PCOC - Summer 2015 - (Page 22)

insurance Stop the Madness! Red Flags for Workers' Comp Fraud By Paul M. Lindsay, Director, Senior Vice President, EPIC Jenkins for the PCOC Insurance Program The most common complaint I field, and the most discussed subject during claims review meetings, centers around fraud. Whether a complete fabrication or exaggeration of an incident, nothing raises the stress and frustration level of an insured more than fraud. Conversely, nothing frustrates the defrauder than being caught in act - some even go to jail! With this in mind, I am diverting from "Predictions" article series to address the immediate problem of fraud. There is great controversy about exactly how much workers' comp fraud costs businesses. Some industry sources, such as the National Insurance Crime Bureau (NICB), put the figure at more than $7 billion a year. Nobody compiles national fraud statistics,  but worker and industry sources alike estimate 1 to 2 percent of claims are fraudulent. In its most recent report on the subject, the National Insurance Crime Bureau reported that the number of "questionable" workers' compensation claims increased between January 1, 2011 and June 30, 2013, although the total number of claims decreased. "Questionable claims" included claims involving claimant fraud, prior injuries unrelated to work and malingering. No one wants to deny legitimate compensation for workers injured on the job. But the following scenarios should raise the suspicions of responsible managers, helping businesses save unnecessary costs and ensuring that legitimate claims are properly compensated. The Red Flags of Fraud 1. Lack of prompt reporting: Injured employees will generally report a claim on a timely basis. Late reporting in and of itself is not necessarily a cause for alarm, but ought to be a signal to review the claim a little more closely. 2. Sketchy details or changing stories: Most claimants can recall the details of their injury. If the claimant seems to be fuzzy on the details, gives vague responses to questions, or changes pertinent information, keep digging. 3. No witnesses: Not every claim has a witness and the absence of a witness should not be used solely to determine fraud. However, if many of the other signs are present, it will be hard to dismiss the lack of a witness. www.pcoc.org / Summer 2015 22 4. New employee: Statistically, the newer the employee is, the more likely the claim is fraudulent, especially if other red flags appear. 5. Monday claims: If the injury allegedly occurred on Friday, usually late in the day, but did not get reported until Monday, there is reason to suspect there might be a little more going on than meets the eye. 6. Disgruntled employee: A disgruntled employee is more likely to place fraudulent claims than an employee with high job satisfaction. 7. Financial hardship at home: Workers' compensation benefits are sometimes seen as a way out of a tight financial situation at home. 8. Employee is difficult to contact: Persistent avoidance often means the claimant has something to hide. 9. Missed medical appointments: When employees are truly injured, they want to get better and will make sure to attend all necessary medical appointments. Missing appointments is another reason to suspect fraud. 10. Employee engages in activity that is not consistent with the injury sustained: If your employee reported a back injury but he still turns out for the local softball team, there is a good reason to suspect fraud. http://pcoc.org/

Table of Contents for the Digital Edition of PCOC - Summer 2015

President’s Message
Martyn’s Corner
Presidential Profile
Best Practices for Exterior Bait Stations
What Do PMPs Want from Suppliers?
Federal Update
Insurance Stop the Madness!
State Capitol Report Legislature Outlook: Loud and Busy
Firm Profile Green Dog Pest Service
Index to Advertisers
Advertiser.com

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