Skip to main content

Workers' Compensation Fraud

By May 24, 2016August 22nd, 2018

wcfraudsmallWhen it comes to fighting Workers’ Compensation fraud, keep in mind that it can happen at any stage of a claim. Here are some of the main ways fraud can occur:

1.  The severity of an injury can be exaggerated, even if the injury is real. For example, someone who is out on leave may claim they have not yet healed, when in fact they are able to return to work. This can be especially problematic if the individual is using the opportunity to get paid by Workers’ Compensation while conducting other work.

2.  An “accident” can happen on purpose, which often may include injuries that are completely falsified. Employees may claim Workers’ Compensation for injuries that are completely unrelated to work. Some potential red flags that may indicate this include:

  • No witnesses to the injury.
  • Injuries with medical details that don’t match up with the employee’s version of what caused the injury.
  • Injuries that are reported on a Monday morning but don’t appear to be new.
  • Medical providers can also be the ones conducting Workers’ Compensation fraud. They may bill for services that are fraudulent, such as tests or services that were never performed. (It’s important to remember that fraud doesn’t always happen at the hands of employees.)

What Can Employers Do to Minimize Workers’ Compensation Fraud?

The possibility of Workers’ Compensation fraud can be frustrating but, fortunately, there are actions employers can take to reduce the risk:

  1. Have a clear policy regarding Workers’ Compensation. Employees should understand the benefits of the program, and they should also understand their obligations. The policy can clearly outline that suspicion of Workers’ Compensation fraud will be investigated and legally pursued when warranted.
  2. Ensure employees understand the need to immediately report any accidents or injuries and that you take their safety seriously. They should not be afraid to report such things and should not face negative consequences for doing so.
  3. Getting an injury treated quickly is often the key to helping the individual recover quickly—which will also minimize costs.
  4. Conduct investigations related to claims to ensure they’re accurate. When an injury occurs, investigating the details will have multiple benefits—not only will it reduce Workers’ Compensation fraud, it could lead to procedural changes that reduce the likelihood of that injury happening to someone else.
  5. Always ask for witnesses to explain what happened. Look for inconsistencies or other red flags, such as:
    • Stories that contradict one another.
    • Injuries that are not medically consistent with the other details of what happened.
    • Injuries and claims that occur immediately before a major change, such as a seasonal layoff or strike.
  6. Implement a Recovery at Work program to get injured employees back to work as soon as it is medically safe. Institute a light-duty option that facilitates the transition back to the workforce sooner rather than later.
  7. Stay in contact with employees for the duration of the time off. Create a regular schedule of communication and monitor progress.
  8. Be sure that HR and management/supervisors are trained to recognize fraud in Workers’ Compensation and what to do if it is suspected. They should also know how to keep employees safe and follow medical restrictions to ensure employees are not re-injured.
  9. Provide a way for employees to anonymously report suspicions of Workers’ Compensation fraud.
  10. Use surveillance equipment on the work site.
  11. Consider having a drug testing policy that includes testing any time an accident occurs.
  12. Hire individuals who wouldn’t even consider it in the first place. Use background checks to look for red flags such as overly frequent job hopping or evidence of previous fraudulent activity. While you cannot disqualify someone merely for filing a workers’ compensation claim in the past, it could be a red flag if they’ve filed an inordinate number. Even if the claims are legitimate, it could mean this individual does not follow safety guidelines.

For more tips and support on controlling your Workers’ Compensation Program, call The Flanders Group at 800-462-6435 or email [email protected].