What is Fraud
What is Fraud
Fraud occurs when a person knowingly or intentionally conceals, misrepresents, and makes a false statement to either deny or obtain workers’ compensation benefits or insurance coverage, or otherwise profit from the deceit. The key to conviction is proving in court that the misrepresentation or concealment occurred knowingly or intentionally.
Premium fraud and benefit fraud are the most common types of workers compensation fraud.
Premium fraud is usually committed by an employer who misrepresents the amount of payroll or classification of employees, or who attempts to avoid a higher insurance risk modifier by transferring employees to a new business entity rated as a lower risk category.
Benefit fraud is usually committed by: a worker who works full time at an unreported job and draws benefits when he or she is supposed to be unable to work, or when a worker fakes an injury; a health care provider or attorney who assists the worker in fraudulent schemes, participates in double billing or bills for services not provided.
An insurance carrier commits fraud if documents are intentionally falsified in order to deprive benefits. Fraud Indicators Fraud indicators do not mean fraud has occurred, but they may require a closer review of the claim or application. Employer fraud indicators include but are not limited to: classification codes not consistent with duties normally associated with the employer’s type of business, for example, a construction company that reports mainly clerical classifications payroll information on the insurance application inconsistent with payroll reported to the Workforce Commission, much larger premium paid for the previous year’s policy small payroll reported by a large company or employee leasing company frequent addition and cancellation of coverage, especially if several business entities appear to be owned or controlled by the same person or group.
Employee fraud indicators include but are not limited to; injuries that have no witness other than the worker, injuries occurring late Friday or early Monday, injuries not reported until a week or more after they occur, injuries occurring before a strike or holiday, or in anticipation of lay off or termination, injuries occurring where the worker would not usually work, injuries not usually occurring in the particular job description, for example, a secretary injured when lifting a heavy object, worker observed in activities inconsistent with the reported injury, worker history of workers compensation claims, conflicting diagnosis from subsequent treating doctors, any evidence of working elsewhere while drawing benefits.
Attorney/health care provider fraud indicators include; receiving bills or explanation of benefits for services from health care providers, insurers or attorneys that seem unnecessary or fictitious boilerplate medical reports, or reports that are merely copies of previously submitted reports, treatment dates on holidays for non-emergency situations, bills from a health care provider or attorney that present an unreasonable amount of hours per day, complaints from the worker that the attorney is (never) available although the attorney files fee affidavits for services, attorney relationship with a health care provider that appears to be a partnership in handling workers’ compensation claims.
