When you think about workers compensation fraud, weโre usually talking about faking an injury to get workers comp rather than an employer trying to avoid a claim. Fraudulent claims on your workers compensation plan can really jack your rates up. Employers have plenty of motivation to cover it up if they believe they can slip under the radar and not get caught.
Table of contents
What is Workers Compensation Fraud?
As we mentioned earlier, workersโ compensation fraud goes beyond just exaggerating a medical condition or injury. It even extends past working for cash while supposedly on disability. Those examples still represent workers compensation fraud, but employers can commit workersโ comp fraud as well.
Employers might underreport payroll to lower their health insurance premiums. On the other side of things, health care providers can overcharge, overprescribe, or otherwise overbill for services not even rendered (or services not really needed or required).
Essentially, workersโ compensation fraud occurs anytime someone deliberately falsifies information or conceals information in order to receive or avoid workersโ compensation benefits.
Examples of Workersโ Compensation Fraud
Fraud by Employees
- Exaggerating or artificially prolonging symptoms
- Working while claiming disability without reporting income
- Claiming fake job-related injuries
- Misclassifying a non-work-related injury as work-related
- Falsifying mileage reports
Fraud by Employers
- Underreporting payroll
- Misclassifying employees to lower insurance premiums
- Deducting insurance premiums from wages
- Failing to have required workersโ comp coverage
Medical or Health Care Provider Fraud
- Padding medical billing with deliberately unnecessary tests or treatment
- Billing for non-provided services or treatment
- Double-billing workersโ compensation and health insurers for the same services
How Prevalent is Workers Compensation Fraud?
In 2019, the Bureau of Labor Statistics said the rate of nonfatal occupational injuries and illnesses among private industry employees was 2.8 cases per 100 full-time equivalent workers. There were 2.8 million injuries or illnesses in 2019 claimed by private industry workers. Those numbers more or less matched the numbers from 2018.
The good news is that the number of claims including loss of income due to time off work has been falling by around 3.9 percent every year since 2000 (measured through 2019).
On a more somber note, 5333 workers died from a work-related injury in the U.S. in 2019. That number increased by 2 percent from 2018. That equates to roughly 3.5 fatalities for every 100,000 full-time equivalent employees.
Whatโs the Big Deal
These kinds of fraud cost the industry, states, and the federal government many billions of dollars every year. Hereโs the opening salvo from the Division of Investigative and Forensic Services, Bureau of Workersโ Compensation Fraud in just Florida alone:
The Division of Investigative and Forensic Services (DIFS), Bureau of Workersโ Compensation Fraud
(BWCF) has maintained twenty-one (21) detectives, two (2) intelligence analysts, and four (4) supervisors
assigned to squads located in Miami, West Palm Beach, Orlando, and Tampa. The BWCF is overseen
by a Captain and a Bureau Chief. In addition to these investigative resources, the Bureau currently has
five (5) dedicated prosecutors located in Miami-Dade, Hillsborough, Duval, Broward, and Palm Beach counties. These resources allow investigators to obtain timely arrest warrants and a more cohesive prosecution
of individuals charged with violating the workersโ compensation fraud statutes and related criminal acts.
First Hand Account of Workers Compensation Fraud on a Jobsite
I heard a firsthand account of an example recently and itโs not that uncommon.
Aย good workerโletโs call him Samโhad an accident and split open his knee. The supervisor noticed him bleeding profusely and told him to get to the ER and let a doctor stitch him up.
There was just one problem. This guy smoked a joint the night before. Itโs going to show up in his blood test since itโs a workplace accident.
We can debate how long the effects of marijuana stay in your system another time. In this case, the guy said heโll just resign rather than get that positive drug test on his record.
So far, we see no major issue. However, this guyโs a reliable hard worker. The Super decided to tell Sam to hold on while he made a few phone calls. After running it up the lineโway up the lineโthey made a decision to just say Sam didnโt come into work that day. He just had an accident at home.
Health insurance covers the cost. For the employer, thereโs no effect on the workers compensation policy, and the company gets to keep a key employee. It seems like a win-win all the way aroundโexcept, of course, for that pesky issue of workersโ compensation and health insurance fraud.
We Want to Hear Your Story!
Do you have a story about workerโs compensation fraud on the job site youโd like to share but stay anonymous? We want to hear from you. Feel free to let us know your thoughts in the comments below.
Or, send us a direct message on Facebook, Instagram, or Twitter. You can also contact us here. We wonโt mention your name or company.
