The total number of questionable workers’ compensation claims is on the rise, with a 28% increase in suspicious claims reported to the National Insurance Crime Bureau (NICB) over the past two-and-a-half years.
According to Mike Tolland, a workers’ comp veteran of 35 years, it is a producer’s responsibility to equip commercial clients to detect when their employees are attempting to pull a fast one on the insurer.
“Most accounts aren’t going to have someone who's well-versed in workers’ comp law, so they’re going to be pretty reliant on the broker to…intervene in claims situations,” Tolland said. “The most common way a broker can help is to make sure every claim is properly investigated. Teach the employer to look closely at claims, particularly ones in which the employer doesn’t think the accident was job-related or within the scope of employment.”
Adding that “it’s the broker’s responsibility to make sure employers don’t play that game,” Tolland suggested producers could even be sued for common law negligence and breach of fiduciary duty in a case of workers’ compensation fraud.
To help producers identify potentially fraudulent situations and educate their clients, Insurance Business
asked Ranney Pageler, vice president of the fraud investigations department at EMPLOYERS Insurance Company of Nevada to share his top 10 red flags of workers’ compensation fraud.
Here’s what he came up with.
1. Monday morning reports
The alleged injury occurs first thing on Monday morning, or the injury occurs late on Friday afternoon but is not reported until Monday.
2. Employment change
The reported accident occurs immediately before or after a strike, job termination, layoff, end of a big project, or at the conclusion of seasonal work.
3. Suspicious providers
An employee’s medical providers or legal consultants have a history of handling suspicious claims, or the same doctors and lawyers are used by groups of claimants.
4. No witnesses
There are no witnesses to the accident and the employee’s own description does not logically support the cause of the injury.
5. Conflicting descriptions
The employee’s description of the accident conflicts with the medical history or First Report of Injury.
6. History of claims
The claimant has a history of a number of suspicious or litigated claims.
7. Treatment is refused
The claimant refuses a diagnostic procedure to confirm the nature or extent of an injury.
8. Late reporting
The employee delays reporting the claim without a reasonable explanation.
9. Claimant is hard to reach
The allegedly disabled claimant is hard to reach at home.
The claimant has a history of frequently changing physicians, changing addresses and numerous past employment changes. Experience shows that when two or more of these factors are present in a workers’ compensation claim, there is a chance the claim may be fraudulent. Remember though, these are simply indicators. Many perfectly legitimate claims are filed on Mondays—and some accidents have no witnesses.