While the vast majority of worker’s compensation claims are legitimate, those that are not can have an outsized negative impact on your business.
All fraudulent worker’s comp claims don’t necessarily follow the same course, but there are a few broad categories that they fit into. Understanding these, and knowing what to watch for, can help you spot potential fraud quickly and keep your business’s losses to a minimum.
Types of Fraud
There are four broad categories that most fraudulent worker’s comp claims fall into. These are:
- Injuries that Occurred Elsewhere – These types of claims involve actual injuries that the employee sustained somewhere else that they then try to pass off as a work-related injury. It may be an old, chronic condition, or it may be a new, acute injury that does require treatment and rehab but should not be covered by worker’s comp.
- Malingering – This also relates to a real injury, and one that may or may not have occurred on the job. Even if it is a legitimate worker’s comp claim, however, the employee will seek to drag out the recovery process, subsequently taking more benefits than they are entitled to and making the claim more costly in total.
- Staged Accident or Injury – Some worker’s comp claims center on an accident that was staged or an asserted injury that doesn’t actually exist. Whether or not the accident was real, the injury may not be, and in either case, worker’s comp should not apply.
- Secret Second Job – A worker who is injured on the job and collecting benefits through worker’s comp may begin a second job on the side while continuing to claim they are too injured to work.
Of course, there are many specific situations that can involve variations and combinations of these scenarios. For instance, an employee who’s willing to fake an injury or claim an out-of-work injury as one that occurred on the job may also try to drag out the claim for as long as possible. Similarly, an employee looking to claim an out-of-work injury might go so far as to stage an accident to give their account more credibility.
What to Watch For
Fortunately, there are some warning signs that can help you identify injury reports that merit a closer look. They include:
- Delayed Reporting
- Refusal of Treatment
- Suspicious Providers
- No Witnesses
- Conflicting Accounts
- Monday Morning Reports
- Changes to Doctor, Home Address, Mailing Address, etc.
- History of Multiple Claims
None of these by themselves means that a particular claim isn’t legitimate, but it does give you reason to look more closely at the situation surrounding the alleged accident and injury.
How to Protect Yourself
Ensuring that your injured workers are properly taken care of and adequately compensated throughout their recovery is an essential part of doing business. However, it’s best for everyone in your company if you can avoid paying fraudulent claims, as they can drive up your premiums unnecessarily and threaten the business’s financial security.
In order to protect yourself from fraud, it’s best to have a detailed plan in place that lays out the process for reporting and investigating work-related injuries, sets up a system for open communication with injured workers, and includes a comprehensive strategy to help injured workers return to their jobs as quickly and smoothly as possible.
If you’d like to learn more about the ways we can help you avoid fraudulent claims, as well as the excellent range of worker’s compensation and other business insurance policies we offer, contact our offices today.