Top 10 signs you may be a victim of workers’ comp fraud
May 28, 2010 by Fred HosierPosted in: Injuries, Special Report, Workers' comp
How do you know that the worker who claims to have been injured on the job isn’t committing workers’ comp fraud?
Over the years, employers and insurance companies have uncovered some telltale signs.
Any one of these red flags alone probably isn’t enough reason to suspect fraud. There’s a better chance the worker may be trying to pull one over on you notice a few of these situations:
- The disgruntled employee. While a worker known as a regular complainer might seem to be the most likely candidate, also consider workers who were recently denied vacation time, demoted or disciplined, and are keeping quiet about it.
- Difficult to contact. Injured employees who are difficult to contact at home may be working at other jobs. Also, beware when employees aren’t available immediately but call right back. In the age of cell phones, people at home can call employees at their new jobs, and then the employees call back using their cell phones.
- The new employee. Statistics show the newer the employee, the more likely a claim is fraudulent.
- No witness. This is more likely to be a red flag when the employee normally doesn’t work alone.
- Unusual circumstance. This one is related to no witness. Was the employee supposedly working somewhere they wouldn’t be normally?
- Rough hands. Calluses or grease under fingernails may be a sign that the worker is double-dipping at another job.
- Knows about workers’ comp. Does the employee show an unusual knowledge about the workers’ comp system?
- 24-hour lawyer. Did the employee get a lawyer very soon after the injury occurred?
- Doctor shopping. A request for a second opinion may not be a red flag, but watch out when the need for a new physician happens after the first doctor says the employee can go back to work.
- Good timing (for the employee). This includes before a layoff and injuries that are reported early on a Monday — a sign that the injuries may have happened off-the-job, over the weekend.
Do you have any signs of fraud to add to this list? You can share your experience in the Comments Box below.
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June 1st, 2010 at 8:23 am
Telling thier supervisor right at clock out time something is sore but didnt do anything different today and then going to the emergency room that night and then reporting the the following morning with an exact incident that caused thier injury. These usually happen mid-week and almost always result in time off from work. Employees that do this usually know hos hard it is to get any info from the emergency room and that the emerg. doctor usually will instruct them to follow up with thier doctor and by all reasoning you can not put them to work until you have them seen by thier doctor and are given either restrictions of off work status. I have usually found that the employee will choose a doctor that is very hard to get them in to and will take many days for them to be seen.
June 1st, 2010 at 8:25 am
I have experienced a high percentage of fraud with late reports of injuries. The later the report the more likely there is fraud involved. I had one where the report was two weeks late. Injury supposedly occurred on the friday before shutdown and was not reported until the following monday more than 2 weeks later. It turned out to be easy to prove as the worker claimed a back injury and then went around showing everybody his vacation photos of water skiing, parasailing, and bungy jumping that occurred after the supposed injury. We ended up firing him for exceeding his doctor imposed work restrictions. Seems he couldn’t lift 5 pounds on his job but had no problem shouldering a full drink cooler weighing in at 75 pounds when he was thirsty and no one else had time to go get it.
June 1st, 2010 at 10:15 am
We had one case were 5 of the 10 items above occurred and the sad thing was, before we realized it, the claim took off and was actually heading out of our control. This person slipped threw a lot of preventive measures we thought we had in place during our hiring process but with the first 2 months we were in a WC claim with this person. We tried to claim fraud but that didn’t work but eventually because we had medical experts in our favor and a great insurance team after almost a year later we did walk out of it a lot better off than we initially thought we would have. This case is settled however there are still after shocks occurring. Although is was an bad experiance we did learn from it and have beefed up our hiring process and set in other policies for existing employees surrounding additional safety and health incentives. What doesn’t kill or hurt you will make you stronger but sometimes it’s scary going through the lesson.
June 1st, 2010 at 10:32 am
Where are the 10 signs that indicate it may be a legitimate claim?
June 1st, 2010 at 3:43 pm
TC I think you misunderstand the point of the article. It is to help companies from falling victim to a fraudulent workers comp claim. It is not intended to prevent an employee from receiving treatment and benefits for a legitimate claim. I hope this article doesn’t effect any future plans you might have.
June 1st, 2010 at 5:46 pm
I agree with Deanna, but I have to add the caveat that we do not control the lifespan of these cases. Whether or not we diligently conduct our own internal investigations and root cause analysis, nor whether or not we can prove these allegations or not, they tend to take on a life of their own in the real world of applicant-friendly courts. Workers Compensation was intended to provide the company with relief from tort law. The apparent legal double jeopardy highlights the legitimate fear of employers that the tort relief; which is such a central feature of workers compensation law, is in danger of slowly being eroded.
June 2nd, 2010 at 7:18 am
I have employees who know the system well. I have had injury reports up to 3 months after the injury. Some will not even report it to me but go directly to the WC Commission. I am not notified until I receive a hearing notice. It is so frustrating. We can not prove an employee did not injure their back at work. I also have repeaters, every couple of years they get injured and get a settlement. If we terminate them it is retalliation, so we are stuck.
I am always looking for new ideas an view points
June 2nd, 2010 at 1:18 pm
Jan, we stopped the kind of issues you have with an “immediate notice” requirement. Injuries which are not reported within 5 workdays are automatically NOT workers comp. we’ve had it appealed and it held up. This does not mean that the injury has to be a recordable when reported, just that the injury has to be reported within that time frame. This allows us to manage the injury properly and to investigate the cause of the injury properly, (it also catches most drugs prior to them being removed from the system).
June 2nd, 2010 at 2:55 pm
Mike,
In the state of IL the statue of limitations is 3 years. If they go to the commission we have to proceed with a WC injury. I have 46 locations throughout the US and this is a common problem. Most of our injuries retain council fairly quickly. At that point I can no longer discuss the injury with the employee. Are your employees written up if they do not report an injury when it happens? I am trying to change our policy here to do that hoping it will help
June 2nd, 2010 at 3:20 pm
Jan - In CA, GA, LA, PA HI, OR, OK and WA (that I know of), writing a person up for failure to report an injury in a timely fashion is not a legal consideration. The WC process trumps disciplinary action, up to and including a failed drug screening and horseplay. Most states will go up to one year for reporting purposes to the WC Board; some will go further. In all the states I mentioned above, surveillance is not a legal consideration either. Tort is slowly creeping in and giving “out-of-work” applicant attorneys a chance to hone their skills. Geographic Presumption and “More Likely than Not” is enough to start the process. In half of the states that I mentioned, the good folks in an Emergency Room/Industrial Clinic will save you the trouble of filing with the state and take it upon themselves to do so on your behalf. That is after all, guaranteed compensation for them…better than most primary healthcare insurance companies.
June 2nd, 2010 at 3:25 pm
They are not written up due to non reporting, it is just not a WC claim. They have to turn it in on our reguular insurance and if it includes time off it is a STD or a LTD issue. We have written a few up when the cause of the non report turned out to be failure to follow safety policies such as LOTO and PPE requirements. We very rarely have had an issue to be honest as I can only remember one none reported injury in the past couple of years, it involved a disgruntled employee who had a spouse, fatehr in law and brother all on work related disability. She was a supervisor who claimed a hand sprain. her second doctor gave her time off. We evaluated her work and found she could do all of it with one hand, (she was a supervisor after all). She then claimed a new and improved sprain of her other hand. Neither injury had any witnesses and both were reported at the 5 day point. Upon investigatiopn we found that she was playing golf and tennis on the weekend. It isamazing what a few dated pictures will do for the workers comp board.
June 2nd, 2010 at 3:59 pm
Mike,
If it works for you, great! I know that it wouldn’t work that way for me. Time and again I have ran surveillance by the IME, and was pre-empted by the doctor who originally charted the injury. In the states where I operate, once something is charted…it is permanant. I personally would never risk having an employee report a claim; no matter how old, to their own insurance. The primary care insurance would see to it that your WC carrier took it over, and the ratings board could come in and make life awfully unpleasant for you. Then again, we are self-insured and work through a TPA. That is what we pay them for…to weed out the suspect claims. In an applicant-freindly state like ours, I would not risk conducting an investigation that involved photography without TPA/WCIRB approval. Take care and be safe!
June 3rd, 2010 at 7:07 am
It wouldn’t work for us either. Once an employee mentions “work related” the insurance companies kick it out and they end up filing wc anyway. I have one who retired on LTD 3 years ago and got an atty stating we aggravated her condition. I tried to argue the statue of limitations had passed but it got thrown out of court stating LTD didn’t count toward the limitations. You just can’t win. The WC system has gotten so out of control with bogus claims. We are self insured also and use a TPA, while we pay them to weed out bogus claims I have to constantly push them. I do realize these are adjusters doing a job like anyone else. They have no concern in regard to the money we are spending.
June 3rd, 2010 at 8:51 am
In the state of VT an employee has up to 2.5 yrs to report a WC claim and we as the employer only have 21 days from the date of filing the claim to dispute it or claim fraud and if we do dispute it there can be absolutely no question of a doubt that the employee is fraudulant. Very hard challenging. However, we do have it in our employee manual that any injury no matter how small must be report as soon as the injury occurs or if the employee is able within a 24 hr time line. This works for us and fortunatly we do have employees with a strong work ethic, we’ve only had one employee in the recent past who took advantage of the WC system and that employee was the one who fit 5 out of the 10 items listed above - new employee (only 8 wks) - new the system - doctor shopping - notified us he was lawyer hunting and no witnesses. The complete upset was we have 24/7 security cameras and he happen to find the one spot that we didn’t have a clear view of him at the time of the incident. Clever huh’…..and since then have added a couple more cameras. However we learn from every lesson and we have upgraded our hiring process and have added more health and wellness regulations to our current employee base. What doesn’t put you down, makes you stronger and better. Have a good day everyone.
June 3rd, 2010 at 9:09 am
I guess it all depends on location and your workforce. I am looking at nerve conductance testing to weed out carpal tunnel pre existing conditions. I used it years ago in the automotive industry. It allowed us to eliminate those who had a pre-exiting condition which we would “agrevate” and therefore own the injury. Pre empoloyment testing in general will help. The key is to be very sure that all tests are relevant to the job being preformed.
June 4th, 2010 at 8:18 am
We don’t have pre-employment physicals because here we have to make an offer of employment before we can give them a physical. Once an offer of employment is made we can not recind because of medical issues. It conflicts with ADA. We do drug and alcohol test them as a condition of employment. We do have a baby boomer work force so we have a lot of aggravation of a pre-existing conditions. Those drive me nuts.
June 4th, 2010 at 8:59 am
Jan is correct - if your state hasn’t made law the post-offer physical examination requirement yet…it soon will. HIPPA/PHI infomation is as closely guarded as National Security Information. A solid offer has to be made and accepted prior to any privacy information being disclosed.
Been great discussing this, can’t wait for the next one.
Everybody have a safe and restful weekend!
June 4th, 2010 at 9:14 am
ADA only covers disabilities which can not be corrected. It only requires you to make reasonable accomidations. If the person is unable to perform the job due to a correctable issue, such as preexisting carpel tunnel conditions, it is not covered under ADA. If a person is too weak, they can bulk up, if a person lacks stamina they can train. Don’t let ADA scare you. ADA can even be defeated in non correctable disabilities if there is a safety issue involved or the cost of accomidation is too great. A case in point was when a pair of sisters with very poor eyesight were turned down for comercial pilots positions at an airline because their uncorrected eyesight was worse than the companies limit. They sued under ADA and lost. Why? because the company was able to prove that their restriction was based on a safety concern and that they could not operate the plane without the aid of their glasses. We have a claus in our forklift requirements that no one will be granted a forklift license if they are not PHYSICALLY capable of getting a state drivers license. Safety and worker health trump ADA, it is not the boogie man. It may take some homework but don’t let it stop you from making a safer workplace and preventing worker injuries.
June 4th, 2010 at 10:05 am
Thank you Mike…Good info!
June 4th, 2010 at 11:19 am
Most of our issues are degenerative back issues which often don’t show up at first until they are performing some type of task. These run into the hunderds of thousands of dollars and often that doesn’t include the settlement. Unfortunately, in IL you can not require a resignation with settlement, then we have arrgravation of a pre-existing condition.
June 4th, 2010 at 11:52 am
Jan, we have had several cases of this sort. We evaluated them post reovery and matched their abilities to our job availibilities. If they could not physically do any of the jobs available we cut them loose with a settlement. It was a lot of work to get set requirements for each job in the plant and more to keep them updated but it can be done. As for pre employment physicals etc, we had the employment offer contingent on passing the physical AND the two week job training. The only time we had a problem was when the plant nurse let an applicant postpone the pre employment physical past the completion of the two week job training. Turned out he had carpel tunnel, knew he had carpel tunnel and therefore avoided the nerve conductance test. We ended up “buying” the injury. The nurse ended up retiring. have you ever thought of working in another state? There are some states I will not work in such as CA and OH due to the laws etc. After all your posts I am going to add IL to that list
June 4th, 2010 at 12:34 pm
I guess I can’t let this conversation rest…
I have a dilemma with our forklift drivers. All accepted the position (in different plants) and the post offer physical revealed that at least three could not pass the Ishiara test for color blindness. Since we didn’t ask them if they were colorblind…as if we were allowed to ask them to begin with, I now have three colorblind forklift drivers, contrary to ASNI Standards for PIV Operators. HR has continued their employ due to ADA requirements. Any advice?
June 4th, 2010 at 1:29 pm
First you have to determine if the colorblindness presents a real and present danger either to safety or to production limits. If the answer is yes then you have to determine if there is an available accomidation. If the answer is yes to the first and no to the second ADA is not an issue. Be careful on the first if there is no safety issue but there is a production issue. Many plants color code for stock diffentaion. We used to but went to a bar code system. Part of the impetus for changing was color perception issues with our operators, forklift and others. Under ADA we had to see if there was a reasonable accomidation from a production standpoint. For us the answer was yes. There was no real safety issue so we changed to bar codes. Our inspectors on the other hand are required to sort by color as our product is a housing decoration item. There was no possible accomidation as they are required to check for color on each item so we have a requirement for perfect color vision on our inspectors and quality control techs. If we had a solid color on our products we could have been pushed towards a color scanner but since they all have patterns we could not nmake one work, (we tried).
June 4th, 2010 at 1:47 pm
We are based all over the US, I personnally have 54 locations I take care of. IL is our corporate office where I am based. I also have locations in CA, TX, OK, WI, CO, etc. IL, CA, and TX are my worst states. In TX there is no settlements so the employee can treat forever, and we all know how CA laws are, RI is also one of my problem states. Once the employees learn how to play the system off they go…………….
June 4th, 2010 at 1:52 pm
Thanks Mike,
As far as the determination of a clear and present danger, my danger is that ANSI says that forklift drivers must pass a colorblind test, and the ANSI Specs are what OSHA refers to. The danger is not no much in color or the hazardous potential, it is in willful lack of compliance. I know that the problem lies in pre-employment screening and job descriptions, but that is not within my control. There is not much in our plants that rely on color. There is a feeling in my department that with a couple thousand new OSHA inspectors being hired, and being an organization that is becoming more financially reliant on fines and citations for its bread and butter…you get he picture.
Believe me, there are many OSHA and WC requirements that are contradicted or stifled by employment law and all of it’s arcane insensibilities. Again, I say…tort is slowly eroding away from what WC was meant to protect the employer from to begin with.
June 4th, 2010 at 1:55 pm
Jan,
I’m headquartered in Los Angeles, but I still say that GA is my worst state, followed by OK. I don’t have plants in WI, and so few calims in TX that I’ve never had to deal with them. Your input is interesting however…thanks so much!
June 4th, 2010 at 2:10 pm
Jan, I sure hope they pay you well. My last job had 12 locations in 6 states and three countries. Between MOE, PROFEPA, MOH and the CA OSHA people it was a real headache. Throw in french and spanish training and arguing with HR over what parts of safety they owned and I owned, (they owned it for the headcount, I owned it when the fit hit the shan), I do not miss those days. More often than not the local management would not call you until they had already pissed off the local enforcement types. Good luck.
June 4th, 2010 at 2:56 pm
John, does it say which test? I know of 2 which the military uses. One, the Failent lantern test only checks for red, green, and white using two “dots” of the three colors. The testee only has to say which color he or she sees top to bottow. I am green/brown color blind but I can pass that test eaasily which allowed me to get into the nuclear power program. The more stringent aircrew colored dot test where they identify numbers and letters is only used, (by the military), if you are aircrew or an electronics type. This may be a loophole.
June 4th, 2010 at 4:14 pm
Mike,
Failent Lanterns check for little more than primary color blindness. The Ishihara (the dot test) is more accurate. ANSI does not specify which test is required, however an Ishihara Chart is more accessible to Safety Managers than the lantern, and the lantern is administrated primarily by an opthomologist or his/her aassistant. Logic dictates that a PIV Operator would have to distinguish between the colors of a stoplight and little more, but the B56 Standard has not been updated for a long time. The Ishihara Chart was the standard back then. You mentioned that in your line of work, it is part of an operators duty to distinguish between many colors as an electronics technician or a hydraulics mechanic would. The standard fails to discern between the two for PIV operators, it just states that a test is necessary, and I have the Ishihara Charts, not the lantern. HR Prohibits me from administering the test and insists that the occupational clinic is the only entity that can for HIPPA/PHI concerns - Go figure… All post-offer test mind you. OSHA does not spell it out in 1910.178, but I have been cited and fined by a sharp auditor who knew what ANSI was. The whisper test is still mandatory for PIV Operators as well…not a lot of people know that.
June 7th, 2010 at 8:47 am
Sounds to me that you should spec the failent test by your contractor who is doeing the test. It is a certified test recognised by all and sundry, even the govt. Back in the good old days I worked as a mechanic in the Navy. my primary job duties included reactor and reactor auxilleries maintenance. Nothing color coded outside of the primary colors. Sounds like you have significantly tougher OSHA types. My last three inspections I “gave” the guy a violation as it was obvious after the first few hours that; A. he wasn’t going home without one, and B he didn’t understand the regs well enough to find one on his own. Total fine in all three was $1200. My much bigger headache from an audit standpoint is the EPA types. They actually know what they are doing and take very few prisoners.
June 11th, 2010 at 10:14 am
One of the biggest problems I encounter is that W.C. most of the time doesn’t do their jobs effectively. If they would investigate claims and check on injured workers half the cases would go away quickly.
June 11th, 2010 at 11:17 am
Kel,
I am in total agreement. I spend more time following up with the adusters to make sure they are doing their jobs than anything else. We pay them to manage the claims but if I don’t constantly baby sit them the claims just sit there with no activity
June 14th, 2010 at 10:04 pm
Easier just to send the check!! Less work.
June 22nd, 2010 at 11:49 am
After reading the other article on OSHA, no wonder manufacturing companies outsource to China. It not just the cheap wages….
June 23rd, 2010 at 9:02 am
Any reason or excuse used to outsource jobs is more about the almighty buck than anything else. All comes back to investigations by the company and Comp.
June 23rd, 2010 at 12:03 pm
All business decisions are about the almighty buck to some extent. When business stops looking at the dollar signs and starts looking at other signs we as employees should start looking in the help wanted section because the company is on the wrongtrack. As managers our main priority should be to help the bottom line. In our field that means keeping the company compliant with regulations while allowing production to make quality products. This means living the life of the production types and consulting with them to come up with inovative solutions to safety issues. 29 CFR may be printed in black and white but there is always multiple ways to skin the cat, no aplogies to PETA; keep that in mind and you and your department will be seen as an asset rather than a hinderance.