The Ugly Truth About Fraud in Workers' Comp Claims

The statistics on fraud are difficult to pin down definitively, but the numbers are staggering regardless of which estimates you believe.

The insurance industry estimates a whopping 25% of all workers' comp claims filed involve some level of fraudulent activity. The most common form is malingering - where an employee extends their time off work even though their injury has healed sufficiently to return. While malingering defrauds the system, it often gets overlooked due to limited resources to investigate every case.

The claims that do get scrutinized are the more clear-cut cases of fraud - injuries that never occurred at the workplace or employees working a second job while collecting benefits from their primary job. These blatant fraud cases account for around 10% of filings.

But fraud isn't just committed by employees. One study shockingly found 42% of individuals exaggerated or were untruthful about cognitive symptoms like memory issues during disability evaluations. As physicians, we have to be diligent about validating self-reported symptoms through clinical tests. We can also potentially enable fraud by granting unnecessary leave from work or inappropriately attributing conditions as work-related for uninsured patients out of a misguided sense of social justice. 

Employers, too, can perpetrate fraud by wrongfully denying legitimate claims or misrepresenting workplace injury data to reduce their premiums. The unlucky truth is there are ample opportunities for fraud by all parties involved in a workers' comp claim.

Detecting and preventing fraud has to be a shared responsibility. Employers need robust reporting procedures. Insurers must have the resources to investigate suspicious claims. As physicians, we have a legal and ethical obligation to ensure our assessments and opinions are unbiased, evidence-based, and honor the foundational principle of non-maleficence. Only then can we protect the integrity of the workers' comp system.