Fraudulent claims are filed by employees who are seeking workers' compensation benefits for non-existent conditions or for conditions that are not work-related.  These claims are not fraud in the criminal sense in most cases.  Therefore, you must be extremely careful in your claim handling approach because some employees may actually have an injury or illness that he or she believes is actually work-related.  The bottom line is that all injured workers are not "gold bricks."  They may not understand the workers compensation system at all and just assume that their condition qualifies under your state workers compensation laws.

The first thing you need to understand is that claims that are based purely on fraud are rare under normal circumstances.  Employees seldom stage work related injuries. That being said, it is more common to find employees who were actually injured off the job and who claim that their injuries occurred at work. As an example, an employee may injure his back while doing yard work over the weekend and wait until the next workday to file the claim as work related. Fraudulent claim reporting may also occur during plant shutdowns or layoffs, or situations that may create a high degree of employee discontent. The good news is that by identifying the fraudulent claims early you have a good chance of successfully defending them.

Listed below is a list of fraudulent claim indicators. The presence of one or more of these characteristics should not lead the Claim Coordinator to automatically conclude that a claim is fraudulent. These are merely signs that a claim could be fraudulent and should be carefully monitored.

• There are no witnesses to an event that should have been witnessed;
• There are conflicts in the descriptions of the incident or exposure that caused the injury;
• There is an inconsistency in the medical histories and description of symptoms;
• The first notice of injury is given late, possibly by notice of a hearing, or after treatment has been provided for an extended period;
• The injury is diagnosed by subjective symptoms only and there are no objective test results to support the diagnosis;
• The employee refuses treatment with the company doctor or assigned clinic, or the employee’s doctor is uncooperative and reluctant to provide information;
• The employee is already represented by an attorney when the injury is reported or is represented soon thereafter;
• The employee is reluctant to talk to your Claim Coordinator;
• The employee refuses temporary duty assignments;
• The injury or illness is reported just before or after an anticipated job change.

If the claim management team encounters any of these telltale signs it should take the following steps as early in the claim process as possible. First, gather prior medical records.  A medical release should be obtained from the employee and the treating doctor should be asked to provide all medical records pertaining to current and prior treatment of the alleged work-related condition. Be sure to review all medical bills against the accident investigation report to make sure the information is consistent;

Second, immediately notify the claim adjuster in writing of the potential problem. Insurance company adjusters approach work related injuries on a “transactional” basis in many cases and often are not equipped to “read between the lines” on each claim. In fact, because insurance adjusters frequently handle over 300 claims at any one point in time, they often do not have the time.  To make matters worse, small fraudulent claims (that may later explode into large, catastrophic claims), are often referred to their “medical-only department” for processing. The bottom line is that the Claim Coordinator must take the initiative to “red flag” the claim and make sure that the insurance company adjuster treats the claim with caution;

Third, monitor on-going medical care. It is absolutely critical that the Claim Coordinator obtain copies of the medical reports outlining the history, symptoms and diagnosis of the employee condition and compare all reports and the condition progresses. When injuries are faked, claimants often have difficulty remembering what they told the physician from visit to visit. By carefully monitoring these medical reports you may uncover inconsistencies;

Fourth, fight all claims that are considered fraudulent. This may include pursuing a criminal case. In most cases this will involve insisting that the insurance carrier not pay anything and contesting the claim every step of the way. The organization may not win each case. However, it will win more than its share and, if a fraudulent claim is ultimately approved, the payment may be less than it otherwise would have been. It also sends a signal throughout the organization that it is not going to tolerate fraudulent claims.