With the economy still on the mend, the National Insurance Crime Bureau estimates worker’s compensation claimant fraud to be the fastest growing insurance scam of the decade. Fraudulent claims have spiked nationwide and continue to gain momentum even with state agencies attempting to crack down on the defrauders. It’s not always a popular topic, but hiring a private investigative service could save insurance companies millions and help to prevent fraudulent claims overall.
Worker’s compensation fraud in its most basic form is fraud that occurs when someone makes a false statement or conceals information in order to receive worker’s compensation benefits or prevents someone from receiving benefits to which they might be entitled. Currently, over forty states have active fraud units.
Recent statistics show that worker’s compensation fraud is on the rise with the economic downturn. In the past, traditionally, less than 1 out of 100, or less than 1 percent of fraud cases were sent to a prosecutor. Over the past decade, fraud charges have gained public attention and garnered outrage. It evokes passion from both the employer and the employee camp.
According to a report by The National Council on Compensation Insurance (NCCI), a U.S. insurance rating and data collection bureau specializing in workers’ compensation claims, claims increased 3 percent in 2010. This represents the first increase since 1997 and only the third time that frequency increased in the last 20 years. Prior to the 2010 uptick, claims had fallen by 56.4 percent from 1990 through 2009, an average decrease of 4.3 percent per year.
These statistics are not to say that every person who files a worker’s compensation case needs to be subject to strict scrutiny in all facets of the claim. The overwhelming majorities of those who file worker’s compensation claims are honest and they file completely legitimate claims. Unfortunately, there are plenty of people committing fraud because they feel entitled to the benefits.
Many insurance companies are dolling out millions in workman comp claims to individuals who believe they can work the system. From making claims up to a certain threshold of monetary rewards to outright lies about their ability to work, these claims add up quickly and could easily be disproved. Insurance companies could save millions yearly in fraudulent claims if they hired a private investigator firm. For a reasonable cost, investigators could collect data and do a comprehensive report with experts in federal, state, and local courts, and properly identify defrauders.
It could easily be considered just part of the cost of business by employing investigators to collect photographic proof of defrauders. Not only would it help with protecting insurance companies bottom lines, it would start to send the message to district attorneys to collect evidence for the purpose of prosecution.
It has become a systemic problem within the insurance industry to look the other way when it comes to worker’s comp fraud. All I’m suggesting is that these companies spend a few hundred to certify that all these claims are justified.
Do you have any questions about how a private investigative team can provide solutions and protect your company from worker’s compensation fraud? Please let me know and I would be pleased to discuss your concerns.