Every successful business has a combination of formal and informal procedures and processes that give it the ability to serve its customers efficiently and cost effectively. Without those procedures, businesses close their doors.
However, when it comes to Workers' Compensation fraud, too many businesses, particularly smaller ones, take a hands off approach and expect the insurance company to handle anything that falls in the Workers' Comp bucket, as if it's their problem. Unfortunately, this can turn out to be an extremely costly mistake.
If you want to keep your total Workers' Comp costs down, here are 7 practical suggestions to make it happen.
1. The cost of Workers' Comp fraud comes out of your pocket. The first step is to recognize who pays for Workers' Comp claims. If you think it's the insurance company, you're dreaming. It's the employer who foots the bills.
To set the record straight, Workers' Compensation isn't insurance. When you have a claim, the insurance company advances you the money to pay it. Then, your Experience Modification Factor
| Advertisement |
|---|
|
|
The story only gets worse if a claim is fraudulent. To cover all the expenses involved in any claim, including a fraudulent one, your Experience Mod goes up and your premiums go up accordingly for, once again, three years.
It's also worth pointing out that when the insurance company advances the money to pay your claims, you are charged interest on the "loan." The first step in dealing with Workers' Comp fraud in your company is to understand that you're the one who pays the piper.
2. Report injuries immediately to your insurance agent - and this should happen whenever there is any type of injury. Then let your agent contact the insurance company. Your agent is the one who cares about you as a customer and who should be managing the claim.
The primary goal is to make sure the injured worker receives the proper treatment, that the recovery protocols are followed to facilitate a speedy recovery so the injured worker is returned to health and the job as quickly as possible. When this process is followed, the possibility of fraud is less likely.
3. Train supervisors on how to handle injuries. A manager or immediate supervisor is the key contact when a worker is injured, since it the supervisor who has a relationship with the worker. Since the supervisor is the person who knows and understands the worker best, it's the supervisor who should accompany the worker to the medical facility. The supervisor's role also should involve contacting the worker during recuperation to express concern and communicate the message that the person is wanted back on the job as soon as possible.
This level of contact is critical to the recovery process since it sends the injured worker the clear message that the employer cares and they are wanted back on the job.
While the supervisor's role with the injured worker may seem obvious, it doesn't always happen and often an injured worker is left feeling alone and cut off from the employer. In such conditions, the employee worries and might begin to think that no one cares. When that happens, a long recovery might be the result - as well as a possible lawsuit.
4. Figure out if others are getting into your checkbook. There are leaks in any system, particularly those that are highly complicated and involve literally billions of dollars a year. These are the perfect conditions for fraud, including Workers' Comp fraud. Although California has a fraud unit in every district attorney's office in the state, the task of detection is daunting. Employees, insurers, medical providers and employers have all found ways to defraud the Workers' Comp system, no matter how many safeguards are put into place.
Once it becomes clear that it's employers who pay virtually all the Workers' Comp bills and who have the most to lose from fraud, there are steps they can take to minimize or stop it.
