Worker’s Compensation Investigations: Resources for Investigators

This article provides an overview of worker’s compensation investigations. According to simplyinsurance.com, workers’ compensation claims pay about $62 billion annually, with about $31.8 billion in cash payments and $31.3 billion in medical benefits. However, some claims were fraudulent and required a worker’s compensation investigation. Workers’ compensation fraud results in $34 billion in annual losses.

What is Worker’s Compensation?

Workers’ compensation programs protect employees who receive physical injuries during their work. Workers’ compensation benefits compensate workers for losses caused by work-related injuries or illnesses. If someone is injured on the job, they may not be able to work for some time and, therefore, can’t earn an income.

The worker’s compensation benefit seeks to provide the injured person with an income when they cannot work or can only work at a reduced rate or capacity. Workers’ compensation is generally a “no-fault” system in which the injured workers receive medical care and financial or monetary compensation benefits regardless of who is responsible for the job-related accident.

Additionally, the program provides death benefits to the survivors of a worker who died due to injuries on the job.

Worker’s Compensation Investigations: Investigating Fraudulent Claims

Fraudulent insurance claims cost the industry billions of dollars each year. To reduce the number of losses due to fraud, thoroughly investigate all claims. In some cases, they use in-house investigators who are a part of their existing staff. In others, they outsource the job to a local private investigator.

Workers’ compensation fraud occurs when someone intentionally misrepresents information or makes false statements to receive workers’ compensation benefits. The employee, the employer, or a healthcare provider can do this.

Types of workers’ compensation fraud

There are many different types of workers’ compensation fraud, but some of the most common include:

• Exaggerating or faking an injury is the most common type of workers’ compensation fraud. Employees may claim that they were injured on the job when they were not, or they may exaggerate the extent of their injury.
• Claiming an injury that is not work-related: An employee may try to claim that their job caused an injury they sustained outside of work.
• Working while receiving temporary disability benefits: An employee receiving temporary disability benefits is not supposed to work. However, some employees may try to collect benefits while still working for their employer or someone else.
• Misclassifying employees: An employer may misclassify their employees to avoid paying workers’ compensation insurance premiums. For example, an employer may classify an employee as an independent contractor when they are an employee.
• Billing for services that were not performed: A healthcare provider may bill for services that they did not perform, or they may bill for services that were not necessary.

The impact of workers’ compensation fraud

Workers’ compensation fraud is a serious problem that significantly impacts the economy. Workers’ compensation fraud is estimated to cost the U.S. economy billions yearly. This cost is passed on to employers, employees, and taxpayers.

How to prevent workers’ compensation fraud

Several things can be done to prevent workers’ compensation fraud. These include:

• Educating employees about workers’ compensation fraud: Employees should know the signs and how to report them.
• Implementing strong internal controls: Employers should have strong internal controls to prevent fraud. This includes having a clear policy on workers’ compensation fraud and a process for reporting suspected fraud.
• Working with insurance companies: Employers should work with their insurance companies to identify and prevent fraud.
• Enforcing the law: Law enforcement agencies should investigate and prosecute workers’ compensation fraud cases.

Surveillance

Private investigators may be hired to obtain proof of fraudulent worker’s compensation claims by surveilling the individual. In this capacity, private investigators may be called worker’s compensation investigators. Types of information collected during surveillance can include videotaping and taking photographs of the subject’s actions and behavior.

The goal is usually to catch someone doing something inconsistent with their injury. Examples include capturing a picture of someone bowling when they supposedly sustained a back injury on the job. Or, catching someone running when they supposedly injured their ankle at work.

Subject and Witness Interviews

In addition to catching the person in the act, there are other methods that an investigator might use to determine if someone is filing a fraudulent claim. Interviews with the claimant may reveal that the injury occurred without any witnesses. While this alone doesn’t prove a false claim, it can be a puzzle piece. 

In addition, the interview may reveal additional information, such as when and where the accident or injury occurred. In some cases, investigators determine that the injury occurred while the individual was not at work. Learn more about how detectives interview witnesses.

Background Checks

Workers’ compensation investigators may run a background check related to the case. Such a check may reveal evidence of financial difficulty or a history of filing insurance claims. An investigator may speak to previous employers, insurance companies, and others as part of the search process. Learn more about background checks.

Hire a Private Investigator to Help With Your Case

To locate a private investigator in your area specializing in providing surveillance services for workers’ compensation investigation cases, please visit our Private Investigation Directory.

Worker’s Compensation Resources

Workers Compensation – Provides workers’ compensation news and information for employees, employers, insurers, and medical providers. Includes a worker’s compensation research center, locating an insurance provider, getting info on your state’s program, and finding professional help relating to workplace injuries and disabilities in the U.S.

For more information and to look up the state website and appointed officials, please visit the United States Department of Labor.

Surveillance Equipment

If you want to purchase the latest surveillance equipment to conduct worker’s compensation investigations, please see our Spy and Surveillance Equipment section. Various high-tech gear is available to help you watch the subject’s behavior and capture photos or videos of their actions.

Questions and Comments

If you have any questions about worker’s compensation investigations, please post a comment below.

Sources / References

• SimplyInsurance – How Many Workers Comp Claims Happen Per Year?
• Conroy Simberg – Insurance Fraud Costs the U.S. $30 Billion Annually.