Effective Workers’ Comp Claim Investigation Techniques

Effective Workers’ Comp Claim Investigation TechniquesMembers of the claims management team are called upon to investigate claims and make determinations of primary liability and the necessity of medical care and treatment.  This requires them to perform tasks on numerous occasions quickly and effectively.  It also includes the ability to be creative while cost-efficient.  Here are some tips to consider in order to succeed at this difficult task.

 

 

Obtain the First Report of Injury

 

The FROI contains important pieces of claims information that can be useful when starting an investigation on a claim.  While the information might not be accurate, it can lead to important information on the background of a claim.  Information to obtain from the FROI include:

 

  • Body parts injured during the incident;

 

  • Names and addresses of medical providers related to the work injury;

 

  • The mechanism of injury;

 

  • Location of the injury; and

 

  • Potential witnesses.

 

While the FROI is not necessarily accurate, it can be valuable for claim development purposes.  It can also assist when it comes to understanding inconsistencies in the claimant’s recorded statement and future deposition.

 

 

Other Accident or Injury Reports

 

In many instances, there are other accident or injury reports that are generated following a work injury. This can include reports from the owner of the premises at which the injury took place, reports from law enforcement and emergency medical service providers and other interested parties.  Information obtained from these reports can move a claim investigation forward in a cost-efficient manner as they are usually free to obtain.

 

Accident reports also contain additional information that is helpful to an investigation.  This includes photographs and videos of the incident.  Information received from these reports can be priceless, especially if they contain information that contradicts allegations made by the injured worker.

 

 

Recorded Statements of the Employee

 

Most jurisdictions allow the workers’ compensation insurance carrier to take a recorded statement of the employee following a work injury.  It is important to follow the applicable statutes or rules to preserve evidence for future use.  A well recorded statement should follow a script to ensure all important questions are asked.  A seasoned member of the claim management team will also learn how to probe for information in a friendly and courteous manner.  When taking a recorded statement, listen carefully to what is being said and ask probing questions.

 

 

Authorizations for Medical and Other Records

 

Although workers’ compensation claims investigations are generally excluded from state and federal health care privacy laws, it still remains important to obtain properly executed authorizations when requesting medical, employment and other records.

 

  • Medical: It is important to obtain a complete set of medical records for an injured party.  This should go beyond what is directly related to the work injury.  Obtaining a complete set of medical records can lead to other areas of investigation and allow your independent medical examiner to have a complete and accurate background of a claimant.

 

  • Employment: These records are used for a variety of reasons.  Not only will it serve as a source to calculate the employee’s average weekly wage, but it will also allow one to understand an employee’s transferable job skills better and identify areas of vocational limitation.

 

  • Industrial Commission: Records regarding prior workers’ compensation claims are generally stored at a state’s industrial commission.  These records include not only details of prior workers’ compensation claims, but the names of former employers and medical providers.

 

 

Other Sources of Investigation

 

There are countless other areas to investigate as part of any workers’ compensation claim.  Sources of research and investigation should include:

 

  • Social media: Checking to see public activity a claimant has on social media is a must. Be cautious as ethical and legal issues can arise when claims investigation break laws to trick someone into giving you access to their accounts.

 

  • Central Index Bureau Check: This is a clearinghouse where insurers and self-insured companies file reports of claims. It allows members to later search for information on prior injury claims based on one’s name and Social Security number.  Costs may apply for these searches.

 

  • Surveillance: This is another tool that can be used. However, there can be significant costs associated with the hiring of a private investigator to research background information on a claimant and take undercover video.

 

 

Conclusions

 

The modern workers’ compensation claim handler needs to be creative when it comes to investigating a claim.  Technology has provided them with numerous resources to obtain information quickly, and in a cost-effective manner.  Performing a diligent investigation can reduce program costs and limit claims litigation.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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 & lead trainer of Amaxx Workers’ Comp Training Center.

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

10 Red Flags Indicating Need For Surveillance in Workers’ Comp

Surveillance Can Be Very Beneficial Tool for Workers Comp When Used ProperlyWhen fraud is suspected, or the injured employee appears to be malingering, surveillance by private investigators is often utilized to obtain information that can be used to move the workers’ compensation claim to a conclusion.   Surveillance properly conducted and documented can be very beneficial at settlement conferences, mediations, and hearings.

 

Surveillance is often used to:

 

  • Obtain photos or videos of the injured employee working either at another job or is working around the home performing yard work, home maintenance, car maintenance, etc.
  • Show the injured employee is not as disabled as claimed – for example, the injured employee uses a cane at each medical appointment but can go grocery shopping without the cane or other medical equipment.

 

The workers’ compensation claims adjuster should maintain an up to date knowledge of the status of the claim.  Surveillance is not a substitute for proper claims management.

 

 

10 Red Flags Indicating Need For Surveillance in Workers’ Comp

 

  • If the adjuster notes any red flags during the course of the claim, surveillance should be considered.  Red flags indicating surveillance could be beneficial include:
  • The injured employee is never at home when the adjuster calls
  • The injured employee develops new complaints and symptoms weeks or months after the initial accident
  • The length of recovery time is excessive for the nature or the extent of the injury
  • There are rumors the employee is working elsewhere
  • The employee is unwilling to attempt modified work/light work
  • The employee’s spouse/partner is also collecting disability income of some type
  • The physical therapy reports or the doctor office visit notes include comments that indicate the employee does not seem to be as injured as the employee claims
  • The employee is receiving an excessive amount of narcotics
  • If the adjuster has been properly working the claim and is up to date on the medical status of the claim, and knows the claimant is not malingering, surveillance is usually not justifiable if there are no red flags.

 

 

Need More than One Piece of Evidence to Help Prove Case

 

Unfortunately, surveillance often has a low “success ratio.”  This does not mean that surveillance was not justified, only that the surveillance did not occur at the same time the employee performed an activity that demonstrated the injury is not as bad as claimed.

 

When surveillance is successful, for example, the private investigator gets 2 hours of video of the claimant shoveling deep snow off his sidewalk, driveway and neighbors walkway, it makes it much easier to settle the claimant’s low back injury claim.  However, the adjuster should not act too quickly with the information obtained by surveillance.

 

When surveillance produces proof that the claimant is not injured as severely as claimed, further surveillance is needed.  One video of the injured employee working or walking without his cane is very much subject to the argument that the claimant “was having a good day,” and the video does not show the claimant spending the next week in bed after shoveling the snow.  To defeat the “one good day” rebuttal of the surveillance video, surveillance video or photos should be obtained on different days.

 

 

Share Videos with Defense Counsel

 

If defense counsel is involved in the claim, the video or photos should be shared with defense counsel.  A decision should be made as to when the surveillance documentation will be used in defense of the claim.  The information obtained through surveillance is normally subject to discovery.  Therefore, the adjuster and defense counsel should collaborate on the most productive time to make the information available to the employee and his/her attorney.

 

Surveillance companies are also utilized to perform civil and criminal background checks, obtain motor vehicle records, interview neighbors and friends to see if the employee has a history of prior medical issues related to the current injury claim, and obtain information on the employee’s educational and work background.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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 & lead trainer of Amaxx Workers’ Comp Training Center.

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

7 Types of Workers’ Comp Claims That Raise Questionable Red Flags

7 Types of Workers’ Comp Claims That Raise Questionable Red FlagsMost workers compensation claims are legitimate. Unfortunately, there will be times when an employee will try to take advantage of the workers’ comp system. When an employee has a workers comp claim with the following characteristics, it is time to be extra diligent in your approach to the claim.

 

 

  1. The Monday Morning Claim

 

When an employee reports an injury within the first few minutes of being on the job on Monday morning, there is a good chance the accident did not happen within those first few minutes but over the weekend while the employee was doing household chores or participating in a sporting activity or other physical exertion. This is especially true if the employee, who does not normally come in early, gets in and gets hurt before anyone else arrives on the job.

 

 

  1. The Unwitnessed Accident

 

A disproportionate share of back injuries, neck injuries, and other musculoskeletal injuries seem to occur when no other employees are in the immediate area. Often these unwitnessed injuries occur to people who have degenerative disc disease, arthritis, or other musculoskeletal issues bothering them before the unwitnessed accident occurs.

 

If your “injured” employee works typically around other employees, and the employee is in an area where the employee normally does not work, when the unwitnessed accident occurs, an in-depth investigation will be needed.

 

 

  1. The Late Report of Injury

 

When an employee is injured on the job, unless there is some really compelling reason to not report the injury, the accident will be reported the same day it occurred or at the latest the following day. When the employee reports an “accident” that occurred last week, last month, or longer, it most likely did not occur at work.

 

 

  1. I Forgot the Details

 

When the employee tells the employer that the back injury happened to carry a box of parts, and then tells the emergency room doctor the injury occurred picking up a heavy piece of equipment, and then the lawyer claims the back injury happened while the worker was using a jackhammer, which version of the accident do you believe? If the accident version varies from medical report to medical report, most likely none of the accident versions are correct. The employee who forgets the details of the accident is most likely having workers’ comp take care of the aching back or another body part when the worker should be paying and submitting bills to the worker’s own health insurance.

 

 

  1. The Unhappy Employee

 

Workers compensation is often abused by an unhappy employee. Sometimes employees may use a workers’ comp claim to keep from being laid off following a disciplinary action or to maintain a source of income when the union calls a strike, or when the factory is closing, or at the end of seasonal employment. When an employee is disgruntled about some aspect of the job, workers comp is often seen as a paid vacation.

 

 

  1. The Cheat

 

While some of the fraudulent workers’ comp claims are to have workers’ comp pay for a real, but not work-related injury, many fraudulent claims are based solely on greed. For example: The employee is offered a temporary “under-the-table job” paying cash. Claiming workers comp indemnity benefits while working under-the-table is a good way of getting additional income while maintaining a job to go back to when the temporary work ends. Other variations of the cheat is the employee who has been working two jobs, but is ready to give the second job up. A workers’ comp claim drawing indemnity benefits from two jobs greater than what is made on only one job provides the excuse needed to make a phony claim.

 

 

 

  1. The Migrating Injury

 

The migrating injury claim is often missed by an employer or adjuster. The employee starts out with a very real, very well-documented injury such as a falling object breaking a foot bone. The employee gets acquainted with the doctor and after several visits advises the doctor there is wrist pain. The doctor starts treating the wrist for carpal tunnel syndrome. When the doctor starts treating a body part that was not injured on the day of the accident, the additional medical treatment needs to be promptly identified and denied.

 

 

Any time you feel there is something just not right about an employee’s workers comp claim, your instinct is often correct. Any time a questionable claim is reported, do not just accept it. Report it to the claims office as questionable and explain why you think so. Ask for a complete investigation and involvement of the SIU (Special Investigation Unit) in the claim. Defeating the questionable claim will have a positive impact on your workers’ compensation costs.

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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 & lead trainer of Amaxx Workers’ Comp Training Center .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

5 Tips – How to Use Surveillance to Prove Workers’ Comp Fraud

There are jurisdictions where workers comp is very employee-friendly, and it seems the employee can do no wrong. In the mind of a judge, it is the employee who suffered a great loss while working for your company. They are in daily pain because of injuries suffered on the job site. They are trying to make ends meet on reduced wages.

 

 

For the most part, this is correct. But every adjuster has a few cases where there is that gut feeling that something is not right. But, if the medical adds up to supporting ongoing disability, and a nagging feeling still exists, then it is time to run surveillance. But how does it work to help in a specific case? There is no question the claimant is injured. More than 10 seconds of video of the claimant getting the mail is needed. Here are 5 ways to think about surveillance and its benefits.

 

 

 

  1. Use a Surveillance Firm that Boasts Results

 

There are many surveillance firms available. Some of them specialize in legal backgrounds in law enforcement, some with military backgrounds, and some with insurance backgrounds to name a few. Whatever the case may be, a reputable firm must be chosen.  Video evidence of the claimant doing something outside of the medical restrictions must be obtained. Showing this as repeated behavior is key.

 

 

Obtaining this kind of evidence to help the case is partially due to luck. But this is where a skilled investigator plays a huge role. Through a background search including social media and understanding the person’s habits, one can begin to theorize how and when the subject will be active.   For example, if the claimant has pictures of deer on a Facebook page, it can be reasoned the Fall season is likely an outdoor time for the worker to be active.

 

 

Feedback from peers in the specific industry and carriers is helpful. Some carriers now have their own surveillance unit, and it can be considerably less costly to use a carrier’s firm than to go outside of the network. This is a large expense. But if good video is recorded, it can save so much more in overtime cost and is a wise investment.

 

 

  1. Plan on 3-5 Days Worth of Surveillance

 

As mentioned above, the person must be shown breaking medical rules. If the claimant has restrictions of no lifting over 15 lbs and is caught at the grocery store lifting 2 bags of groceries, that is not exactly case-changing evidence. But, if the worker is lifting groceries one day, then going home and doing yard work for 2 hours, helping a neighbor the next day cut a tree down, then waxing the car a day later followed up by working with a friend to remodel a kitchen, now potential evidence is building to show a pattern. It shows the worker living a normal life with little to no medical problems.

 

 

The scenario of finding evidence is probably not going to happen on every file, but it is amazing to discover what people are doing on their spare time. Some people hole up in houses and only stick arms out to retrieve mail from the bin by the front door.  Those people may have experienced having surveillance used on them! While others are out golfing, playing softball, deer hunting, or boating with a shoulder injury to name a few scenarios. Whatever it may be, the employer needs enough video to justify the person breaking medical restrictions as often as possible. This is especially helpful when an IME supports an ongoing disability. Then after video is successfully recorded, it is sent to the IME doctor for review. And the doctor may change an opinion to show no ongoing medical disability. If there is a suspicion that a claimant is not 100% truthful with a disability, and the right video and doctor’s opinions coincide, then the adjuster’s suspicions are justified.

 

 

 

  1. Be Sure Reports Detail All Activity

 

Just the video alone can be enough to swing an opinion to deny ongoing benefits. In addition to the video, record every activity, action by action. Sometimes the events unfold before the investigator can get the camera rolling. Or the investigator cannot get a shot due to location. Investigators should still document the activities of the subject in great detail. Chances are the agency may be deposed on the case at a later date, so most reputable firms are extremely detailed in every fact and activity on the case. In these cases, it is preferred to have too much information than not enough.

 

 

 

  1. The Video Obtained Has to be Clear

 

Getting video of the claimant is very important, but it can be worthless if the claimant is out of view or the picture is fuzzy. A lot of this comes down to the investigator’s experience and the quality of the equipment the firm uses. Ask for examples of video and reports to gain an idea of how a case is handled.

 

 

 

  1. The Subject Has to be Violating their Restrictions Frequently

 

We mentioned above getting 3-5 days worth of video to show the subject breaking restrictions on multiple occasions.  There are cases of a judge viewing a video of the claimant breaking restrictions on one occasion and then turning to the subject and saying “Why were you lifting 40 lbs when your restrictions state you should only lift 20 lbs?”   The response is usually something like, “Boy I must have been having a good day that day because I could hardly lift anything at all.”

 

 

It may seem unbelievable, but depending on the jurisdiction, some judges believe it.   Show the judge the worker’s behaviors are not just a one-time thing. The person is violating restrictions on a daily basis for 4 straight days. Imagine if surveillance could be done for 30 days in a row, so much evidence of restriction violation would exist. Malingering would be simpler to prove.

 

 

And that is the goal and challenge when recording a person doing the wrong thing more than one time. It shows a pattern and makes the point the person is leading a normal, pain-free life, despite reporting otherwise to the doctor. If blatant disregard is evident through the use of video on multiple occasions, there is a great chance of getting the desired result — terminating the fraudulent claim.

 

 

Summary

 

Surveillance can be a useful tool to help confirm a claimant’s honesty. But to benefit from it fully, certain guidelines must be followed. First, a reputable firm must be used making sure the firm is descriptive and up on the latest technology. Try to obtain as much video as possible and then tie it into the case defense. Although not every person “doing fraud” will be caught, chances are those violating the medical restrictions and working second jobs under the table will be caught.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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 & lead trainer of Amaxx Workers’ Comp Training Center.

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

5 Scenarios to Use Surveillance to Stop Workers’ Comp Fraud

5 Scenarios to Use Surveillance to Stop Workers' Comp Fraud

Surveillance is expensive.  The cost of a private investigator (PI) to establish the claimant’s workers compensation injuries are not real or exaggerated, varies from $75 to $175 per hour, depending on the location and the legal requirements within the state to become a private investigator. The cost of surveillance can quickly escalate as the private investigator sits and waits all day for the claimant to come out of his house or to leave and travel away from the claimant’s residence.  Too many $1,000 to $2,000 invoices received by adjusters, only to learn that the claimant came out on his porch several times to smoke cigarettes, or walked out to the mailbox, has made many adjusters skittish about using surveillance.

 

To stop a fraudulent claim with surveillance requires the surveillance to be used correctly and in the right situation.  Here are the most appropriate times to use surveillance.

 

  • When the employee claims he is so severely injured that he is unable to do anything.
  • When there is a strong reason to believe the limitations of the injury are not as stated
  • When it is learned the employee is working elsewhere
  • When the claim has the potential to become catastrophic
  • When there is a need to stop a claim that all the co-workers know is fraudulent

 

 

The Exaggerator

 

With the exaggerator, the employee had a verifiable accident, but the alleged injuries are way out of proportion to the objective medical evidence.  For instance, the employee fell and bruised her knee.  The next thing the employee is treating for injuries to her neck, upper back, lower back, both knees, headaches, and fibromyalgia.  The employee tells the medical provider she hurts so bad that she can hardly walk and any effort to lift anything creates intense pain.

 

Surveillance video showing the employee walking through the mall carrying several purchases will discredit the employee’s subjective complaints, but it usually will not lead to her quick recovery.  The exaggerator once confronted with the lie about her injuries will quickly concoct another lie, like she had accidentally taken an overdose of her pain medicine, so she went to the mall to get the things she needed before the pain came back.  One thing smart adjusters know about surveillance is usually more than one day of video to refute the excuses of the employee’s caught on film is needed.

 

 

Phony Limitations

 

Medical providers often determine the work restrictions they place on an employee by the information they receive from the employee.  This is especially true with back injury claims where the employee is unable to bend or twist and is given a low weight lifting restriction.  If there is not a modified duty program, then all the employee needs is a no lifting restriction to be off work.  While it may be rare the employee actually has to lift 25 pounds, the employee has told the doctor that he has to frequently lift 25 to 50 pounds.  The doctor assigns a 10-pound lifting restriction to protect the employee from further injury.

 

Surveillance can be effective if the employer or the adjuster knows the claimant’s off work routine and can plan the surveillance for a time when it is believed the employee will be active.  Unfortunately, if the adjuster does not know when the employee may be active, surveillance is often wasted money as the PI has to be at the right place at the right time to catch the claimant lifting anything.

 

 

Got Another Job*

 

Most employees who fake an injury or exaggerate a real injury do so because they do not want to work.  However, occasionally there will be an enterprising employee who thinks he can work at another job while collecting workers compensation from the insurer.  The new job maybe seasonal work or could be another job the employee wants to try out before turning in his resignation.

 

Often the employer will receive a tip from another employee or even anonymously that the “injured” employee is working for a competitor or in an unrelated business.  This is an excellent time to use surveillance as the workers’ compensation claim can be brought to a quick conclusion with video of the employee working at another job.

 

*You may know your employee has another job prior to their claim, or your employee may tell you the truth about the other role before you found out through investigation.  If this is the case, you may want to conduct surveillance if you think they are performing more significant work than what they can provide for you.

 

 

Catastrophic Injuries

 

When the employee is seriously injured with the potential to be designated as a total permanent disabled person, surveillance should be used to verify the limitations of the employee.  Often the surveillance will prove the employee is unable to walk without a cane, or cannot bend to get into his automobile, or must have assistance to climb steps.  Surveillance in this situation can justify bringing the claim to a quicker settlement based on the verified physical limitations of the employee.

 

Occasionally the surveillance will show the claimant has the doctors fooled and the extent of the injury is not nearly as severed as the employee has portrayed.  While the odds are against the PI being successful, when the PI does prove the employee is not seriously injured, or the injuries do not limit the claimant as the claim cost savings can be substantial.

 

 

The Co-workers Know it is Fraudulent

 

When the employee has told the entire department that he is going to “take a vacation on workers comp”, the employer knows the employee has to be caught.  If the employee does not even care it is known that the claim is highly questionable, the failure to stop it will set the company up for many more bogus workers comp claims.

 

When the employer presents sufficient evidence to the adjuster that the claim is fraudulent, the adjuster will often assign surveillance.  If the adjuster does not, the employer should.  If the employee is allowed to present a phony work comp claim and gets paid time off, the employer can expect other employees to file copy-cat claims when they want a paid leave of absence.

 

Surveillance needs to be used to prove the claim is fraudulent.  Ample documentation needs to be compiled through surveillance to prosecute the employee for fraud.  When the employer prosecutes fraud, the number of fraudulent claims quickly drops to near zero.

 

If appropriately used, surveillance can reduce the cost of fraudulent claims.  Anytime you think a claim is fraudulent or you believe surveillance has potential to prove a claim to be bogus, contact your workers’ compensation adjuster, and discuss why you think surveillance is needed. You will often be right.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO Amaxx LLC. He is an expert in workers’ compensation cost containment systems and helps employers reduce their workers’ comp costs by 20% to 50%.  He works as a consultant to large and mid-market clients, is a 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 & lead trainer of Amaxx Workers’ Comp Training Center.

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2018 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

 

 

 

4 Essential Elements of Work Comp Claims Investigation

workers' comp InvestigationIt is important for even the most experienced claims handlers to brush up on their claims investigation skills.  Doing so adds a layer of diligence to one’s claims investigation and improves client satisfaction.  It also provides an opportunity to look at things from a different angle and reduce workers’ compensation program costs in the long run.

 

 

Interviewing the Injured Worker

 

An effective claims management and investigative tool is the interview with the injured worker.  Not only are they a witness to the incident, but it can also help the claims handler and the team evaluate the case.  This includes the character and believability of the employee.

 

Important information to obtain from the injured employee includes:

 

  • How did the injury occur?

 

  • What type of work were they performing just prior to the incident?

 

  • How did they report the injury?

 

  • What was the extent of their injury?

 

  • Where did they receive medical care and treatment before and after the incident?

 

It is important to be friendly and remember the injured worker is a human being who deserves to be treated with respect and dignity.  One can empathize with the employee and still be an advocate for the insured.  Be sure to remain calm and establish rapport.

 

 

Determine Other Witnesses

 

This requires a member of the claims management team to act like a detective and ask the right questions.  Witnesses not only includes people who saw the incident occur, but others who know the employee’s habits and conduct.  It can also include people involved in the recovery of the employee.

 

Important information to obtain can include:

 

  • Activities or interests of the employee beyond work. Do they go to a certain restaurant?  Whom have they received medical care and treatment from in the past?  What organizations do they belong to?

 

  • A determination as to the employee’s educational and vocational background. It is also important to know if they have been involved in prior workers’ compensation claims or personal injury litigation.

 

 

Injury Site Reconstruction

 

Many denied or disputed claims rest of the proposition that an injury could not of occurred based on the described mechanism.  This is often relevant in repetitive injury cases where the employee is claiming the injury occurred over a period of time.  In these incidents, it is important for a medical or vocational expert to provide expert opinion testimony as to the physiological aspects of a claim.

 

Members of the claims management team may also need to work with a client who is not cooperative.  In order to capture this evidence, it is important to develop professional relationships and educate the insured on injury site reconstruction and evidence preservation prior to the occurrence of an injury.

 

 

Understanding the Law

 

Lawyers are a great source of accurate information concerning the law in workers’ compensation matters.  However, members of the claims management team need to understand the law.  The goal is to reduce program costs by limiting attorney referrals to those instances where it is necessary.

 

In the meantime, members of the claims management team can be proactive in this area without getting a law school education.  This can include:

 

  • Hosting defense attorneys for “lunch and learn” opportunities;

 

  • Attend continuing education programs with an emphasis on state specific rules and case law trends; and

 

  • Use in-house roundtable sessions to better determine what cases should be referred to legal counsel.

 

 

Conclusions

 

It is important for members of the claims management team to master the basics when handling workers’ compensation files.  This includes frequent refresher courses on handling claims with an emphasis in reducing workers’ compensation program costs.  This includes simple things that include interviewing witnesses, including the employee, and understanding this law.

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

Steps to Take for 5 Common Areas of Employee Workers’ Comp Fraud

When employees file fraudulent workers compensation claims, not only are they stealing from the insurance company, but also stealing from their employer, the shareholders of the employer if a publicly held company, and from their co-workers. The fraudulent workers comp claim is included in the claim history used by the insurance company to set the premium rates for the employer. When the employer pays higher insurance cost due to fraud, there is less money available to invest in the company and to pay the wages and pay raises of the employees of the company.

 

Nearly 25% of workers comp claims involve some element of fraud or malingering, whether it is an outright false claim or inflation of an otherwise legitimate claim. The Coalition Against Insurance Fraud estimates workers compensation fraud cost employers $6 billion a year. The National Insurance Crime Bureau recently reported the number of suspicious or questionable claims has increased as the economy has deteriorated. In fact, workers comp fraud is the second largest category of white-collar fraud only behind income tax evasion. Every employer must be vigilant in protecting themselves from the dishonest employees who will attempt to exploit the workers comp claim system.

 

 

There are five common areas of employee workers comp fraud:

 

  1. The false injury. The employee claims a hurt back or neck or other muscle problems for the sole purpose of collecting indemnity benefits.
  2. The inflated injury. The employee receives a real job related injury but then tries to extend his/her time off work by pretending the injury is worse than it really is so s/he can collect indemnity benefits.
  3. The prior injury. The employee has a real back, shoulder or knee problem from years ago, but now needs additional medical treatment for it.
  4. The at-home injury. The employee gets hurt at home, working for someone else or participating in a sports event, and claims s/he got hurt on the job.
  5. The malinger. The employee got hurt, got well, but got use to staying home and does not want to come back to work.

 

There are several courses of action the employer can take to combat workers comp claim fraud. One of the most effective things an employer can do reduce workers comp claim fraud is to have a well publicized and well used transitional duty or light duty return to work program. While a return to work program will not prevent all fraudulent workers comp claims, it will stop many of them.

The dishonest employee who got hurt at home but does not have medical insurance, or has medical insurance with a high deductible, will still file the fraudulent claim that he got hurt at work. However, the dishonest employee who wants to take an extended paid vacation with workers comp indemnity benefits, or the dishonest employee who wants to work at another job while collecting workers comp benefits, will be stopped from doing so by a strong transitional duty program.

 

 

Steps to Prevent Workers’ Comp Fraud

 

In addition to a strong transitional duty program, there are various other steps the employer can take to fight fraudulent claims including:

 

  1. Do not hire employees of questionable character or background. Prior to any offer of employment, thoroughly check the references of the potential employee and their background information.
  2. If an employee refuses transitional duty work, or tries transitional duty work for an hour or two, or a day or two and then stops, make an immediate inquiry into what part of the transitional duty job can’t be done. Make arrangements to alter the transitional duty job to fit the complaints. If the employee still refuses the transitional duty work, ask the insurer’s claims office to consider surveillance on the employee to be sure the limitations away from work are the same as when at work.
  3. Keep an ear open to the rumor mill. Disgruntled employees are far more likely to file a fraudulent workers comp claim then happy employees. Address any legitimate grips or complaints of the employees.
  4. Train your supervisors and department managers to recognize the characteristics of claims frequently indicating fraud. Provide the supervisors and department managers with a copy of our blog on Employee Workers Compensation Fraud
  5. Make sure all new and current employees are aware of your fraud policy of prosecuting workers comp fraud as a criminal offense. (And back it up! If you have an employee who commits workers comp fraud be sure to fully prosecute. If you want to see the number of your workers comp claims skyrocket, feel sorry for the employee or his family and not prosecute an obviously fraudulent claim).
  6. Make sure all employees understand that fraudulent claims come out of the employer’s pocket and reduce the pay raises or bonuses for everyone.
  7. When you suspect a workers comp claim may be fraudulent or when you have rumors or evidence that a claim has an element of fraud, contact the workers comp insurer’s Special Investigative Unit. They have the expertise and the connections with law enforcement to properly investigate and build the necessary proof to prosecute the fraud.
  8. Make it a requirement that the claims handling office of the insurer or third party administrator files an Insurance Services Office index report on every new workers comp claim and does a claims inquiry every six months as long as a claim remains open.
  9. Do not make it easy for the employee to file a bogus claim by having a loose safety program. By removing safety hazards from the work place, the employee has fewer options in creating a false injury scenario.
  10. Remember many fraudulent claims start out with a real injury. When the employee sees the television commercial with somebody holding fists full of money their attorney got them for their workers comp injury, the employee may be tempted to exaggerate his/her own claim. Anytime an employee hires a television attorney, you cannot discuss the claim with the employee, but you can advise the employee of the company’s policy to fight all claims vigorously when an attorney is hired.
  11. Make it a practice to reward fraud tips. Have a publicized program of paying a reward to anyone who reports a workers comp fraud resulting in conviction.

 

Fighting fraudulent workers comp claims is not easy, but it is absolutely necessary to protect your company’s bottom line. Make fraud prevention a component of your integrated workers compensation program.

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

Inside Tips & Tricks for Effective Social Media Investigation

Fraud, waste and abuse (FWA) continue to be a significant driver in workers’ compensation program costs.  The result for many programs are higher costs per claim, which are passed along to the insured.  This trickle-down effect ultimately hurts the employees, which are the people served by workers’ compensation insurance programs.  Now is the time for interested stakeholders to employ innovative and creative investigative techniques used advanced techniques in claims investigation based on easy to use technology.

 

 

Social Media: Going Beyond the Basics

 

Social media investigation continues to be an area of initial research in every workers’ compensation claims investigation.  This is based on the continued growth in it is use over the last decade.  It is also an important area to investigate given its use with all generations.  The use of Facebook is a common example:

 

  • There are currently over 1.5 billion users of Facebook worldwide. The United States contains some of the most active users on this social media platform;

 

  • Over 72% of people who use the Internet are connected on Facebook; and

 

  • Nearly 10% of Facebook users do not change the privacy settings on their account. This means there is still a significant portion of users who allow all posts and updates to be visible to the general public.

 

Pictures posted to Facebook and other social media often contain hidden metadata.  This is information stored in the background due to the user failing to adjust the settings on their smartphone or other cameras.  The result is a treasure trove of information for the taking.  This includes:

 

  • Date and time stamp information as to when the photograph was taken; and

 

  • Specific longitude/latitude information as to where the photograph was taken.

 

Using this data, someone creates a “geofence,” which tells the world when and where a specific event took place.  It also limits the ability of someone to testify otherwise.

 

 

Vehicle Tracking and Sightings

 

State and local governments have employed millions of public security cameras across the country to capture real time images of what is taking place in their communities.  Part of this technology includes the use of license plate tracking information, which records when and where a particular vehicle passes a certain location.

 

While accessing and searching this information may be time consuming, it can establish a number of items that can be useful in a claims investigation.

 

  • The location where a claimant’s vehicle has visited;

 

  • Establish a pattern of locations visited by an employee;

 

  • Verify the testimony of an employee concerning the route taken to a certain location, which is important in “traveling employee” cases; and

 

  • Accessibility of information nationwide—it is used in every major city in the United States.

 

 

Keyword Search Technology

 

Most social media platforms are driven by “keyword” search technology.  This allows all users to use various terms and locate posts and other information from all users on the platform.

 

In the context of a workers’ compensation claims investigation, any user can ethically search to find information on where someone has been.  This includes postings by organizations or events listed in the platform that tag or record the names of attendees.  Although a user has set their privacy to limit the information from strangers, the fact someone else has a posting that includes a specific person’s name allows the public to obtain information.

 

 

Conclusions

 

Members of the claims management team have lots of readily accessible information at their hands based on today’s technology.  Proactive members will learn how to harness this information to advance and coordinate surveillance on workers’ compensation claims in a cost-effective manner.  The ultimate result is lower program costs and quicker claims resolution on troublesome files.

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

11 Red Flags of Workers’ Compensation Fraud

As an employer, you must be vigilant in your efforts to protect your company from the few employees who do commit workers compensation fraud.   Adjusters often refer to possible fraud in a workers comp claim as looking for “red flags.” A “red flag” is anything standing out from the ordinary.

 

Any one of the items on the following list of “red flag” do not prove a workers comp claim is fraudulent. However, if you have several “red flag” on a single claim, it’s a good idea to consult with both the adjuster and the SIU unit about the claim.

 

 

11 Red Flags of Workers’ Compensation Fraud

 

  1. Late Reporting
    1. If an employee is really injured on the job, it is unlikely the employee will wait days or weeks to report the injury.
  2. Accident Details
    1. The accident details are sketchy, vague or fuzzy.
    2. The employee has difficulty in recalling what happened.
    3. The employee changes the description of the accident when inconsistencies are pointed out.
    4. The nature of the injury is not consistent with the nature of the work done by the employee.
    5. The date, time and location of the accident is unknown or forgotten.
    6. The accident details are inconsistent with the employee job duties.
  3. More Than One Version of the Accident
    1. The employee gives completely different versions of the accident to the employer and the adjuster and to the doctor.
    2. The employee keeps modifying the story of what happened.
    3. The employee leaves out pertinent information.
    4. The accidents details vary from medical report to medical report.
  4. Witnesses
    1. There are no witnesses to the accident and the employee normally works around other people.
    2. There are witnesses but their version of the accident differs from the employee’s version of the accident.
    3. The accident occurs at a location away from where the employee would normally be working.
    4. The nature of the injury is unusual for the employee’s line of work.
    5. The employee’s co-workers express doubt that the accident occurred.
  5. Unhappy Employee
    1. The employee is disgruntled about some aspect of his/her job requirements.
    2. The employee was demoted or passed over for a promotion.
    3. The employee is on the list to be laid-off.
    4. The employee is on “positive improvement needed” status and is about to be terminated.
    5. The employee has had numerous prior employers.
    6. The “accident” occurs immediately prior to a strike, plant closing or the end of seasonal employment.
    7. The employee is a new hire.
  6. Monday Morning Claims
    1. The employee has an early Monday morning accident before the supervisor or other employees see him on the job (accident occurred off the job over the weekend).
  7. Injured Worker is Never at Home
    1. The injured employee is not at home during the normal workday.
    2. The employee is always sleeping when the adjuster calls or cannot be disturbed.
    3. The employee’s family member is vague or noncommittal about when you can reach the employee.
    4. The employee is “away” but quickly returns all calls from a cell phone, not the home phone.
    5. The employee uses the address of friends or family members and has no definite address or uses a Post Office box as an address.
    6. The spouse or other family members do not know about the workers comp injury.
  8. Financial Reasons
    1. The employee’s spouse is not working and drawing workers comp indemnity benefits, social security disability payments, welfare or unemployment insurance and the  employee wants the same life style.
    2. The employee inquires about a settlement early in the claim process.
    3. The employee was having prior financial problems.
    4. The employee is nearing retirement age.
    5. The employee files for benefits in a state other than where the accident occurred.
    6. In the states where an employee can collect workers comp indemnity benefits based on the amount of combined wages from both the workers comp employer and a second job employee.
    7. The failure to report other work income while drawing indemnity benefits.
    8. The employee took excessive time off just prior to the injury.
    9. The employee is in the middle of a divorce or other family disturbance.
    10. The social security number used by the employee belongs to someone else.
    11. The employee applies for Social Security benefits before the injury occurs.
    12. Income from workers comp, disability or other sources exceeds the employees prior after tax income.
  9. Medical Care
    1. All the injuries are subjective — pain without trauma, soft-tissue, emotional.
    2. The employee changes doctors frequently “doctor shopping” or changes doctors when released to return to work.
    3. The employee has excessive treatment for soft-tissue injuries.
    4. The medical treatment reported by the employee is different from the medical care stated in the medical reports.
    5. The nature of the medical treatment changes from one body part to another after the employee has been treating for a while.
    6. The employee misses medical appointments.
    7. The employee fails to show up for an independent medical examination.
    8. The employee refuses or delays diagnostic testing.
    9. Whiteouts, corrections, erasures on medical forms submitted by the employee.
    10. Exaggerated pain symptoms.
    11. The employee has a history of multiple workers comp claims and/or reporting subjective claims of injury.
    12. The injury relates to a preexisting medical condition or health problem.
    13. The medical reports provided by the employee appear to be second or third times photocopied.
    14. The length of recovery is excessive for the nature of the injury.
  10. Inconsistent Physical Ability
    1. The employee who has been off work for a while has calluses on hands or grime under the fingernails
    2. The medical reports reflect “muscular” “tanned” or other adjectives to reflect the employee is in good health.
    3. The employee is unable to work due to the injury but is seen painting his/her house, mowing the lawn, carrying heavy objects, etc.
    4. The employee has a high-risk hobby or does other physical exertion activities.
    5. Surveillance reflects physical activity greater than what is reflected in the medical reports.
    6. You learn the employee is working elsewhere while drawing indemnity benefits, especially where the work requirements exceed the capabilities reflected in the employee’s medical reports.
  11. Miscellaneous Red Flags
    1. The employee is unusually pushy to settle the workers comp claim
    2. The employee has extensive medical knowledge but no training in the medical field, or has extensive insurance terminology but no work experience in the insurance field.
    3. The employee was referred by a friend who name he does not know to a particular doctor or attorney.
    4. The employee is a part of a group of employees using the same doctor and the same attorney for their workers comp injuries.
    5. The attorney’s letter of representation is the same day of the injury or even dated before the “injury.”


Summary:

Remember, even if the employee’s claim has every one of these “red flag,” it still does not prove fraud. However, if the work claim has more than one of these “red flag,” you definitely want to bring in a fraud investigator to delve deeper into the claim. The more fraudulent claims you identify and deny, the lower your overall cost will be for workers compensation insurance.

 

 

 

Michael Stack - AmaxxAuthor Michael Stack, CEO 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

 

11 Ways to Manage Employer, Provider, and Employee Fraud in Workers’ Compensation

11 Ways to Manage Employer, Provider, and Employee Fraud in Workers’ Compensation Workers’ compensation fraud by workers gets the most publicity. But additional fraud is committed by staffing companies, professional employer organizations, medical and ancillary service providers, and brokers.

 

Sometimes multiple parties are involved, as in the case in California involving an alleged $40 million medical billing and kickback operation that involved more than two dozen physicians, pharmacists, and business owners.

 

Here are also some simple preventive measures that could potentially save companies mega dollars.

 

 

11 Ways to Manage Employer, Provider, and Employee Fraud

 

  1. Educate the workforce. Explain to employees that workers’ compensation fraud hurts the whole company and the loss of revenue may threaten upcoming pay raises or even their jobs. They also need to be informed that fraud is a serious crime with penalties. They should have a way to report suspected fraud anonymously.
  2. Teach the higher-ups. Managers and supervisors should understand that every reported injury should be treated as legitimate; however, they should also be taught to recognize some of the red flags that may indicate a fraudulent claim and have a procedure for reporting them. They also need to know how to take statements about an injury — from the worker and any witnesses.
  3. Work with the insurer. Report all suspicious claims immediately.
  4. Investigate ASAP. Make sure all reported injuries and illnesses are immediately and thoroughly investigated.
  5. Pay careful attention throughout the claims process to see if any information changes or doesn’t make sense about the injury. Also, note whether the injured employee was disgruntled prior to the injury.
  6. Drug tests. Require drug testing as a condition of employment. Drug users are statistically more likely to file fraudulent workers’ compensation claims than non-users.
  7. Implement a zero tolerance policy for fraud and take every action possible to expose and prosecute it.
  8. Make examples of cheaters. Whether it is a worker, provider or someone else involved in the process, all participants should see that you will take all steps necessary to fight fraud.
  9. Evidence Based Medicine (EBM). Make sure all treatment follows evidence based treatment guidelines and do not allow claims handlers to authorize treatment unless they have been trained in EBM
  10. Clean the provider network. Vet providers before allowing them into the medical network. Verify their physical location and try to determine if they own the clinic. Where possible, remove from your network any provider who has been accused of fraud.
  11. Involve workers. Regularly send out notices to injured workers with the dates and types of treatment that has been billed and ask them to report discrepancies.

 

 

Conclusion

 

Fraud costs companies billions of dollars. The money lost is passed on — in the form of higher premiums, increased prices for services, or lower money available to pay employees or expand the business.

 

Instead of turning a blind eye to the situation, organizations should adopt a zero-tolerance policy for fraud, educate all involved and enforce rules and regulations to expose the guilty parties and deter it from happening again.

 

See also: Be Aware of Employer, Provider, and Employee Fraud in Workers’ Compensation

 

 

Michael Stack - AmaxxAuthor Michael Stack, Principal, 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 & lead trainer of Amaxx Workers’ Comp Training Center. .

 

Contact: mstack@reduceyourworkerscomp.com.

Workers’ Comp Roundup Blog: https://blog.reduceyourworkerscomp.com/

 

©2017 Amaxx LLC. All rights reserved under International Copyright Law.

 

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

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