How the Adjuster Handles a Suspected Fraudulent Claim

Many injured workers and the public in general often feel it’s “them” against the EMPLOYER. They also think insurance companies live to deny claims – of any type. So, okay – now and then we hear of an insurer who denies claims left and right, but in truth most claims are accepted.

When claims are denied there is usually a good reason. Let’s explore how an adjuster handles fraudulent claims…

When the adjuster has questions about a claim it may be denied or suspended pending investigation. Receiving a Notice of Dispute or Suspension of Benefits does not mean the claimant (injured worker) is suspected of fraud, it just means there is an ongoing investigation to determine the validity of the claim- the claim is being substantiated.

Fraud constitutes statements made or injuries claimed that are 100% untrue. Carriers rarely see an outright fraudulent claim in workers compensation even though this is what is so often reported on television. The carrier must prove without a shadow of a doubt that the claimant is lying about the circumstances or statements surrounding the injury claimed. And, even though I use the words “shadow of a doubt” that is not the true legal standard for how much proof the carrier must have. The burden of proof is established by the workers comp laws in each respective state and varies, and is much less than in a criminal case.

Adjusters are always looking for more definitive information from doctors including: past medical records, workers comp injuries or auto accidents, pre-existing conditions, and witness statements to help correlate the injury to the claim details. They will also review photographs of the location where the injury is said to have occured and a handwritten statement from the claimant. A recorded statement is critical for further action against the claimant if the claim is determined to be fraudulent. Good claim investigation takes time. Medical report statements and objective medical evidence are the most solid details to go on.

If a worker claims a knee injury at the workplace, unwitnessed by anyone and has no classic signs of a knee injury, that doesn’t constitute fraud. It just means the claim is weak and may be denied. In such a case, an adjuster may speak with the insured to request surveillance to “see” what degree of disability the claimant is exhibiting in their day-to-day activities.

On the other hand, if the worker claims a knee injury and submits a medical slip created on a home computer, fraud is possible if it is an attempt to submit a piece of evidence for the support of a claim that is a 100% fake. The carrier may initially accept the claim and then discovers through investigative means the medical slip is a fake, completely made up or altered to state there is a higher degree of disability than there really is. The claim will be denied and, in some jurisdictions, the carrier will pursue recovery of payments made to the claimant through legal means.

A claimant has to be very bold, and ready to risk probable legal action from both the carrier and the state were the claim is filed. Filing a fraudulent claim is not very rewarding, and the down side is huge — which is probably why true fraudulent claims are rare.

A claim under investigation doesn’t mean it is denied due to fraud. It means the adjuster’s investigation is not complete. The most common mistake employers make is not reporting a claim to the adjuster. Even when an employer has a good idea the “injury” is not legit, or doesn’t make sense, report it and let the adjuster decide. If the claim is denied be assured it is done properly and ethically.