Virginia, Maryland and DC, along with most other states, require businesses to provide workers' compensation insurance in the event that an employee is injured on the job. Both businesses and employees can become involved in the serious issue of workers' compensation fraud.
There are two types of workers' compensation fraud: premium fraud, which is when a business attempts to misrepresent its workers' compensation coverage to lower its insurance costs; and claimant fraud, when an employee falsely claims to have suffered a work-related injury to gain workers' comp benefits.
The following are "red flags" that claimant fraud may be occurring. If a workers' compensation claim fits several of these scenarios, it may be time to launch an investigation.
- Monday morning injury reports. The alleged injury occurs first thing on Monday morning, or the injury occurs late on Friday afternoon but is not reported until Monday.
- Employment change. The reported accident occurs immediately before or after a strike, job termination, layoff, end of a big project, or the conclusion of seasonal work.
- Suspicious providers. An employee's medical providers or legal consultants have a history of handling suspicious claims, or the same doctors and lawyers are used by groups of claimants.
- No witnesses. There are no witnesses to the accident and the employee's own description does not logically support the cause of the injury.
- Conflicting descriptions. The employee's description of the accident conflicts with the medical history or injury report.
- History of claims. The claimant has a history of a number of suspicious or litigated claims.
- Treatment is refused. The claimant refuses a diagnostic procedure to confirm the nature or extent of an injury.
- Late reporting. The employee delays reporting the claim without a reasonable explanation.
- Claimant is hard to reach. The allegedly disabled claimant is hard to reach at home and does not respond promptly to messages.
- Frequent information changes. The claimant has a history of changing physicians, addresses or jobs.
Business owners should clearly and continuously convey to all employees a commitment to workplace safety as well as a zero tolerance of workers' compensation fraud. Ask your insurance broker for anti-fraud materials such as posters or payroll stuffers, and educate employees about the adverse impact that fraud can have on each of them and their individual positions.
For more information on worker's compensation insurance, contact TriState Business Insurance.
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