When you think of fraud in Workers' Compensation (Work Comp), it’s common to picture an employee exaggerating injuries to collect benefits.
You might extend that thought to medical providers who continue unnecessary treatment, but there is another group that can also turn claims into a business: the lawyers handling these matters.
Paying to Play
One recent case involved an attorney who took on thousands of claims and used an upfront arrangement with a referral firm to keep the volume high.
The firm required the attorney to guarantee a certain level of medical expenses at participating clinics so the referral network profited from ongoing tests and procedures. These kinds of upfront payment arrangements can mirror patterns that insurers watch for and may relate to protections found under Wire Transfer Fraud (Crime) Insurance in other contexts.
Tightening Everything Up
Although fraud of this type is troubling, investigations can prompt useful changes: better claims screening, clearer provider billing rules, and stronger documentation requirements.
Improved oversight of referrals, medical billing, and attorney-fee arrangements helps reduce abuse and can lower the overall cost of coverage for employers and insurers.
Fraud and You
This should be a concern no matter where your business is located, because schemes can be set up quietly and run for years before discovery.
If you have reason to review the attorneys your workers use, doing so may be worthwhile; you can also talk to an agent about risk controls and best practices for monitoring claims.
Frequently Asked Questions
How can I spot possible attorney-related fraud?
Look for unusually high volumes of similar claims tied to the same clinics, repeated referrals to the same providers, or a pattern of excessive medical testing.
What should I do if I suspect fraud?
Report suspicions to your insurer or claims administrator and preserve documentation; they can investigate without exposing your business to liability.
Can employers investigate former or current employees' claims?
Employers should avoid conducting independent investigations that could violate privacy or labor laws and instead coordinate with insurers and legal counsel.
Do insurers have tools to detect these schemes?
Yes—insurers use data analytics, billing audits, and provider credentialing to identify abnormal patterns and potential fraud.