The RED FLAGS of Workers Comp Fraud

A critical part of controlling workers’ compensation costs is to put into place solid investigation techniques.  No matter how severe or minor a workplace injury, each case needs to be reviewed to identify any fraudulent claims and take appropriate action.

When communicating with employees, make it clear that the company will: 

• Immediately investigate each accident when it occurs to determine the root cause
• Identify corrective measures
•  Watch for minor extensions of days out of work and outright fraudulent claims.

Review these Red Flags of Fraud and request an investigation if you suspect a claim is illegitimate or exaggerated.

Injured Worker Red Flags: 

• Injury reported late, to an attorney or to the state commission before reporting it to the employer.
• Fails to attend weekly meetings.
• Is uncooperative, e.g., refuses to try a transitional duty job.
• Is never home when you phone, especially during regular workday hours.
• Has only a postal box rather than a home address.
• Misses doctor appointments.
• Is known to perform seasonal activities, hobbies, or work.
• Has moved out of town or out of state.
• Disputes average weekly wage due to additional income.
• Files for benefits in a state other than the main location.
• Disputes information supplied by the employer on “First Report of Injury” notice.
• Refuses to cooperate in claim investigation.
• Has an unstable work history.
• Has recently been terminated, demoted, or passed over for promotion.
• Has a prior history of injury management or liability claims.
• Makes excessive demands or is pressing for a quick settlement.
• Carries little or no health insurance.

 Medical Flags: 

• Medical reports are repetitive, indicating continuing, constant pain with conservative medical treatment
• The word “disproportionate” is used in medical reports
• The doctor mentions there is “facial grimacing”
• Positive “Waddell Tests” (test for low back pain) are mentioned

Workplace Flags: 

• Employer experiencing labor difficulties (i.e., layoffs, strikes, walkouts).
• Tips from fellow workers, friends, or relatives.
• The insurance company wants to settle the claim for a considerable amount of money.

“Things” just don’t ADD UP! Trust your gut, and if something seems off, be sure to check it out.

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