. The medical speaks for itself, and that is what the adjuster uses to make a decision. Period.
Author Rebecca Shafer, JD, President of Amaxx Risks Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing, publishing, pharmaceuticals, retail, hospitality, and manufacturing. See www.LowerWC.com for more information. Contact: RShafer@ReduceYourWorkersComp.com.
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.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
Doctors and other providers who defraud the system for their own financial benefit are few, amounting to less than 4 percent. Yet, these few account for millions of dollars spent unnecessarily and without improved outcomes. Moreover, you could be helping these doctors defraud the system.
Fraudulent providers use tactics such as increasing the frequency and duration of medical services, billing at the highest levels regardless of state fee schedules, and billing repeatedly hoping to generate duplicate payments. Even more subversive are those who add multiple diagnoses to their exaggerated billing to avoid exposure by bill review systems. Such perpetrators also shrewdly submit bills using slightly altered names and addresses so their excesses are not easily noticed by electronic systems.
Modifying names and addresses is an easy and effective way to obfuscate data. Computer systems are literal, meaning they accept the data as it is. Consequently, adding a comma, reversing first and last names as they appear in one field, and adding or omitting a suite number, and abbreviating are all common ways to cause the system to create multiple records. Each iteration of the information is treated as unique by most computer systems so each becomes a separate record representing the same person or entity. While providers are sometimes dedicated perpetrators of these data deceptions, payers often contribute to the problem.
1. Data quality is a people problem
Data quality in the provider demographic record in a computer system is critical to analyzing provider performance. How can individual provider performance be evaluated using analytics when multiple records representing the same person are present in the data? How can individual providers be identified when several hide behind the same TaxID number? Some providers use different names for the same office location or claim different specialties. Differentiating the good and bad is challenging.
Accurate data entry is critical to data quality, yet little attention is paid to this basic operational process. Good and bad doctors, as well as payers, are all guilty. A policy requiring names and addresses be pulled from a drop-down list of providers would prevent creating multiple entries caused by name reversals, misspellings, and key entry errors. This is basic software design. For those unable to create a hard-coded list from which the data entry person can select, a copy and paste policy should be established and enforced.
Manually typing information for each bill guarantees errors, record duplication, and confusion. Aggressive process management will significantly reduce the data entry problem.
Developing software interpretive rules to automatically correct and combine multiple records is fraught with uncertainties. For instance, a software rule might be written to interpret name reversals by looking for a comma indicating the last name is first. However, a comma is often not present, so even more confusion is created. Commas and periods, present or not, in names and address are a common issue of data quality and impossible to correct programmatically. It is a people problem.
2. Unique identifier
Still, the best way to resolve the problem, whether it results from provider billing practices or data entry at the payer level, is to require unique provider identifiers such as NPI or state license numbers. NPI (National Provider Identifier) is a system required by CMS (Centers for Medicare and Medicaid Services). Individual providers must have an NPI number to be reimbursed by Medicare. Workers compensation payers should require the number on bills, a simple way to clarify provider identity. Of course, the same data entry rules must apply — either choose providers from drop down lists displaying NPI numbers or use the copy paste method to avoid inaccurate NPI number entry.
Most medical providers currently have NPI numbers because they want to be reimbursed by CMS for non-workers comp services. NPI numbers in the bill and in payers computer systems would eliminate the disguise offered by deliberate or unintended data duplication.
3. Fighting medical fraud
Fighting medical fraud is more than challenging. But it is not only providers who contribute to the problem. Clean and complete provider records where the data are entered exactly the same way for every bill received from a provider will go a long way to correcting the problem. Duplicate records would be avoided and individual performance more accurately and fairly analyzed.
Evaluating provider performance and rating providers analytically depends on correct individual identification. Multiple records in the data for the same provider generated by sloppy data entry practices simply perpetuate and exaggerate the problem.
Author Karen Wolfe, BSN, MA, MBA, President/CEO, MedMetrics®, LLC. Karen is founder and president of MedMetrics® LLC, an Internet-based Workers Compensation medical analytics company. She applies her medical knowledge to gathering, understanding and applying Workers Compensation data to the operational process. MedMetrics imports, integrates, and analyzes its clients’ medical billing and claims level data. MedMetrics uses several tools such as Predictive Intelligence Profiling and Medical Provider Performance Assessment to gather and analyze data. Contact: Phone: 541-390-1680; Karenwolfe@medmetrics.org; www.medmetrics.org.
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.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
An Albany, N.Y., woman was recently ordered to spend one to three years in state prison, and ordered to pay $43,405 in restitution, based on false claims she made concerning a neck injury, Albany County District Attorney David Soares announced.
Kelly Woods, 23, admitted she lied to doctors, the New York State Insurance Fund, and the State Workers Compensation Board by claiming she was suffering a permanent flexion of her neck at a 90-degree angle.(WCxKit)
She claimed her condition was the result of a workplace accident at a local construction firm based in Colonie, N.Y. Woods was caught during video surveillance moving her head and neck normally, according to prosecutors.(WCxKit)
Soares said Woods later fled to Utah and had to be extradited to New York. In March, she pleaded guilty to third-degree insurance fraud. NYSIF said the prosecution saved more than $591,000 in future benefits.
Author Robert Elliott, executive vice president, Amaxx Risks Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com.
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.
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.
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