Keeping Even With The Comp Fraudsters

So, you think Joe the Glazier's workers comp claim in fraudulent. What do you do?

1. Say the heck with it, you can't be bothered, and anyway it is the insurance company that pays
2. You've complained before, and nothing happens, and you say the heck with it
3. You want to fight back, but you don't know what to do
4. You call your favorite consultant, Mr. Jack Daniels, and discuss your options

Let's work on number 3, unless you just want to keep paying and paying.

Joe the Glazier had an accident. Insist that any accident in your company be reported to you immediately, and that a preliminary written report be given within one hour. I know one major national glass company that requires all accidents, from anywhere in the country, be reported to the CEO. Get everyone in your company on the program that all accidents must be reported immediately and paperwork filled out. You can really key in on the accidents where the employee files a late report...usually as some sort of retribution for an actual or perceived slight. You can quiz Joe why he didn't tell his supervisor at the accident time. One company I know fires any employee who doesn't report an accident promptly. They feel that a late claim is fraudulent, and they don't want the employee around. You will get more notices of "I strained my shoulder" and "I twisted my ankle". That's OK. Write down what happened, that there is no need for medical attention, and go on about your day. The moral of this story...have an accident reporting policy in place and strongly enforce it. Also, have a witness program in place, where any one in the vicinity of the accident writes a short report. This will also place a crimp in fraud.

Most fraud begins only after a small, insignificant accident, but then Joe sits home and watches the commercials for 1-800 call a lawyer. Be sure to get Joe back to work, part-time, light duty, or whatever. Let him file papers, and then dump them out, and file them again. Keep Joe working, and you will reduce your follow-up fraud.

If you suspect fraud, call your insurance carrier's fraud department. Private carriers are the most responsive and state funds are the least responsive. Safety groups are in the middle. First step, contact your agent or company representative to see who to talk with in the fraud division. When you get through, you need more than just a hunch to get them mobilized. After all, just about every employer thinks that just about every comp case has some element of malingering about it. The carrier may ask you to fill out a form. Have them fax or e-mail to you, fill out promptly and return promptly. If they see you dragging your feet, so will they. Show them this is important to you. You should have specific information, such as a report that Joe was seen working at another company or that he was doing heavy work around his home. Give them the time and place that Joe was working.

If Joe milks his claim, staying home for a couple of extra weeks, that is fraud. There is no way you are going to prove this. There is no way your carrier will investigate this. If you complain about Joe for this, you are waisting your time and the carrier's time. When you get a real fraud case, they will not be as attentive because of the 'chicken little' (the sky is falling) concept.

Only discuss Joe's case, or your feelings about fraud, with your personnel department, or with senior management. If you are a smaller company, keep this to yourself and the insurance carrier. But, you can listen. In fact, this is the best way to gain information. Listen to your other employees--don't comment and don't ask leading questions. Most fraudsters like to brag about how they are putting one over on the company. You will hear this from your loyal employees.

After you hear a rumor about Joe's fraud, don't have a company meeting and say you've heard there is fraud going on, and that you will prosecute. You are setting yourself up for a libel situation. Twice a year, you should be having a company meeting about many topics. Include safety. Strongly mention here that fraud will not be tolerated, will be investigated, and if found, the results will be given to authorities. You can't threaten your staff with a police investigation, only the police or district attorney can do that, but you can place a serious tone on your feelings relating to workers comp fraud.

If your carrier does agree to further investigate your claim, and in my experience they investigate a very few, don't brag about this yourself. You should tell no one in your company, unless absolutely necessary. If the investigation is successful, talk all you want. If it isn't, and most are not, you don't want your company to know that you thought someone committed fraud and you couldn't do anything about it. Some people think you should tell your company when pursuing an investigation, that it shows everyone you are serious about fraud. I feel that if you are not sure you will succeed, don't broadcast what may not be successful. To me, this only emboldens others to be fraudulent.

Here is how the insurance companies think. A fraud investigation costs about $1,000 per day, and usually takes 3-5 days. They need to be pushed to spend that amount of money to save $400 a week in worker's comp costs. If Joe is putting in for a lot of medical visits, then they will be interested.

Next week we will discuss how to hire and work with your own investigator for workers comp fraud.

The Midwest Glass Show is next week in Chicago. I hope that anyone nearby creates some time to attend. There are great seminars, exhibitors who want to teach you about their products and you will have the chance to meet other glaziers from around the country. I'll see you there and personally autograph copies of my latest blog. (Do you think we will need extra security to keep our loyal readers in line while they wait for the autograph?)

Fraud and Workers Comp Costs

A recent survey found that 35% of workers comp claims have some element of fraud involved...from the simple taking of a few extra weeks, to the extreme of false medical bills running into hundreds of thousands of dollars. When this fraud occurs, you pay. Your employment modification rate is impacted, and you pay more for your insurance. Here are some steps to help you in this problem.

First, as we have said before, prevent the accident. Safety pays in so many ways in your shop, most of which you can not quantify in advance. I promise you, that a safety program is less expensive than a worker's comp program, and returns better dividends to you.

Joe comes to you and says he hurt his back. It is Monday morning around 8:30 am. He was lifting a lite of glass and felt a pop. Sure. Odds are he is redoing his basement or working a weekend job, and that is where the pain occurred. He waited to get to work so he can claim it. How do you prevent?

On Monday morning make a standard practice of being in the shop as the crew comes in. If someone is limping, is walking slowly or looks out of sorts, ask questions. See how they move and before they go to work, make a decision if that worker is fit to work. Not easy, I know, but this is the second leading cause of fraud...the accident that occurred at home...or at the part-time job. How to prevent? This is going to sound corny...but it works...have each foreperson lead five minutes of stretching before each shift. This will not only help people to prevent injuries, but will spot the worker who you should be asking questions of.

Here are some of the many flags to look for to help you think about fraud on Joe the glazier.

• Joe has a history of subjective injuries, like sprains or muscle pulls
• Joe reports the accident on Monday morning, just after arriving
• Joe gives only a vague description of the accident's cause
• Joe was recently passed over for a job promotion
• Joe is up for early or regular retirement, and wants to get started early
• Joe changes his address to a PO Box or sends his mail to a relative's address after the accident
• Joe moves out of state after the accident, so he cannot accept light duty or part-time work
• Joe's accident happens just after he was reprimanded for something at work
• There were no witnesses to the accident
• Joe's injury cannot be seen medically, like a claim for stress or emotional trauma
• Joe's accident is only reported after a run-in with his supervisor
• Your first notice of the accident is from an attorney or medical provider
• Medical providers have two very different opinions of the injury
• Joe is claiming a longer recovery period than is normal to the type of injury reported
• Joe has his accident during the lunch hour
• Joe changes his doctor two or three times to get an opinion that fits his needs, or to extend the case
• Joe skips a couple of his doctor's appointments
• Joe's attorney says he/she is in charge of the case and not to speak to Joe
• You know that this attorney is known for worker's comp fraud cases
• You know that Joe's medical provider is known for milking comp cases
• You receive an attorney's letter within 24 hours of the accident
• You receive a tip from other employees that Joe is working at another job
• Joe's injury comes at a time when he is working on his house, and needs time to finish his at-home projects
• You are about to announce a lay-off, and Joe's claim starts a day before
• Joe is never available for a phone call, especially during work hours
• Joe has a grudge against the company
• Joe comes into your office and has grease under his fingernails, or is wearing work clothes
• The bills for Joe's medical services and prescriptions are huge
• Joe visits his doctor two or three times per week, with your insurance paying the bill
• Joe doesn't get better after a couple of weeks of intense treatments
• Joe travels a long distance to his medical appointments

What is the most reliable flag here? To me, it is the tip from other workers. In most companies, most workers care about their jobs and their company. When they see someone, who may be a friend, attempt to defraud their company, someone will let you know. And you will see that all the Joes trying to collect like to brag and show off a little. They may come by the company on a Friday afternoon, and buy a six pack for their working buddies. One of those buddies, will realize they will be better off if Joe does not drain the company.

Another point, most fraud cases come from employees with under two years of work history with you. Another good reason to retain employees and reduce turnover.

There sure are a lot of flags here...can there be an honest claim? In fact, most claims are honest, and Joe may be out of work for a very short time. The fraud cases, though, are the big bucks. One or two heavy fraud cases in a year will make your workers comp insurance rates go through the sky.

We'll discuss more about these flags and what you can do when you feel there is fraud in next week's blog.

Controlling Worker's Comp Costs

The best way to control worker's comp costs is to prevent accidents. Safety pays dividends in every aspect of a glass business. But, the alleged accident has just occurred, or has just been reported. What can we do from here to control the costs for Joe the Glazier.

Two broad areas need to be addressed:

1. Reducing the costs of a legitimate claim


2. Reducing and eliminating the fake claims

Joe dislocated his shoulder and was cut when a lite broke that he was carrying on his shoulder. Yes, he should have worn arm guards, but that's not for now. How do we control the costs?

Two things will help...reduce his medical bills, and get him back to work ASAP. Ask Joe for permission to review his medical bills relating to the accident. Without his written permission, you won't get anywhere. Assuming Joe gives you the permission, go over the bills with your worker's comp carrier. Have them explain what you do not understand. If there are bills for specialists that you don't understand, ask. Many times a dishonest medical group will send patients for referrals, when they know it is a comp claim. Look for unneeded items, like orthopedic inserts after this shoulder injury. Or maybe a eye exam that was requested. Look to see if Joe is making his appointments. A missed doctor's visit pushes Joe's return to work out another couple of weeks in most cases.

See if Joe is going to physical therapy two-to-three times per week. If he isn't, either he is ready to go to work or the injury wasn't as bad as first perceived. Are all of Joe's appointments in the evening? Is he working somewhere off the books during the day? Is Joe keeping in touch with you or his supervisor from your company? If you haven't heard from Joe for a couple of weeks, call him to say hello. He should be either at therapy, the doctor's, or home. See how long it takes to call you back when you leave a message. Did Joe take a mini-vacation for five days?

Look at the worker's comp payouts for his wages. Do they have the correct wages? Did Joe include his overtime or holiday bonus in his base earnings he reported to the insurance company. When you get a request to verify his wages, and are too busy to answer, then Joe's numbers will be used by the insurance carrier.

Joe is basically an honest person but sitting home watching day-time TV can turn anyone dishonest. Every third ad is for a worker's comp attorney. So, one day Joe gets interested and suddenly he sees all new doctors, and his scheduled return to work has been extended by three months.

Enough already...Joe's accident was unavoidable, and he will return to work as soon as he can...you say. Congratulations, you are now entered into the naive-business-leader-of-the-year-contest. Every accident is avoidable. The question is do you want to spend the training time, invest in the correct equipment, and discipline yourself and your team to work safely?

Every worker says they want to get right back to work, but studies have shown that a worker out longer than three weeks, has a much lower return to work rate. Get Joe back to work, away from the TV and the doctors, and you come out ahead.

Set-up a light duty work program for all employees. It may not be their same old job, but you should have work available for all comp cases. Maybe sweeping the floor, or filing in the office. This is the number one way to get employees back to full-time productive work. Pay Joe his normal wage, even if he were a glazier, pay that wage as he sweeps the floor. Get him back involved in your company, and he will want to go back to his regular job!

Create a menu of every job that can be done by someone on light duty. Every company can come up with dozens of items:

• Taking your trucks to the fleet wash


• Doing inventory


• Sweeping the plant


• Painting


• Teaching other employees


• Learn how to use your computers


• Learn another language


• Doing simple work like putting logos on tempered glass or operating a spacer bender


• Audits of parts and supplies room


• Filing


• Following up on old quotes


• Answering the phone

You are paying Joe's salary while he is on comp, so you might as well get some work out of it. Even if it is only a half-day, that is good. Keep people in the habit of coming to work. Even someone can only work for twenty minutes, have them work twenty on, and twenty off. It is still better than paying them to stay home and watch the commercials from the ambulance chasers.

Other things to look out for:

• Joe changes his doctor's a couple of times. All this does is continue to delay a finding that he could come back to work.


• Joe goes for an Independent Medical Examination (IME) and gets a different report than by going to his own doctor. Or, Joe cancels more than one appointment with for the IME...this shows he doesn't want to be seen by the impartial doctor.


• Watch for a claim of disability that doesn't fit the injury. In Joe's case he has a bad shoulder, and puts in for disability on his shoulder and knee.


• Watch out for the time that Joe says he wants to come back to work, but suddenly you get a lawyer's letter asking for more info. Joe watched too much TV.


• You ask Joe to come into the office for a follow-up, and he is wearing work clothes, or has grease on his hands or fresh mud on his shoes, or if you can see his car or truck, and there is a tool box.

Next week we will discuss employee surveillance, working with your insurance carriers fraud unit, your own investigator and other warning signs of fraud.

A Vacation Week

Hello to the thousands who faithfully read this blog...you get a week off from reading, as I am taking a week off from writing. We will pick up next week with some thoughts on worker's comp fraud.