Leading the Fight on Fraud
The State Insurance Fund has been leading the fight on fraud with their arrest record nearing the 1,000 mark. State Insurance Fund’s special investigation unit, the Division of Confidential Investigations (DCI) is comprised of white collar crime investigators, most with over 20 years of law enforcement experience with top Law Enforcement Agencies. It is estimated that every dollar DCI uses to fight fraud returns $7 to $10 in savings through deterrence and restitution.
What is Workers' Compensation Fraud?
Claim fraud can be broken down into two categories:
1. Claimant fraud
2. Provider fraud
Claimant fraud occurs when a worker knowingly makes a false or misleading statement for the purpose of obtaining workers’ compensation benefits. The most common type of claimant fraud is when a worker exaggerates his condition in order to continue benefits relating to the work related accident they suffered.
Claim fraud can also occur when an employee files a claim for an accident that did not occur, injuries that do not exist or injuries that are not work related.
Types of Claimant Fraud to be aware of:
- Malingering – when an injured worker recovers from their injuries, however, continues to receive benefits.
- Receiving benefits while employed elsewhere – an employee who files a workers’ compensation claim and collects benefits while claiming they are unable to work and works another job without reporting income/work status.
- Non-work related injury – when an employee claims he/she was injured at work, however the injury occurred while not engaged in work activities.
- Non-injury claim – when an employee fakes an injury in order to collect workers’ compensation benefits. This often occurs after a layoff or plant closing announcement or rumor.
- Multiple claims – an employee who files multiple workers’ compensation claims for the same injury.
- Prescription drugs – when prescriptions are misused for illegally resale.
Provider fraud occurs when doctors, medical practices or medical laboratories charge excessive fees for medical services performed or charges for work never performed. Provider fraud can also occur if the provider convinces the employee to file a workers’ compensation claim in lieu of unemployment benefits claiming the individual can make more money. A less obvious form of provider fraud could be unnecessary tests or treatment, even if the injury is legitimate and some form of treatment is needed.
Types of Provider Fraud to be aware of:
- False billing – when a doctor, clinic or lab bills for services not performed.
- Kickbacks – a medical provider who pays or receives compensation for a patient referral.
- Self-referrals – a medical provider who inappropriately refers patients to clinic or laboratory in which the provider has a financial interest
- Upcoding – a provider who bills for a more expensive treatment or service than what was performed.
- Unbundling – a provider that performs a single service and bills it as a series of separate procedures.
- Over-utilization – a provider administers and bills for unnecessary medical services.
- Product switching – a provider or pharmacy that bills for one type of product but dispenses a cheaper version.