management prevent fraud and malingering

8/14/2019 Management Prevent Fraud and Malingering

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PREVENT FRAUD AND MALINGERING

R-E-S-P-E-C-T May Help Prevent Fraud and Malingering

Just a little bit of respect motivates workers to get back to work.

Perhaps the best strategy for preventing malingering is also the simplest: treat your

employees with respect. According to Kirk Hansen, a workers compensation specialist

with the Alliance of American Insurers, an attitude of respect towards employees may domore to prevent malingering than a phalanx of fraud investigators.

One of the biggest errors employers make, Hansen stated, is to assume that employees

are dishonest. That can become a self-fulfilling prophecy when someone is treated as amalingerer from the outset. That may create an employee with a bad attitude.

For that reason, he cautioned employers against harassing employees who file workers

comp claims. While employers need to be vigilant to spot fraud and malingering, there isa difference between a vigilant attitude and an antagonistic or confrontational attitude.

The difference of course is but is only the foundation. As Hansen pointed out, the

employer must adopt specific policies in its workers compensation program to

effectively discourage fraud and malingering. What follows is an outline of some of thepolicies he recommended.

1. Screen employees before hiring. The employer should know as much as it can

before hiring, Hansen stated. This policy should include checking references andverifying the information on employment applications.

2. Standardize accident reporting. Employers should establish a standard accidentreporting procedure. All employees should sign a form acknowledging their obligation to

report any injuries immediately and informing employees of whom to notify in case of an

accident.

3. Investigate all accidents. Should the employer conduct a separate investigation, apart

from its insurer? Absolutely, said Hansen. Insurance companies do the best job they can

with the resources they have, he stated. But no insurance company would notappreciate or benefit from an investigation by the insured. He noted that the employer

has unique opportunities that the insurer lacks-such as the potential to be at the accident

scene within minutes after an incident.

The employer should also designate a person in advance to be responsible for

investigations. Hansen noted that the decision depends on the particular employer. If anHR person has expertise in this area, then the employer might want that person to conduct

the investigations. Whoever is chosen, the responsibilities should be set out in the

persons job description, and proper training should be provided.


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As a practical matter, Hansen advised that the internal investigator take photos of the

accident scene and diagram how the accident was caused. With fraud, the workers

version of the accident tends to evolve, he noted. For that reason, it is also important tohave the employee sign an accident report form that lays out the facts in detail, and the

form should be prepared and signed as soon as possible after the accident. The employer

could record the statement (notifying the employee in advance, of course), but it isimportant to also put any statement in writing. Hansen cautioned against letting the

employee tell the story in narrative form (Theyll say very little); it is preferable to ask

a series of specific questions aimed at yes or no answers.

4. Direct the worker to a good physician. In many states, employers have the right to

select the initial physician, but they fail to exercise that right. Hansen urged employers to

direct the employee to a good physician who understands the goal of return to work.

Even if the employer doesnt have that prerogative, the employer should still offer to help

the employee choose a physician. This gesture not only shows that the employer is

concerned about the employees welfare, but also ensures that the employee sees a doctorwho understands the return-to-work process. Hansen also recommended driving the

employee to the physician after the accident. Employees want to be taken care of, hestated. Take the opportunity to send them to a good physician.

5. Have workers pick up benefits checks. Many employers fail to take advantage of a

golden opportunity: electing to have the insurer send the benefits checks to the employerfor re-distribution to the worker. Why would an employer want to do that?... to limit

opportunities to malinger or commit fraud.

As Hansen explained, when workers are obligated to come in to the workplace to pick up

their checks, the employer accomplishes two important objectives: It prevents employees

from becoming alienated from the workplace and limits opportunities to work secondjobs during their disability.

If the employee makes excuses and wont come to the office, the employer shouldconsider that a red flag for fraud. Also, when the employee does come in, the employer

should pay attention to detail. Does the worker have grease on his hands? Is he having

trouble walking? Maybe he is limping while inside the office, but walking normally on

the way back to his car.

6. Conduct surveillance when appropriate. In most instances, the insurance company

would handle any investigation. But if the employer were self-insured, it should payparticular attention to the red flags. If two or three red flags are raised by the claimants

behavior, then the self-insured employer should consider surveillance.

Hansen noted that employers should be aggressive in this area, even if 9 out of 10

attempts at surveillance fail. The tenth try makes it worth it, he remarked.

7. Get the word out on fraud. Hansen stated that people tend to tolerate workers


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compensation fraud more than other types of criminal behavior because they often fail to

recognize who pays for the fraud. Many people see it as a victimless crime, assuming that

the insurance company absorbs the cost of the fraud. The fact is, the insurance companydoesnt absorb the cost; it passes it right back to the employer through higher premiums,

and the employer passes it back to the consumer through higher prices.

The word is getting out, Hansen stated. Insurers have made progress in educating the

public that fraud doesnt just hurt insurers, but everyone. When that word gets out, then

neighbors and other individuals wont look the other way. They know that that person ischeating society as a whole.

While all of the above strategies should help minimize the incidence of fraud and

malingering, the most important is the element of respect. Ninety-nine percent ofemployees are honest, Hansen emphasized. They are not submitting a fraudulent claim.

Most want to get back to the workplace.

management prevent fraud and malingering

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