How to Identify Fraudulent Workers’ Compensation Claims

In an article written by Scott Fulmer on August 6, 2010 and posted in Pursuit Magazine- http//pursuitmag.com, Scott Fulmer is a Security and Investigation Professional and President & CEO of Scott B. Fulmer Investigations in Texas. In the article he lists and discusses the (40) most common red flags associated with fraudulent workers’ compensations claims. I think anyone in the business should be keenly aware of these common flags that are found in fraudulent claims. It is widely believed that approximately 30% of all claims involve some form of fraud. Our investigators can help you identify the possibility of fraud which will ultimately help us conduct a more effective cost efficient investigation. Below is the list of the (40) most common fraud flags adjusters and investigators should look for when determining the possibility of a fraudulent claim.

1. There are no witnesses to the injury or the only witnesses are the claimants “close” co-workers. Employers should install security cameras in the workplace. Installation of cameras can decrease the number of fraudulent Workers Compensation claims.
2. The claimant and witness statements offer conflicting information. Do the statements seem rehearsed or even identical? Do they both contain the same misspelled words? Perhaps its not a coincidence.
3. The report of the injury is not timely. Both adjusters and investigators should advise employers to have clear and specific guidelines for reporting work-related injuries. Supervisors should be trained to bring accidents to the attention of management immediately.
4. The accident report, statements and other documents contain numerous cross-outs, white out, erasures or are incomplete.
5. The claimant cannot recall specific details about the accident. Along with a selective memory loss many claimants change details of their statement after inconsistencies have been pointed out. Employers and adjusters should continue to question them on specifics to arrive at what actually happened.
6. The injured worker is a new employee. David Wylie with Texas Mutual Insurance Company stated in Fraud No Small Matter for Small Business, statistically the newer the employee is, the more likely the claim is fraudulent, especially if other red flags appear.”
7. The claimant has a poor attendance record at work Poor attendance records have a funny way of becoming Workers Compensation claims.
8. The claimant has a history of discipline issues along with poor attendance. Employees who have discipline problems can become disgruntled employees. A disgruntled employee, as Wylie pointed out “…has a motive to fabricate the claim.”
9. The accident occurs immediately before or after a vacation Employees can become disgruntled when their request for vacation is denied. Many claimants view time off for a Workers Compenstaion injury as a “vacation.”
10. The accident occurs immediately prior to an employees retirement. Often the employee will take an early retirement and may even be moving out of the city or state. If the employer or adjuster knows the claimant is moving this information should be relayed to the investigator immediately.
11. The employee is injured prior to a strike, company layoff, termination or the employer closing or relocating the business.
12. The employee is injured after giving notice. Nothing says thank you more than an employee who leaves the job and is “injured” during his last few days. This often happens with employees performing seasonal or temporary work.
13. The employee is injured after receiving a disciplinary action, demotion, being passed over for promotion or being placed on probation The common denominator is that the claimant is disgruntled. Again, disgruntled employees are more likely to file fraudulent Workers Compensation claims.
14. The claimant has problems with workplace relationships.
15. The claimant leaves the country for medical treatment.
16. The claimant has a history of reporting subjective claims or has more than one claim at a time.
17. The claimants job history reflects a series of jobs held for relatively short periods of time This alone, should alert employers to potential problems.
18. The claimants alleged injury relates to a pre-existing health problem.
19. The claimant’s involved in hobbies or sports. Claimants injured playing sports over the weekend often attempt to blame it on a work-related injury early Monday morning. When adjusters have claimants that are active in sports this information should be passed on to the investigator.
20. The claimant is involved in home improvement or auto repair activities.
21. The claimant has a part-time job that is labor intensive, i.e. building outdoor decks, installing tile, etc. Many claimants view Workers Compensation as a vacation of sorts and an opportunity to get some real work accomplished.
22. The injury occurs on a Friday but is not reported until the following Monday, or the injury happens early Monday morning or at the beginning of a weekly shift. Probably one of the most common red flags. This could indicate the claimant was injured over the weekend.
23. The incident report and the medical evaluation offer conflicting information.
24. The claimant refuses or delays treatment to diagnose the injury
25. The claimant won’t come to the telephone, is sleeping and can’t be disturbed or is never home. Again, one of the most common red flags. Begin surveillance early at this claimants address. More than likely he is very active.
26. The claimant misses physical therapy, occupational therapy or other medical appointments/
27. The claimant provides a telephone number but doesn’t live at the address associated with it a variation of this is the “message phone,” where the message taker is evasive or ambiguous when asked about the claimant. Investigators should ask adjusters for every telephone number associated with the claimant. Reverse the telephone numbers for the actual addresses.
28. The claimant provides his friends, parents or other family members address or a hotel or post office box. In other words the claimant is hiding. Check proprietary databases and follow him from an appointment or when he picks up his WC check from his employer.
29. The claimants family doesn’t know anything about the claim or they are extremely helpful to the point of the information sounding rehearsed.
30. The claimant is going through a divorce.
31. The claimant is going through a child custody battle.
32. The claimant having financial difficulties. A fraudulent Worker Compensation claim may be the least of your worries. This type of claimant is prone to stealing from his employer.
33. Tips or anonymous information from co-workers, relatives or neighbors suggest that the claimants injuries are exaggerated or not legitimate Yet another reason to suggest to clients that the investigator perform an activity check or neighborhood canvass or survey.
34. The claimants lifestyle is incompatible with his known income.These types of claimants have their fingers in all kinds of pies and are usually very active. Surveillance is a must.
35. The claimants family members are on workers’ comp or have a history of claims or lawsuits. A family that “claims” together stays together. Use discretion when conducting surveillance and especially when making neighborhood inquiries.
36. The claimants injuries are subjective.This involves soft-tissue injuries, phantom pain, emotional injuries, etc. This is very common and difficult to prove otherwise. The best course of action is surveillance of an active claimant over several days.
37. The claimant changes physicians frequently.This occurs when the physician releases the claimant to return to work or when his diagnoses is at odds with the claimants assertions.
38. The claimant is healthy, tanned or sunburned.The claimant is obviously involved in outside activities. People are creatures of habit. Men begin shaving on the same side of their face every morning. Regardless of how careful claimants with exaggerated or fraudulent claims are, they eventually will go back to their routines.
39. The claimant and other workers from the same employer use the same attorney, doctor, chiropractor or clinic.
40. The claimant is familiar with claims-handling procedures or workers’ comp rules. At the very least this could indicate that the claimant has filed a previous claim. It also means the claimant may be expecting surveillance. Use discretion and be careful.

It is important for employers, adjusters, and investigators to work together to identify and uncover fraudulent claims. We can help! Original article can be found at: http://pursuitmag.com/top-40-red-flags-which-may-indicate-workers-compensation-fraud/#ixzz118vn73tw Works Cited:

• Ball, Jody, The Bible on Worker’s Comp Investigations. 1997, Thomas Investigative Publications, Austin.
• Fay, John J., Encyclopedia of Security Management. 1993, Butterworth-Heinemannn, Boston.
• Wylie, David. Fraud No Small Matter For Small Business. 2010 http://sbinformation.about.com