Recession expected to boost workers’ comp fraud rate
January 14, 2009 by Fred HosierPosted in: In this week's e-newsletter, Latest News & Views, Workers' comp
PDF To some employees, collecting workers’ comp looks better than collecting unemployment.
And for companies, that could mean more workers trying to game the system in the upcoming months.
That’s the warning from Willis’ 2009 edition of Marketplace Realities & Risk Management Solutions.
The insurance brokerage expects rising unemployment to produce “an increase in both claim frequency and the length of time injured workers remain out” just because some workers may see comp as more lucrative than unemployment benefits.
So workers may be tempted to fake or exaggerate injuries, or even claim an old one is “acting up again.”
There is a counterpoint view.
Some economists believe comp claims could decrease because companies usually retain their more experienced — and safer — employees, and workers could be concerned that claims would jeopardize their jobs.
Have you ever contested an employee’s workers’ comp claim? You can let us know — anonymously — in the Comments Box below.
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Tags: recession, unemployment, Workers' comp
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January 14th, 2009 at 2:16 pm
RE: Recession expected to boost workers’ comp fraud rate
Hello,
I handle the worker comp claims for my company and we are seeing a rise in the number of old injuries that are “acting up”. Our insurance company does fight claims on our behalf and has just recently denied one and is probably going to deny one that I am going to report after respopnding to your letter. Our management team is aware of the possibility of increasing fraudulent claims and are reporting minute details when noticed. Some questionable claims have slipped into the system, but overall our efforts are stopping many before they start. On the other hand, I also handle the unemployment claims for the company- so the economy has actually given me a little sence of job security!
Thanks.
January 19th, 2009 at 2:59 pm
I handle the work comp claims for my employer and I have been active in denying 4 claims over the last 6 months. Often, an employee that claims an injury that supposedly happened months earlier is subject to an investigation by our claims investigator as well as violating company policy for not reporting an injury immediately. However, we have seen an increase in the ‘old injury’ or reoccuring strain related claims as they are much harder to disclaim. However, I believe that, with the current economic climate, unemployment is much more attractive because comp claims are not guaranteed if there are questionable timelines as to when the injury happened and there is typically a point when MMI is reached and further payments are only based on follow-up treatment.
January 19th, 2009 at 7:16 pm
Remember to keep good records,this includes even the smallest details. Some workers will gamble
that the employer did not take pictures and did not do an air tight investigation. Dont be scared of the DART. Some formans will water down the initial investigation in order to keep the DART rate down. In the long run everybody will be money ahead if you just deal with whole truth of the matter within 24 hours.
Darrell Fullerton
Environmental & Safety Consultants
NY, NY
February 2nd, 2009 at 5:19 pm
[...] Recession Expected to Boost Workers’ Comp Fraud Rate [...]
March 16th, 2009 at 3:16 pm
We deny all the time - and we are successful at it. My corporate philosophy is give every deserving injured worker the attention and care they have earned and need to become whole again, and be equally aggressive on claims that are questionable or clearly fraudulant. Just don’t depend on your TPA to do it for you - most will accept everything. We have a large deductible policy, so we have a vested interest in paying only legitimate and reasonable expenses. Multiple jurisdictions make it more complicated - what’s aceptable in one state may not have to be accepted in another. You have to do your homework, and you have to be willing to push for legal determinations, not adjuster opinions.
We have seen increased difficulty in getting the more complicated claims closed, which means more communciation with the TPA. If you are not involved in every claim, particularly in today’s economy, you get what you deserve; more claims, higher expenses, higher mod, higher premium.
April 16th, 2009 at 9:20 am
We have had several major WCC the past few years. As a general contractor the union subcontractors have decided their salting tactics were not effective. The Unions can’t stand the fact they are losing thousands each year in membership and need to find other ways to stick-it to the merit shop G.C’s. All were filed by Union Stewards or their immediate jobsite Supervisors. There was never any witness to the alleged crimes. All are still in court wasting valuable time and money. None are legitimate.
April 28th, 2009 at 9:03 am
I have had successes and failures when I had great video of workers on workers comp. Most large insurance companies have lawyers that are given the lattitude to hire private investigators to film personnel when their claims are questionable. Although the films showed non-controvertable evidence that employees were faking their symptoms, some DOL arbitrators have ruled against the insurance company. This is not always the case. We had great film of one employee on his roof, hammering nails. When we went to court, the Doctor described the limitations of the employee and stated that “this will be as good as it gets”. When the lawyer showed the film taken four day prior to the court date, he asked the Doctor what he thought about those limitations now. The Doctor’s response was that the employee had obviously overstated his limitations. The case was thrown out.
July 15th, 2009 at 6:13 pm
I handle the WC for my company. Not only do we have questionable WC claims, we have seen an increase in the claims. Once on WC, the workers really know how to play the doctors. I had one guy out with a broken finger for 3 months, totally high on pain killers. I would call him to see how he was doing and ask him for paperwork (he is supposed to stay in touch with me every week and provide me with doctor’s restrictions). He got so mad at me for “harassing” him, he filed a complaint with his union. He didn’t think it was my business how he was doing. He almost lost his benefits for lack of cooperation. I don’t believe the system is employer friendly at all. Sad really that the workers think they are guaranteed an income if they get hurt. To some of my guys, it’s a paid vacation with a pay-out at the end, if they’re lucky. I had one guy file 3 claims (different) within 30 days. Oh yeah, he forgot to tell anyone he was injured until the next day. Also, I have a ton of claims that were reported within an hour of starting work on a Monday morning (after the big softball tournament). Imagine that.
July 16th, 2009 at 9:24 am
When I first began started at my current employer( 1year ago), there were 24 open or litigated WC claims and 26 average recordable injuries a year. Now, after changing our focus, working within the state WC laws, vigorously investigating and managing each new case and denying those we know to be suspect, we have reduced our open claims to 4 and, 1/2 way through this year, are at a 66% reduction in injuries.
Fraudulent claims can only be eliminated by good hiring practices, superior supervisor and employee training and constant re-evaluation of practices and policies, along with a dedicated risk management carrier.
It is possible to handle these suspect claims. It just takes hard work and dedication.
September 22nd, 2009 at 12:31 pm
We have had good luck when we contest our WC claims. We also manage our claims and work closely with the insurance company. We are assigned one adjuster so the communication stays at top level at all times.
We are union and have a collectively bargained ADR (alternate dispute resolution) carve-out in which an Ombudsman (retired administrative law judge) works with all involved for claim resolution. This process has saved our company and other union affiliated contractors many thousands of dollars. The only time an attorney can get involved is if the case goes to arbitration.
The other thing that has helped a great deal is that legislature has changed our work comp laws. Look up SB 899 in California. It is designed to reduce claim costs for new and existing claims. So far, this has made a significant impact with regards to TTD and PD pay outs.
November 11th, 2009 at 11:08 am
Every claim should be investigated for both compensability and fraud. This is true in good times and bad times. One of my clients (a group fund) has lots of small members. They are seeing a rise in the number of claims being reported by the owner operators as the local business cycle slows down. Very hard to deny this type of claim since the injured party is both the employer and employee. Direct contact investigation is a key component - true fraud is always hard to prove in Louisiana. But the Office of Workers Comp is putting more focus on this issue - cases of suspected fraud are reported to the fraud unit - the fraud unit and state police have made some big bust in the last few months. Premium/payroll fraud was the last big news story. Each jurisdiction has its own rule and processes for dealing with claims of fraud — avoid crying wolf without all the facts. We are currently investigating three separate fraud claims - I don’t think the economy has anything to do with the issues presented. Substandard hiring practice and poor management seem to be the smoking gun in most cases. One of our cases has already been reported to the State fraud unit.
February 8th, 2010 at 9:47 pm
why would workers comp wont my personnel ,medical,social security,police ,internal revennue and much more for my workers comp case .my case is9 years old and still open .thank you jim west
October 2nd, 2010 at 1:23 pm
What you are not realizing is that most cases are legitimate. That is why insurance exists.
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