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Red flags for fraudulent workers' compensation claims

California company owners are sometimes victims of employees who falsely claim compensation for work-related injuries or illnesses that are not work-related or never occurred, or injuries that are exaggerated. In an attempt to reduce such incidents, it may be beneficial for employers to educate their workers about the adverse effect that fraudulent workers' compensation claims can have on each individual. Suspicion of fraudulent claims may result in all other claims to be perceived as false.

A fraud investigator recently pointed out that fraudulent workers' compensation claims can be a severe strain on business operations and may lead to an increase in the cost of insurance. He stated that there are ways to prevent such claims by keeping a lookout for specific red flags. These tell-tale warning signs of potential fraud include:

  • Injuries that allegedly occurred at the start of a Monday morning shift or late Friday and reported on Monday. In fact, any claim that is not reported timely without feasible explanation may cause suspicion.
  • Injuries that occur immediately after or before a change in employment, such as at the completion of a project, job termination or a strike.
  • When there is reason to suspect the worker's doctor who may have been involved with suspicious claims previously, or the worker's claim history that may have included fraudulent claims. Some workers may refuse medical examination or treatment as confirmation of the extent of the work injury.
  • When injuries were not witnessed by anybody or the worker's accident description is inconsistent with the nature of the injuries.
  • An injured or disabled worker who is not reachable at home or where he or she is recuperating may be active elsewhere. Workers who have a record of relocating or changing jobs regularly may also raise some suspicion.

California employers may want to report suspected fraud to their insurance carrier. Those who have fallen victim to fraudulent workers' compensation claims may benefit from retaining the services of an experienced workers' compensation defense attorney. Such a professional will analyze the benefit claim for irregularities and evidence of fraud while working to protect the business owner's interests. Fraudulent employees can be held responsible for illegal actions and may be criminally charged.

Source: bizjournals.com, "How to protect your business from workers' compensation fraud", Ranney Pageler, Dec. 26, 2014

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