Workers’ Compensation Fraud

Piles of CashWorkers’ compensation fraud happens when an individual intentionally makes a false claim or hides information in order to receive or prevent someone from receiving workers’ compensation benefits.

Earlier this month, a man from Attleboro plead guilty to fraudulently collecting over $53,000 in workers’ compensation benefits. He did this by collecting benefits while continuing to work – something the Massachusetts Attorney General and the Insurance Fraud Bureau call “double dipping.” The Insurance Fraud Bureau says that “double dipping” occurs quite often, and they are currently looking into over 80 different cases.

The Attleboro man was injured on a construction site and approved for temporary total disability benefits. Although state law requires those that receive workers’ compensation to disclose information on their current employment, current health, and some finances, the man did not report that he was receiving any income. Because of this, his compensation was not decreased to account for the money he was making in his new position.

Other Types of Fraud

Workers’ compensation fraud, however, can be more than simply one employee lying about his disability or working while partially disabled. It can also include employers who underreport their payrolls to receive lower premiums, employers who lie about injuries their workers have suffered, and healthcare providers charging for treatment they have never given.

In addition to being knowledgeable on the many different types of fraud that exist, it is useful to be aware of some of the ‘red-flags’ one should notice when looking for fraud. Here are a few:

If one is looking for fraud by employees, one should make note any injury that has no witness except for the employee himself/herself. Also, if the injury is not reported for a significant amount of time after it occurs, this may be a sign that an employee has not been truthful about the injury suffered. Fraud can also occur with employers. Here, employees should watch for the use of classification codes that are not consistent with the job functions associated with the job profile. Employees should also be on the lookout for small payrolls reported by large employers and any cancellations or revisions of workers’ compensation coverage.

How often does fraud occur?

Although workers’ compensation fraud is frequently covered in the media, studies show that only 1 to 2 percent of workers’ compensation claims are fraudulent. A PBS report argues that while estimates of the cost of workers’ compensation fraud vary from $1 billion to $5 billion per year depending on who is doing the estimate, the total amount of money this accounts for in yearly expenditures for workers’ compensation is very small. In other words, while workers’ compensation fraud is an issue, and the amount of money being scammed is no small amount, the money that individuals legitimately receive for injuries they suffer in the workplace dwarfs the amount of money illegitimately gained.

If you or someone you know has been a victim of workers’ compensation fraud, or if you would like to know about how workers’ compensation fraud may affect your life, contact John J. Sheehan today, or call us at 877-762-9510 today.

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