What is fraud?
When an employee deliberately misrepresents or fails to disclose material facts of an injury and receives workers' compensation benefits which he or she is not entitled to.
- Working while collecting total wage-loss
 benefits
- Claiming a faked injury
- Extreme exaggeration of injury to collect benefits
- Misrepresentation of wage loss
- Severe malingering
- Claiming a non-work injury as work related
- A deliberate injury
Occasionally employees do some of these without knowingly violating the law. That's not fraud. It's fraud only when it can be proven that the employee's motive was to intentionally defraud the system.
In some situations, SFM acknowledges the injured employee has a legitimate claim but notices he is malingering, or not motivated to recover from the injury and get back to work. This is a vast gray area in which the employee is not deliberately violating the law but is hindering the progression of the claim.
In these cases, SFM can hold an internal "round table" discussion to determine the best way to get the claim back on track. Techniques used by SFM can include surveillance, an independent medical evaluation or a reduction in settlement benefits.
In cases where the employee intentionally committed workers' compensation fraud, it is punished as a theft crime.
Convicted offenders may be ordered to pay restitution, fined and imprisoned, depending on the severity of the offense.
The Special Investigations Unit also watches for red flags suggesting policyholder and provider fraud. Red flags may include employers misrepresenting employee wages or a provider intentionally coding a procedure incorrectly.
Prosecuting fraud cases under current law can be difficult because the insurer must prove beyond a doubt that the employee intentionally and deliberately intended to defraud the system.
That's why it's important to gather all the evidence and supporting documentation to build the legal case.
SFM's Special Investigations Unit looks for leads by checking a software database that contains billions of public records. The database can bring to light such things as an employee's ownership in a business.
When given credible evidence an "injured" employee is trying to defraud the system, SFM's claims representatives may hire a private investigator to perform surveillance on the employee.
Surveillance is best utilized when there is solid information that something specific will occur, such as building a porch addition.
There are times surveillance doesn't show proof the employee is trying to defraud the system. Because surveillance is expensive, your claims representative and SFM's special claims investigator will determine whether the situation warrants spending extra dollars on additional surveillance or whether another avenue is best.
Additionally, claims representatives can request an independent medical examination, and subpoena income tax records to perform a forensic audit of the employee's finances. An audit looks for evidence like other sources of income, which could mean the claimant is working at another job.
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