Red Flags for Workers' Compensation Fraud

There is no sure-fire way to identify fraud without proof, but there are red flags. Employers should call their carriers immediately if they identify two or more of these flags.

• Disgruntled employee. The employee has a motive to fabricate the claim. Perhaps he or she was denied vacation time, demoted or fired.
• Employee is hard to contact. The employee may be working another job while collecting benefits. This practice, called “double-dipping,” constitutes fraud.
• New employee. Statistically, the newer the employee is, the more likely the claim is fraudulent, especially if other red flags appear.
• No witnesses. Make note of alleged accidents with no witnesses, especially if the employee’s duties rarely call for him or her to work alone.
• Varying accounts of accident. The injured worker may describe the accident differently to the employer and the doctor, or witnesses’ accounts may differ from the injured worker’s account.
• Accidents on Fridays or Mondays. Accidents that occur on Fridays or Mondays should raise suspicion, especially if other red flags appear.

Some additional possible indicators of employee fraud include:

• Injuries that occur just before a strike, holiday, or anticipated layoff or termination
• Injuries occurring just after the worker has been disciplined
• Injuries occurring where the worker would not usually work
• Injuries that are unusual for the employee's type of job
• Injuries that aren't reported until a week or more after they occur
• The worker is observed in activities that are inconsistent with the reported injury
• The worker has a history of comp claims
• There is evidence that the injured employee is working elsewhere while drawing benefits

In addition, some possible indicators of fraud by attorneys or health care providers include:

• Receiving bills or explanations of benefits from health care providers, insurers, or attorneys for services that seem unnecessary; "boilerplate" medical reports; or reports that are merely copies of previously submitted reports
• Bills from a health care provider or attorney that reflect an unreasonably high dollar amount or hours per day
• Treatment dates on holidays for non emergency situations
• Statements or complaints by the worker that the attorney is "never" available, even though the attorney is billing for services
• Attorney relationship with a health care provider that appears to be a partnership in handling workers' compensation claims

These factors are not conclusive proof of fraud, but they may act as a tip-off to it. If you suspect fraudulent activity, promptly report the facts to your workers' compensation insurer.

Source: Excerpted from articles ‘Workers' Compensation Fraud Growing Problem,’ http://sbinformation.about.com/cs/insurance/a/ucfraud.htm and ‘Fraudulent workers' comp’ California Employer Advisor; http://www.employeradvice.com/public/1874.cfm

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