I would like to respond to last week's articles in Safety Economics Weekly ("When Employee's Fake Injuries" and "Workers' Comp. Fraud: How Widespread Is It?"). I have a unique perspective. I worked in a Workers' Compensation setting in Canada for 18 years before moving to the prevention side. I'd like to discuss my take on the debate over the dimensions of the workers' compensation fraud debate and suggest some preventive measures to supplement those recommended by Richard Hawk in last week's article.
Is Workers' Comp. Fraud Overstated?
As you mention in the article, insurance companies claim that up to 80% of all workers' compensation claims are exaggerated or overstated. I side with the "critics" who say that fraudulent claims account for less than 5% of total claims. However, due to system complexity, delayed or overlooked treatment and ineffective claim management of legitimate claims, secondary issues such as depression enter the picture, making a successful return to work more difficult.
Most certainly, exaggeration or "malingering" in legitimate claims exists. But I do not believe that such claims exceed 10% of all claims submitted. Before you suggest that I am naive, please know that my job involved managing the most difficult and contentious claims in our jurisdiction. I can honestly say that there is very little in terms of misstating and exaggerating of claims that I haven't seen.
Preventing False Claims
So, how do you prevent employees from faking injuries? The measures outlined by Mr. Hawk in the article are a good start. However, I would suggest some additional steps:
1. Focus on Overall Relations with Employees
Generally speaking, the best way to get rid of the fraud problem is to improve your relations with employees. There will always be a handful of employees who have a predisposition to fake or exaggerate an injury. But in my experience, most fraudulent claims are a symptom of poor overall relations with employees. Improve the employee/employer relationship and the fraudulent claims problem diminishes and maybe even disappears.
2. Screen Claims
Hiring a medical specialist to review claims and perform medical assessments can be an effective way to discourage or at least screen out fraudulent claims. This costs money so you can't afford to have specialists screen each and every claim. You should call in the specialist only when there are inconsistent findings or grounds to suspect fraud.
3. Discipline the Fakers
Employers should treat the faking of injuries as a serious offense warranting the imposition of discipline up to and including termination. Implement a no tolerance policy for any type of fraudulent/unethical behavior, resulting in pursuit of criminal prosecution. Publish names of employees who are prosecuted for fraud or subject to civil action for misrepresentation.
What to Do If You Suspect Fraud
An employer that has grounds to suspect that a claim submitted by one of its employees might be fraudulent should consider bringing the evidence to the attention of the insurance or workers' compensation carrier.
But be careful. Intervening in the disposition of the claim is a serious matter and you shouldn't do it unless and until you have solid evidence. In Canada at least, it takes more than hearsay evidence to influence the initial entitlement decision or claim acceptance.
If you feel certain that fraud is being committed but don't have solid evidence to back it up, you might want to consider conducting an investigation, including surveillance. Then, if the investigation yields concrete evidence of fraud (e.g., a videotape that shows an employee working or performing strenuous physical activity while claiming benefits for a supposedly debilitating injury), pass the information on to the insurance/workers' compensation carrier.
To repeat, I believe that employees do fake injuries but do not do it as often as the insurance companies claim. I also believe that you can take measures to prevent your employees from committing fraud. And, as a measure of last resort, you can intervene to keep an insurer from paying a claim you suspect to be fraudulent.
WORKERS' COMP FRAUD
The SafetyXChange Members' View
Next week, we'll share your views on and suggestions for combating workers' compensation fraud.
THIS DATE IN HISTORY
|The U.S.S. Arizona is sunk killing 1,500.|
December 7, 1941
There are probably two historical dates that every American knows. One is July 4, 1776 - the signing of the Declaration of Independence.
The other is Sunday, December 7, 1941, a date which will live in infamy.
It started at 7:55 A.M. Before night fall, 2,400 Americans had been killed and another 1,200 wounded in the Japanese attack on Pearl Harbor.
PEARL HARBOR TODAY
By Glenn S. Demby
On this 61 st anniversary of one of the bloodiest days in American history, SafetyXChange would like to salute the U.S. Navy for turning Pearl Harbor into a site where lives are being saved. Every day.
Naval Command has started a new program called "Operation Seatbelt" at the famous Oahu base. It started when base safety personnel discovered that 91 percent of motorists were wearing their seatbelts when exiting base gates. Not bad. But the Navy wants to raise that number to 100 percent.
To accomplish that goal, base security has set up electronic signs reading "Seatbelts save lives - buckle up" at strategic locations around the base. Observers have been designated to monitor compliance. Defensive driving training has also been stepped up, especially for base personnel under 26 years of age. (Nearly two-thirds of sailors killed in crashes of privately owned vehicles on bases were under 25).
The Navy hopes Operation Seatbelt will be a smashing - or rather, a non-smashing - success so it can be applied at other bases across the country and the world.