A Survey of Workers Compensation Abuse | USBlawg

While worker?s compensation is a necessary system to protect employees, there is a small percentage of employees who choose to abuse the system because of the way the system is set up.? Worker?s compensation insurance is a no-fault system that does not require the injured claimant to prove an injury was the fault of a third-party to receive compensation if they are injured on-the-job.? Because the system allows injured workers to receive both compensation for medical expenses and for a portion of their lost wages, many criminal minded individuals find it very enticing to get time off by falsifying stories or exaggerating minor injuries that have occurred at the workplace.? <a href=?http://www.dailyfinance.com/2011/07/21/the-real-cost-of-workers-comp-fraud/?>While studies by PBS? Frontline uncovered that only 1 to 2% of claims are fraudulent, this small percentage is affecting more than just insurance rates.</a>

The Number of Claims Being Filed is Going Down But Rates Are Increasing

As a business owner, you would assume that worker?s compensation rates would go down industries all across the board if the number of claims filed shrunk.? <a href=?http://www.dailyfinance.com/2011/07/21/the-real-cost-of-workers-comp-fraud/?>While the frequency of the claims filed between 1991 and 2008 has dropped by 55%, the rates for worker?s compensation insurance are higher than ever.</a>? Part of the reason why these costs have gone up is because of the increased cost of medical care and disability payments.? In addition to the rising cost of healthcare, fraud is a factor that will continue to drive rates up and cost both businesses and consumers money.

How Many Worker?s Compensation Claims Are Fraudulent?

Each state has a has a Worker?s Compensation Fraud Program that is dedicated to investigating both simple and complex cases.? This department investigates the claimants, white collar criminal doctors, and even lawyers who conspire with insurance companies or individuals to cheat the system.? The Fraud Program has investigated and convicted hundreds of individuals each year of worker?s compensation fraud.? <a href=?http://www.insurance.ca.gov/0300-fraud/0100-fraud-division-overview/0500-fraud-division-programs/workers-comp-fraud/index.cfm? title=?">In the state of California 797 arrests were reported in 2011 that resulted in 666 convictions.? While $8,484,998 was collected in restitution, the total chargeable fraud for these arrests was $248,118,899.? Considered the fact that this is only one state and only a small portion of fraud is actually identified, the total fraud in the nation is expected to exceed $3 billion.</a>

Insurance Companies Are Passing the Costs On to Businesses

Obviously, insurance companies are not going to just accept the fact that they are paying fraudulent claims.? The only way an insurance company can stay in business is to raise rates to offset the costs of fraudulent claims.? Rate increases do not only affect business owners.? <a href=?http://www.dailyfinance.com/2011/07/21/the-real-cost-of-workers-comp-fraud/?>In fact, Detective Paul Colbert, a worker?s compensation investigator, this fraud can cost the average consumer about $900 per year</a>.? The increased rates, increased healthcare costs, and reduced pay are all factors that are affecting more than just the business.? Worker?s compensation fraud is something that affects everyone and not just employers like some may think.

With the growing popularity of social media platforms like Facebook, fraud is much easier to catch for criminals who do not think they will be investigated.? Any employer who suspects that their employee has filed a fraudulent claim should report this information to their state?s Fraud Department as soon as possible.? The more that states can reduce the amount of fraudulent claims paid, the lower that insurance companies can make their rates.? Consumers may also see increases in pay and decreases in overall medical care costs.

Byline

This piece was contributed by Peyton Miller, a freelancer based in the great city of Oakland, CA; Peyton frequently writes on law, politics, finance and labor issues. Workers compensation issues are exceedingly important, as are Employee Discrimination issues; click to visit a firm with substantial experience in this latter area.

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Source: http://www.usblawg.com/employment-labor-law/a-survey-of-workers-compensation-abuse/

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