Workers’ compensation programs are one of the oldest types of insurance plans in the U.S. Workers’ compensation insurance provides critical medical and income support for workers who become injured on the job. More than 129 million workers are covered by state-based workers’ compensation programs in the U.S. Every state regulates their own program; there are no federal standards to guide workers’ compensation programs.
As a result, workers’ compensation programs have found themselves rife with problems. A major concern for employers is the lack of reliable criteria for pursuing suspected fraud. The lack of a clearly-defined strategy causes employers to waste money on investigations that go nowhere.
Wasteful fraud investigations can be costly for employers. Investigations often fail due to the lack of reliable criteria for when to hire investigators, how surveillance should be conducted, and whether a case merits prosecution. Employers need to focus on cases that truly merit the assignment of resources while avoiding wasting time and human resources in cases that do not warrant them.
There are several reasons fraud investigations fail, including:
In order to prevent wasteful fraud investigation, employers need to establish quantifiable metrics that can be applied to each case that indicates:
Employers that want to successfully address even single incidences of fraud need to develop a standard set of criteria that establishes which cases need to be investigated as well as what that investigation will entail in order the ensure the investment of the investigation is worth the expense.
For example, a company could decide to only investigate lost-time claims, which may reduce the number of cases they determine meet the criteria. Red flags can also be part of the standard criteria, such as:
Following a standard set of criteria for claimant fraud investigations will allow your company to direct more resources to fewer cases, resulting in better outcomes. According to DigiStream Investigations, a company that specializes in workers’ compensation investigations, surveillance conducted over five days is 20 percent more productive than claims conducted over two days – the most common timeframe being used for investigations. Combining other surveillance tactics, such as reviewing social media, before conducting surveillance, increases the efficacy of the investigation.
Establishing a standardized threshold for referring workers’ compensation cases for claimant fraud can make a big difference in the amount of money spent on investigations. Modern claims technology will also help employers make better selections about which cases are sent to investigators. In the end, everyone wins when resources are directed to the cases most likely to be successfully prosecuted because the rising cost of premiums are controlled.
Lanier Upshaw, Inc. helps businesses identify their risks and put the right coverages in place that will protect your employees and bottom line. Contact us here to learn more about our innovative programs that will help your business become more successful and profitable.