May 16, 2014
California Worker’s Comp Fraud – part 5
Definition: Fraud All Workers Comp
In elementary terms, fraud occurs when someone knowingly lies to obtain some benefit or advantage to which they are not otherwise entitled, or to deny some benefit that is due and to which someone is entitled, or to obtain a workers’ compensation insurance policy at less than the proper rate, cost, or premium.
The Most Common Workers’ Compensation “Red Flags”
- The injured worker is a new hire.
- The applicant took unexplained or excessive time off prior to claimed injury.
- The alleged injury occurs prior to or just after a strike, layoff, plant closure, job termination, completion of seasonal or temporary work, or notice of employer relocation, and so on.
- Applicant reports an alleged injury immediately following disciplinary action, notice of probation, demotion, or being passed over for promotion.
- Applicant has a history of personal injury, workers’ compensation claims, and/or of reporting “subjective” injuries.
- Applicant’s job history shows many jobs held for fairly short periods of time.
- The alleged injury relates to a preexisting injury or health problem.
- Applicant uses addresses of friends, family, or post office boxes; has no known permanent address, and frequently moves.
- Applicant’s family members know nothing about the claim.
- Applicant was experiencing financial difficulties and/or domestic problems prior to submission of claim.
- Applicant has a high-risk activity, such as skydiving, as a hobby.
- The applicant’s version of the accident has inconsistencies; is not credible.
- There are no witnesses to the accident or witnesses to the accident conflict with the applicant’s version or with one another.
- Applicant fails to report the injury in a timely manner.
- Accident or type of injury is unusual for the applicant’s line of work.
- Facts regarding accident are related differently in various medical reports, statements, and employer’s first report of injury.
- The Social Security number provided does not belong to the applicant.
- Applicant refuses to or cannot produce solid or correct identification.
- Applicant avoids use of U. S. mail; hand-delivers documents.
- Applicant cannot be reached at home during working hours although he claims to be disabled from working; or the message taker is vague and noncommittal. Applicant is otherwise unavailable and elusive.
- Applicant’s lifestyle does not coincide with reported/known income.
- Several of applicant’s family members are receiving workers’ compensation, unemployment, Social Security, welfare, etc.
- Income from workers’ compensation and collateral sources (unemployment, Social Security, long-term disability, etc.) meet or exceed wages after taxes.
- Applicant refuses diagnostic procedures to confirm injury, or refuses to attend a scheduled defense medical exam.
- Applicant’s co-workers express opinion that injury is not legitimate.
- Alleged injuries are all subjective; i.e., soft tissue, pain, and emotional issues.
- Applicant changes version of accident after learning of inconsistencies; misrepresentation or fabrication by any party.
- Applicant frequently changes physicians, or does so after being released to return to work.
- Physical description of applicant indicates muscular, well-tanned individual, with callused hands, grease under fingernails, or other signs of active work.
- Medical treatment is inconsistent with injuries originally alleged by employee.
- Applicant undergoes excessive treatment for soft tissue injuries.
- Treatment as reported by applicant is different from doctor’s statements in medical report.
- Applicant is examined by several doctors when one doctor could have taken all the information and reached a diagnosis.
- Applicant reports seeing a doctor for a very brief period of time; however, reports and billing indicate a lengthy visit.
- Applicant’s description of treatment indicates nonmedical personnel rendering medical treatment.
- Applicant sends in medical reports that appear to be altered.
- Applicant lives far from medical facility, yet receives frequent treatment.
- Surveillance shows applicant’s activities are inconsistent with physical limitations related in medical reports and disposition.
- Surveillance or “tip” reveals totally disabled worker is employed elsewhere (especially suspicious if employment conflicts with work restrictions given by treating doctor).
- Applicant cannot describe either diagnostic tests or treatment for which employer was billed.
- The doctor ordered diagnostic testing that is not necessary to determine extent of applicant’s injury; or, diagnostic testing is performed, yet there is no request by doctor in medical files.
- Diagnostic tests are performed by a vendor not in close proximity to doctor’s office or applicant’s home, vendor uses post office boxes on all documents, or cannot supply diagnostic records.
- Doctor or medical clinic has ownership share in diagnostic group.
- Various reports by a doctor on different applicants’ cases read identically or similarly.
- Post office box used for a clinic/doctor address instead of a street address.
- Medical reports appear to be second- or third-generation photocopies.
- Physician cannot be located at address shown on documentation.
- Doctor’s report never identifies claimant by gender or gets gender wrong.
- New or additional medical problems are alleged and attributed to the original injury.
- Specific “soft tissue” injury develops psychiatric overtones.
- Medical reports contain inaccurate terminology, spelling errors, variations in physician’s signature or are rubber-stamped with the doctor’s name.
- Medical facility uses multiple names or changes name often.
- RVS/CPT (Relative Value Scale/Current Procedural Terminology) codes show evidence of upgrading level of services.
- Billings are received for unnecessary or not rendered services.
- Medical facility has consistently billed the workers’ compensation, auto, health, and other insurance carriers and has received payments from more than one.
- Applicant is unable to define medical ailments as listed on claim form.
- Lawyer’s letter of representation or letter from medical clinic is first notice of claim.
- Lawyer’s letter is dated the same day as the reported incident or shortly thereafter.
- There is a repeated pattern of doctor/attorney referrals; the same doctor and attorney work together on a large volume of claims
- Applicant states that a “friend,” whose name is no longer remembered, provided referral to attorney/clinic.
- Applicant filed for unemployment or disability benefits before visiting attorney or clinic.
- Applicant alleges doctor or clinic was found through a “hot line.”
- Applicant is overly pushy, demanding a quick settlement, commitment, or decision.
- Applicant is unusually familiar with claims-handling procedures, workers’ compensation rules, laws, and proceedings.
A long list, which is not all the red flags of WC fraud, but the most common ones.
Keep in mind that fraud is only perpetrated by a small number of those throughout the entire system. For the most part, the system works as it is supposed to, without a hitch.
I will end this week on a lighter note.
This is a true story of a WC Injury I handled as the employer liaison between the employee and the insurance insurance carrier. Not a fraud situation, but one of those claims that that leaves a forever memory.
One afternoon I received a panic stricken call and had to ask the caller to please slow down so I could understand her. “THE CAT IS DEAD” is what I was hearing on the other end of the phone. When the story was finally unraveled, it turned out a high school counselor was working at her desk when PLOP from the ceiling a cat had fallen through, landed on her desk right in front of her. Not only that, but the poor kitty landed on the counselor’s spiked letter holder and had impaled itself. Both the counselor and the cat screamed bloody murder. As the cat jumped down from the desk, frantically running around and out of the office and down a corridor of classrooms, another counselor sprung up and started chasing the cat in an attempt to catch it and help the poor kitty who was still attached to the letter holder. He did finally catch the cat but didn’t expect such a fight. The cat scratched the heck out of counselor’s arms and face, before it succumbed to death.
Carrying the poor dead kitty back to the office, all bloodied and scathed, was a sad situation, bringing others in the office to tears.
I told the secretary who initially called me that we needed to fill out a WC claim form and get the guy counselor medical attention. We also needed to call animal control to pick up the deceased cat, and have it checked for disease. Everything turned out ok, and the guy counselor was fine after first aid was administered and band aides were applied. End of story, but for some reason when I think back on this case I can’t help but chuckle at the scenario. One for the books!
HAPPY FRIDAY EVERYONE!