Last Updated on: 18th October 2023, 09:02 am

Workers Compensation Fraud

Workers compensation fraud is when someone tries to get workers comp benefits they shouldn’t get. This article will explain what workers comp is, the different types of fraud, how people commit it, and what happens if you get caught.

What is Workers Compensation?

Workers compensation, or workers comp, is a type of insurance that covers medical expenses and lost wages if you get hurt on the job or sick from work. It’s required in most states. Your employer pays the premiums. When you file a workers comp claim, the insurance company pays your medical bills and some of your salary while you recover .

The idea is to help people who get hurt at work without them having to sue their employer. Workers comp is the “exclusive remedy” meaning you can’t also sue your employer for damages. The tradeoff is you get your medical costs covered and some income while you’re out of work .

Types of Workers Comp Fraud

There are a few common types of workers comp fraud:

• Fake injuries – Claiming you got hurt on the job when you didn’t.
• Exaggerating injuries – Making your injury seem worse than it really is.
• Old injuries – Claiming an old injury happened at work.
• Malingering – Taking way longer to recover than needed.
• Working while collecting – Working another job while collecting workers comp.

Let’s go over these in more detail:

Fake Injuries

This is when someone claims they got hurt on the job, but they didn’t really. Like pretending to slip and fall at work and file a workers comp claim. Or saying you got hurt lifting boxes, but you never lifted anything heavy.

Workers comp usually doesn’t require much proof of how the injury happened. So it can be tempting for people to fake accidents to get the benefits. Insurance companies watch for red flags like :

• No witnesses to the accident
• Changing descriptions of how it happened
• Prior similar claims
• Monday morning injuries – suspicious if happens first thing Monday morning

Exaggerating Injuries

Sometimes people have a real but minor injury at work. But they exaggerate how bad it is to try and get more workers comp benefits. For example, maybe they strained their back moving furniture. They could claim severe pain and inability to work, even though it’s just a pulled muscle.

Doctors watch for signs of exaggerated injuries like :

• Symptoms that don’t match expected recovery
• Refusing or avoiding treatments that could help
• Unusual pain behaviors during exams

Old Injuries

People might claim an old injury happened recently at work. Like if they had a bad knee from sports years ago. They could pretend to fall and hurt their knee at work to file a workers comp claim.

Signs of an old injury claimed as new :

• Pre-existing medical records about the same problem
• Treatments don’t match expected progress for new injury
• X-rays show degenerative changes from old injury

Malingering

Malingering means dragging out recovery time on purpose to keep getting workers comp benefits. Say someone has a sprained wrist from work. It should heal in a few weeks. But they pretend it’s not getting better so they can keep collecting payments.

Doctors notice signs of malingering like :

• Symptoms and problems inconsistent over time
• Lack of effort and non-cooperation during exams
• Refusing treatments expected to help

Working While Collecting

Most states require you to report any income you earn while collecting workers comp. Some people work another job while collecting benefits but don’t report it. That’s considered fraud.

Investigators look for :

• Cash income that’s not on tax returns
• Activities on social media that contradict claimed injuries
• Tips or complaints from coworkers

How People Commit Workers Comp Fraud

There are a few common ways people try to pull off workers comp fraud:

• Fake witnesses – Getting friends to back up the fake accident story.
• Fake doctors – Doctors who exaggerate injuries for profit.
• Lying – Not disclosing other injuries, income sources, etc.

Fake Witnesses

Having a witness helps prove a workplace accident happened. So people committing fraud might get friends or coworkers to lie and say they saw the accident.

Investigators look for :

• Witnesses who are related or close friends
• Statements that sound rehearsed or copied
• Witnesses who change their story

Fake Doctors

Some doctors defraud workers comp by exaggerating injuries for profit. They might diagnose fake conditions, perform unnecessary tests and procedures, or prolong treatment.

Signs of a fake doctor :

• Unusual diagnoses not supported by medical records
• Lots of expensive, unnecessary treatments
• Patients all have same vague symptoms

Lying

Lying is common in workers comp fraud. People may lie about:

• How the injury happened
• The severity of symptoms and limitations
• Other conditions and injuries they have
• Income from working another job

Investigators look for inconsistencies and evidence that contradicts claims.

What Happens If You Get Caught?

The penalties for workers comp fraud depend on the state. But all states take it seriously. Some potential consequences are :

• Felony charges – Workers comp fraud over a certain dollar amount is a felony.
• Fines – From hundreds to hundreds of thousands of dollars.
• Jail time – Up to 5 years in prison for felony fraud.
• Repayment – Having to pay back all the workers comp benefits received.
• Loss of benefits – Forfeiting your right to future workers comp for that injury.
• Job loss – Getting fired if you defrauded your employer.

Some key defenses to fight workers comp fraud charges are :

• You didn’t realize you were committing fraud.
• You made a mistake or misunderstood the rules.
• You have a medical condition that explains the inconsistent symptoms.
• The insurer’s investigation was biased or flawed.

But it’s very hard to beat fraud charges once you’re accused. It’s not worth the risk trying to cheat the system. Be honest upfront and focus on getting better.

The Bottom Line

Workers comp fraud hurts employers, insurers, taxpayers, and honest employees. Some people think of it as easy money. But it can ruin your career, finances, and reputation if you get caught. It’s better to prevent fraud by reporting suspicions and following the rules.

If you’re injured at work, be upfront with doctors, investigators, and your employer. Getting better should be your only focus. With honesty and patience, the system is designed to cover your medical treatment and lost wages so you can heal.