Workers' Compensation Module
Workers' Compensation fraud hurts state economies as it causes substantial increases in health care and insurance costs. The National Insurance Crime Bureau reports that billions of dollars are paid annually for false claims, and this translates into higher goods and services costs for everyone. With the Aware-Workers' Compensation module, you can start stabilizing costs and restoring the integrity of your state's Workers' Compensation system by detecting fraud.
Workers' Compensation fraud poses nationwide problem
The extent of Workers' Compensation fraud is hard to determine, but the U.S. Chamber of Commerce estimates that 10 percent of all Workers' Compensation claims involve some kind of fraud or benefit abuse. The State of Kentucky says that 25 percent of all its claims involve fraud, costing the state $60 million a year, while the Veterans Administration reports that 40 percent of all of their cases involve some kind of fraud. Though the figures may vary, Workers' Compensation fraud is a nationwide concern.
Workers' Compensation fraud is often much more complicated than unemployment insurance (UI) fraud, and can be perpetrated by a variety of parties. Fraud cases may involve claimants, employers, attorneys, insurance carriers and even healthcare providers. Many times, it is otherwise honest people who commit this serious crime and the nature of Workers' Compensation fraud makes it difficult to detect, especially when collusion is involved.
The California Department of Insurance estimates that 70 percent of all Workers' Compensation fraud cases involve claimant fraud, where a claimant files a false claim for an injury supposedly sustained in the workplace. The Workers' Compensation module focuses specifically on claimant fraud and features 12 "one-click" audits designed to recognize patterns in disparate data that could help uncover fraud.
The list of audits was developed with the help of a team of members from the Strategic Services on Unemployment & Workers' Compensation. The audits can call attention to suspicious data in reported claims, such as multiple claims from the same address or multiple accidents at the same time of year. They can also detect if social security contributions are paid or UI earnings and income tax wages are reported while on temporary or permanent total disability. While the module currently focuses on claimant fraud, future Workers' Compensation modules can target fraud committed by employers, doctors, lawyers, insurance carriers and healthcare providers.
Workers' Compensation fraud is prevalent in all states and on all levels. Organized fraud schemes often involve recruiting people to file false work injury claims. The claimants are sent to medical or legal referral centers, known as "claim mills," which then refer them to a doctor or lawyer who is part of the fraud scheme. With the Workers' Compensation audits, you can check for patterns that reveal repeated occurrences of the same doctor and lawyer working together on large volumes of claims.
Everyone pays for Workers' Compensation fraud
While Workers' Compensation fraud results in direct costs for benefits, attorney fees and medical care, it also has long-term effects in the form of production delays, retraining costs and equipment replacement. Also, because many insurance companies accept fraud as an inevitable expense of doing business, they pass the cost on to their customers in the form of higher insurance premiums. Some experts attribute as much as 10 percent of paid premiums to the cost of fraud.
When Workers' Compensation fraud is committed, everyone pays for the few who defraud the system. Aside from the economic hardships it produces in wasted tax and corporate dollars and more expensive goods and services, it also threatens the integrity of the system, causing unnecessary delays in treating legitimately injured workers. Once you start using the new Workers' Compensation module to detect, prosecute and prevent fraud, you can help stabilize costs and restore the integrity of your state's Workers' Compensation system.
View the list of 12 "one-click" audits for the Worker's Compensation module.