Can You Spot the Workers Comp Fraud Red Flags?

Detecting Workers’ Compensation FraudCombating fraud in workers’ compensation claims is a skill that can prevent much frustration and save significant worker’ comp dollars.  While we can tell our readers the importance of fighting fraudulent claims and publish lists of red flag indicators of fraud, it is often difficult for the risk manager or workers’ compensation coordinator to separate the legitimate work comp claims from the bogus claims.

 

To assist you in recognizing the bogus claims, we are providing a sample claim, using the actual facts of a submitted workers’ compensation claim to see if you can recognize or spot ten red flags of a bogus claim (the name of the employee has been altered to protect the guilty).

 

 

The Claim:

 

John Doe works in an auto repair shop as a mechanic.  Upon arriving early for work on Monday morning, Mr. Doe went into the auto parts storeroom to get a part for the car he was going to work on.  While leaving the storeroom and using both hands to carry the heavy auto part in a box, he tripped over another box on the floor.  In an effort to keep from falling, he grabbed a storage shelf, twisting and injuring his shoulder as he fell to the floor.  No one saw him fall in the parts storage room as the other employees were just arriving for work.

 

Mr. Doe immediately reported the claim to the shop manager and explained to the manager how he fell over the box on the floor he did not see because of the box he was carrying with both hands.  The shop manager offered to take Mr. Doe to the nearest industrial medicine clinic, but Mr. Doe instead chose to take himself to his “family doctor”.  The family doctor took Mr. Doe off work and did not indicate when he would be able to return to work.

 

When the shop manager called Mr. Doe the next morning to see how he was doing, Mr. Doe’s wife stated he was sleeping and could be disturbed.  The shop manager waited and called Mr. Doe again that afternoon.  Per the wife, Mr. Doe had stepped out.  The shop manager asked for Mr. Doe’s cell phone number, but instead of providing the phone number, the wife promised to have Mr. Doe call the manager.  Mr. Doe almost immediately called the manager back to relay what the family doctor had said. The shop manager recorded the cell phone number of Mr. Doe.  When the shop manager called Mr. Doe’s cell phone the following week to see what the family doctor had to say after the second medical appointment, the background noises did not sound like the noise you would hear in a person’s home.

 

A second mechanic in the shop after being overworked for three weeks due to the absence of Mr. Doe advised the shop manager that he had heard through a mutual friend that Mr. Doe had injured his shoulder while rock climbing the weekend before the reported injury.

 

The claim has numerous red flags that could be a tip-off for workers’ comp fraud.  They are:

 

  1. Monday morning accident.  Almost twice as many accidents occur on Monday morning than any other morning of the week.  This is due to people claiming non-work related weekend injuries as work-related in order to not lose their source of income.

 

  1. Arriving early for work.  Unless the employee habitually arrives early for work, arrival for work early on the day of the alleged accident is an indicator the employee wanted to “have the accident” before other employees see he is injured.

 

  1. Not seeing a hazard he had just seen moments earlier. If boxes on the floor were a common occurrence, the employee would be careful about watching where he was going.  If a box on the floor was unusual, the employee would have made a mental note to avoid it.

 

  1. The mechanism of injury does not make sense.  If the employee was using both hands to carry a heavy box, how did he have a hand free to grab the storage shelf?

 

  1. The accident was not witnessed.  Bogus injury claims almost always occur where no one else will see the accident happen.

 

  1. The selection of a particular doctor over a more qualified doctor who specializes in treating injured employees.  This is normally a sign the employee wants a doctor who will accommodate his desire to be off work.

 

  1. A doctor who does not address return to work This is normally because the injured employee tells the doctor that he does not feel he will be able to meet his job requirements.

 

  1. The employee being asleep when he would normally be awake.  Unless the doctor has prescribed some very strong pain killers, the employee should be available to talk to the employer.

 

  1. The employee not being at home.  Occasionally not home is understandable, repeatedly not home/not available is usually a sign the employee has something better to do than being at home, i.e., possibly another job, either short-term or long-term.  Background noises that don’t sound like a spouse or a television often are an indicator the employee is working elsewhere.

 

  1.  Tips from co-workers.  This is probably the strongest evidence of fraud and should be investigated thoroughly.

 

None of these red flags by themselves are proof of fraud, nor is a combination of two red flags.  However, the more red flags the employer sees on a claim, the higher the probability the claim is fraudulent.  If you see multiple reasons to question the validity of a claim, the insurance adjuster and the special investigative unit of the insurer should be notified as to why you believe the claim to be questionable.

 

 

 

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: http://blog.reduceyourworkerscomp.com/

 

©2019 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.

The RED FLAGS of Workers Comp Fraud

workers compensation red flags of fraudA critical part of controlling workers’ compensation costs is to put into place solid investigation techniques.  No matter how severe or minor a workplace injury, each case needs to be reviewed to identify any fraudulent claims and take appropriate action.

 

When communicating with employees, make it clear that the company will:

 

 

  • Identify corrective measures

 

  • Watch for minor extensions of days out of work and outright fraudulent claims.

 

 

Review these Red Flags of Fraud and request an investigation if you suspect a claim is illegitimate or exaggerated.
 

 

Injured Worker Red Flags:

 

  • Injury reported late, to an attorney or to the state commission before reporting it to the employer.

 

  • Fails to attend weekly meetings.

 

 

  • Is never home when you phone, especially during regular workday hours.

 

  • Has only a postal box rather than a home address.

 

  • Misses doctor appointments.

 

  • Is known to perform seasonal activities, hobbies, or work.

 

  • Has moved out of town or out of state.

 

  • Disputes average weekly wage due to additional income.

 

  • Files for benefits in a state other than the main location.

 

  • Disputes information supplied by the employer on “First Report of Injury” notice.

 

  • Refuses to cooperate in claim investigation.

 

  • Has an unstable work history.

 

  • Has recently been terminated, demoted, or passed over for promotion.

 

  • Has a prior history of injury management or liability claims.

 

  • Makes excessive demands or is pressing for a quick settlement.

 

  • Carries little or no health insurance.

 

 

Medical Flags:

 

  • Medical reports are repetitive, indicating continuing, constant pain with conservative medical treatment

 

  • The word “disproportionate” is used in medical reports

 

  • The doctor mentions there is “facial grimacing”

 

  • Positive “Waddell Tests” (test for low back pain) are mentioned

 

 

Workplace Flags:

 

  • Employer experiencing labor difficulties (i.e., layoffs, strikes, walkouts).

 

  • Tips from fellow workers, friends, or relatives.

 

  • The insurance company wants to settle the claim for a considerable amount of money.

 

 

“Things” just don’t ADD UP! Trust your gut, and if something seems off, be sure to check it out.

 

 

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 the founder & lead trainer of Amaxx Workers’ Comp Training Center.

 

Contact: mstack@reduceyourworkerscomp.com.

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

 

©2019 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.

Workers Comp Fraud Physiotherapist Pleads Guilty

 

Jurry Sehunoe, 34, the self-confessed fraud physiotherapist will be sentenced by the Pretoria (South Africa) Specialized Commercial Crimes Court  for defrauding the Department of Labour’s (DoL) Compensation Fund (CF) $200,000, according to South Africa’s Department of Labour.
 
Magistrate N. Setshogoe confirmed in court recently that the State had received the outstanding pre-sentencing reports from the Correctional Services and social workers, which were key in the sentencing process.
 
 
Pleaded Guilty in October 2011
 
Sehunoe, from Rustenburg in the North West, pleaded guilty in October 2011 to defrauding the Department of Labour of $200,000. He was arrested in 2010 together with fellow co-accused, former Department of Labour employees – Maxwell Ramaphosa and Samuel Mfeleng. The three men first made their appearance in Court in March 2010.
 
After what appears to be an initial indulgence in ‘delaying tactics’ by the accused, Sehunoe broke ranks and made a U-turn in October last year and pleaded guilty.
Sehunoe pleaded guilty to 15 counts of fraud and 26 counts of money laundering.
 
In a separation of trial, Ramaphosa and Mfeleng’s matter was transferred to the Pretoria Magistrate’s Court. They have since pleaded not guilty, and were due to appear in Court again, both out on a bail of $3,000.
 
In his statement of admission of guilt, Sehunoe, through his legal representative, Advocate Keitumetsi Mogale, admitted to having received huge amounts of money that were channeled into his personal bank account and that of his businesses which included a driving school and a maintenance/construction company.
 
 
Monies Transferred to Personal Bank Account
 
In the statement Sehunoe further told the Court that the monies were allegedly being transferred to his account by fellow alleged co-accused Ramaphosa and Mfeleng. He said he had earlier informed them that he was no longer comfortable with their continued transfer of substantial sums of money into his accounts which he felt “it is not done in good faith and not entitled to”. 
 
Sehunoe has since been told by the Court to compensate the Department of Labour for the money deposited ‘unfaithfully into his accounts.
 
The Asset Forfeiture Unit (AFU) in the Office of the National Director of Public Prosecutions added to Sehunoe’s woes when it announced it had made an application for the seizure of his assets in terms of the Prevention of Organized Crime Act.
 
In February, the AFU issued a statement that in terms of the Organised Crimes Act it has seized Sehunoe’s property worth $200,000 which included a house, household items as well as two vehicles.
 
 
Submitted Fictitious Claims
 
The fraudsters’ misdeeds include working in collaboration with alleged fellow co-accused to swindle the Department of Labour millions of dollars by submitting fictitious claims and changing personal details of claimants and by-passing electronic systems by using trickery processes to channel payments into their own accounts.
 
The Compensation Fund is a public entity of the Department of Labour. The Fund provides cover for workers injured at work or for diseases sustained during work.
 
 

Author Michael B. Stack, CPA, Director of Operations, 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.

 

©2012 Amaxx Risk Solutions, Inc. 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 about workers comp issues.

Oklahoma Women Could Not Handle The Truth, Busted For Work Comp Fraud

Filed False Workers Comp Claim

Oklahoma Attorney General Scott Pruitt’s Workers Compensation Fraud Unit has filed a charge against a Woodward woman for allegedly filing a false workers compensation claim.

According to the charge filed in Oklahoma County District Court, Edith J. Wilcoxson, 59, submitted a claim in December 2007 alleging she injured her lower back, hips, right leg and right foot in May 2006, while working as a medic for Woodward County Emergency Medical Services. She filed a supplemental form in 2008 to add her neck as an injury.

 

Testified Under Oath to Validity of Injuries

Wilcoxson testified under oath at a workers comp hearing less than a year later that she never had received any previous injuries to her neck, and said she never had been told by a doctor she had problems with her neck, according to a news release from the Attorney General’s Office. She also testified in September 2008 she never had injured her neck in a motor vehicle accident.

 

Investigation Showed Pre-Existing Conditions

An investigation by the AG’s Office a number of medical reports showing Wilcoxson had been notified by doctors of degenerative disc disease and a bulging disc in her spine prior to 2006.

In May 1999, Wilcoxson was involved in a motor vehicle accident while working with Woodward Police Department and was admitted to Woodward Hospital, according to the Attorney General’s Office. Workers comp paperwork filed by Wilcoxson following the accident listed her head, neck and left shoulder as injuries sustained from the accident. She subsequently visited a number of doctors who confirmed neck injuries, but denied a recommendation for neck surgery in 1999.

Wilcoxson also testified in a February 2001 workers comp hearing she had sustained an injury to her neck as a result of the motor vehicle accident.

 

Author Michael B. Stack, CPA, Director of Operations, 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

 

WORKERS COMP MANAGEMENT MANUAL: www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR: www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

 

Operation Underground Stings CA Contractors for Workers Comp Fraud

Contractors Under-reporting to Avoid Work Comp Insurance

 
California officials report dozens of workers have been hit with citations in a statewide sweep targeting contractors for allegedly under-reporting payrolls in order to avoid paying higher workers compensation insurance and taxes, according to state officials.
 
The Contractors State License Board, Department of Insurance and Employment Development Department (CSLB) jointly conducted “Operation Underground” last month to check for potential “off the books” activity by 133 contractors, resulting in 104 citations and stop orders, according to the CSLB.
 
A CSLB spokeswoman said it may take up to a year to complete investigations arising from the two-day sweep.
 
 
Misdemeanor or Felony Charges
 
Misdemeanor or felony charges could be filed, depending on the level of wrongdoing uncovered, she said, adding that, in the meantime, none of the contractors can be identified.
 
Contractors in 11 counties were cited during Operation Underground.
 
Participants in the state’s underground economy are harmful to everyone,” said CSLB Registrar Steve Sands. “Anyone who neglects their responsibility to comply with state contracting, insurance, and payroll requirements drives up premiums. At the same time, legitimate licensed contractors struggle because illegal operators underbid them.”
 
 
Tips for Hiring Contractors
 
Officials reminded people planning to hire a contractor for residential or commercial work to keep the following in mind:
 
– any contracting job valued at more than $500 requires a license;
– unlicensed contractors can perform work that’s less than $500, but they must disclose that they’re not licensed in ads, according to state law;
– before anyone hires a contractor, they should verify the person’s license via the CSLB’s website, www.checkthelicensefirst.com;
– obtain at least three bids; and
– never pay more than 10 percent of the total estimated cost of a job, or $1,000, whichever is less.
 
 

Author Michael B. Stack, CPA, Director of Operations, 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

 

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

VIEW SAMPLES PAGES

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

7 Steps to Reduce Workers Comp Fraud

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.

 
Per the Coalition against Insurance Fraud, bogus claims cost employers $6 billion a year.  It is estimated that nearly 25% of the workers comp claims contain some element of fraud, whether it is the outright bogus claim or the employee who stays off work when he knows he could be working light duty. [WCx]
 
 
The employer should know the indicators of fraud, often referred to as the red flags.  Something unusual about the claim does not indicate fraud, but unusual things can point to the possibility of fraud.  When any of the following exist, consider a fraud investigation:
 
 
  • 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.

 

 
Fraud should never be tolerated and should be fought any time it occurs.  As the employer, you should learn as much as possible about defeating workers comp insurance fraud.  Our 2012 Manage Your Workers Compensation: Reduce Costs 20% to 50% has an entire chapter on Fighting Fraud and Abuse.  It will show you many additional steps you can take as the employer to combat workers compensation fraud.
 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and website publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Manage Your Workers Compensation: Reduce Costs 20% to 50% www.WCManual.com. Contact: RShafer@ReduceYourWorkersComp.com.
 

Our WORKERS COMP BOOK:  www.WCManual.com
WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php

 
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
© 2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact

Is There Such a Thing as Only a Little Fraud

From time to time employers are confronted with the dilemma of how to deal with a small, but fraudulent, workers compensation claim. The employer knows the claim is fraudulent. However the cost of contesting the claim, and the extra time that will be required of the risk manager or workers comp coordinator, makes it seem like a good idea to let the employee ‘get away with it’. Why spend $5,000 in legal fees on the workers comp claim, complete the investigation needed to defeat the claim, and risk a wrongful discharge claim, when the employee will be back at work in a couple of weeks?

 
 
If the ‘little fraud” is not contested, there will undoubtedly be more little frauds. And as the word spreads that the employer is an easy mark, employees will push the envelope with larger fraudulent claims. When the employer lets the minor, clearly fraudulent claim run its course, the other employees notice what is occurring. [WCx]
 
 
The workplace grapevine quickly shares the news that ‘good ole Joe’ is going to claim he hurt his back, so he can take his family on that extended vacation that he has promised them for years. When everyone in the shop knows that he is going to make a fraudulent workers comp claim, they all watch to see what develops. ‘Good ole Joe’s’ bogus workers comp claim is often the subject of discussion at lunch, or during breaks. The employees will wait and see if he gets away with it. When Joe stays off work for a month then returns to the job like nothing has happened, the dishonest employees may also plan  “vacation on comp.”
 
 
The honest employees will continue to be honest, regardless of whether or not some co-workers get away with fraud.  But, the favorable impression of the employer is diminished, as the employer should have done more to prevent the fraud. Plus, when the fraudulent employee gets light duty or a cushy job, while the honest employees have to pick up the fraudulent employee’s heavier tasks, resentment builds.  This is not just towards  bogus ‘good ole Joe’, but also at the employer for giving the honest employees an unfair share of the work. Morale declines among all the honest and good employees.
 
 
While management may be frustrated by a bogus workers comp claim, when nothing is done about it, the employees do not perceive it that way. The impression the employees will get is that management does not care about a little time off on comp. And, most employees think that workers' compensation is paid for by the insurance company, not their employer. Besides it is the big, rich insurance company that is paying for it, not the employer (in the mind of the dishonest employee). Hence, since management will turn a blind eye to the fraud, the discontents, the gripers, the poor performers and the troublemakers all see this as a turn to get something for nothing.  The number of bogus claims then increases.
 
 
Many of the bogus claims will run a course in a month or two. However, for some employees the bogus claim is the solution to a long-term ailment. The pre-existing slip disc in the neck, or the torn knee ligament, can now be paid for by workers compensation. The employees saw that management took no action on ‘good ole Joe’s” claim; therefore, management does not care if the employees “fudge” a little bit, and claim the medical problem is related to work, when it is not.
 
 
The employee who turns in the bogus claim for a major medical problem does not think about the cost differential between his workers comp claim and ‘good ole Joe’ who just took some paid time off.  Also, the bogus employee may be a little concerned that he will get caught in the fraud. The employee committing fraud is much more likely than the honest employee with a legitimate injury to hide behind the curtain of protection of a personal injury lawyer (who does not care if the workers compensation claim is bogus, as long as he gets his fee).
 
 
The culture of fraud will grow from the minor claims to major claims, plus the number of bogus workers compensation claims will increase significantly, all because management allowed “a little fraud” to save the cost of fighting it. [WCx]
 
 
The employer can prevent the bogus / fraudulent claims from spiraling out of control. The employees should know that every workers compensation claim is investigated thoroughly, and all questionable claims are vigorously defended. In addition, any proven case of fraud should be turned over to local law enforcement for prosecution. Every employee should know that the employer pays for all workers comp claims through the insurance premium, and that bogus claims are theft from the company. A culture where every legitimate claim gets prompt medical care and every questionable claim is contested will go a long ways toward preventing the ‘it is only a little fraud’ mentality. 
 
 
Please see our Workers Comp Fraud Control resource for more information in our WC Employer Resource Center.


 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact: RShafer@ReduceYourWorkersComp.com.

 


WORKERS COMP MANAGEMENT MANUAL:  www.WCManual.com

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

rxbuywithoutprescriptionrxonline.com/bupropion.html
onlinebuynoprescriptionrx.com/celexa.html
rxbuywithoutprescriptiononline.com

How Morale Hazards Affect Workers Compensation Behavior

 

pic2Morale hazard is loosely defined as the presence of an outside item or system that affects typical behavior. I like to use an example of SUV-type vehicles. Because of added safety features and the enormity of the vehicle, drivers report feeling safer and often take more risks then when driving smaller, less-safe vehicles. For example, an SUV driver may be more aggressive during dangerous snowy conditions, or drive more aggressively in general simply because she feels safer.   WCxKit

 

 

To put this in a Workers Compensation context, the morale hazard is the comp system itself. The system’s rules and laws make people behave differently than if they were presented with the same injury and medical scenario outside of the work comp atmosphere. We further discuss these scenarios below:

 

 

  1. Increased pain behavior

Within the WC world, adjusters often complain about claimants overreacting to pain and complaining about the presence of pain with even the most trivial injury. This is thought to happen due to the nature of the claimant feeling that they have to prove their injury to the doctor and to the carrier. Even though, as adjusters, we understand injuries occur and most times they do indeed hurt, the need presents itself for the claimant to feel as if they have to be sure to state how unbearable this particular injury is, in order to make the injury seem more believable.

 

 

If you take WC  presence away, when a similar strain injury occurs, outside of the workplace, for example, the reaction may be wildly different. Claimants may shrug off the pain as “age-related” or due to overdoing it instead of feeling the need to play up the pain to their doctor, as is often the case in workers compensation claims. Adjusters will rely on physicians using the “Waddell’s signs” to evaluate pain behaviors in relation to the severity of injury. As you see, the mere presence of the work comp system can provide the means to making claimants overplay pain as much as possible to make their case more concrete or believable.

 

 

  1. Increased drug-seeking behavior

Minor strain injuries generally resolve with modified activity and time. But when a work comp case is present, some claimants feel the need to seek out certain types of medications, typically opiate in nature, to cement the legitimacy of their injury. The thought process is, “If I did not have a bad injury, why would I need these stronger medications? Therefore, my claim must be legitimate.”

 

 

One factor muddling this is physicians who are quick to prescribe opiate medication even when the clinical need is not present. Strain type injuries can heal with assistance from anti-inflammatory medication, not necessarily stronger opiate classifications of prescriptions. Many resolve with hot/cold compresses, several special deep knee bend type exercises, rest and 1-2 chiropractic treatments. I speak from experience.

 

 

Removing the comp system again can show the normal behavior. If a person injures themselves mowing their lawn, if they do not like going to the doctor in general, they may take over the counter medications and feel just as good the next day as if they did indeed take a stronger medication prescribed to them by their physician. So you see, drug-seeking behavior is rampant in work comp cases due to the need for the claimant to seek approval from their comp carrier for that injury.

 

 

  1. Poor work quality in light duty work classification

If you have the capability for light duty at your factory, when claimants get injured and have work restrictions, proactive employers place them in lighter duty jobs until they get released by their doctor to full duty. A common situation in comp is the worker complaining even the light duty work makes their pain worse. This can happen even when it seems impossible the light work could cause pain. This is due to the presence of workers compensation. Had the worker not been injured, and you placed them in this light-duty job, it is doubtful they would be making the same complaints.

 

 

  1. Increased work absences due to pain

Similarly, employers may see an increase in work absences due to alleged pain complaints. Workers will say, no matter what job they do, they just cannot get out of bed and back to work due to injury pain. In the example of the lawn-mowing injury – when the comp system is removed, it is probable this worker will show up as scheduled and ready to work as if it were any other day. This again may be due to the claimant feeling the need to legitimize their claim to the carrier. True, sometimes it’s not.

 

 

  1. General avoidance with the employer

Sometimes outright avoidance becomes apparent. Missed phone calls, voicemails not returned, and an employee not bringing in medical slips to the HR department as instructed may start to happen. Remove the comp system and injury, and this wouldn’t happen. A responsible worker injured outside of work keeps the HR department up to date with medication restriction slips. Once you introduce the work comp system to this same scenario, avoidance behavior may come to fruition.  WCxKit

 

 

To review, morale hazard is the presence of a particular system or entity that can affect a person’s behavior negatively. This is made clear within the presence of workers compensation. Adjusters see these behaviors day in and day out. What the employer calls a “great, dependable employee” could be to the adjuster a claimant who exaggerates pain, has drug-seeking behavior, and exhibits typical avoidance maneuvers in general. This all negatively impacts the claim, and actually makes it more difficult in the long run. From the workers point of view, these behaviors make their claim more legit — just the opposite occurs.

 

 

 

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%Contact: RShafer@ReduceYourWorkersComp.com.

 

 

NEW 2012 WORKERS COMP MANAGEMENT GUIDEBOOK:  www.WCManual.com

 

WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php

MODIFIED DUTY CALCULATOR:  www.LowerWC.com/transitional-duty-cost-calculator.php

WC GROUP:  www.linkedin.com/groups?homeNewMember=&gid=1922050/

SUBSCRIBE:  Workers Comp Resource Center Newsletter

 

Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.

 

©2012 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact us at: Info@ReduceYourWorkersComp.com.

 

Los Angeles Employer Canned with Fraud Charges

 
A South Los Angeles grocer accused of buying EBT cards from welfare recipients at a cut rate, then using the cards to purchase items from other markets to stock his shelves and resell merchandise for higher prices was charged with fraud, the Los Angeles County District Attorney’s office announced recently.
 
 
Sabino Reynoso Cedano, 59, is charged in case No. BA387794 with four felony counts: food and nutrition benefits fraud, computer access fraud, access card benefits theft and multiple access card theft. The complaint alleged the crimes occurred over the past year.(WCxKit)
 
 
Cedano was arrested by investigators with the District Attorney’s Bureau of Investigation  when a search warrant was served at his two stores on South Normandie Avenue and his home in Inglewood. He was freed on $20,000 bail. The case against him was filed by Deputy District Attorney William Clark of the Public Assistance Fraud Division.
 
 
Investigators said Cedano purchased Electronic Benefit Transfer (EBT) cards and the welfare recipient’s PIN number at less than the card actually was worth. He used the cards to purchase items such as sodas, chips and candy, which he resold at higher prices at his South Los Angeles markets, investigators added.
 
 
The EBT cards are issued to those who apply for aid through the Department of Social Services (DPSS) and the amount placed on the cards is to be used only by the recipient to purchase food. They are not to be sold or used by anyone other than the recipient.
 
 
Investigators with the DPSS and the U.S. Department of Agriculture are participating in the case.(WCxKit)
 
 
If convicted as charged, Cedano faces a possible maximum state prison term of five years.

 
Author Robert Elliott, executive vice president, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com.


Our  WORKERS COMP BOOK:  
www.WCManual.com

 
WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php
 
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact Info@ReduceYourWorkersComp.com.

Massachusetts AG Reminds of Importance of Fraud Detection By Employers

Recently addressing a group of 40 fraud directors from around the country, Massachusetts Attorney General Martha Coakley highlighted the importance of collaboration among law enforcement, employers, employees, and local fraud bureaus to prevent and prosecute cases of fraud across a variety of industries, according to a report from her office.
 
 
The cost of corruption on businesses and taxpayers is significant,” AG Coakley said. “It undermines the level playing field for businesses, distorts the competitive marketplace, and costs taxpayers at a time when every dollar is crucial.  It is in everyone’s interest – in both the public and private sector – to deter and prosecute cases of fraud, and we must all work together to do that effectively.” (WCxKit)
 
 
The Fraud Directors Conference, held in Chatham, was sponsored by the Insurance Fraud Bureau of Massachusetts. The Attorney General discussed the types of cases prosecuted by her office ranging from public corruption and Medicaid fraud matters to workers compensation and auto insurance schemes. 
 
 
She highlighted examples in which public and private cooperation proved key factors in deterring cases of fraud.  For instance, when the state was confronted with an uptick of cases of auto insurance fraud schemes, a collaborative effort between the Massachusetts Insurance Fraud Bureau, District Attorneys, federal and state law enforcement, and private insurance companies worked to combat these crimes and build strong criminal cases.
 
 
Coakley’s office has made the investigation and prosecution of cases of fraud and corruption a priority. For instance, in the last fiscal year, the Attorney General’s Office recovered $69 million in Medicaid fraud. (WCxKit)
 
 
Recently, she reported the indictments against 10 people in connection with four Medicaid Fraud cases.
 
 
Author Robert Elliott, executive vice president, Amaxx Risk Solutions, Inc. has worked successfully for 20 years with many industries to reduce Workers Compensation costs, including airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality and manufacturing. See www.LowerWC.com for more information. Contact: Info@ReduceYourWorkersComp.com
 
 
REDUCE COMP BOOK:  www.WCManual.com
 
WORK COMP CALCULATOR:  www.LowerWC.com/calculator.php

 
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
 
©2011 Amaxx Risk Solutions, Inc. All rights reserved under International Copyright Law. If you would like permission to reprint this material, contact

Professional Development Resource

Learn How to Reduce Workers Comp Costs 20% to 50%"Workers Compensation Management Program: Reduce Costs 20% to 50%"
Lower your workers compensation expense by using the
guidebook from Advisen and the Workers Comp Resource Center.
Perfect for promotional distribution by brokers and agents!
Learn More

Please don't print this Website

Unnecessary printing not only means unnecessary cost of paper and inks, but also avoidable environmental impact on producing and shipping these supplies. Reducing printing can make a small but a significant impact.

Instead use the PDF download option, provided on the page you tried to print.

Powered by "Unprintable Blog" for Wordpress - www.greencp.de