If you are a CEO or business owner, you probably have had experience in the workers’ compensation arena in some way or another. While most employees who file claims for workers’ compensation are actually injured or are deserving of the compensation, there are employees who file false claims or exaggerate injuries to get more money. Did you know that one-fourth of all insurance fraud is due to worker’s compensation fraud? If employers and owners have never thought about this issue before, it is probably because it has gone unnoticed and undetected, making it an easy crime, until investigated.
Workers’ compensation fraud occurs when a claimant, employer, or health care professionals lies to gain compensation, more money than their claim should have been worth, savings, or other benefits. There are many reasons why worker’s compensation is an easy crime to commit. Employees are often not monitored every second of every day, while at work. This makes it likely that injuries along with other work-related issues occur, without employers, managers, or other employees even finding out. The other major reason for why fraudulent claims are easy to go undetected is because employees can easily get injured and make it appear as if the injury occurred at work, or because of work-related activity, even when that is not the case.
With the major reasons for why worker’s compensation is prevalent, here are some reasons for how employees commit worker’s compensation fraud:
- Pre-existing injuries that did not occur at work;
- Claims filed for injuries that have no witnesses;
- Filing multiple claims for the same injury;
- Getting injured at work, but exaggerating or lying about the severity of the injuries;
- Not visiting a medical professional right away or purposely missing appointments;
- Facing financial stress;
- Faking an injury;
- Staging an injury;
- Getting injured from a non-work related activity; and
- Getting injured after being terminated.
All of the situations mentioned above are ways that employees get away with worker’s compensation fraud. It is self-explanatory why this particular type of fraud is so easy for employees to get away with and go undetected. The amount of money lost due to worker’s compensation is staggering. To put the losses into perspective, it actually equals the amount of money that could fund almost 3 space shuttles or about 38,000 college four-year college tuitions, according to the National Insurance Crime Bureau.
There are three most common types of worker’s compensation fraud, committed by employees include false claims, continuing to work while receiving benefits, and exaggerated claims. False claims are typically the most dramatic and difficult to get away with, even though so many employees still do. When an employee stages an injury or simply lies about getting injured when he or she did not, a false claim can be filed to receive benefits. Employees can also file claims after continuing to do activities that they should not be able to do according to what they are claiming for injuries. For example, an employee may make a claim that he or she injured their shoulder and are not able to do any heavy lifting. This employee would continue working and doing heavy lifting, while receiving benefits for not being able to do heavy lifting. Secondly, an employee could be working a second job while receiving benefits for being injured. Lastly, an employee could lie about the severity of his or her injuries and receive a certain amount of benefits that he or she should not be receiving because the injury is not as severe as it was portrayed.
When worker’s compensation fraud occurs, it positively affects the worker who is committing the fraud. However, it negatively affects not only the employer but also the other employees and the consumers. As a result of this fraud, employers end up with increased premiums, co-workers end up having to compensate for the loss in work that the “injured” employee would be doing and may lose out on bonuses or raises that are transferred to making up for the increased premiums. Consumers may then have to pay more for elevated delays, manufacturer expenses, and other losses. Worker’s compensation fraud branches out like a tree and touches everyone connected to the business.
Some ways that employers and business owners can minimize the risks of this type of fraud or reduce the likelihood could include:
- Thorough screening processes before hiring employees;
- Increased security and monitoring;
- Programs that focus on post-injury monitoring and care;
- Partnering with medical providers who specialize in work-related injuries;
- Fraud policies and programs that eliminate second chances after worker’s compensation fraud;
- Increased training for employees.
Though the prevention strategies mentioned above may help employers minimize the threat of worker’s compensation fraud, they are not a guarantee. This system that is put in place to ensure injured employees are taken care of can be abused and leave businesses vulnerable to loss of profitability and productivity. Investigations into past and current worker’s compensation claims is the only way to ensure that businesses are not being taken advantage of. Without investigation, fraud could continue going on right under employers’ noses and go undetected. Do not add to the staggering loss that this country faces due to worker’s compensation fraud and get help before it is too late. If you believe that your business is being taken advantage of due to false worker’s compensation claims, call Advanced Investigations to speak with someone about your specific situation and needs.