Human Resources & Safety -PreventFraudinWCClaims

Preventing fraud in workers’ comp claims

The following steps will also help lower costs from legitimate claims

This article was provided by Berkley Administrators of Connecticut Inc., the third-party administrator for CBIA Comp. Services. For additional information on CBIA’s workers’ compensation program, click here.

Every year, about $620 billion in workers’ compensation claims are filed in the United States. It’s estimated that 25% of them, amounting to more than $150 billion, are fraudulent. But you can protect your company from this abuse. And you can do it in a positive way. By incorporating the following tips into your existing loss-prevention and control programs, you can reduce fraudulent claims while you bring down costs from true workplace injuries.

Have a written policy about the importance of promptly reporting all accidents and injuries to supervisors or designated workers’ comp claims representatives. Put this in employee handbooks and make clear that filing a false claim is grounds for discharge.

Make sure all supervisors know how to handle workers’ comp claims, including:

whom to send a worker to in order to complete the report of injury,
the importance of immediate investigation and written witness reports, and
the supervisor’s responsibilities to make sure the employee gets appropriate medical care.

Have trained and experienced claims-reporting personnel make sure the reported injury is thoroughly documented. Pay special attention to the WC-12 forms and make sure the facts are accurate and make sense.

Have the employee record the cause and nature of the accident in his or her own words. Encourage the employee to be specific, and have him or her sign and date the statement.

Re-enact accidents — even minor ones — to determine what happened and how the hazard can be avoided in the future. The emphasis of the re-enactment should be on safety and injury prevention; gathering useful evidence of possible abuse is just a by-product. If possible, include a union representative, safety manager, supervisor, the injured worker and other interested parties. The more visible and team-oriented the effort, the better.

Have the supervisor accompany the injured worker to the health care provider for emergency treatment or, with the employee’s permission, to initial non-emergency treatment. Getting injured workers to doctors who have experience in occupational medicine is one of your best means of avoiding exaggerated claims. Never accept a fax or copy of a physician’s report for a return-to-work date — these are sometimes altered by unscrupulous employees.

Stay in touch with injured employees while they’re out of work. Be suspicious of employees who miss medical appointments or are not available when you call.

Be alert for clues that point to abuse — such as unwitnessed Monday-morning accidents or a rash of deer-hunting or fishing-season injuries.

Make it clear that the main purpose of your program is the prevention of injuries to your workers by the removal of hazards and the proper training and enforcement of work habits. Get worker buy-in before you implement new initiatives.

Promptly report any claim to your carrier or third-party administrator. Late reporting of claims causes more lost time and higher medical costs, fosters abusive claims, and increases the probability of expensive litigation.

Most workers’ comp claimants deserve every penny they get. But the people who fake, exaggerate or prolong their injuries make it difficult for honest workers to collect. What’s more, we all have to pay for fraud through higher rates and reduced company benefits. It’s well worth it to protect your company with a clear, consistently administered loss-prevention and control program like the one described above.