By Dixie Somers
Often, the only way an employee may seek compensation for injuries sustained at work is through making a claim against their employer’s workers’ compensation insurance. Unlike other legal relationships, employees may not bring a general personal injury suit for damages against their employer; they may only rely on the workers’ compensation regime to pay for their injuries.
Because this workers’ compensation mechanism is so widespread—and depending on your jurisdiction it may even be a function of government and not private industry—it is particularly vulnerable to fraud and abuse. But how? And how do you, as an employer, spot such fraud and mitigate abuse?
First, though, why does this matter?
Employers new to workers’ compensation insurance may not realize this but the more claims that are made against their policy, the more likely it is their policy’s monthly premium will be increased. In this way, workers’ compensation insurance is like any other type of insurance. Thus stopping fraud should be a very real priority, as it can potentially save a small business owner a significant amount of money over a long period of time.
The most common type of workers’ compensation fraud may be generally categorized as “injury” fraud. In this type of fraud the worker might fake or exaggerate an injury that actually occurred at work in the hopes of a quick payoff. Sometimes, their injury may have occurred off the job and be entirely unrelated to their duties. In this case, they may not have personal insurance sufficient to cover the expense, or the workers’ compensation policy might provide better benefits. In either case, another common type of workers’ compensation “injury” fraud is the “transfer” of said injury from an uncovered location to a covered location.
This should be fairly easy to spot, as “transferring” an injury often requires the employee in question to concoct a complicated story of how they were injured that may not make sense in your work environment (i.e. Someone claiming a serious back injury in a job that requires no lifting.)
The best way to spot this kind of fraud is to observe the behavior of the employee in question. Have they been calling out sick a lot? Have they been doing unusual things around the workplace, potentially reckless or dangerous things? All of these are signs of potential fraud.
Professional fraud occurs when doctors, lawyers, and even insurance adjusters, conspire to falsify medical records and legal documents to get more money for a person’s supposed injury—money they can skim off the top and share among the conspirators. Professional fraud is much more difficult to spot, and it often requires the services of an experienced workers’ compensation attorney to root out and unravel.
Employers who are facing serious workers’ compensation fraud issues are highly encouraged to seek professional, licensed, legal counsel to help advise them through the claims dispute process and, if necessary, to help them develop and put on evidence of the fraud at a formal legal proceeding.
Dixie Somers is an Arizona-based freelance writer. Follow her @DixieSomers.