Fraud in Workers Compensation
workmans comp fraud is a serious crime. It is also a popular crime. According to the National Insurance Crime Bureau, workers compensation fraud is the fastest growing insurance fraud scam in the United States. Workers’ comp fraud is estimated to cost insurers approximately $5 billion per year. This cost is passed on to the public, through increased policy premiums that lead to increased cost of doing business and higher prices.
Worker’s Compensation Fraud Cases
workers compensation reporting fraud can take many forms. In general, any action designed to obtain money from insurance workers compensation that is not a legitimate recovery for injury or damages incurred, is a form of worker’s compensation fraud. Common examples of worker’s compensation fraud include:
- Exaggerating the severity of an injury: Worker’s compensation benefits can include short term or long-term disability claims for workers’ who are unable to work. Some workers’ exaggerate the severity of their injury in order to obtain these benefits.
- Staging an Injury:Some worker’s pretend to be injured on the job, or cause an injury on purpose in order to collect worker’s compensation benefits.
- Failure to disclose pre-existing conditions: While an injury at work that exacerbates an existing medical problem is compensable, if you were already injured and your job didn’t contribute in any way to that injury, you cannot recover.
- Claiming personal injuries as labor injuries: If you get hurt at home or during your free time and that injury is unrelated to work, you cannot recover worker’s compensation benefits for it. Some worker’s will attempt to pretend that the injury occurred at work in order to recover
- Working illegally while collecting worker’s compensation benefits: If your doctor restricts you from work and you collect worker’s compensation benefits, you are not allowed to work at any other job. If you are working at another job, your benefits should cease, as you are no longer disabled under the terms of the statue.
Workers Compensation Employer Fraud
- Underreporting the number of employees: Premiums for worker’s compensation insurance policies are charged based on the number of worker’s. In order to save money, some employers lie about the number of workers they have, or lie about the types of job their worker’s are doing.
- Lying to employees: Some employers will lie and tell an injured employee that he or she is not entitled to benefits, in order to preclude a legitimate worker’s compensation claim form being filed.
Why Does This Happen and How?
Worker’s compensation is a no-fault system, which makes it ripe for abuse. Since employees do not have to prove employer negligence to recover for injuries, it can be easy to stage an injury or falsify a claim.
Some lawyers and doctor’s have created “Claim Mills” which are illegal schemes designed to perpetuate fraud in the worker’s compensation industry. These lawyers recruit worker’s to become “injured.” The worker’s then go to clinics where the doctor’s are also “in on” the scheme, and the doctors pronounce them injured or disabled. These schemes exist because of the potential for large settlements inherent in worker’s compensation claims.
Investigating Worker’s Compensation Fraud
Worker’s compensation fraud is often discovered by surveillance tapes or from an investigation by the workers compensation bureau. Employees who claim to be injured may be observed engaging in sports or other physical activities that suggest that they are exaggerating the severity of their injuries.
Many states have also established investigation departments designed to combat worker’s compensation fraud. For example, in California the “Underground EconomyStrike Force” is dedicated to discovering employer premium fraud.
Read more on Health Insurance Fraud.
Consequences of Worker’s Compensation Fraud
In most cases, the consequences of worker’s compensation fraud can be quite severe. Possible penalties include large fines and jail time. Restitution (return of money obtained as a result of fraud) is also required.In some states, worker’s compensation fraud is a felony with severe penalties. In California, for example, Senate Bill 1218 made Worker’s Compensationfraud a felony, and 527 people were convicted during the year 2007-2008.
Insurers are required to report cases of suspected fraud to district attorneys and other government agencies designed to investigate worker’s compensation fraud.
Getting a Lawyer Involved
If you are accused of worker’s compensation fraud, it is essential to speak with workmans comp lawyers immediately. Because of the severe potential penalties, it may be advisable to consult with a criminal attorney who specializes in worker’s compensation fraud.