A good percentage of employers have dealt with malingering at one point – or the act of exaggerating or feigning illness to get out of work. While only a small number of workers’ comp claims are fraudulent, quite a few claims (nearly 25% of all lost-time claims) are “exaggerated.” This is also known as malingering. In other words, the claim lasts longer than the medical disability. This is when employers need to be vigilant and invest into resources that help counter fraud claims.
Some people take advantage of the system by staging accidents and faking injuries. Other dubious activity includes, claiming non-work related injuries occurred on the job and inflating the degree of injury and the length of disability. There have also been cases where they claim old injuries are a new work related injury. These claims can be very frustrating for an employer, but processes exist to prevent or reduce the incidents of fraudulent workers’ comp claims. Listed below are top ten ways to reduce or eliminate these claims:
- Pre-employment (post offer) background checks
- A strong transitional duty program
- Train supervisors and managers on fraud prevention
- Fraud tip lines & anti-fraud posters
- On-site Investigation of Injury
- Social Media Investigation
- Medical Records Search
- Covert Investigation
- Proactive use of medical providers
- Prosecute vigorously any proven fraud
Workers’ compensation fraud prevention
Spotting red flags for fraud and understanding why fraud is being committed are vitally important. Not only will having a system in place help to identify the issue, it allows you to ask your adjusters for an investigation to match. Your input will needed in guiding that investigation, and be prepared to take action if the adjuster isn’t being aggressive enough in their investigation. Here are some things to consider when controlling fraud:
- Read and review surveillance reports, videotapes and photographs.
- Coordinate investigation results with medical advisers.
- Create a program to combat fraud – this can include a tip line and rewards for any relevant tips.
- Educate your employees about how fraud hurts their fellow employees as well as the employer.
- Create a strong return to work policy and program, coordinating with doctors or case managers. Having a medical professional review every injury can greatly reduce malingering.
- Utilize your Safety Program to discourage and prevent fraudulent claims.
- If you see a questionable claim, investigate it – what is the purpose of that claim, and was it related to their job or not?
- Screening is hugely important – be active in both pre-employment and post-offer screening to weed out people who cannot safely perform the job or who are serial filers.
Stepping over dollars to save pennies
The importance of a good investigation cannot be overstated. Saving a few dollars now can cost you big later. A good example comes from a recent report I read in which a company reported $1.5m in losses for a year. They reviewed their data and noticed that only $100 had been spent on investigating those claims. The numbers seemed absurd, with only $100 being spent to control $1.5m in losses.
To address this, the company overhauled their system and set aside a much larger budget for investigation and loss control. In the following period, they spent $41,000 instead of $100 on medical review and investigation, and the total claim costs dropped to only $500,000. They were able to save $1m by spending only $41,000 – a massive return on investment and one that many businesses could benefit from.
Learn more about how a good review and followup process can benefit your workers’ compensation policy and reduce your costs – read our full Workers’ Compensation Buyers Guide for more information: