Workers compensation is an idea as old as time. Seriously. The ancient Sumerian Nippur Tablet – no. 3191, dating back to 2050 BC, laid out the laws of monetary compensation for specific worker injuries. The ancient Greeks, Romans, Arabs and Chinese all had compensation schedules in place too. Since then, obviously, the concept has evolved and been refined, resulting in the system virtually every industrialized nation uses today. A system whereby an employer must pay, or provide insurance to pay, the lost wages and medical expenses of an employee who becomes ill or injured on the job.
In a perfect world this is an excellent benefit. However, for a disgruntled worker, it can be a viewed as a minefield of money. Workers Compensation fraud accounts for 25% of total insurance fraud, amounting to $7.2 billion a year. That said, compensation medical services only account for 2% of total medical expenditures – so it’s not high on the radar of policy makers. So who will watch the store? The insurer is certainly watching, but a closer eye would be the employer – but you need to know how the system is abused and what to look for.
Some of the ways an employee can take advantage of the system is by: fabricating injuries; inflating injuries; citing ‘old’ injuries; pretending an injury happened at work that didn’t, and malingering.
Red flags to alert an employer to these possible fraud are: accidents that are reported to have occurred late Friday or early Monday morning; accidents that aren’t witnessed or promptly reported; seasonal workers; an injured worker who is reluctant to accept treatment from a medical provider; when the doctor’s diagnosis is not consistent with the treatment; workers can’t be reached; or a worker has a history of short-term employment. There are others, if you suspect fraud, I can help. Please contact me.
So how can an employer protect themselves from having their insurance premiums rise, and their loss experience record be illegitimately inflated? First and foremost is a well-orchestrated safety management program. In conjunction, there should be post-injury and return to work management programs. Investigate any and all accidents. Also, educate your employees on the purpose and program benefits, as well as the laws regarding abuse. Most importantly, pay attention to your employee’s complaints and concerns. According to the Coalition Against Insurance Fraud, “‘The strongest predictor of fraud is a chronically disgruntled work force.” So, keep your people happy and safe, and keep your eyes open.
Thanks for reading!