Prevent Workers Compensation Fraud with These 4 Tips

October 11, 2019 • Previsor

Workers compensation fraud comes in many forms. There’s claim fraud, employer fraud and even insurance carrier fraud. Fraud impacts everyone within the work comp system, and the truth is that fraud goes unreported every day. Follow these best practices to prevent workers compensation fraud in your organization.

1. Screen job applicants

You should always be diligent when hiring a new employee. Look for candidates who meet the position’s qualifications and fit in well with your company’s safety culture. Employees who identify with your company’s mission are more likely to be engaged at work and less likely to want to game the system.

Many employers perform background checks on job candidates. It’s important to know what you can and cannot ask during an interview. Certain questions and topics could expose you to discrimination allegations, even if that’s not your intention.

But you can learn a lot about someone by asking questions that uncover their integrity and dedication to safety and work comp policies. Thoughtful, open-ended questions can allow the candidate to reveal their true colors and help you extend offers to the best fit for your company.

Some examples:

  • How would you perform this task?
  • Describe a work situation in which you encouraged or motivated a coworker.
  • If you disagreed with management about a policy or process, how would you respond?
  • If your boss asked you to lie for them, what would you do?

Be sure to consult your company’s legal counsel on interview and hiring best practices.

Men in business casual attire shake hands

2. Educate employees and encourage reporting

Many work comp carriers have a dedicated unit to investigate possible fraud cases. Often, the only way investigators find out about suspicious activity is because a business owner or employee reported it.

Speak transparently with your employees about fraud. Teach them about the warning signs of fraud. Most importantly, make sure employees know that they are expected to report suspected work comp fraud. If they’re not comfortable speaking with management, they have options. They can anonymously report suspected fraud to their work comp carrier or their state’s Department of Labor.

Simply having an open dialogue about reporting fraud will help prevent suspicious activity. Employees will know the topic is top of mind and their coworkers are more likely to notice questionable behavior.

Download our Report Suspected Fraud poster to hang in your break room or common area.

3. Conduct thorough incident investigations

Regardless of the circumstances, you should complete an incident investigation report for all injuries. Taking time to evaluate why an injury happened is critical to your workplace safety program. A thorough understanding of the root cause is the first step to preventing future incidents.

In addition to fueling safety improvements, an investigation can expose inconsistencies or suspicious details. Collect the important information about the incident as soon as you learn about it. Some key details are:

  • Employee’s name, title and hire date
  • Date, time and location of incident
  • Who the incident was reported to and when
  • Extent of injury
  • Accompanying property damage
  • Other factors contributing to the incident

As soon as possible, find out if anyone witnessed the incident other than the injured worker. Ask witnesses to provide detailed descriptions of what happened. Collect this information from each witness separately. Have each witness provide a written statement for documentation purposes. If you have surveillance cameras, review the footage to verify the details you gather from witnesses and the injured worker.

After an incident, it’s important to conduct the investigation as quickly as possible. Be sure to have an incident investigation report form on hand. Be prepared to ask the right questions during post-incident interviews.

For more information, check out the National Safety Council’s guide, How to Conduct an Incident Investigation.

4. Stay in communication with injured workers

A documented return to work program is one of your most valuable tools to prevent workers compensation fraud. This program can reduce claims costs, increase employee morale and improve medical outcomes.

Part of a successful return to work program is keeping in touch with the injured worker. Ask how they’re doing. Show an interest in their recovery process. Visit them at home or in a medical facility if they’re comfortable with a visit. Not only does this impact their psychological recovery, but it also gives you opportunities to notice any details that don’t add up.

Just remember that most work comp claims are valid. No one wants to get hurt at work. If one of your employees does, keep in mind that recovery can be long and painful. Their injury is impacting their family life as well as their ability to work. You’re there to support them in making a plan to successfully return to normal life – including work – quickly and safely.

Prevent workers compensation fraud

When someone cheats the system – whether it’s a business owner, an employee or an insurance carrier – everyone loses. Investigating and prosecuting fraud is expensive. Plus, fraudulent activity often diverts resources away from those who truly need them.

Ask your insurance carrier how they help prevent work comp fraud to support workers and keep your premium down. Here’s what we do. >

October 11, 2019
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