Workers' Compensation Rights
By far, the best way to avoid fraud is to treat employees well.
Educating employees about workers’ compensation rights and insuring that benefits are promptly paid are two ways to make sure this happens. Employees who do not like the way they are treated are far more likely to file fraudulent claims than those who are content. If the manager and the worker have a nice allegiance, and the worker knows and trusts the manager, and everybody knows everybody else in a cooperative environment, there's much less chance that an employee would even think about doing that kind of thing, maintains Michael Levin, a risk management consultant with Tillinghast.
Confronting employees (don't!)
As a manager or supervisor, you are more likely to be faced with the question of whether an employee's injuries are real. Rule number one is this: Never accuse a worker of faking an injury.
Why? First, hard-core fraud such as faking injuries is relatively uncommon. Second, if you have taken steps to explain workers’ compensation to your employees, worked with them to make the job safer, and paid benefits that are due, employees are highly unlikely to abuse that trust. Third, when a manager or supervisor accuses an employee of fraud, it almost guarantees that an attorney will be brought in and costs will rise.
Having an objective physician conduct a competent medical examination remains one of the best methods of uncovering a faked or exaggerated injury. An accusation of fraud, coupled with attorney involvement, only makes that objective medical exam more difficult to obtain. Good employee relations make for fewer workers’ compensation problems. So even if you are sure someone is exaggerating, refrain from making that up-front accusation.
Adopting a zero tolerance approach to fraud
One of the most effective ways for businesses to control workers’ compensation costs is to control the frequency of all insurance claims--legitimate and fraudulent. A zero tolerance for fraud and a well-orchestrated safety program should be the standard policy for all employers. Here a few guidelines:
- Screen employees before you hire them. Verify the information on job applications, and check their references. Candidates who lie on applications may be more likely to commit insurance fraud;
- Use a fraud prevention exit interview. Whenever possible, have terminated employees sign a form attesting that they have not been injured in your workplace. Thus, you reduce your exposure to future claims;
- Display fraud awareness and prevention posters in your workplace. Also display fraud reporting hotline numbers, such as the National Insurance Crime Bureau's hotline 800-TEL-NICB, which provides consumers with a means of reporting workers’ compensation and other forms of insurance fraud
Educating employees
Educating employees about what to do if they have a workers’ compensation claim may be the easiest way to avoid fraudulent claims down the road. Here are some ways to accomplish this:
- Make sure every worker has a current written statement of your policies on workers’ compensation and workplace safety. These policies should be updated at least once a year;
- Remind workers of your workers’ compensation, safety, and disability management policies on a regular basis through newsletters, bulletin boards, and meetings;
- Tell employees where to report injuries;
- Inform employees about the health care providers you would like them to see in the event they may have a claim. Tell employees whether you have chosen these providers because they are the best;
- Make sure employees know that ultimately the money for injuries comes from the employer. As these costs affect the bottom line, they inevitably impact the employer s ability to compete in the marketplace.
Insuring claims are properly paid
Employees who are confident that their claims are being expedited are far less likely to abuse the system than those who do not trust their employer. The simple truth is that good employee relations make for fewer workers’ compensation problems. Here are some guidelines:
- Accept the fact that there will be claims;
- Set and regularly update a return-to-work goal on every file;
- If you decide to pay, pay promptly;
- Review files for third-party subrogation;
- Have a system to check for second-injury fund reimbursement;
- Give supervisors a checklist or form outlining what to do and what information to report when an injury occurs. Investigate every case as if it would be litigated. Provide supervisors with a plan regarding visitation with the worker when he or she is off, tell them what to say and do when they visit the worker, and give them an opportunity to visit workers on company time.
Aggressively defending against fraudulent claims
If you suspect an employee has filed a fraudulent claim, you should be very aggressive in defending against it, advises Mr. Levin. Employers do not want other employees to find out an employee got away with filing a false claim or they may decide to follow suit. He recommends employers take this approach: We re going to take very, very good care of you, but we don't want you to defraud us or take advantage of us.
Establishing light-duty work
If employees are involved in light-duty work, even for part of the day, the employer is able to monitor their progress more closely than if they were sitting at home all day. Because the employer can directly observe injured employees, it will be more difficult for them to exaggerate symptoms. Also, making such work available is one way to help employees become productive members of the company again. In fact, perhaps the most important and effective thing an employer can do to reduce costs is to develop an aggressive return-to-work program.
In the past, many employers had a policy of not letting employees come back to work until they were fully recovered. For many employers, the paperwork and other costs involved with tailoring a job to a person with an injury were just not worth it. However, times have changed. With costs spiraling out of control, employees who can make any contribution to the company should not stay away from work on disability.
If just to improve an employee's mental state, light-duty work should always be offered. Even if an employee can only work part-time or half days at first, light-duty work will get injured employees out of the house and may convince them that returning to work is possible. It is important to note, also, that the Americans with Disabilities Act prohibits an employer from discriminating against a person with a disability, as defined by the Act, who is qualified for a desired job.
Reprinted with permission. © CCH