Can You Detect Fraud in Your Work Comp Cases?

Improving safety, reducing work comp costs and preventing fraud is one of our featured services.  I learned much about work comp from the very beginning of my career since the first job I ever had was as an industrial physical therapist working for an occupational health clinic.  I have extensive experience in work comp from many sides:  the medical provider side, the physical testing side (Functional Capacity Evaluations), the case management side, the return to work side and the risk management side of work comp.  Having been able to observe and experience all aspects of work gives me a unique advantage in working with employers to take control of their work comp. 

One important aspect of keeping work comp costs down is being able to detect legitimate claims from bogus ones.  How good are you at recognizing red flags?  Let me provide you a claim story and see how many red flags can spot.  (This is based on an actual submitted work comp claim):

The Claim Story:

John Doe works in the supply chain department of a large hospital.  John arrived for his shift on Monday morning and began his day like he always does by working the dock for deliveries.  He and another co-worker work the dock together.  Every Monday there a special package that gets delivered that has to be hand delivered to the ICU.  This Monday Mr. Doe asked his co-worker to take the package to ICU.  Shortly after his co-worker left he noticed a box had somehow fell into the yard.  He left the dock and went out into the yard to pick up a box that fell off the dock.  He pick up the box with two hands and as he was walking back over to the dock steps he slipped and fell to the ground injuring his lower back.  He stated there was a puddle of water that he must have caused him to slip. There was a short rain shower the evening before.  No one saw him leave the dock and no one saw him fall. 

Mr. Doe immediately went to find a co-worker and told him what happened.  His manager was due to arrive within 20 minutes so he waited for him.  As soon as the manager arrived he explained how he slipped and fell in the yard while carrying a box with box hands.  The manager had him fill out a first report of injury while he went out to check the yard for the puddle—none was visible.  When the manager came back he stated he didn’t see any puddle.  Mr. Doe paused a bit and then stated that something must have been on the ground to cause him to slip.  The manager then offered to take him to the emergency room to be checked out.  Mr. Doe declined stating he’d rather go see his family doctor.  The family doctor took Mr. Doe off work for 1 week and indicated a return visit at that time.

The manager called Mr. Doe the next day mid-morning to check in on how he was doing.  Mr. Doe’s roommate stated he was still sleeping from the pain meds and would let him know he called.  The manager called back in the afternoon.  This time the roommate stated he stepped out to take a short walk since that is what his family doctor told him to do as tolerated.  The roommate promised to have Mr. Doe call the manager as soon as he came back.  Within a few minutes Mr. Doe called the manager to tell him what his family doctor said.  The manager got Mr. Doe’s cell phone number and told him he would be calling him again after his next doctor’s appointment. 

The next week, the manager called Mr. Doe’s cell phone to hear what transpired during his second medical visit.  Mr. Doe answered the phone but the background noise didn’t sound like that of being at home resting.

Another supply chain worker came to the manager that week after working more hours due to the absence of Mr. Doe.  The worker stated Mr. Doe had told him that the weekend before he reported the injury that he injured his lower back while doing some yard work at home.

The claim story has several red flags that suggest the claim may not be all that it seems.  Did you spot the following?

1. Monday morning accident:  Monday mornings are the most popular times for work accidents to occur.  This is mostly due to people not wanting to admit they got hurt over the weekend so as not to lose any income.
2. Claiming there was a hazard when there was none seen:  The worker blames the accident on a hazard that isn’t easily verified.
3. None one saw him:  This may be flag if normally others would be in the area.  Bogus claims almost always happen when no one else is around.
4. Unusual occurrence:  Boxes don’t normally “fall off” the dock. 
5. Declining to be seen in the emergency department:  If someone is seriously injured he should want to be seen quickly and by qualified doctors.  This may be a sign that he wants to see a doctor who will be sympathetic to his request for time off.
6. Employee being asleep when he would normally be awake:  Pain killers can make people groggy but usually not to the point where they can’t talk to the manager.
7. Employee not being home:  Not being home sometimes is perfectly understandable; however, this may be a sign that he is working somewhere else or is enjoying the time off.  Different background noises are possible but it shouldn’t sound like a party and/or like he is working somewhere else.
8. Tips from co-workers:  This is usually the best and strongest evidence of fraud.  This information should be investigated closely.

Keep in mind none of these red flags in and of themselves are proof of fraud, nor is having 2-3 flags proof of fraud.  However, the more red flags the employer sees, the higher the chance the claim is or at least in part fraudulent.  When you see multiple signs to questions the legitimacy of the claim, make sure you notify your insurance adjuster as to why you believe the clam should be in question and that you’d like a special investigation.  Your adjuster doesn’t have to act on your concerns but most will in order to minimize their and your loss.

Now there are other measures employers can put into place that can deter fraud from occurring in the first place.  That information will be for another blog.  In the meantime, if you have a high mod rate and ever increasing work comp costs, contact us to learn how to take control of your work comp!