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Workers Compensation


Workers Compensation Fraud What is Workers Compensation? Workers compensation is the exclusive remedy for injured workers . This means that in exchanged for ... – PowerPoint PPT presentation

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Title: Workers Compensation

Workers Compensation
  • Fraud

What is Workers Compensation?
  • Workers compensation is the exclusive remedy
    for injured workers.
  • This means that in exchanged for the
    protection that workers compensation coverage
    offered, employees surrender their right to sue
    employers for damages arising from a work place

  • When is it Fraud ?
  • Workers Compensation fraud occurs when there is a
    knowing misrepresentation with the intent to
    obtain benefits that are not deserved.

  • Workers Compensation Facts
  • The rising cost of insurance is a national
  • Historically claims increased during tough
    economical times.
  • Fraud is one of the driving factors for increased
    insurance premium rates.
  • (10 premiums to cost attributed to fraud)
  • Difficult to access, estimated that 25 of all
    Worker compensation claim involve some element of
  • Number of contested claims has more than tripled
    , 4000 cases since 1988 to 12,000 in 1994
  • Total number work related incidents exceeds 84000
    cases in 1994.
  • Estimated total annual fraud loses for KY are at
    60 million to in 1994.

  • Attorney Fees
  • For the first 25,000 of the award can charge
    up to 20
  • For the next 10,000 of the award can charge
    up to 15
  • and 5 for the remainder of the award not
    to exceed 12,000
  • 25,000 _at_ 20 5000
  • 10,000 _at_ 15 1500
  • 10,000 _at_ 5 500
  • 45,000 7000

Ombudsman Program Was Formed To Help The Public
Understand the Worker Compensation System
  • 1. Serves as a neutral and reliable
    information source for employees, employers,
  • medical providers and other programs
  • 2. Respond to inquiries and complaints about
    the system and participants in the program
  • Advise all parties of their rights
    Mediate disputes
  • Workers Compensation Specialist
  • 1. As a low cost means to resolve disputes
    Expedite delivery of service to injured workers.
  • 2. In addition Specialist Assist workers
    obtaining medical reports and other documents
    necessary for a claim benefits and assist in
    completing claims forms.
  • 3. Facilitate evaluation of injured workers to
    ascertain the feasibility of vocational

Types of Fraud
  • Claimant
  • Employer
  • Attorney
  • Premium
  • Medical provider
  • Insurance provider

AIK Insurance Adjuster 14 year service
  • Has turned in 5 fraud claims with overwhelming
    evidence Video, witness statements and doctor
    record .
  • (Results Dismissed
    not enough evidence)

AIG Insurance Adjuster 10 year service
  • 1 fraud claim with overwhelming evidence

  • (Results Paid back 1/2 money no further action)

Work Comp Attorney20 year service
  • Fraud is hard to prove, pursue only to stop
  • But remember frivolous claims are a result of
    your relationship with your employees.

Occupational Therapist Thera-care
  • Seen some sort of fraud everyday
  • Doctors/Therapist aligning with lawyers.
  • Billing (Out of whack)
  • Functional Capacity Examination
  • (Functional Capacity Evaluation (FCE) is a
    systematic process of assessing an individual's
    physical capacities and functional abilities.)

(No Transcript)
Medical Expense
  • Drugs are the fastest raising cost of worker comp
    medical expenses resulting in about 8 in 2002.
    The rising cost is mainly due to the greater use
    of prescription drugs doctors are prescribing
    more drugs. The best way to fight drug cost is to
    switch from name brands to generic equivalent
    types. The rising cost of drugs with clinic
    partnership and pharmacies lend itself toward
    fraud in small rural setting.
  • Annual Prescription drug expenditures.
  • 1991...42 1996...
  • 1992...44 1997... 84
  • 1993...50 1998...100
  • 1994...59 1999...118
  • 1995...62 2001...138

Mary Frickers Article Massive Fraud
  • Desperate workers may turn to violence and
    suicide because of delays of benefits combined
    with bodily injury.
  • Money paid is unbelievably small.
  • System overhauled claiming widespread fraud by
    injured workers. 300,000 claims (30)
    unsubstantiated, 5 years later legislature order
    investigation and suspicious claims were around
    only at 1.
  • Employers and Insurers commit fraud by denying
    benefits yet focus is on investigation against
    workers California Dept. of Insurance
    reported out of 1505 claims in 1996
  • (1222
    workers, 88 employers, 120 medical providers
    0 insurers)
  • Every year for the past 7 years state audit finds
    insurers mismanaging 50 of the claims.
  • In 1994 only 200 people in the state was rated
    100 disabled
  • California State Disability insurance is being
    used as a bank for insurance companies only 1/3
    gets repaid.

Spotting Workers Compensation FraudSeveral flags
to watch for
  • Note If two or more you should notify your
    work comp carrier.
  • Injuries beginning on a Monday morning due to an
    employee getting hurt over the weekend.
  • Hard to prove conditions such as Carpal
    tunnel syndrome, back problems and stress.
  • No visible injury Injuries are subjective.
  • Doctor hopping. Associates that may be changing
    doctors may be looking for a doctor to give them
    the restriction they want or drugs proscribe to

  • Employee retaliation when someone who has been
    discipline and is seeking a way to get back at
    the company.
  • Employee termination or plant closing.
  • The associate has a prior workers comp history or
    multiple claims.
  • No witnesses to the injury.
  • Associates filing claims may refuse diagnostic
    testing or therapy.
  • Avoiding substance abuse testing

  • Accident not reported timely
  • New employees - more likely to have an accident.
  • Not taking medication

  • Taking Action
  • Prevent Workers Comp Fraud
  • Insist on experienced adjusters
  • Know the attorney (Dont be surprised if a new
  • attorney is assigned.
  • Develop a game plan that is agreed on by the
    employer, claims company and lawyer.
  • Employer must get involve early and be more
    proactive in fighting fraud.

(continued) Prevent Workers Comp Fraud
  • Institute a fraud line
  • Publicize zero tolerance for fraud.
  • Make sure employees know that claims will be
  • Initiate and investigation with in the first 24
  • Document jobs with picture and video taping.
  • Have a rapid response for spotting a fraudulent
  • Train employees
  • Require employees to keep you updated as to
    medical status and actions

What To Do If You Have A Accident/Claim(Initiate
and within the first 24 hours)
  • Initiate investigation
  • View location
  • Preserve scene
  • Photograph scene
  • Immediate witness interviews and statements
  • Obtain detailed accounts
  • (Who, what, when, where and how
    incident happen)

Guidelines (Accident/Claim)
  • What part is hurt? / Where does it hurt?
  • What did injured worker tell you?
  • Where did it happen?
  • Who witness this?
  • How was the worker injured?
  • Have they been trained?
  • Was safety rules followed?

Guidelines (Accident/Claim)
  • Was employee doing the assign task?
  • Had they done this before?
  • How often is this performed?
  • What is their past history
  • What have you heard? (Gossip)

Functional Capacity Evaluation (FCE) is a
systematic process of assessing an individual's
physical capacities and functional abilities.
  • The FCE is a significant tool that can be used to
    make objective and reliable assessments of the
    individual's condition.
  • To determine the individual's ability to safely
    return to work full time or on modified duty
  • To determine if work restrictions, job
    modifications, or reasonable accommodations are
    necessary to prevent further injury
  • To determine the extent to which impairments
    exist, or the degree of physical disability for
    compensation purposes
  • To predict the potential ability to perform work
    following acute rehabilitation or a work
    hardening/work- conditioning program

Associates in Rehab
  • Physical capacity evaluation
  • Ergos
  • 1) Static Dynamic Strength Measurements
  • 2) Whole body range of motion
  • 3) Work endurance
  • 4) Standing Work Tolerance
  • 5) Seated Work Tolerance

Ergos Work unit
  • Surveillance
  • What are you getting?

What have we Learned?
  • Initiate good sound safety procedures
  • (Place most of your energy toward prevention
    before it happens)
  • Get supervisor involved.
  • Train staff how to properly report an accident.
  • Listen to your people.
  • Good documentation is essential for claim
    prevention and investigations. (supervisor
    report/near misses)

  • The End