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Issue Date: February 1, 2008
Investigating fraudulent worker’s comp claims involves the private investigators working with companies or their third-party administrators to get the proper intelligence to catch abusers in the act. Another perception is that people who file worker’s comp claims are “faking.” As a point of fact, those abusers represent a relatively small percentage of workers comp claims. Roughly 80 percent of all claims filed are legitimate, from people who are genuinely hurt and entitled to a worker’s compensation claim. That’s not to say companies should rubber-stamp every claim, but you shouldn’t have a chip on your shoulder that everybody who files is trying to take advantage of the system. As an organization, you do have to be wary of the red flags of potential worker’s comp abuse. In L&W Investigations’ training seminars on workers comp, we teach companies to be on the look out for red flags and identify the wide variety of red flags that can exist in a potentially fraudulent claim. The following are a few common red flags that are covered in these training seminars: Multiple claims – has the claimant filed more than one workers comp claim in the past or within a short period of time? Longer absences than anticipated for minor injuries; an unwillingness to come back to work on partial duty or other jobs within the company. Missed medical appointments While these red flags will help you sniff out potential fraudulent claims, the majority of your suspicions will probably be based on reports from other employees—anonymous or otherwise. They’ve either seen their “injured” co-worker doing some sort of physical activity or even heard it from the horse’s mouth about getting paid for workers comp while working under the table for somebody else. The list goes on and on when it comes to abuses. The question is what to do next. Investigating a tip of abuse requires either hiring an investigator on your own if you’re self-insured or contacting your third-party administrator. In either case, the information you provide to the third-party administrator or investigator will determine the success or failure of the investigation. Period. Why? Because 99 percent of all workers comp investigations will require video surveillance of the claimant, an operation that generally occurs over two to three days in eight-hour shifts. So if you’re not providing the investigator or third-party administrator with the information needed to identify the claimant—name, photo, physical description, current address, injury and its limitations—the investigation is doomed to fail from the start. Once the investigator can positively identify the claimant then it’s a matter of continuing surveillance and documenting their behavior and actions. If he or she is working a second job while collecting on a worker’s comp claim, the video surveillance and subsequent report will tell the story. Same thing if he or she claims a back injury yet is training for the Boston Marathon during the day. If the investigator’s report, with video and still photos, shows the claimant behaving in ways not appropriate for their reported condition, your company will be able to confirm that the claim is fraudulent. Again, that’s not to say you should suspect everybody who files a worker’s comp claim of trying to get away with something. Quite the contrary, if somebody’s injured on the job it’s the job of the insurance company to pay that claim. As the employer, your best defense against fraudulent worker’s comp claims is to keep current records on your employees. Make it a point to have employees update their information annually and check off if their information has changed. Keep photos on file of your employees, whether it’s their ID badge photo or just get in the habit of taking a photo of all new employees. If you’re a larger company, you may want to consider a toll-free fraud hotline for employees to report abuse anonymously. Fraudulent worker’s comp claims costs businesses in the billions each year, both in lost man-hours, medical payments and increased premiums. By simply increasing your awareness and making a few procedural changes (such as keeping current employee information) you can greatly reduce the impact fraudulent worker’s comp claims have on your company and your bottom line. Neal Lyons is the chairman and chief executive officer of L&W Investigations Inc., based in Westborough, Mass. For more information, please visit Web site at |
