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.
- 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.