While the vast majority of workers’ compensation claims are legitimate, fraudulent claims create a serious problem for both employers and insurers. Fortunately, there are several things you can do to help prevent outright fraudulent claims, as well as malingering claims that stay open longer than necessary.
- Hiring Practices – Eliminating fraud starts during the hiring process. Of course, a potential employee isn’t going to come right out and tell you that they’re going to commit workers’ comp fraud, but there are plenty of red flags you can look for. These include frequently changing jobs, a cavalier attitude about safety, and a substantial criminal record.
- Educating Management – When your management team knows how to spot the signs of workers’ comp fraud, they can quickly alert you to the situation and take steps to prevent a fraudulent claim from being filed. When they know what steps to take as soon as an accident is reported, as well as why it’s important to thoroughly follow all procedures, they can often eliminate the opportunity for an employee to file a fraudulent claim.
- Thorough Investigations – Whether you think a claim is fraudulent or not, it’s important to perform a thorough investigation of the incident and the circumstances surrounding it. Not only will this enable you to quickly identify the types of inconsistencies that often point to fraud, but it will also show your employees that you take these types of claims seriously, and that there is a good chance they will be caught if they attempt to file a fraudulent claim in the future.
- Continuous Engagement – Staying in contact with both the injured employee and the insurance carrier over the course of a claim will help you identify signs that an employee is not being truthful about the nature of their injury and recovery, and it will also ensure the claim isn’t left open for longer than necessary for any reason.
- Medical Oversight – Having an independent medical advisor review claims and medical records can help you spot inconsistencies and other signs of fraudulent claims quickly.
- Transitional Programs – When you have a system in place to get injured workers back to work quickly, it reduces the chance that a claim will be left open due to malingering, either because the employee is trying to extend the time off period or because they don’t know there are modified duty options available.
- Thorough Prosecution – When you do uncover a fraudulent workers’ comp claim, pursuing thorough prosecution of the perpetrator is the best way to help prevent similar situations from arising in the future. When your employees see what happens to someone who gets caught, they’ll be much less likely to make an attempt at fraud themselves.
- Comprehensive Safety Program – Thoroughly educating your employees about your workplace safety program, as well as about how workers’ compensation works, is an excellent deterrent as well. It helps reduce the opportunities for accidents covered under your policy, and it also lets the employees know that you’re paying attention, making it less likely they’ll get away with filing a fraudulent claim.
- Tip Lines – Another essential part of your fraud prevention program should be a system for employees to report suspected fraud anonymously. Make sure everyone knows how to do this by including it as part of safety training and by posting flyers in high-traffic areas.
- Video Systems – Investing in a video system is another great way to eliminate the potential for fraudulent workers’ compensation claims. When you can quickly call up a recording of the area and time frame in which an injury reportedly occurred, you can see for yourself exactly what happened and identify any potential inconsistencies quickly. And just knowing that they’re being recorded makes employees much less likely to attempt to report an injury fraudulently.
There are many forms workers’ compensation fraud can take, including the reporting of an old non work-related injury as a new work-related one, exaggerating the extent of an injury, or claiming an injury occurred on the job when it actually happened elsewhere. By taking some sensible precautions and maintaining vigilance, however, you can identify potential fraud quickly and avoid making any unnecessary payments.
To learn more about what we can do to help you eliminate workers’ comp fraud in your business, call our email us today.