Fighting comp fraud: ‘Fear factor’ works
May 18, 2009 by Jim GiulianoPosted in: Communication, In this week's e-newsletter, Latest News & Views, Money
Workers-comp fraud costs employers $30 billion a year, according to insurance-industry estimates. So someone is cheating. Your best approach to the problem: Stop it before it starts.
Most of your company’s employees probably are honest people who wouldn’t fake an injury to collect workers compensation. Keep in mind, however, that it just takes one cheat to cause your comp bills to go up and – not incidentally – hurt the morale and productivity of good people.
The best way to stop the problem? Call it the “fear factor.” Warnings,
when they come from the right source, really do help, according to
the National Insurance Crime Bureau.
Strongest ally
Your strongest ally in this fight – if you’re not self-insured – is your insurer. It can educate and warn employees that they’re playing with fire when they fake an injury.
Consider asking a rep to come in and talk to employees about:
- how adjusters and reps get trained to pick up on red flags that are the trademarks of fraudulent claims – no need to get specific; just telling employees about the system can be enough to discourage a crook
- what happens when cheaters are caught - firing, criminal charges, restitution – and how the insurer aggressively goes after cheaters “to keep the premiums down for honest companies and their hard-working employees like you”
- actual cases of fraud that have been uncovered – and the penalties meted out to the cheats.
Tags: National Insurance Crime Bureau, workers comp, workers compensation
May 18th, 2009 at 7:10 am
Here is an excellent resource to help businesses spot Workers-comp fraud.
From the Ohio Bureau of Workers’ Compensation website (http://tinyurl.com/pekmym).
Fraud red flags
A red flag is a warning or a sense that something isn’t right with a claim and should lead one to take a closer look. The lists below will help employers know what to look for when identifying possible fraudulent behaviors. Identification of any one of the following red flags does not mean that fraud exists. However, in order to submit a Fraud Allegation Form to Bureau of Workers’ Compensation (BWC), you need only have a suspicion that fraud may have been committed. Special agents assigned to the BWC special investigations department will carefully collect and analyze the facts to determine whether or not fraud was committed.
Spotting injured worker claim fraud – Red flag indicators that may signal fraudulent activity
Spotting health-care provider fraud
Red flag indicators that may signal health-care provider fraudulent activity
Spotting employer fraud
Red flag indicators that may signal employer fraudulent activity
May 26th, 2009 at 12:25 pm
My company has had four claims filed in the past year. The first was from an employee who was terminated for theft. The claim was filed one week after the termination. The second was a valid injury. The third was from an employee who filed the claim 5 months after the “injury”. After a year of treatment, the doctor determined the the injury was not due to the accident. The fourth was from the same employee who claimed to have tripped over a plastic strap, no witnesses. She claimed the same injury that she claimed on the third claim.
The insurance company is not always the first line of defense. In each of the disputed claims, the insurance carrier ignored our objections, as it is easier and cheaper for them to process the claim, pay whatever sum is necessary and raise the company’s premiums to cover the expenses.
Don’t place to much faith in the insurance company to protect against fraudulent claims.
May 26th, 2009 at 2:50 pm
Ed, I totally agree with you. A couple of years ago, I started a new HR job and the insurance company called me on day 2 and told me to sign the W/C release that they were faxing…to the tune of $45,000. Of course, I didn’t and we found another insurance carrier.