Performance Thinking

Expert information and solutions for your business.

Summer 2011

Ten Red Flags of Workers’ Comp Fraud

Most workers’ comp claims are legitimate, but if your company has ever been the victim of a fraudulent claim, you are probably hyper vigilant about avoiding that situation in the future. At Scott Insurance our Risk Performance Specialists have identified ten “red flags” of workers’ comp fraud. These red flags are simply indicators that a claim might be fraudulent, however the more of these criteria that are met, the more likely fraud is involved.

Many claims that begin as legitimate on-the-job injuries turn fraudulent when employees attempt to abuse the system by staying out of work longer than necessary. That’s why the claim must be proactively managed until the employee is released to full duty.

  1. First notice of injury is delayed.
    Friday injury is reported on Monday. It is possible the injury occurred over the weekend, not at work. Delay between time of the alleged injury and first doctor’s appointment: Often an employee suffers an injury off the job, but can relate it to a recent “incident” that happened at work.
  2. There are inconsistencies in reporting of injury.
    Many times an employee will tell one version of the “incident” to a supervisor and a variation of that version to the claims administrator, doctor, and/or adjuster.
  3. First notice of claim is a letter of representation from an attorney or a hearing notice from the Workers’ Compensation Commission.
    This is very common in cases in which an employee has an injury that is unrelated to his job. He might feel it is a minor injury, but later when it is determined surgery is needed, he needs compensation while out of work. This happens frequently with employees who have been let go.