We all like to get one over on the system, it’s part of our revolutionary nature. What kind of Americans would we be if we don’t “fight the power,” as it were? Whether it’s citizen against government, student against teacher, or child against parent, we appreciate the rebellious spirit. But perhaps no power struggle is more fraught than employer against employee.
Plenty of us admire the spirit of the worker. We champion the ethics of a unified workforce (most of us anyway…). We like it when workers choose to organize and fight for what’s fair. We even like it when we get one over on the boss. Maybe a server orders themselves fries on the house. Big deal, right?
When it is a big deal, and when “sticking it to the man” goes too far, is when employees commit workers’ comp fraud. These schemes do more to hurt your fellow workers than it does to help anyone.
What Is Workers Comp Fraud?
Workers compensation fraud is the intentional act of exploiting the workers comp system for personal financial gain. Schemers achieve this by providing false information or withholding crucial information in order to receive benefits that are fraudulently obtained. In short, it’s cheating the system for selfish gain. This type of fraud can be committed by employees, employers, healthcare providers, or anyone involved in the workers comp process including family members.
One notable incident involved a Philadelphia woman defrauded two employers of about $170K for about two years. In addition to having to pay that back and serve at least five years in prison, she also probably had to pay for a Philadelphia workers’ comp attorney. This isn’t the only recent instance either. There is no shortage of people who feel that they can get away with committing fraud.
There are serious consequences for this kind of lazy, exploitative behavior beyond holding the fraudster accountable. They undermine trust and efficacy of the workers’ compensation system, allowing employers to unnecessarily treat very real workplace injuries with suspicion. They can increase insurance premiums that end up being passed onto businesses and consumers. They also divert resources away from people with real injuries who are counting on those benefits to maintain an income. When you commit workers’ comp fraud, you are harming injured workers further. It just makes everything so much harder for people in need of these benefits.
Types Of Workers’ Compensation Fraud
There are more than a few ways people might try to claim workers compensation. First is plain old Employee Fraud, where employees fake or exaggerate injuries. Think of someone cleaning a floor and deliberately slipping and falling on a wet spot. This type of fraud extends to malingering (pretending to be more injured than is true) or delaying recovery in order to extend benefits longer than needed. That could mean putting in super low effort in physical therapy or even failing to attend a recovery session.
Employers can also exploit the workers’ comp system. They can do this by underreporting payroll, which is reporting fewer employees or lower wages in order to lower premium costs. They can sometimes even work with specific payroll providers who calculate, rather than take out and pay, the taxes owed so that the employer can pay the taxes owed themselves, *wink wink*. Another way they can commit fraud by not purchasing workers’ compensation insurance as is required by law.
Healthcare providers are also capable of engaging in workers’ comp fraud for personal gain. One way is to bill for services not rendered, billing for more expensive services than were performed, or kickback schemes that involve accepting payments for referring patients to specific providers, facilities, or treatments for financial gain rather than the best interest of the patient. One such instance involved a New York-based doctor who lost his medical license after being indicted for first-degree conspiracy and money laundering. The doctor was allegedly submitting more than $4.4 million in fraudulent bills for service to insurance companies.
How To Prevent Workers’ Comp Fraud
In order to help prevent others from engaging in workers’ comp fraud, there are a couple things you can do. First and most obvious is a surveillance system. We, as a society, generally accept being surveilled in public or professional spaces (for better or for worse). Setting up a camera system in strategic locations can help capture fraudulent activities and work as a deterrent. Hard to commit fraud when you know you’re being watched.
Another method would be to perform regular audits and compliance checks to spot any inconsistencies or unusual billing practices. “Follow the money” works for a reason. Finally, you could set up employee training and whistleblower programs to cultivate an atmosphere of self-policing, encouraging a culture of honesty and integrity that can sometimes work as a deterrent against fraud.
Conclusion
The anarchists among us might cheer on the prospect of committing workers’ comp fraud. A “burn it all down” kind of vibe, you know? One can understand the passion for getting one over on the system while also acknowledging that it hurts far more than it helps.
When people commit fraud, they are knowingly or unknowingly making it significantly harder for injured employees to receive the benefits they actually need. These actions erode trust in a necessary social safety system that benefits everyone. They create needless suspicion by employers when an employee is injured on the job. They siphon necessary resources, lead to higher premiums, and further complicate what is supposed to be a safety net for injured workers who need to maintain an income.
If the broader social consequences aren’t enough to deter workers’ comp fraud, the legal ones should be. Hefty fines and imprisonment are no picnic and can even injure family or community members who are counting on the offender to maintain an income. Financial instability, prison time, and damaged reputation seems like it would be enough to deter fraud. But greed is a potent drug.
Workers compensation fraud like the classic slip-and-fall scheme, payroll underreporting, or kickback schemes exploit a system intended to help people when they cannot help themselves. It’s a mandated community effort that only helps us stay stronger. People will continue to take advantage of the system and it will weaken, if we allow it.
