Accident Investigation and Fraud

Red Flags

Sometimes an employee gets through and is hired that has some negative motives. Free money is the biggest motive. Fraudulent workers often secretly take a second job or open a side business while falsely claiming they're too injured to work. They then receive lost wages from their workers comp policy -- and illegally earn extra money from their other job.

Time off is another draw to fraud. Dishonest workers collect insurance money and claim they're disabled while pursuing hobbies, sports or other personal activities, like hunting, gambling, sporting events or fixing up their home while supposedly injured.

Common Cases of Fraudulent Claims

  • Hurt Off the Job - Workers get injured off the job, but say they're hurt at work so their workers comp policy covers the medical bills. A person might hurt his back at home moving furniture. Or maybe sprains an ankle ice skating. Then he/she pretends the injury happened at work.
  • Fake Injuries - Some workers simply invent injuries. Soft-tissue injuries such as muscle problems with the back and neck are popular scams. They're hard to disprove, and thus are easier to get away with. See the news release issued by the Minnesota Commerce Department detailing a multi-million dollar scheme to defraud insurance companies through false claims.
  • Old Injury - Sometimes a worker with an old injury that never quite healed will claim he just got hurt on the job. A damaged knee or rotator cuff, for instance.
  • Malingering - Staying at home longer by pretending you're still disabled, even though you've healed enough to return to work. Once people are off for more than 30 days they are 90% less likely to ever return to that job.
  • Inflated Injuries - A worker has a fairly minor job injury - maybe a slight twinge in her lower back - but insists her back is seriously sprained. This lets the worker collect more workers comp money and stay off the job longer.

What Can Employers Do to Combat Workmans Comp Fraud?

According to the National Insurance Crime Bureau (NICB), a good workers compensation program starts with a "well-orchestrated safety management program" to prevent accidents from occurring in the first place. But once an accident occurs, a diligent post-injury management program, including return to work, plays a key role in successfully managing injured employees and the company's workers compensation loss experience. Providers also play a key role in this. Providers who specialize in work-related injuries also can better oversee and encourage the employee's recovery and return to work. Experts suggest that medical providers also make good partners in anti-fraud efforts by recognizing and raising "red flags" to employers, including identifying malingering.

Everyone in the company can take a proactive role in the fight against fraud by knowing the red flag indicators and reporting suspected fraud to management.

What Are Some of the Red Flags?

  • No Witnesses to the injury.
  • Accident occurs early Monday or Late Friday
  • No report - or late report - to the supervisor
  • Specifics of injury are vague
  • Recollection of injury details change
  • Poor employee - attendance/reviews/attitude
  • Newly hired employee
  • Injury happens around vacation/retirement/layoff
  • Prior reports of injury or illness.
  • Witnesses and injured worker's stories are different
  • Significant history of claims filed
  • Going through financial, emotional, physical issues
  • Does not want to use doctor referred by the company
  • Misses medical appointments.
  • Anonymous information comes forth
  • Claimant will not return to work
  • No communication from worker
  • Worker knows claim handling procedures or terminology
  • Worker retains attorney immediately - attorney reports injury
  • Family history of work comp claims

Insurance fraud is not a victimless crime. Read more about the 2017 conviction of a chiropractor and his patient recruiters on our blog.

Accident Investigation

Everyone wants their workplace to be free from hazards and injury, with the goal of getting everyone home safe to their families at the end of the work day. Investigating workplace injuries helps ensure safety by identifying and correcting the underlying cause, and preventing the injury from occurring again.

According to OSHA, investigating a worksite incident-injury, illness, fatality, or close call provides employers and workers the opportunity to identify hazards in their operations and shortcomings in their safety and health programs. Most importantly, it enables employers and workers to identify and implement the corrective actions necessary to prevent future incidents.

Accident investigations that focus on identifying and correcting root causes, not on finding fault or blame, also improve workplace morale and increase productivity, by demonstrating an employer's commitment to a safe and healthful workplace. Often conducted by a supervisor, to be most effective, these investigations should include managers and employees working together, since each bring different knowledge, understanding and perspectives to the investigation.

How to Conduct an Accident Investigation

  1. Get a brief description of how the injury occurred. The supervisor and/or the injured worker should carefully list the facts surrounding the occurrence.
  2. Immediately send the injured employee for medical treatment to one of the specified medical clinics. In cases of severe or life-threatening injuries, medical treatment is the first priority. In these cases, the supervisor should call 911 or take the injured employee to the hospital emergency room without delay.
  3. Get detailed facts of the injury. The supervisor and/or the injured worker should list all of the injured body parts. Failure to initially list an injured body part will cause doubts if injury is claimed at a later date. All gathered details will assist in determining the compensability of the claim. Do not look for fault: just the facts of what happened.
  4. Identify where it occurred. The supervisor and/or investigator should preserve the scene as needed. Take photos from all angles, both close up and far away. If objects or machinery were involved, take photos of serial numbers and defective areas. Investigate the accident site. The supervisor should personally visit the site of the injury and make note of any unsafe working conditions, need for repairs, and/or safety violations.
  5. Document the names, phone numbers, of any witnesses and their statements. Talk to co-workers about what happened, what they visually saw and what the employee was doing prior to and after the accident. Sometimes going back over the injured employee's entire day prior to the accident is helpful.
  6. Make sure documentation is saved, and reports are understandable and filled out completely.

Why is it so important to investigate the root cause? An investigator who believes that accidents are caused by unsafe conditions will likely try to uncover conditions as the cause. On the other hand, one who believes they are caused by unsafe acts will attempt to find human error as the cause. Therefore, it is necessary to examine the underlying factors in the chain of events that ends in an accident.

The important point is that even in the most seemingly straightforward accidents, seldom, if ever, is there only a single cause. For example, an investigation which concludes that an accident was due to worker carelessness, and goes no further, fails to seek answers to several important questions such as:

  • Was the worker distracted? If yes, why was the worker distracted?
  • Was a safe work procedure being followed? If not, why not?
  • Were safety devices in order? If not, why not?
  • Was the worker trained? If not, why not?

We do this in-depth investigation to help alleviate future conditions and processes that may lead to a more serious type injury.