The cost of work comp fraud comes to nearly $5 billion per year (National Insurance Crime Bureau). This multi-billion dollar cost effects both large and small businesses and can account for as much as 10% of your overall work comp insurance premiums.
It is important to know the common warning signs of workers' comp fraud, including:
Late Reporting: They often report the claim far after alleged incident occurred.
Lack of Witnesses: Although not every legitimate claim has a witness, the lack of witnesses...along with other warning signs...may indicate fraud.
Details of the Alleged Incident Conflict: Details of the alleged incident change slightly each time the worker recounts them.
Financial Hardship: Seen more often in a down economy, personal financial issues or a lack of health insurance may lead some to exaggerate a claim in order to afford medical care.
Avoidance: The claimant attempts to avoid discussing the claim with you for fear they may give their ruse away.
Missed Medical Appointments: A legitimately injured worker will desire to take advantage of the scheduled medical appointments to return to their former healthy state.
Questionable Activities: Does the claimant's injury complaints contradict evidence of outside activities such as sports or hunting?
The Worker was Terminated: A work comp claim made by the claimant after they were fired should always be treated as suspicious.
Frequent Changes: Look for signs of recent and frequent address changes, physician care providers and places of employment.
Disgruntled Employee: A disgruntled employee is most likely to commit work comp fraud out of spite or a sense of entitlement.
It should be noted that any one sign does not indicate fraud has been commitment, but if the claimant checks more than one box on this list, it may be worth investigating the incident more closely.
If performing investigations of this nature is not something your business is equipped for, EPI's Risk Management team is ready to assist. EPI Risk Management services small and medium-sized business with OSHA compliance, work comp management, training and more. Email Nate Fredrickson at nmfredrickson@equitesintel.com
If you have more questions about the benefits of allowing EPI to help your company manage risk.