According to James Bonk, regional vice president of G4S, a multinational security services company, people commit insurance fraud for a number of reasons:
- They perceive it to be a victimless crime perpetrated against a faceless insurance company.
- They hope to make up for the premiums they have paid in the past.
- They think many people inflate or falsify insurance claims.
- They believe they will not be caught.
- They see it as a quick and easy way to make money.
Speaking at a recent NationaLease meeting, Bonk explained there are four elements to insurance fraud:
- There is a lie or material misrepresentation.
- The fraud is intentionally or knowingly made.
- It is done to gain a benefit that is not due or deny a benefit that is due.
- The lie must be material.
Bonk was quick to point out that the majority of injured workers have legitimate claims and want to get well and return to work. Unfortunately, when it comes to injuries, there are some employees who are less motivated to return to work and will abuse the system in their effort to remain off work or to secure an unreasonably high settlement.
He shared some red flags to look for in medical insurance claims:
- Late reporting of an injury
- Early Monday injuries
- Cumulative trauma
- Reports of employee being very active outside of work or while receiving temporary total disability
- Injury reported immediately following disciplinary action
- Applicant is a new employee or has not received or has declined medical benefits
- Injury was reported immediately following time off or when time off was denied
- Applicant’s version of the accident is related differently in accident reports, statements, employer’s first report of the injury, and medical reports
- Applicant cannot be reached at home during work hours while on temporary total disability
- Reports or rumors of the claimant involved in activities inconsistent with stated physical limitations
- Claimant submitted documents that look altered or unprofessional
Bonk also shared some general liability red flags:
- Accident details from the claimant are vague, lacking details and specifics
- Accident occurs in an area where someone should not be
- Any anonymous phone calls or letters alleging possible fraud
- Any false statements willfully made with the intent to deceive
- Any law enforcement inquiry about the validity of any part of the claim
- Attorney and/or treating doctor located a great distance from claimant’s home or work
- Claimant is having serious financial difficulties
- Claimant says there are no witnesses to the accident even in an area where you typically would find people
- Claimant threatens to go to an attorney if the claim is not settled quickly
- Disability is not substantiated by objective medical findings
- Medical reports appear to be photocopied with name, employer, etc. typed in
- There is no incident report of an accident with injuries
While all this may seem overwhelming, there are ways to fight insurance fraud. Be on the lookout for the above-mentioned red flags and take appropriate action if you see any. Engage in open communication with the insured and the claims and investigative functions to share critical information. Investigate AOE (arising out of employment) and COE (course of employment) claims. Search databases, conduct hospital sweeps and background searches. Also, conduct social media investigations. If necessary, authorize surveillance.
Bonk suggested that in order to protect themselves from insurance fraud, businesses should:
- Provide a safe workplace
- Establish corporate anti-fraud policies
- Know its employees
- Educate employees on safety requirements and anti-fraud policies
- Respond to any injuries that occur on the job
- Work with your insurance company
Unfortunately, there are unscrupulous people who will try to commit insurance fraud. Be alert for red flags and investigate any claims that seem suspicious.