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How To Spot and Avoid Fraudulent Workers’ Comp Claims
Accidents can happen in any workplace, which is why workers’ compensation should be non-negotiable for any business, despite the size. By providing a necessary safety plan in the case of injury while at work, employees can feel at ease knowing if such unfortunate circumstances were to occur, their medical and financial needs would be compensated. Sadly, just like any insurance claim, fraudulent claims can arise from time to time. Although not common, it is still important to arm your business with not only the knowledge of how to spot a fraudulent claim, but it’s helpful to know how to prevent it in the first place.
Types of Workers’ Comp Insurance Fraud
Typically, workers’ comp claims can fall into three main categories — employee, employer, or health care providers. Although there are numerous ways to commit fraud, here are several of the most common:
1. Claim-related fraud can be committed by inventing a story or scenario in which an injury happened at work, when in fact, it did not happen at all, or the injury happened outside of working hours and off company property. Fraud can also take place when an injury exists but is exaggerated and inaccurately reported.
2. Policy-related fraud can take place when a supervisor or employer inaccurately misclassifies their employees, doesn’t carry the appropriate coverage required by law, or by labeling employees as contractors.
3. Healthcare fraud can exist when a healthcare professional fraudulently bills for a service that didn’t occur or for an injury that does not exist.
Can I Prevent Workers’ Comp Fraud Entirely?
Although it may be impossible to completely eliminate fraudulent workers’ comp claims, you may be able to reduce the likelihood by maintaining a diligent and watchful eye.
Have Authorized Security Recordings of the Workspace and Parking Lots. It’s hard to argue with what can be seen with your own eyes. By maintaining recorded and accessible videos of all areas used by employees, it allows mitigating the risk for imaginary claims. To be extra cautious, we recommend storing all security footage for a MINIMUM of 90 days.
Promote Safety Culture – Pizza parties, accident-free trackers, and risk assessment meetings all can keep the conversation of safety as a top priority.
Maintain Open Communication – By allowing employees to feel safe and secure in their ability to openly communicate with their superiors, you increase the chance they will feel confident in disclosing any information that could be helpful when investigating claims.
You can also:
• Directly and clearly publish safety expectations
• Handle delicate situations with care
• Establish a sound reporting system
How Do I Spot a Fraudulent Claim?
Let’s face it, as much as we want to trust our employees to always tell the truth and to act with the utmost integrity, there is still the chance that there may be one bad apple. Unfortunately, one bad apple can spoil the bunch, costing your company both time and resources. So, how can you spot a not so honest claim?
- • Keep an eye out for documents that appear forged or altered in any way.
- • Unable to receive concrete diagnoses regarding injured employees claim
- • The accident occurs off-camera and in a very low traffic area
- • The claim is submitted post-termination or after disciplinary actions
- • A repeated pattern of injury in the same employee
- • Medical findings do not support injury claims or description of the accident
- • An uncharacteristically long delay in reporting the claim
Fraudulent claims can happen to even the best of companies. Lucky for you, there are always ways to protect and secure the integrity of your company. This is why Mainline Insurance takes particular care in protecting the assets, reputation, and legacy of our clients. - If you suspect a fraudulent workers’ comp claim, please talk to your Mainline Insurance agent who can guide you through the appropriate channels to find clarity and truth, despite the complexity.