Workers’ compensation is an essential benefit that protects employers from expensive medical expense claims while simultaneously providing employees with the financial support they need while they heal from work-related injuries. While fraud is relatively uncommon, successful workers’ compensation scams can cost millions of dollars. As a result, premiums go up, companies have smaller profit margins, and employees have to jump through more and more hoops to get coverage for their injuries. Knowing the types – and signs – of workers’ compensation insurance fraud can help employers and workers better protect themselves.
Types of Worker’s Compensation Fraud
Workers’ compensation scams fall into one of three categories:
- Claim Fraud. Claim-related fraud involves inaccurate injury claims on behalf of employees. So, for example, when an employee is hurt outside of work but claims that the injury occurred during work hours so that medical expenses will be covered. Another example when someone claims an injury is more serious than it is to get a larger payout.
- Policy Fraud. Policy fraud is committed by employers, and occurs when companies try to lower their insurance expenses by hiding information or flat-out lying to the insurance company. The most common examples are when companies lie about the size of their workforce, classify employees incorrectly, or try to obtain coverage under a new company name.
- Medical Provider Fraud. Doctors and other medical professionals can commit fraud by providing unnecessary services in order to get paid by workers’ compensation insurance. Providers might bill under incorrect codes, offer unnecessary referrals, or participate in kickback schemes that allow multiple people to benefit unfairly from workers’ compensation insurance.
Each type of fraud weakens the overall workers’ compensation system, punishing those who use this benefit correctly. It’s important for insurance companies to catch cases of fraud and penalize those responsible.
Warning Signs of Fraud
There are several red flags to look for if fraud is suspected in a workers’ compensation case. Employees might offer conflicting descriptions that change between reports, or they may have accident descriptions that do not match up with their injuries.
The timing of an injury report is also an important factor. An unexplained or unreasonable delay in a report can be indicative of fraud. It can also make it hard for employees to get the screening they need to verify their injuries.
When an employee is hurt at work, prompt medical assessment and treatment is essential, both for the employee’s health and for the handling of the workers’ compensation claim. If a worker refuses screening or diagnostic procedures, it’s difficult for companies to confirm the existence or extent of an injury.
Protecting Your Company from Fraud
Careful handing of workers’ compensation insurance claims can minimize fraud and keep premiums low for honest companies and workers. Claims professionals should carefully research a worker’s job duties and tasks to ensure that their injuries align with the type of work they do. Insurance companies can also track medical provider data to look for warning signs of fraud. Tracking insurance codes, referrals, and other data can highlight patterns that may indicate fraudulent activity by a medical provider. To guard against policy fraud, insurance claims specialists can check how often a company switches insurance providers and whether or not the company has applied for insurance under a different name.
Keep Your Business Safe from Workers’ Compensation Fraud
If you think you may be the victim of a workers’ compensation scam, it’s important to act quickly to get the right evidence and documentation. Find out what the next step is by contacting Scott J. Sternberg & Associates at 561-687-5660.