What Is Workers' Compensation Fraud And How To Avoid It

Committed by employees, employers or medical providers, Workers’ Compensation fraud costs can exceed thousands of dollars and jeopardize your job. Understand this type of fraud and how you can avoid it as you protect yourself and your future.

What is Workers’ Compensation Fraud?

When an employee, employer or provider makes a false statement or conceals information about a work-related injury or treatment, Workers’ Compensation fraud occurs. The fraud typically allows or hinders a person from receiving benefits.

Consider these three categories of Workers’ Compensation fraud.

Claim Fraud

  • Claiming an injury that did not occur or exaggerating symptoms.
  • Filing a claim for a non-work injury or illness.
  • Claiming ongoing symptoms after successful treatment.
  • Working while receiving benefits but not reporting that income.
Employer Fraud

  • Failing to purchase adequate Workers’ Compensation coverage.
  • Misclassifying employees or underreporting payroll to cut insurance premium costs.
  • Deducting insurance premium payments from employee wages.
Health Care or Medical Provider Fraud

  • Ordering unnecessary testing or treatment for financial gain.
  • Billing for treatment or services that never occurred.
  • Billing the employee’s Workers’ Compensation and health insurer for the same service.
How to Avoid Workers’ Compensation Fraud

A business or medical provider that commits Workers’ Compensation fraud could owe fines and related costs that lead to bankruptcy, or the fraudulent employee could be fired. It’s in everyone’s best interests to avoid fraud in several ways.

Always tell the truth.

From reporting an injury or illness to completing the final treatment paperwork, everyone in the Workers’ Compensation process should prioritize honesty. Never try to cheat the system in exchange for extra money.

Verify Workers’ Compensation insurance coverage.

Employers should ensure they purchase adequate Workers’ Compensation insurance for their employees. Employees should also verify Workers’ Compensation coverage before they accept a job.

File and follow through on legitimate claims.

Employees who do suffer a work-related illness or injury should file a Workers’ Compensation claim, participate in the necessary treatment and model how benefits are supposed to work.

Hire an independent auditor.

Hold everyone accountable during the Workers’ Compensation claims process. Ideally, the auditor should be independent and unbiased while evaluating the company’s insurance coverage, claim legitimacy and treatment.

Use reputable medical and health care providers.

Every employer maintains a list of Workers’ Compensation medical and health care providers that injured or ill employees must see. Be aware at all times of fishy tactics, including unnecessary tests or extra claims.

Report Workers’ Compensation fraud.

Reach the Workers’ Compensation Fraud Division at 1-800-201-3362.

Workers’ Compensation fraud is your concern, whether you’re an employee, employer, or medical or health care provider. Do your part to avoid fraud and protect yourself, your job and your future.
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