Research shows that the majority of Workers’ Compensation claims reported to employers legitimately occurred in the workplace. However, many claims have at least one, if not several, elements of fraud. Factual misrepresentations, prior injuries, symptom magnification, unauthorized prescription use and staged accidents are examples of behaviors that likely constitute fraud in most jurisdictions.
Prevention begins with increased awareness in the workplace. Claims fraud has many victims, and employees should be educated on the impact that fraud has on the employer, other employees and society as a whole.
Following are several basic steps for investigating and preventing Workers’ Compensation fraud at work:
- Thoroughly Investigate all Accidents
- Timeliness and detail are critical, foundational components of any investigation. The use of sound, common-sense investigative techniques will uncover signs of possible fraud.
- Verify the facts of the incident in detail
- Separate witnesses and interview them as soon as possible following the accident
- Review video surveillance of the accident promptly
The facts should paint a clear picture of what happened. If they don’t add up there’s probably a reason. Collaborate with your Workers’ Compensation adjuster to determine what additional steps should be taken, by whom, and when.
Use Sound Hiring Practices
Conduct proper background checks using a nationwide service before hiring a new employee. Verify references and information listed on job applications. People who lie on applications or have criminal records may be more likely to lie about an injury.
Promote a Fraud-Free Workplace
Don’t be afraid to discuss workers’ compensation policies and procedures with employees, including what to do when an injury occurs, your stance on fraud and return to work. Take the opportunity to show them how insurance costs affect the money available for other benefits such as health insurance, raises, etc. To prevent off-the-job accidents from being filed as workers’ comp claims, explain to them how short-term disability works if you offer that benefit. Also, tell them that while workers’ comp is there to help employees who are injured, fraud is a crime.
Learn Potential Fraud Indicators
The National Insurance Crime Bureau (NICB) offers these signs that a claim might be fraudulent when two or more are present:
- Rumors of foul-play
- An unusually long time between when the injury occurred and when it is reported, especially if the injury is serious
- The employee can never be reached at home or provides a beeper number as their main number
- The employee switches doctors after being released to work
- The employee’s story of the accident changes
- The accident:
o Occurred on a Friday afternoon or Monday morning
o Happened just before a termination or layoff
o Happened outside of the employee’s normal working hours - No one witnessed the injury
Start a Return-to-Work Program
When employers have transitional duty available for employees who are injured, then committing fraud becomes less tempting.
Conduct Periodic Safety Checks
Your safety program should include regular inspections of the work area and equipment. Fix any hazards immediately and document all checks and repairs. Such safety records could later become evidence.
Hold Exit Interviews
To discourage post-termination claims, part of your exit interview should include a signed statement from the employee as to whether or not they experienced an unreported injury at work.