What you need to know about workers’ compensation fraud

A good workers’ compensation fraud story can make for great television.

For example, there was the case of the postal carrier  who claimed a shoulder injury prevented her from lifting mail trays into trucks, but then had no problem spinning the big wheel on the game show The Price is Right.

Or the case of a woman who was caught on surveillance camera hitting herself in the forehead with a sprinkler head that had fallen from the ceiling, but missed her.

While those made-for-TV cases of workers’ compensation fraud do happen, they’re extremely rare. Even more subtle types of fraud such as exaggerating symptoms or claiming off-the-job injuries occurred at work represent a tiny percentage of workers’ compensation claims.

Although workers’ compensation fraud rarely happens, it can cause serious and costly problems for employers when it does.

Fraud comes in many forms

Workers’ compensation fraud can come in many forms — some brazen and some subtle.

Exaggerating symptoms: Sometimes employees exaggerate the severity or duration of their symptoms — or both — and say that they’re unable to do work that they’re actually capable of.

Working elsewhere: Another form of fraud occurs when those who are off work due to total or partial disability take on another job while collecting workers’ compensation wage replacement benefits. Typically, we find out about these types of cases because an employer is suspicious and calls the claims representative. Sometimes we can verify those suspicions through surveillance.

Fabricating an injury: In rare cases, employees have fabricated injuries entirely to get coverage for an injury that occurred previously or to simply get paid time off work. If there were no witnesses to the alleged incident, it can be tough to prove fraud in these cases, but security cameras can sometimes help.

Special Investigations Unit looks into potential fraud

SFM’s Special Investigations Unit is constantly looking into questionable claims by conducting background checks and determining whether further investigation – such as surveillance – is warranted.

Typically an investigation starts with claims representatives, attorneys or employers suspecting fraud. Things that might tip an employer or claims representative off to potential fraud include:

  • Learning the claimant has a criminal history
  • Hearing that the claimant is working side jobs
  • Finding that medical notes aren’t consistent with the injury report
  • Seeing that there is excessive medical treatment and the employee doesn’t seem to want to return to work

If you suspect fraud, contact your SFM claims representative at (800) 937-1181 or report it using our online contact form.

Learn more about SFM's Special Investigations Unit in this video:

Prevent fraud with thorough hiring practices

As an employer, the most important thing you can do to prevent workers’ compensation fraud is to be careful who you hire. Even as it gets tougher to fill vacancies as the economy picks up, don’t lower your standards.

Check references, verify educational and work history and conduct criminal background checks. When investigating questionable claims, SFM sometimes discovers employees had felony convictions their employers hadn’t been aware of.

Thoroughly investigating accidents after they occur — taking photos and talking to witnesses — also helps. The primary reason for investigating accidents should be for safety reasons — to ensure similar accidents don’t happen again, and it’s important that your injured employee doesn’t feel like a suspect. However, these investigations can reveal signs of fraud on the rare occasions when it happens.

The vast majority of workers’ compensation claims are legitimate, and the chances that fraud will occur at your workplace are slim, but maintaining good employment practices and managing claims thoroughly will lower the chances even more.

This was originally posted on November 24, 2015 and updated September 6, 2017.

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