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You are here: Home / Claim Management / Fight Workers Comp Fraud & Abuse / New Ways a Private Eye Can Reduce Fraudulent and Frivolous Claims

New Ways a Private Eye Can Reduce Fraudulent and Frivolous Claims

July 21, 2010 By //  by Patrick Barger Leave a Comment

FACT: Your employees will file Workers Compensation claims . . .
FACT: Not all of them will be legitimate.
Patrick Barger, President of Arcane Invesigations, LLC, tells us that unfortunately, many try to beat the system by filing fraudulent or frivolous claims. The National Insurance Crime Bureau estimates Workers Compensation claim fraud costs the industry $5 billion per year. This occurs when your employees falsely claim to injure themselves at work; exaggerate minor work injuries to receive benefits; and/or take sick leave from your company while working another job. You become the victim. THE BOTTOM LINE: It costs you a lot of money!
Private Detective Agencies Can Verify ALL Claims
Hiring a reputable, experienced and credentialed Private Detective Agency for workers compensation claim verification can go a long way to deter would-be fraudsters. Private investigative services are routinely used by employers, claims adjusters and third-party administrators to confirm the legitimacy of certain claims where fraud is already suspected. But when investigators are hired after a claim has been filed and much time has elapsed, it costs you more money in surveillance fees. In these cases, insurance companies (and ultimately, the policyholder) and self-insurers pay for the “pound of cure.” (WCxKit)
Consider this potential solution to reducing surveillance fees and creating a blanket of deterrence to throw over those people waiting to cash-in on your workers compensation insurance: hire a Private Detective Agency to take the initial report of ALL workers compensation claims. In most cases, HR personnel take the initial report of a workplace injury. Likewise in most cases, HR personnel are not trained fact-finders or interview specialists. Good Private Investigators are subtle, know the right questions to ask and are experienced in determining and documenting the facts you need to know. When suspected fraud is discovered, investigators are already familiar with the case and can capture the necessary evidence to prove it. 
After the first time an employee visits with a private investigator to discuss an injury, it won’t take long for your entire workforce to know the first place they will stop when filing a workers compensation claim is a Private Detective Agency. As a result, those employees considering a fraudulent or frivolous claim will always think twice. This is a very inexpensive “ounce of prevention.”
Review ALL Claims
In addition to taking the initial injury report, Private Detective Agencies can also do a world of good toward terminating fraudulent and frivolous claims by conducting a review of existing open cases. For example, Arcane Investigations currently contracts with a major employer to periodically review each and every open workers’ compensation claim they currently have on the books. In this case, HR asks all injured employees to meet with us individually for a periodic review of their case. It is well publicized this is a review of all cases, not just one person’s — an audit of the employer’s entire workers compensation procedure, if you will. We go over the initial injury report and ask a series of follow-up questions concerning their current status. If we did not take the claimant’s initial injury report, this review process allows us to subtly inform them of our ongoing involvement.
A review strategy puts claimants on notice that there are trained professionals involved in their employer’s process. For our clients, it has had a profound effect on speeding-up the rate at which would-be malingerers return to work as well as toward early and reduced settlement or dismissal of claims in favor of the employer. Another valuable “ounce of prevention” versus a more expensive “pound of cure.”
Reduce Workers Comp Claims in General
Using a Private Detective Agency to verify all workers compensation claims is having an impact on reducing the overall number of claims for many employers. Arcane Investigations, LLC, has been taking the initial report of workers compensation injuries for several employers over several years. Those employers have experienced an average 35% decrease in overall claims filed since we began our program. This is attributed to the average employee asking themselves, “Do I really need to file a workers’ comp claim?” If the injury is "real" then of course they do, but if not, there is pause and reflection.
Various Investigation Types
If you do not use a Private Detective Agency to take the initial report of all workers compensation claims as an inexpensive “ounce of prevention,” then there are techniques that will definitely give you the “pound of cure” you’re looking for. A Private Detective Agency can use the following methods to help you verify workers compensation claims: 
·       Activities Checks are general in nature and determine several key elements of a subject’s life to document the person’s daily routine
·       Sub-Rosa Surveillance is specific in nature and uses video or still-photo evidence to document physical activity to compare to claimed injuries
One or both of these types of investigations will help determine if your employee’s claim is a legitimate one. Private Detective Agencies use a combination of both of these techniques in various degrees depending on the unique characteristics of the case. This is where the “rubber meets the road” and is no place to cut corners in your efforts.
Not All Private Detective Agencies Are Credible
When choosing a private detective agency, make sure the one you hire is reputable. Depending on your state’s requirements, many people who manage to get a license as a private detective are those who failed to be hired as police officers. In Nebraska for example, prior to about 15 years ago, anyone who could pass a background check could manage to get a license. Some were highly credible while others clearly were not. Many of these people who were not are still in business today. Since then, Nebraska has implemented a requirement that all private detectives must possess 3,000 hours of investigative experience before they are granted a license. Ask your potential private detective for references and credentials and know your state’s requirements for licensure. (WCxKit)
Pay Legitimate Claims Only!
Whether you own a business, are self-insured, an insurance agent, or responsible for employees, a Workers Comp investigation can help ensure all claimants are entitled to the compensation they receive.
 
Author Patrick Barger is President and Supervising Investigator of Arcane Investigations, LLC who we are pleased to welcome as our latest guest contributor. His firm consists of staff who were former law enforcement officers, government investigators or academics. Patrick is also a keynote speaker specializing in the area of fraud. He can be reached at 402-473-2773 or www.ArcaneInvestigations.com

WC Calculator:  http://www.LowerWC.com/calculator.php
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WC Round Table LinkedIn:  http://www.linkedin.com/groups?homeNewMember=&gid=1922050/

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.

  
©2010 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact
 Info@WorkersCompKit.com 

Filed Under: Fight Workers Comp Fraud & Abuse Tagged With: Eliminating Fraud and Abuse, Private Detective Agencies

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