Combating fraud in workers' compensation claims is a skill that can prevent much frustration and save significant worker' comp dollars. While we can tell our readers the importance of fighting fraudulent claims and publish lists of red flag indicators of fraud, it is often difficult for the risk manager or workers' compensation coordinator to separate the legitimate work comp claims from the bogus claims.
To assist you in recognizing the bogus claims, we are providing a sample claim, using the actual facts of a submitted workers' compensation claim to see if you can recognize or spot ten red flags of a bogus claim (the name of the employee has been altered to protect the guilty).
The Claim:
John Doe works in an auto repair shop as a mechanic. Upon arriving early for work on Monday morning, Mr. Doe went into the auto parts storeroom to get a part for the car he was going to work on. While leaving the storeroom and using both hands to carry the heavy auto part in a box, he tripped over another box on the floor. In an effort to keep from falling, he grabbed a storage shelf, twisting and injuring his shoulder as he fell to the floor. No one saw him fall in the parts storage room as the other employees were just arriving for work.
Mr. Doe immediately reported the claim to the shop manager and explained to the manager how he fell over the box on the floor he did not see because of the box he was carrying with both hands. The shop manager offered to take Mr. Doe to the nearest industrial medicine clinic, but Mr. Doe instead chose to take himself to his “family doctor”. The family doctor took Mr. Doe off work and did not indicate when he would be able to return to work.
When the shop manager called Mr. Doe the next morning to see how he was doing, Mr. Doe's wife stated he was sleeping and could be disturbed. The shop manager waited and called Mr. Doe again that afternoon. Per the wife, Mr. Doe had stepped out. The shop manager asked for Mr. Doe's cell phone number, but instead of providing the phone number, the wife promised to have Mr. Doe call the manager. Mr. Doe almost immediately called the manager back to relay what the family doctor had said. The shop manager recorded the cell phone number of Mr. Doe. When the shop manager called Mr. Doe's cell phone the following week to see what the family doctor had to say after the second medical appointment, the background noises did not sound like the noise you would hear in a person's home.
A second mechanic in the shop after being overworked for three weeks due to the absence of Mr. Doe advised the shop manager that he had heard through a mutual friend that Mr. Doe had injured his shoulder while rock climbing the weekend before the reported injury.
The claim has numerous red flags that could be a tip-off for workers' comp fraud. They are:
None of these red flags by themselves are proof of fraud, nor is a combination of two red flags. However, the more red flags the employer sees on a claim, the higher the probability the claim is fraudulent. If you see multiple reasons to question the validity of a claim, the insurance adjuster and the special investigative unit of the insurer should be notified as to why you believe the claim to be questionable.
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