Workers’ Compensation is one of the most significant expenses many businesses pay on a recurring basis. Between 0.5% and 40% of payroll can be spent insuring and protecting employees against loss and injury. So it’s understandably an issue most business owners spend a lot of time worrying about, specifically workers’ comp fraud.
While the vast majority of workers’ compensation claims are legitimate, studies have estimated between 1-2% of them are fraudulent. With more than 135 million workers in the United States covered by workers’ compensation insurance in 94% of all businesses, that means there are upwards of 3 million non-fatal workplace accidents every year, or roughly 3% of the working population.
And while that fraud can occur both on the employer side (misrepresenting payroll or misclassifying employees), it more often happens on the employee side, claiming injuries that do not exist or are not as severe as claimed. For this reason, a good back to work program is extremely important – providing California businesses with a much needed tool to combat this kind of fraud.
FIGHTING FRAUD THROUGH BACK TO WORK PROGRAMS
There are many ways you can fight fraud in your company. Use of surveillance equipment, careful prehire screening for all potential employees, fraud abatement programs that detect and handle fraud as soon as it occurs (or before). These are all sound systems that work well to catch those who abuse the system.
But a lot of fraud occurs not because of premeditation, but because the opportunity arises. Someone who has been injured and is asked to check in, to visit the doctor, to report their pain levels and mobility – they have the opportunity if the systems are not in place to take additional time that they may not need.
A good back to work program does a lot of this by providing a structure for injured employees, clear expectations, and a system through which they can return to work even if they aren’t back to 100%.
HOW BACK TO WORK PROGRAMS REDUCE THE RISK OF WORKERS’ COMP FRAUD
A good back to work program takes several factors into account, not just getting people back into the office, but building a line of communication while they are injured. This means:
- Constant Communication – Ensuring you stay in touch with your employee regularly, making it clear you want them to return and hope they get better soon.
- Monitoring Medical Care – Ensuring that your employees are seeking reputable medical care from a trusted provider whose assessment you can trust and rely on.
- Modified Duties – Establishing modified duties for employees so they can return to work as soon as is physically and mentally possible. Studies show that injured workers recover faster when they return to work sooner.
The goal here is not to maximize value from your employees to keep them from feeling the temptation to cheat, but to provide them with a clear path to return to work. The long and arduous recovery time some might face, especially for more serious physical injuries in an already demanding job, can make it near impossible to get back to work in a reasonable period of time, even if the injury fully heals.
A good return to work program combats this by ensuring your employees know their status, speak to you regularly, receive the best medical care, and have a plan in place to get back to the workplace as soon as they are physically capable. That difference can greatly reduce not only the duration of workers’ compensation claims, but the risk of fraudulent claims from workers who simply don’t feel ready to get back to a physically demanding job.
TAKE ACTION TO PROTECT YOUR COMPANY
If your company currently pays higher than average rates for workers’ compensation due to a high ExMod rating or a limited number of carriers willing to cover you due to past experiences, there are many things you can do.
Implementation of a safety and prevention program, return to work programs to combat fraud and long claims, and regular administrative followups with open claims can all help reduce your rates.