| How
to Recognize Suspicious Claims
Specific
indicators of workers’ compensation fraud
— Use this
checklist of 52 red flags to review
workers’ compensation claims for evidence
of fraud. Refer to the checklist when a
claim is initially reported and as the case
proceeds. No red flag by itself clearly
indicates fraud, but combinations of red
flags should alert you that closer scrutiny
is warranted. As soon as you suspect fraud,
report the indicators to your claim
representative. They will review the claim
and work with you to investigate the fraud
indicators. The 52 red flags of fraud are
organized into six categories.
SUSPICIOUS
ACCOUNT OF
ACCIDENT
No specific date, time and place for injury
included on claim
Details of injury reported on him are
sketchy at best
Claimant does not promptly report injury to
supervisor
Discrepancies exist between claimant’s
account of injury and witnesses’ accounts
Injury is unwitnessed
Co-workers share rumors that accident is
illegitimate
Reported accident occurs in an area where
claimant does not work
Claim may be part of a suspicious pattern of
claims from the same area or location
SUSPICIOUS
TIMING OF
CLAIM
Injury is reported as occurring on a Monday
or Friday (injury might have occurred away
from workplace or claimant may use claim to
extend weekend.
Claim occurs prior to anticipated layoff,
termination, strike or retirement
Claim occurs after claimant has been
terminated
Claim occurs shortly after employee was
hired
Claim occurs after injured worker took
unexplained or excessive time off
Injury is "seasonal" (before
seasonal lay-off) or is recurrent (claimant
has pattern of reporting an injury before a
vacation)
Claimant is having financial difficulties
Claimant has been complaining about his job,
supervisor or the company
Claimant recently bought a private
disability policy
SUSPICIOUS
NATURE AND
EXTENT OF
INJURY
Type of injury is unusual in claimant’s
line of work
Injury concerns soft tissues and cannot be
objectively verified
Discrepancies exist between injury and facts
of the accident
Claimant refuses diagnostic procedures to
confirm injury
Claimant refuses to cooperate with
rehabilitation personnel
Claimant files for compensation because of
vague complaints of stress
Claimant has history of reporting subjective
injuries (such as headaches, nausea and
sleeplessness)
SUSPICION
THAT EMPLOYEE MAY BE WORKING
ELSEWHERE WHILE
RECEIVING BENEFITS
Adjuster has difficulty reaching claimant at
home during the day
Claimant offers no permanent address or has
frequent relocations while receiving
benefits
Claimant frequently cancels or misses doctor
or therapist appointments
A potential new employer for claimant calls
to verify previous employment
Tip has it that claimant is presently
employed elsewhere
SUSPICIOUS
MEDICAL TREATMENT
Physician has reputation for handling
suspicious claims
Prolonged or excessive treatment received
for minor injury
Discrepancies exist between treatment or
medication and claimed injury
Sketchy details are listed on medical bills
Medical bills are photocopies, not originals
Claimant received unnecessary
hospitalization
Claimant visits several doctors (possibly in
search of a medical opinion that favors the
claim)
Physician directs treatment to occur at a
facility where he has a financial interest
Bill lists a treatment date that is a
holiday
Bill is inflated due to
"unbundling" billing for each step
of medical procedures
Medical report appears exactly the same as
other reports from the same physician
Insurers for both workers’ compensation
and group health are billed simultaneously
and payment is accepted from both
SUSPICIOUS
ENGAGEMENT OF LEGAL
ASSISTANCE
Your first notice of the claim is by an
attorney or you learn that the claimant has
hired an attorney immediately after filing
the claim
Attorney lien or representation letter is
dated the day of the accident
Attorney suggests a settlement or buy out
soon after claim is filed
Claimant initially shows willingness to
settle with insurer, but later hires an
attorney and files subjective complaints
Attorney threatens further legal action if
quick settlement is not made
Claim involves excessive demands for
compensation of a permanent injury
Attorney has a reputation for handling
suspicious claims
Your company experiences a high number of
suits from a specific law firm
The same combination of attorneys and
medical providers involved in previous
claims recurs.
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