What Is Workers’ Compensation Fraud?

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When you think of workers’ comp fraud, you might think of an employee faking or exaggerating an injury or illness to get insurance money. In reality, workers, employers, and even health care providers can commit this type of fraudulent activity.

Workers’ comp fraud is defined as situations in which “someone willfully makes a false statement or conceals information in order to receive workers’ compensation benefits or prevents someone from receiving benefits to which they might be entitled.”

There are a few ways this plays out:

Claimant Fraud

According to the New York Inspector General, this type of fraud “occurs when an employee intentionally misrepresents or helps another misrepresent an injury for the purpose of obtaining workers’ compensation benefits to which they are not otherwise entitled.”

To understand this definition, let’s look at an example:

  • One notorious workers’ comp fraud story is that of a man who claimed to have injured himself at work so badly that he could not return to his job. While living off workers’ comp benefits, the man took three months off and was discovered to be giving skydiving lessons with no apparent signs of injury. He was promptly charged with fraud.

For people on worker’s compensation, it is often unclear what physical activity they may do while out of work / receiving benefits. You may do the things the doctor says you can do. The most common type of fraud is when a claimant tells his doctor he / she is unable to perform any type of physical activity, and is then taped going on outings or doing home maintenance. Be honest with your doctors when talking about the things you do and do not do.

Furthermore, it is very important when filing a claim for worker’s compensation that you disclose all prior claims and injuries. Insurance carriers maintain a national database of all claims and injuries and if you do not disclose your prior injuries when filing a claim they will find out. Immediately upon filing your case, you should discuss any past injuries when speaking with your legal representative to prevent issue down the road.

Employer Fraud

When an employer misrepresents facts about its employees to avoid paying a premium, knowingly denies compensation to an employee, or lies to an employee in order to discourage them from filing a claim, that employer is committing workers’ comp fraud.

Sometimes, employers misclassify their workers as independent contractors to avoid paying for workers’ comp insurance. Other times, businesses create shell companies to disguise workers and lower their premiums.

One instance of employer fraud involves a security company with multiple firms that hired over 2,000 workers. The business-owner created a fake holding company to incorporate all the firms and claimed that his overall “business” only had 35 employees. He was convicted of grand theft of labor and insurance fraud.

Healthcare Provider Fraud

When medical professionals involve themselves in insurance schemes, they are committing a white collar crime. Any provider in the workers’ compensation system can create false bills or invoices to misrepresent medical treatment for a claimant. Often, providers bill for services never performed, perform unnecessary services, or double bill different insurance companies.

In one case, a chiropractor referred patients with workers’ comp coverage to a spinal surgeon, regardless of whether they needed the surgeries. Money exchanged hands through fake contracts and insurers were billed for services never performed.

Each individual involved in the scheme faces a prison sentence and must pay back the millions of dollars they received during the 15-year conspiracy, dubbed by the FBI as “Operation Spinal Cap.”

What to Do About Fraud

If you suspect workers’ comp fraud, you can file a complaint with the Offices of the Inspector General. You can also express your complaint by phone at 1 (800) 367-4448.

When submitting your complaint, try to include as much information as possible. You will need to know the name of the business, the type of injury, as well as the date and location where the injury occurred.

If you believe you are being denied benefits or otherwise defrauded by your employer, you should not only file a complaint, but also hire a workers’ comp attorney.

At The Perecman Firm, P.L.L.C, we can help you get the workers’ comp benefits you deserve. We will fight for you like family while helping you and yours recover.

Call us at (212) 577-9325 or share your case with us during a free consultation.

For over 40 years, David H. Perecman has distinguished himself as one of the leading personal injury lawyers in New York City, championing all types of personal injury cases including construction accidents, premises accidents, automobile accidents, and medical malpractice, along with employment discrimination, false arrest, and civil rights cases.