Workers Compensation Fraud

Workers compensation fraud has been causing the economy approximately $5 billion dollars a year ever since the inception of the Federal Employment Compensation Act. In fiscal year 2007-2008, law enforcers have seen 4,973 convictions, assigned 515 new cases, and have had 375 arrested and 432 prosecuted. The total amount lost to these fraudulent activities reached $292,390,871. Many activities have not been identified nor investigated and yet the National Insurance Crime Bureau is sure to announce that since 2000, workers compensation fraud takes account for the fastest growing insurance scam in the history of the United States. Such atmosphere prods insurance companies to increase premium costs and leaves employers with no other choice but to subscribe to retrenchment procedures and layoffs with high hopes to avoid bankruptcy.

Some employees deliberately lie about an injury or illness to collect more benefits than what they deserve. Worse cases of fraud happen when the employee didn’t even have a work-related injury or illness. There are cases when the injury or illness is exaggerated to extend the collection of benefits. Employees alone could not perform such forgery. Workers compensation mills are prevalent everywhere in the United States. Lawyers and doctors alike make a fool out of the system by submitting fraudulent medical claims in exchange for commission. Fraud is further aggravated because doctors have the last statement as to when an employee is already fit to work. In most cases, fraudulent activities happen when the employee insist on staying off work to collect benefits longer than what the employer deems necessary. In this manner does workers compensation fraud has evolved into a viable white-collar crime.

New employees are more likely to commit workers compensation fraud especially when other indications are detected. An employee who also frequently files multiple claims seems to be more adept with the racket. Employers should immediately seek for the employee’s motive to fabricate a claim. It could be that the employee was denied work privileges, incentives or promotion and wants to get back at the company by filing a fraudulent claim. There are cases when an employee who recently found out about a probable termination or layoff will take what he/she can from the company through workers compensation.

You can also detect a workers compensation fraud when the injured or ill employee is difficult to reach. This is why employers are encouraged to contact the employee while off work to ensure that he/she is not working another job while still collecting benefits from the company. Such practice is known as double-dipping.

Be a little skeptic when the accident occurs on Fridays or Mondays. These are especially suspicious because it seems that the employee is avoiding immediate medical attention. Deliberate delays in seeking medical treatment for the injury are one of the signs that the employee is plotting a fraudulent claim.

You will know if an injury did not really occur during work when the injured employee cannot present any witness to the accident. You should also investigate further especially if the employee is not usually tasked to do work alone. Workers compensation fraud easily appears orchestrated when a witness’ testimony does not match that of the employee. Be cautious about such activities. It is best to prevent them from succeeding before the claim even reaches the insurance commission.