Worker's compensation programs came into law in the 1910s in America. These programs are compensation plans for the victims of all job-related injuries. When an employee gets hurt on the job, the employer is liable for medical expenses, lost income and other expenses until the employee has healed enough to return to work.
Workers comp fraud has become a large crime today in America. In fact, the National Insurance Crime bureau found that Workers’ Compensation fraud accounts for approximately 25% of all fraud perpetrated, and is one of the fastest growing areas of fraud.
According to a recent survey, the strongest indicator of possible claim-related workers comp insurance fraud include employees with histories of filing claims, no witnesses to an incident, untimely reporting of injuries or illnesses, and reports of incidents that coincide with a change in employment status such as looming layoffs or a demotion.
Here's a list of the most popular types of fraud:
- Hurt outside of the job. Workers may get injured off the job, but say they're hurt at work so their workers comp policy covers the medical bills.
- Inflated injuries. A worker may have a fairly minor job injury, but "milks" the injury and insists s/he is seriously hurt. This lets the worker collect more workers comp money and stay off the job longer.
- Fake injuries. Some workers simply pretend to be injured. Injuries such as muscle problems with the back and neck are popular scams and hard to disprove, thus, are easier to get away with.
- Old injuries. Sometimes a worker with an old injury that never quite healed will claim s/he just got hurt on the job so they can get paid for time lost on the job and not have to pay any copayments for medical services. A damaged knee or shoulder, are popular examples of old injuries.
- Malingering. Basically, this means the injured employee stays at home longer by pretending they're still disabled, even though they've healed enough to return to work.
Workers Comp fraud doesn't just comprise of dishonest employees, it can also include crooked doctors and lawyers, or medical equipment companies who overcharge when it is a Workers Comp claim. Even an employer is committing fraud if he doesn’t carry the legal amount of insurance required by the state.
In recent years, the insurance industry's focus on cheaters and malingerers helped push through a national cost-cutting reform for workers' compensation, a campaign supported by outrage over the alleged abuse of the system. 33 states have now passed laws that reduce benefits, and create hurdles to getting medical care or making it difficult to even qualify for worker’s comp. The problem, however, is that the vast majority of workers' compensation cases aren't fraudulent. Studies show that only 1 to 2 percent of workers' compensation claims are proven to be fraudulent. That doesn't include the percentage of those who get away with the fraud, so the numbers could actually be higher, but it is still hurting those who really need the workers compensation benefit.
If you are an employer and suspect one of your employees of Workers Comp fraud, contact ICS. Our investigators can help prove or disprove the fraud, so you know you aren't being taken advantage of. People who commit Workers Comp fraud are committing a crime and could face a felony charge resulting in restitution, heavy fines and/or possible jail time.