Denver Worker's Compensation Info: Employer Steps to Eliminate Workers' Compensation Fraud

July 1, 2013 by Rebecca Shafer, J.D.

Employers need to stay on top of fraud by proper investigation. Many examples of all kinds of clever schemes, plans, ideas and criminal behavior have been featured in our blog.

Employers need to be aware of the lengths a dishonest worker may go to fraudulently obtain benefits. Therefore, employees need to be aware of the company’s intention to vigorously pursue all suspicious workers’ compensation claims. It costs a lot less to find, investigate and stop fraud and abuse then to let a healthy employee illegally collect benefits. If you think a claim is fraudulent, then you need to tell your insurance adjuster immediately.

When to Investigate a Claim

To verify the extent of an employee’s disability
If the injury is not consistent with nature of business
To substantiate the ability of an employee to return to work or perform transitional duty
To verify whether the employee is engaged in outside employment
To prove insurance fraud
To reduce (or increase) the amount of a settlement
To deter future fraudulent activity

Work closely with your third party administrator to request an investigation. Investigations are not a one-size-fits-all arrangement. Different characteristics of a claim may require different types of investigation. Fraud will not be found in every investigation. However, never investigating will be more costly than investigating every claim.

Types of Investigation

General Investigation

This is an in-depth undertaking, compiling concrete evidence to determine the cause of the accident. To do this you would obtain:

witness statements
documents supporting the accident
photographs

Activity Check

This is a brief surveillance where an investigator makes inquiries to friends and neighbors about the claimant’s daily activities. This may include documenting activities by videotape.

Sub-Rosa Investigation

This is a more comprehensive investigation documenting the employee’s activity level by obtaining a cross-section of the person’s activities on film. Use this investigation judiciously. Hire only qualified, bonded investigation firms. Monitor the investigation closely.

Virtual Investigation

This is where a professional conducts an on-line search of social media and other public sites to uncover an employee’s activities that are inconsistent with their claimed physical and medical restrictions. This may include photos of the employee participating in hobbies, sports or other activities, such as working at other jobs.

A Case Study

A California parks worker was apprehended as the result of an investigation conducted by the California Department of Insurance. California charged the worker with presenting a false or fraudulent insurance claim and making false or fraudulent statements to his employer and to his treating physicians.

Over a five-year period, the man reportedly told his doctors:

He was unemployed
His injury continued to worsen
He could not walk or walked with great difficulty, pain and limping, even after surgery to repair the injury
He made similar statements under oath during a deposition taken when he filed for workers’ compensation.

What an investigation found

Undercover surveillance video captured the individual walking normally and bearing weight on his left ankle with no indications of pain
He was videotaped performing work-related activities at an auto-repair shop
He made inconsistent statements and material misrepresentations regarding the severity of his industrial injury and his employment status during appointments with physicians treating and/or evaluating him
These inconsistencies were in his sworn deposition testimony taken to file a false workers’ comp insurance claim with the employer’s third-party administrator.

The cost to the employer of his falsely receiving workers’ compensation benefits: $170,000

            $38,200 in indemnity benefits
            $23,300 in temporary total disability benefits
            $14,800 in permanent disability benefits
            $38,500 in medical treatment
            $ 3,600 in vocational rehabilitation benefits
            $50,400 in legal expenses, defense costs and surveillance/investigation

What was the injury?

He “rolled” his left ankle while painting lines at a tennis court in a city-owned park.

Is anyone asking why it took FIVE YEARS to bring this worker to justice?

Author Rebecca Shafer, JD, President of Amaxx Risk Solutions, Inc. is a national expert in the field of workers compensation. She is a writer, speaker, and publisher. Her expertise is working with employers to reduce workers compensation costs, and her clients include airlines, healthcare, printing/publishing, pharmaceuticals, retail, hospitality, and manufacturing. She is the author of the #1 selling book on cost containment, Workers Compensation Management Program: Reduce Costs 20% to 50%. Contact:RShafer@ReduceYourWorkersComp.com.

Editor Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.

Contact the Law Office of O'Toole & Sbarbaro, P.C. today if you have a workers' compensation or a Social Security disability case.

Law Office of O'Toole & Sbarbaro, P.C.

Phone: 303-595-4777

We are located in the Denver Metro area.

226 West 12th Avenue Denver, Colorado 80204

Disclaimer

Any content of this blog is intended for informational purposes only.It is not intended to solicit business, provide legal advice from The Law Office of O'Toole & Sbarbaro, P.C. and does not serve as a medium for an attorney-client relationship. Therefore, The Law Office of O'Toole & Sbarbaro, P.C. is not responsible for the information on this blog which may not apply to every reader. Always seek professional counsel if you have any legal matters. Contents within the blog of The Law Office of O'Toole & Sbarbaro, P.C., logos and other related media are protected by the copyright laws of the United States and other jurisdictions.

Visit: workerscompensationdenverlawyer.com

Friday, July 5, 2013

Employer Steps to Eliminate Workers' Compensation Fraud

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