Workers’ Comp Fraud is Painful but Preventable

12 Feb Workers’ Comp Fraud is Painful but Preventable

Workers’ compensation fraud costs American employers millions of dollars a year. The most publicized form of the fraud involves bogus claims by workers, but they are not always the perpetrators. Sometimes, health care providers and insurance carriers try to pull workers’ compensation scams, too.

Employee-perpetrated scams

The vast majority of workers’ compensation claims are valid. However, when claims are not valid, it can be a costly headache for employers.

To uncover possible workers’ comp fraud perpetrated by employees, look for certain anomalies. For example, accidents with no witnesses, or incidents that occur just before an anticipated strike, layoff, or termination. Also regard with suspicion an injury that is not consistent with the nature of the employee’s position or your business, or if the worker:

  • Cannot recall specifics about the injury or accident
  • Refuses or delays diagnostic procedures
  • Is never home or is reported to be sleeping and unable to be disturbed
  • Moves out of state

It may be possible to expose worker-initiated scams simply by interviewing fellow employees or paying unannounced visits to the injured employee’s home.

Leave it to the professionals

Detecting fraud when the perpetrator is not an employee can be more difficult. Health care providers — including doctors, nurses, physical therapists, pharmacists, and rehabilitation providers — may bill for treatment or services they never provided. Or, they may submit duplicate bills for a single service to more than one insurer.

Providers committing fraud often raise red flags. For example, they might:

  • Submit medical reports that are nearly identical for different patients with different conditions
  • Report that employees are unable to work for longer periods than would be expected for the type of injury involved
  • Bill for office services provided on weekends or holidays
  • Charge higher-than-expected fees for treatment
  • Delay providing requested records

For their part, shady insurers sometimes accept gifts from health care providers to gain referrals or settle claims. They also may alter evidence on a legitimate claim so that benefits are denied, or, conversely, supported. To help expose these acts, watch out for improper or inefficient claims management.

Abuse means higher costs

It is in your company’s interest to prevent the kind of abuse that increases the cost of workers’ comp coverage. If you need help getting to the bottom of suspected fraud activities, contact us.