What is Workers' Compensation Fraud?

Workers’ compensation fraud is an attempt to secure workers compensation benefits by means of fabricating an on-the-job accident or by exaggerating the effects of a legitimate accident. The idea behind the fraud is to receive the benefits for as long as possible, allowing the recipient to make use of the funds for any purpose desired. The incidence of workers’ compensation fraud is an ongoing concern to both employers and the companies that provide workers compensation insurance policies to those employers.

In order to minimize the chances for workers’ compensation fraud to take place, many insurers as well as employers require that any reported incidents meet strict requirements before claims are approved and benefits are extended. This includes criteria such as prompt reporting of the accident leading to the injury and the examination and treatment of the injury by qualified medical professionals. It is not unusual for an employer or insurer to require a second opinion from a professional other than the employee’s private physician. While the qualifications may seem somewhat stringent, this approach helps to expose blatant attempts to defraud the insurer, making it possible for the insurance company to focus on providing benefits to workers who do have legitimate claims.

There are a number of signs that may indicate that workers’ compensation fraud is in the making. One of the more common indicators is the lack of reporting the incident in a timely manner. For example, if the purported injury takes place on a Friday afternoon but is not reported until the following Monday morning, many insurers will go over the details of the claim in greater detail. This is because the delay in reporting leaves room for speculation that the injury actually took place at some point over the weekend, when the employee was not at work.

Another indication that workers’ compensation fraud may be in the works is vague details regarding the occurrence of the accident. This is especially problematic when there is no witness to the event that can fill in gaps in the account of the employee. Along the same lines, if the employee’s account of the accident seems to shift or change in some ways as time goes on, there is a greater potential that some sort of attempt to defraud the insurance company and the employer is occurring.

Many employers will also take into consideration the general attitude of the employee before the occurrence of the purported event. The potential for disgruntled employees to be involved in workers’ compensation fraud is great, since the fraud can be seen as a way of not only creating a steady stream of revenue but also as a means of getting back at the employer for perceived wrongs done to the employee. For this reason, investigating workers compensation claims that originate with an unhappy employee may require a higher degree of scrutiny than in other cases.

While each of these signs may indicate an attempt to commit workers’ compensation fraud, they are not in and of themselves proof that fraud is taking place. A disgruntled employee may sustain a legitimate injury on the job through no fault of his or her own. People do sometimes sustain an injury at work on a Friday afternoon that seems to be nothing at first, but results in severe pain over the weekend, leading to reporting the incident on Monday. Especially in accidents that involve employees being struck by falling objects and losing consciousness, the injured party may have only a vague idea of what happened. For this reason, carefully investigating every claim to determine what did and did not happen, rather than making assumptions in advance, is extremely important.