Use Medical Expertise To Control Employee Fraud

While most medical providers are honest and operate with high integrity, it is important to recognize that medical providers have ability and power to commit and aid employees in commission of workers’ compensation fraud. The more the provider sees or treats the employee, the more can be billed.

While not actually being provable as fraud, medical providers may require unnecessary testing and treatment in order to protect themselves against mal-practice claims.

Incidents that may suggest fraud or collusion between Doctor and Employee:

Billing under wrong treatment codes.
Billing for visits that never occurred.
Extending disabilities beyond normally expected recovery periods.
Setting permanency ratings that are above normal expectations.
Bringing in latent symptomology or non-related symptomology.
Claiming aggravated pre-existing conditions.
Charging for a treatment that was higher than the one preformed.
Recommending care, prosthetics, medical equipment, or treatment that might not be needed.
Presenting vague or guarded diagnosis that does not fit facts as to how the loss occurred.
Weak explanations as to causally related treatment.
The medical provider has close associations with plaintiff counsel.

Adjuster Challenges:

Adjusters, like the public at large, hold the medical providers in high esteem. It is easy for an adjuster to blindly believe that the medical provider knows best. Even if adjusters do suspect problems they may be easily intimidated when trying to challenge the medical provider. It is tough to challenge when the playing fields are so separated.

To compound the problem, most medical reports are now coded by number, making it more challenging for an adjuster to know what the numbers represent.

States that have medical fee schedules and treatment standards often can be manipulated so that a higher paying code could apply. Most adjusters cannot be expected to have the medical expertise and training to pick up on these subtleties.

Medical Management:

All claim units need one claim technician, or a medical advisor with a strong knowledge of basic traumatic injury and occupational disease exposures. This includes knowledge of normal treatment procedures, normal expected disabilities, and possible underlying pathologies that may be aggravated. Training in state medical fee and procedure schedules is mandatory.

The medical expert should be able to determine if the injury or disease is causally related to the employment. Handling technicians need to assist the medical expert by taking statements and gathering detailed factual evidence describing exactly how the loss occurred.

The medical expert needs to keep current on new medical procedures, changes in fee and treatment law. If the claim unit cannot have an in house medical expert all cases should be referred to a medical management organization.

Such an individual is on a closer level of knowledge to the medical provider. Medical providers should be more receptive to a call from another medical expert.

On discovery of an issue or problem, direct contact with the medical provider is made. If resolution does not occur, the medical expert with the handling adjuster should immediately move for Independent Medical Evaluation, Utilization Review, and/or contact Defense Counsel for the next appropriate step.

Seriously injured employees should be placed under medical management. Employees with more than 12 weeks of lost time due to injury or disease should be reviewed for medical management.

Author Michael Stack, Principal, COMPClub, Amaxx LLC. He is an expert in workers compensation cost containment systems and helps employers reduce their work comp costs by 20% to 50%. He works as a consultant to large and mid-market clients, is co-author of Your Ultimate Guide To Mastering Workers Comp Costs, a comprehensive step-by-step manual of cost containment strategies based on hands-on field experience, and is founder of COMPClub, an exclusive member training program on workers compensation cost containment best practices. Through these platforms he is in the trenches on a working together with clients to implement and define best practices, which allows him to continuously be at the forefront of innovation and thought leadership in workers’ compensation cost containment. Contact: [email protected].

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