How to Spot False Workers Compensation Claims

You’re probably looking online for an answer on “How to Spot Workers Compensation Claims”. Well, it’s probably the most often repeated refrain when we speak to folks whose companies are suffering under the high cost of employee injuries. They feel victimized by the system, mistreated by morally challenged employees, wronged by the insurance carriers who re-enforce the false perception that there is nothing they can do. Here’s the good news that perception is not only false but can be a huge competitive advantage for you.

It’s a competitive advantage because while your competition is playing the woe is me fiddle finger ; you put forth processes and protocols that won’t eliminate fraud, but will make you much less of a target in the future sending a strong message to the rest of your employees that you take employee injuries very seriously as long as they are legit. If they are not established, it may be considered fraud by the insurance carrier, which is a felony.

The tenor of this article is not to teach you how to build systems that lower the probability of fraud, that will come later another publication or posting. We want to help you identify the red flags that may show you might be getting deceived.

Here are six red flags of a possible and potentially fraudulent workers compensation claim.

1. Most workers compensation claims are reported Monday morning. The reason is that the injury potentially took place over the weekend. Maybe in a softball game, maybe doing yard work. Quite often these employee lack health insurance which is why they might use the workers comp system to obtain medical treatment. If your employee reports an injury first thing Monday morning, look for some of these other signs.
2. The injured individual refuses diagnostic procedures like an X-ray or MRI. This might be because they really don’t want the answer. If they are truly hurt, they would want the test done to receive the correct diagnosis and treatment to get back to being functional. Let the employee know there is no cost for the test so you take money out of the equation. If they still refuse recommended diagnostic tests in poker we call that a “tell”.
3. You can’t grasp a clear idea of what actually happened from those involved. Lack of clarity, conflicting stories should give you pause. Separate the injured employee from the witnesses and perhaps call in a professional to execute the accident investigation.
4. You’ve heard gossip about the employee’s injury. Careful with this as there could be different motivations in play. All this does is confirm that you need to take a deeper dive into the claim.
5. There are no witnesses to the injury event.
6. The claim is reported more than seven days after the injury occurred. This in of itself is not a red flag as most companies don’t have a solid on-boarding process whereby the employee knows when to report an incident or injury.

One of these flags is not a conclusive way to determine a workers compensation claim is false. But if there are three or more, it’s an indication to take a closer look through a really good accident investigation process. At Metropolitan Risk we have several tools available to our clients like our Digital Surveillance Pak which is a robust tool that tracks the employee on both the internet and the streets from our partners desktop.

Before re-affirming and acting upon your suspicions on a false workers compensation claim, consider these statistics and factors.

• According to the Safety and Health magazine, newer employees are more susceptible to injury due to lack of their experience. Take into account the employee’s age and sufficiency in job training when judging the validity of the workers comp claim.
• Experts in the industry estimate that only 1-2% of workers compensation claims are false. When you use this as a reference you only have a maximum 2% justification on your assumptions.
• It takes a lot of effort and finances to train a new employee on safety and compliance.

When an employee submits a false workers compensation claim, there are crucial steps to take to protect your business. Upon uncovering a false claim, the employer must report their findings to their claims adjuster.

The issue is: employees stay out too long on workers compensation which could be considered border line fraud. We think there is a bigger opportunity there.

If you’ve noticed multiple red flags and continuously doubted the validity of the claims, give us a call at 914.357.8444. or request a free consultation with one of our RISK ADVISORS.