You Caught ‘Em Red Handed, Action Steps For Fraudulent Work Comp Claim

It is a fact that most workers compensation claims are legitimate. However, workers compensation fraud is prevalent in nearly every employer in America. There are many types of fraud investigation including:

– General Investigation

– Activity Check

– Sub-Rosa Investigation

– Medical Records

– Virtual Investigation / Social Media

– Workplace Monitoring

Based on the nature of the claim, the employer should know what options are available, and what to ask for. You should also work with only qualified, bonded investigation firms, and monitor the investigation closely.

If during your investigation you uncover what appears to be fraud, it’s time for documentation, and time for action.

Avoid “Good Day / Bad Day” Syndrome

Make sure to do enough investigation so you record the activities over a long(ish) period of time. This is to avoid what is known as “good day, bad day syndrome” — meaning the employee has some good days and some bad days. If you have only a brief snapshot of activities, it is not an indication of overall condition and in a hearing the judge may rule the evidence is not enough to prove inconsistent activity.

Communicate With Treating Doctor

1. Send your proof first class mail, certified and return-receipt requested to the employee’s doctor and include all your contact information, employee name and claim number. Or, take it to your company’s consulting doctor, also called a medical advisor or peer-to-peer, and meet with him/her first to share the information and discuss whether the activity (if prolonged) is contrary to what you are being told about their abilities

2. Explain the situation to the doctor that has given a prognosis of “not able to work”. Say something like, “You indicated on a Disability Form provided to Mr. Jones he was unable to work because he had very limited range of motion in his back. In light of the investigation videotape and report enclosed would you please review the situation and determine whether Mr. Jones’ range of motion is still very limited. Our investigators observed Mr. Jones on five consecutive days one week and several days the following week, doing landscape work with a local landscaping company. Additionally, over the weekend he was observed playing softball for several hours at a time. He was doing these activities with no apparent physical or medical limitations.”

3. Ask the physician if he or she agrees the employee is now able to perform his original job as XXX and request an amendment of the disability form report and fax it immediately to your office.

4. Enclose a new Disability Form for the doctor to amend with the new, proper physical restrictions, if any.

5. Include your phone number and encourage the physician to call with questions.

Author Michael B. Stack, CPA, Principal, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

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Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker, attorney, or qualified professional.