Learn ways you can thwart workers’ compensation fraud
Due to the prevalence of workers’ compensation fraud across the U.S., companies are responding with a list of best practices to help fight this epidemic. Your commercial clients can apply many of these same tactics to help fight workers’ benefits fraud in their own companies, so share these 13 tips with them.
We’ve compiled information from insurers, HR practitioners, attorneys, claims experts and more. While by no means an exhaustive checklist, the following tactics can help you prevent workers’ compensation fraud in many cases, or at least make it more difficult for would-be fraudsters.
1. Make workplace safety a priority with your safety program. Hold regular safety training meetings. Reward workers when safety milestones are met. When it’s clear that your company culture keeps safety top-of-mind, it’s harder to fake an injury because the circumstances just aren’t there.
2. Have a clear policy regarding workers’ comp. Explain to employees the purpose of this program, its benefits – but also its obligations. Help them to understand how the program works and your zero-tolerance stance on fraud. Emphasize that suspicions of workers’ compensation fraud will be investigated and legally pursued when warranted. Also be sure employees understand how they can anonymously report their suspicions of fraud.
3. Promote a fraud-free workplace. Use emails, posters and employee newsletters to spotlight workers’ comp fraud as a serious crime, detailing the anonymous reporting process.
4. Choose a designated workers’ comp medical provider. Use this provider consistently for all employees. Work closely with this provider to ensure
- Injuries at each occurrence are consistent with the employee’s explanation of the accident.
- The list of essential duties provided to the injured worker is also given to you, so that you know when the worker is cleared for light duty or regular return to work.
5. Screen new hires thoroughly. Run thorough background checks on potential employees before hiring. Red flags to look for include excessive job hopping and previous fraudulent activity, whether in work comp or in another arena. Your background check should include credit records, social security number, educational records, driving records and criminal records. “The cost of performing background checks is more than worthwhile if it helps avoid just one workers’ compensation claim,” said Duncan Prince of Invensure Insurance Brokers in an EHSToday article.
6. Consider installing video equipment. Monitoring employee activity has proven to be a deterrent not only of workers’ compensation fraud, but also other workplace crimes.
7. Consider drug testing. It’s safe to say that drug users typically aren’t the best employees: Not only are their actions typically more unsafe, but they’re also more likely to file false claims. So instituting a drug testing policy any time an accident occurs may not only deter workers’ comp fraud, but may also reduce workplace injuries overall.
8. Establish a plan for workplace injury. Designate a point person in each division or group to be in charge when an injury occurs. This person is responsible for: calling for medical help as needed; alerting the predetermined medical provider of an incoming injured worker; logging a description of the accident and injury; noting witnesses’ names; preserving any workplace evidence; and reporting the injury to HR and the insurance claims contact within your company. View more on best practices for incident reporting.
9. Investigate the claim. Make sure that HR and supervisors are trained to recognize fraud and know what to do if they suspect wrongdoing. Gathering and logging facts will not only help mitigate fraud – but may also uncover some procedural changes that might help reduce future accidents. Be sure to write down eyewitness accounts right away, while memories are fresh.
10. Look for red flags. Be on the lookout for these conditions which may point to fraud, says work comp insurance specialist MEMIC: The injured person is a job hopper or has a work history riddled with holes; the claimant has a child support lien or an extensive criminal record; the claimant seems to have exaggerated details about the incident or injury; co-workers are showing skepticism.
11. Listen to the grapevine. After the injury and throughout the claims process, keep an ear to the ground. While many rumors are just that – rumors, employee conversations may be a source of information about the accident or injured worker. If an employee comes forward with suspicions of workers’ benefits fraud, take them seriously without jumping to conclusions.
12. Stay in touch with the injured worker. Maintain a regular schedule of communication, monitoring their healing progress. Showing personal and company concern for the worker helps ease emotional strain and may help mitigate the temptation to become an opportunist – to milk the system for more money or more time off.
13. Ease the way for return to work. Assure the claimant that your goal is to get them well again and back to work. As we mentioned in an earlier post on return-to-work strategies, work to create a light-duty job for the recovering employee.
Regularly training management as to what to do when an injury occurs and red flags to watch for, as well as consistent employee training on workplace safety, the purpose of workers’ compensation and the fraud detection you have in place, will go a long way towards mitigating workers’ benefits fraud.
Resources:
Tips for Preventing Fraud in Workers’ Compensation Claims, HR Daily Advisor
Here are the 3 most common types of workers’ comp fraud, and how to prevent them
Seven Steps You Can Take to Stop Workers’ Compensation Fraud
An Integrated Strategy To Prevent Claimant Fraud In Workers’ Compensation
This article originally ran on the Arrowhead Tribal blog. It has been modified and updated to better fit the needs of Valiant producers and their workers’ compensation clients.
