Workers Compensation

1
Workers Compensation

• Fraud

2
What is Workers Compensation?

• Workers compensation is the exclusive remedy
  for injured workers.
• This means that in exchanged for the
  protection that workers compensation coverage
  offered, employees surrender their right to sue
  employers for damages arising from a work place
  injury.

3

• When is it Fraud ?
• Workers Compensation fraud occurs when there is a
  knowing misrepresentation with the intent to
  obtain benefits that are not deserved.

4

• Workers Compensation Facts
• The rising cost of insurance is a national
  concern.
• Historically claims increased during tough
  economical times.
• Fraud is one of the driving factors for increased
  insurance premium rates.
• (10 premiums to cost attributed to fraud)
• Difficult to access, estimated that 25 of all
  Worker compensation claim involve some element of
  fraud.
• Number of contested claims has more than tripled
  , 4000 cases since 1988 to 12,000 in 1994
• Total number work related incidents exceeds 84000
  cases in 1994.
• Estimated total annual fraud loses for KY are at
  60 million to in 1994.

5

• Attorney Fees
• For the first 25,000 of the award can charge
  up to 20
• For the next 10,000 of the award can charge
  up to 15
• and 5 for the remainder of the award not
  to exceed 12,000
• 25,000 _at_ 20 5000
• 10,000 _at_ 15 1500
• 10,000 _at_ 5 500
• 45,000 7000

6
Ombudsman Program Was Formed To Help The Public
Understand the Worker Compensation System

• 1. Serves as a neutral and reliable
  information source for employees, employers,
• medical providers and other programs
  participants
• 2. Respond to inquiries and complaints about
  the system and participants in the program
• Advise all parties of their rights
  Mediate disputes
•  
• Workers Compensation Specialist
• 1. As a low cost means to resolve disputes
  Expedite delivery of service to injured workers.
• 2. In addition Specialist Assist workers
  obtaining medical reports and other documents
  necessary for a claim benefits and assist in
  completing claims forms.
• 3. Facilitate evaluation of injured workers to
  ascertain the feasibility of vocational
  rehabilitation.

7
Types of Fraud

• Claimant
• Employer
• Attorney
• Premium
• Medical provider
• Insurance provider

8
AIK Insurance Adjuster 14 year service

• Has turned in 5 fraud claims with overwhelming
  evidence Video, witness statements and doctor
  record .
• (Results Dismissed
  not enough evidence)

9
AIG Insurance Adjuster 10 year service

• 1 fraud claim with overwhelming evidence
  
• 
  (Results Paid back 1/2 money no further action)

10
Work Comp Attorney20 year service

• Fraud is hard to prove, pursue only to stop
  others.
• But remember frivolous claims are a result of
  your relationship with your employees.

11
Occupational Therapist Thera-care

• Seen some sort of fraud everyday
• Doctors/Therapist aligning with lawyers.
• Billing (Out of whack)
• Functional Capacity Examination
• (Functional Capacity Evaluation (FCE) is a
  systematic process of assessing an individual's
  physical capacities and functional abilities.)

12
(No Transcript)
13
Medical Expense

• Drugs are the fastest raising cost of worker comp
  medical expenses resulting in about 8 in 2002.
  The rising cost is mainly due to the greater use
  of prescription drugs doctors are prescribing
  more drugs. The best way to fight drug cost is to
  switch from name brands to generic equivalent
  types. The rising cost of drugs with clinic
  partnership and pharmacies lend itself toward
  fraud in small rural setting.
• Annual Prescription drug expenditures.
•  
• 1991...42 1996...
  78
• 1992...44 1997... 84
• 1993...50 1998...100
• 1994...59 1999...118
• 1995...62 2001...138

14
Mary Frickers Article Massive Fraud
Exposed

• Desperate workers may turn to violence and
  suicide because of delays of benefits combined
  with bodily injury.
• Money paid is unbelievably small.
• System overhauled claiming widespread fraud by
  injured workers. 300,000 claims (30)
  unsubstantiated, 5 years later legislature order
  investigation and suspicious claims were around
  only at 1.
• Employers and Insurers commit fraud by denying
  benefits yet focus is on investigation against
  workers California Dept. of Insurance
  reported out of 1505 claims in 1996
• (1222
  workers, 88 employers, 120 medical providers
  0 insurers)
• Every year for the past 7 years state audit finds
  insurers mismanaging 50 of the claims.
• In 1994 only 200 people in the state was rated
  100 disabled
• California State Disability insurance is being
  used as a bank for insurance companies only 1/3
  gets repaid.

15
Spotting Workers Compensation FraudSeveral flags
to watch for

• Note If two or more you should notify your
  work comp carrier.
• Injuries beginning on a Monday morning due to an
  employee getting hurt over the weekend.
• Hard to prove conditions such as Carpal
  tunnel syndrome, back problems and stress.
• No visible injury Injuries are subjective.
• Doctor hopping. Associates that may be changing
  doctors may be looking for a doctor to give them
  the restriction they want or drugs proscribe to
  them

16
(continued)

• Employee retaliation when someone who has been
  discipline and is seeking a way to get back at
  the company.
• Employee termination or plant closing.
• The associate has a prior workers comp history or
  multiple claims.
• No witnesses to the injury.
• Associates filing claims may refuse diagnostic
  testing or therapy.
• Avoiding substance abuse testing

17
(continued)

• Accident not reported timely
• New employees - more likely to have an accident.
• Not taking medication

18

• Taking Action
• Prevent Workers Comp Fraud
• Insist on experienced adjusters
• Know the attorney (Dont be surprised if a new
• attorney is assigned.
• Develop a game plan that is agreed on by the
  employer, claims company and lawyer.
• Employer must get involve early and be more
  proactive in fighting fraud.

19
(continued) Prevent Workers Comp Fraud

• Institute a fraud line
• Publicize zero tolerance for fraud.
• Make sure employees know that claims will be
  investigated.
• Initiate and investigation with in the first 24
  hours.
• Document jobs with picture and video taping.
• Have a rapid response for spotting a fraudulent
  claims.
• Train employees
• Require employees to keep you updated as to
  medical status and actions

20
What To Do If You Have A Accident/Claim(Initiate
and within the first 24 hours)

• Initiate investigation
• View location
• Preserve scene
• Photograph scene
• Immediate witness interviews and statements
• Obtain detailed accounts
• (Who, what, when, where and how
  incident happen)

21
Guidelines (Accident/Claim)

• What part is hurt? / Where does it hurt?
• What did injured worker tell you?
• Where did it happen?
• Who witness this?
• How was the worker injured?
• Have they been trained?
• Was safety rules followed?

22
Guidelines (Accident/Claim)

• Was employee doing the assign task?
• Had they done this before?
• How often is this performed?
• What is their past history
• What have you heard? (Gossip)

23
Functional Capacity Evaluation (FCE) is a
systematic process of assessing an individual's
physical capacities and functional abilities.

• The FCE is a significant tool that can be used to
  make objective and reliable assessments of the
  individual's condition.
• To determine the individual's ability to safely
  return to work full time or on modified duty
• To determine if work restrictions, job
  modifications, or reasonable accommodations are
  necessary to prevent further injury
• To determine the extent to which impairments
  exist, or the degree of physical disability for
  compensation purposes
• To predict the potential ability to perform work
  following acute rehabilitation or a work
  hardening/work- conditioning program

24
Associates in Rehab

• Physical capacity evaluation
• Ergos
• 1) Static Dynamic Strength Measurements
• 2) Whole body range of motion
• 3) Work endurance
• 4) Standing Work Tolerance
• 5) Seated Work Tolerance

Ergos Work unit
25

• Surveillance
• What are you getting?

26
What have we Learned?

• Initiate good sound safety procedures
• (Place most of your energy toward prevention
  before it happens)
• Get supervisor involved.
• Train staff how to properly report an accident.
• Listen to your people.
• Good documentation is essential for claim
  prevention and investigations. (supervisor
  report/near misses)

27

• The End