By LexisNexis Workers' Compensation Law Center Staff
As part of our Fraud Awareness Month campaign, we interviewed Dennis Jay, the Executive Director at the Coalition Against Insurance Fraud, on recent issues and challenges with respect to fraud investigation, including workers' compensation fraud. Be sure to check out Dennis Jay's FraudBlog.
LexisNexis Workers' Compensation Law Center Staff (WCLC): Dennis, do you believe we are a “nation of cheaters”?
Dennis Jay:I do not believe we are a "nation of cheaters," although I can see how someone may think that in looking at the studies and seeing all of the cases of financial fraud in the news media. There is a changing cultural dynamic where people are becoming more accepting of some unethical behavior. Most people, however, do not commit fraud and do not have a high tolerance for it.
WCLC: Why do people commit workers' comp insurance fraud and other forms of insurance fraud?
Jay: The answer is complex and quite varied. People commit fraud (1) for the money, obviously, (2) because they feel they can get away with it, (3) because they are in financial dire straits, (4) they feel "the system" has wronged them and they are owed, (5) they dislike an employer or insurance company.
WCLC: What is the worst case of workers' comp fraud by a claimant that you've read about in the media?
Jay: One worse case involving a worker doesn't come to mind. There are so many. There are also dumb cases, such as the judo instructor who filed a claim for permanent and total back injury, and the next week posted the upcoming classes he planned to teach on his MySpace page.
WCLC: What is the worst case of workers' comp fraud by an employer that you've read about in the media?
Jay: The worst cases result in injured employees in financial ruin. There are also many. One that comes to mind is a Florida case where a man was killed on the job and his family was left in poverty because the employer failed to secure coverage. In another case, a construction worker lost a leg and couldn't afford a prosthesis.
WCLC: How can we deter workers' comp insurance fraud and other forms of insurance fraud?
Jay: Fraud can be deterred through a multiple-strategy approach. For fraud by workers, employers need to establish a zero-tolerance fraud approach, go an extra mile in taking care of truly injured workers and create an environment where fraud is not tolerated and employees feel safe in reporting fraud. Employees also must see that there are consequences to cheating.
For premium fraud, insurers need to take more of a zero tolerance. And they need to conduct far more audits. Some investigations are collaborating with labor unions that see the fraud first-hand.
WCLC: How do states effectively combat workers' comp insurance fraud and other forms of insurance fraud when anti-fraud resources seem to be declining?
Jay: Some states beef up deterrence because that is the cheapest way to combat fraud. Also, smarter techniques in investigation, such as use of social media and other technologies, can help.
WCLC: How will a medical fraud provision in the national healthcare reform legislation help to curb fraud committed against property-casualty?
Jay: The new health care reform bill may include provisions to increase collaboration between government and the private sector in detecting and investigating suspect medical providers. There also may be more resources to combat medical fraud.