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15 Warning Signs of Workers’ Compensation Fraud

The workers’ compensation insurance system is a no-fault method of paying workers for medical expenses and wage losses due to on-the-job injuries. While the majority of WC claims are truthful, the National Insurance Crime Bureau reports that billions of dollars of false claims are submitted each year. To help you detect possible WC fraud, experience […]



The workers’ compensation insurance system is a no-fault method of paying workers for medical expenses and wage losses due to on-the-job injuries. While the majority of WC claims are truthful, the National Insurance Crime Bureau reports that billions of dollars of false claims are submitted each year. To help you detect possible WC fraud, experience shows a claim may be fraudulent if two or more of the following factors are present:

 

  1. Monday Morning: The alleged injury  occurs either “first thing Monday morning,” or late on a Friday afternoon but not reported until Monday.
  2. Employment Change: The reported accident occurs immediately before or after a strike, a layoff, the end of a big project or at the conclusion of seasonal work.
  3. Job Termination: If an employee files a post-termination claim
    1. Was the alleged injury reported by the employee prior to termination?
    2. Did the employee exhaust his/her unemployment benefits prior to claiming workers’ compensation benefits?
  1. History of Changes: The claimant has a history of frequently changing physicians, addresses and places of employment.
  2. Medical History: The employee has a pre-existing medical condition that is similar to the alleged work injury.
  3. No Witnesses: The accident has no witnesses, and the employee’s own description does not logically support the cause of injury.
  4. Conflicting Descriptions: The employee’s description of the accident conflicts with the medical history or First Report of Injury.
  5. History of Claims: The claimant has a history of numerous suspicious or litigated claims.
  6. Treatment is Refused: The claimant refuses a diagnostic procedure to confirm the nature or extent of an injury.
  7. Late Reporting: The employee delays reporting the claim without a reasonable explanation.
  8. Hard to Reach: You have difficulty contacting a claimant at home, when he/she is allegedly disabled.
  9. Moonlighting: Does the employee have another paying job or do volunteer work?
  10. Unusual Coincidence: There is an unusual coincidence between the employee’s alleged date of injury and his/her need for personal time off.
  11. Financial Problems: The employee has tried to borrow money from co-workers or the company, or requested pay advances.
  12. Hobbies: The employee has a hobby that could cause an injury similar to the alleged work injury.

BACK TO THE BASICS: 7 Simple Ways to Reduce Your Workers’ Compensation Costs

Are you looking for ways to reduce your WC costs? Going back to the basics in establishing and managing your safety programs allows you to control your premiums through minimizing your losses. Here’s how. 1) Get Management Behind it First and most importantly, the only way companies really control their workers’ compensation costs is to […]



Are you looking for ways to reduce your WC costs? Going back to the basics in establishing and managing your safety programs allows you to control your premiums through minimizing your losses. Here’s how.

1) Get Management Behind it

First and most importantly, the only way companies really control their workers’ compensation costs is to convince all involved that controlling cost is worth the effort. Companies who have made the greatest strides do so because everyone is focused on the importance of safety.

2) Use Modified Duty/Return to Work Programs

If you don’t have a company policy on modified duty, you’re at a distinct disadvantage. It is an important practice that needs a comprehensive approach. The most successful Return-to-Work program can accommodate almost any restriction.

3) Understand the Elements that Contribute to your WC CostsYour classification codes, experience modification, sudden company growth or company acquisitions can all affect your premiums. It’s important that you know the impact that each brings to your overall workers’ compensation pricing.

4) Orientate and Train Your Employees

Orienting and training your employees is a crucial step in promoting a safe work environment. How you train and encourage your new employees in safe working practices will determine your insurance costs in the near future. During orientation, you’ll find that many employees resist asking questions. To counter this reluctance, you, the employer, should use checklists and fill any gaps by explaining, in detail, what you expect of new employees.

At the end of the training course, ask new employees to sign the checklist to confirm that they understand and have been instructed in the company’s safety procedures. This signed checklist should become part of the employee’s permanent record.

5) Put Policies into Practice

If you don’t have safety policies, then develop and use them. Most companies have written disciplinary procedures but fall short when it comes to using them.

Review your claim information—do the same people and injuries show up from year to year? If so, are your employees properly trained and do they understand disciplinary procedures?
Insist that claims are reported immediately. Statistics reveal that for every week a claims goes unreported the cost increases

6) Report Claims Promptly

Insist that claims are reported immediately. Statistics reveal that for every week a claims goes unreported the cost increases dramatically—as much as 50 percent. When employees delay reporting an injury, find out why. Then turn to your policy statements and use the necessary disciplinary procedures on record. Your goal is to get employees to report injuries, not to judge whether an injury is important enough to report.

7) Investigate Causes (the “why” behind the “what”)

Even after a claim is paid, the incident is not over until you discover its root cause. While one injury is behind you, others will take its place unless you do something to reduce the chance of the incident reoccurring. Go beyond “what” happened and find out “why” it happened. Round table “claims without names” at your safety committee meeting, so employees can compare notes and learn from the past.

Reduce your Worker’s Comp costs

Are you looking for ways to reduce your WC costs? Going back to the basics in establishing and managing safety programs allows you to control your premiums through minimizing your losses. Here’s how. Get Management Behind it First and most importantly, the only way companies really control their workers’ compensation costs is to convince all […]



Are you looking for ways to reduce your WC costs? Going back to the basics in establishing and managing safety programs allows you to control your premiums through minimizing your losses. Here’s how.

Get Management Behind it

First and most importantly, the only way companies really control their workers’ compensation costs is to convince all involved that controlling cost is worth the effort. Companies who have made the greatest strides do so because everyone is focused on the importance of safety.

Your internal strategy—which centers on preventing claims—is much more important than shopping for a higher dividend.

Use Modified Duty

If you don’t have a company policy on modified duty, you’re at a distinct disadvantage. It is an important practice that needs a comprehensive approach. The most successful Return-to-Work program can accommodate almost any restriction.
Understand the Elements that Contribute to Your WC Costs
Your classification codes, experience modification, sudden company growth or company acquisitions can all affect your premiums. It’s important that you know the impact that each brings to your overall workers’ compensation pricing.

Orientate and Train Your Employees

Orienting and training your employees is a crucial step in promoting a safe work environment. How you train and encourage your new employees in safe working practices will determine your insurance costs in the near future. During orientation, you’ll find that many employees resist asking questions. To counter this reluctance, you, the employer, should use checklists and fill any gaps by explaining, in detail, what you expect of new employees.

At the end of the training course, ask new employees to sign the checklist to confirm that they understand and have been instructed in the company’s safety procedures. This signed checklist should become part of the employee’s permanent record.

Put Policies Into Practice

If you don’t have safety policies, then develop and use them. Most companies have written disciplinary procedures but fall short when it comes to using them.

Review your claim information—do the same people and injuries show up from year to year? If so, are your employees properly trained and do they understand disciplinary procedures?
Report Claims Promptly

Insist that claims are reported immediately. Statistics reveal that for every week a claims goes unreported the cost increases dramatically—as much as 50 percent. When employees delay reporting an injury, find out why. Then turn to your policy statements and use the necessary disciplinary procedures on record. Your goal is to get employees to report injuries, not to judge whether an injury is important enough to report.

Investigate Causes

Even after a claim is paid, the incident is not over until you discover its cause. While one injury is behind you, others will take its place unless you do something to reduce the chance of the incident reoccurring. Assign the task of correcting the problem to your safety committee, supervisors or managers, and then ask for proposed corrective action.

Note: Always ask the injured employee how the injury could have been prevented. And do so while the event is still fresh in his or her mind.

Do your research. Check out OSHA’s website at www.osha.gov.

Farallone Pacific Insurance Services can develop safety programs tailored to your needs. Call us. We have the expertise and resources to help you find and close your costly safety gaps.

7 Easy Strategies to Reduce Your Workers Compensation Costs

Here are seven easy strategies that can help you reduce your experience modifications and lower your workers compensation costs: 1) Get management behind it. Focus on how safety pays off, and convince everyone involved that controlling costs is worth the effort. Your internal strategy for preventing claims is much more important than shopping for a better […]



Workers_Compensation_ComputerHere are seven easy strategies that can help you reduce your experience modifications and lower your workers compensation costs:

1) Get management behind it. Focus on how safety pays off, and convince everyone involved that controlling costs is worth the effort. Your internal strategy for preventing claims is much more important than shopping for a better premium.

2) Use modified duty. Adapt a company policy for modified duty. The most successful return-to-work program can accommodate any restriction.

3) Understand what contributes to your workers compensation costs. Your classification codes, experience modification, sudden company growth or acquisitions can all affect your premiums. Know the impact of each factor.

4) Train your employees well. How you train every employee and encourage safe working practices will determine your insurance costs.

  • Develop safety checklists and thoroughly explain what you expect.
  • At the end of training, ask employees to sign the safety checklists to confirm they understand their responsibilities, and have received training about safety procedures. Add these documents to the employee’s permanent file.

5) Actively put your policies into practice. If you don’t already have safety policies, develop them. If you have them, use them! Then review your claims information to see if the same people and injuries keep showing up year after year. You may need to re-train employees and make sure they understand disciplinary procedures for not following your safety policies.

6) Report claims promptly. Insist that claims are reported immediately and apply disciplinary procedures when they’re not. (For every week a claim goes unreported, costs increase by as much as 50 percent!)

7) Investigate causes. An incident isn’t over until you discover the cause. Assign the task of correcting the problem to your safety committee or managers, and ask for their solution.

  • While the event is fresh in an employee’s mind, always ask how the injury could have been prevented. Find out the “why” behind the “what”.
  • Do your research: Check out OSHA’s website at www.osha.gov or visit your MyWave® OSHA website to find related, helpful information.