Workers’ comp fraud is a growing problem and one that hurts insurers, employers, employees and consumers. Fraudulent claim costs get passed down to everyone except the perpetrator. In North Carolina alone, there was a 465% increase from the 2016-2017 fiscal year to the 2017-2018 fiscal year. On average, the fraud amounts to around $30 billion per year. Spotting and preventing it is the only way to reduce these costs.
Workers’ Comp Fraud Takes Many Forms
One of the reasons workers’ comp fraud is so hard to spot is it comes in a variety of forms. Sometimes an individual works alone and simply fakes an injury. This is actually one of the easiest to spot as the individual usually makes a mistake, proving they’re not actually injured. Social media is often their downfall.
Some other types include:
· Attorney – An attorney works with the claimant to create false claims. They may also partner with a doctor or clinic to falsify the injury report.
· Employer – Sometimes, employers may adjust evidence, harass employees, lie to employees or even use fraudulent doctors to prevent legitimate claims from being filed.
· Medical – Doctors may overbill insurers to get a kickback. They may also falsify reports for fraudulent claims in order to get a portion of the workers’ comp claim.
· Evidence tampering – This can involve an employee, employer or the insurer. Evidence is tampered with to either prove a fraudulent claim or disprove a legitimate claim.
These are just a few of the many different ways fraud is committed. No matter what form it comes in, workers’ comp fraud is dangerous. It can leave people who are actually injured on the job with no money for medical care, while those who aren’t hurt bleed the system.
Looking For Red Flags
A great way to help prevent workers’ comp fraud is to train everyone to look for red flags. For instance, if an accident occurs, train employees to stay close to prevent any evidence from being tampered with. Everyone’s responsible for helping prevent fraud by looking for anything suspicious. Things such as a vague or delayed injury report, no witnesses, a refusal of diagnostic testing, history of claims and being difficult to contact at home after the injury are all signs.
Have A Zero Tolerance Policy
While it’s not always the employee or employer committing the fraud, such as doctors exaggerating claims without the patient’s knowledge, implement a zero tolerance policy for fraud. Explain to all employees what the consequences are and how workers’ comp claims are investigated. This should include frequent check-ins to check on the employee’s health. Not only does this show employees you care about their well-being, but discourages fraud in the form of extending workers’ comp after healing.
Encourage Fraud Reporting
Offer ways for employees to report workers’ comp fraud. For instance, if they see an employee with a back injury lifting heavy appliances during a kitchen remodel, provide a way for them to report it. This can be to a boss or through an anonymous ethics hotline. Knowing that fraud is being watched for and reported helps cut down on employees willing to commit it.