Part 1: Introduction

Everyone’s heard horror stories about fraudulent workers’ compensation claims.  The details vary, but most tales have a common theme: workers scamming their employers and insurers.

It’s true that workers’ compensation fraud costs American employers millions of dollars a year and that the most publicized form of the fraud involves bogus claims by workers.  What’s also true, but less talked about, is that workers aren’t always the ones at fault.  Health care providers and insurance carriers also can participate in workers’ compensation fraud.

Under the Radar

The vast majority of workers’ compensation claims are valid.  When claims aren’t valid, however, it can be a giant headache for businesses.

Employee fraud may be the easiest for employers to spot, because it often involves someone collecting benefits while earning other income, or seeking benefits for an injury that didn’t occur on the job.  Such scams can be uncovered by interviewing fellow employees or paying unannounced visits to the injured workers’ home.

But it can be more difficult for employers to detect fraud when the perpetrator isn’t the employee.  Health care providers – rehabilitation counselors and pharmacists, as well as doctors and nurses – may bill for treatment or services they never provided.  Or they may submit duplicate bills for a single service to more than one insurer.

Next - Part 2: Vital Signs of Trouble