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 INVESTIGATIONS

Details | Investigations

The Claims Investigator’s Ally                                by Neal Lyons

The key to any investigation of an insurance claim rests in the information given to the investigator. Whether it is your company's special investigative unit or a private investigations firm contracted by your third party administrator, they need thorough and explicit information to conduct surveillance on the claimant. Without this information, the investigator is operating in the dark.

With that in mind, the company's human resource department-with its vast collection of employee data-can be a major reason why an investigation of a workers compensation claim fails or succeeds. But does this mean that human resources department now doubles as investigators? Not quite.

Working with Investigators

Performing video surveillance for a potentially fraudulent workers comp claim requires visual confirmation of the claimant. Unfortunately for human resources professionals, the information that is useful to an investigator conducting surveillance is not always on a job application. Still, human resources should try to provide the private investigator as much of the information below as possible, including:

• Full name
• Address
• All telephone numbers
• Photograph of the subject
• Complete physical description (age, sex, race, height, weight, hair color, scars and tattoos)
• Social Security number
• Driver's license number and state of issuance
• Marital status
• Custodial children
• Current work status
• Professional licensing
• Right- or left-hand dominant
• History of prior surveillance
• Number of hours of surveillance authorized

Video surveillance usually takes place over two to three days in eight-hour shifts. So if you are not providing the investigator or third party administrator with the information needed to identify the claimant, the likelihood of a successful investigation drops considerably.

With a little extra effort, human resources can also attain other helpful information. One example is the name and address of the doctor or physical therapist the claimant sees for their injury. That information would have been part of his or her claim and reported to the benefit provider for the claimant to keep their benefits. Human resources should have access to that data.

Providing detailed information is particularly important when dealing with a large third party administrator. Many of these companies are multi-billion dollar entities with thousands of clients. Sometimes it can be difficult to speak directly to an individual when you call. That makes it imperative that when you make your request to have a claim investigated, something that could possibly be outsourced to a private investigator, the information you submit must be as thorough as possible.

Once the investigator can positively identify the claimant it is just a matter of continuing surveillance and documenting behavior and actions. If the claimant is working a second job while collecting on a workers comp claim, the video surveillance and subsequent report will tell the story.

The same applies if he or she claims a back injury yet is training to run a marathon or goes to the gym every day. If the investigator's report, with video and still photos, shows the claimant behaving in ways that are inappropriate for their reported condition, your company will be able to confirm that the claim is fraudulent.

HR as Facilitator

Human resources is not the scapegoat for all failed investigations, however. Far from it. Your human resources department can be the facilitator-even the hero-in discovering fraudulent claims by being on the lookout for red flags.

Around 80% of all claims are legitimately filed by people who are genuinely hurt and entitled to a workers compensation claim. Of the remaining 20%, there are a number of red flags that can identify a fraudulent claim. Here are a few of the more common ones:
 

• The claimant has filed more than one workers compensation claim in the past within a short period of time
• Longer than anticipated absences for minor injuries or an unwillingness to come back to work on partial duty or other jobs within the company
• The claimant was experiencing significant financial difficulties or domestic problems prior to the submission of the claim
  The alleged injury occurs prior to or just after a strike, layoff, plant closure, job termination, completion of temporary work or notice of employer relocation
• Lawyer's letter of representation or letter from medical clinic is first notice of the claim
   
• The claimant reports an alleged injury immediately following disciplinary action, notice of probation, demotion or being passed over for promotion
• There are no witnesses to the accident, or witnesses to the accident conflict with the claimant's version or with one another
   
• The accident or type of injury is unusual for the claimant's line of work
   
• The claimant frequently changes physicians or does so after being released to return to work
   
• The claimant is a new hire or working at a family-owned business
• Claimant's job history shows many jobs held for fairly short periods of time
• Claimant uses addresses of friends, family or post office boxes; has no known permanent address or moves frequently
• Facts regarding accident are reported differently in various medical reports, statements and employer's first report of injury
• Income from workers compensation and collateral sources (unemployment, Social Security, long-term disability, etc.) meets or exceeds wages after taxes
• Physical description of claimant indicates signs of active work
• New or additional medical problems are alleged and attributed to the original injury
• Claimant is overly pushy, demanding a quick settlement, commitment or decision

While these red flags are good indicators of potentially fraudulent claims, many suspicions will probably be based on reports from other employees. They have either seen their "injured" co-worker doing some sort of physical activity or heard them bragging about double-dipping (getting paid for workers comp while working under the table for somebody else). There is no end to the variety of workers comp abuses, and human resources can be your eyes and ears for these kinds of tips.

Again, that is not to say you should suspect everybody who files a workers comp claim of trying to get away with something. In fact, it is not uncommon for a video surveillance of a suspected fraudulent claim to show that the employee is actually hurt. That is OK, too. If somebody's injured on the job, it is the job of the insurance company to pay that claim.

Most companies using a third party administrator are actually paying for their investigations via their deductibles. Having your human resources department involved in the investigation as a facilitator is a way to ensure your company is getting the most out of the investigation.

Since it will be actively involved, human resources should also be included in the selection of the investigation firm, ensuring you select a company that you are comfortable with and that specializes in insurance claims. Companies that do not get involved with their investigations firm typically do not get as good results as those that have active participants. That way, you are protecting your company's investment and ensuring a better result.

According to the Coalition Against Insurance Fraud, the costs associated with fraudulent workers comp claims and other insurance fraud cases total more than $80 billion per year. In today's economy, lost man-hours, medical payments and increased premiums can have a major impact on your company's financial health. By simply increasing your awareness, making a few procedural changes (e.g., keeping current employee information) and being involved in claims investigations, you can greatly reduce the negative impact fraudulent workers comp claims have on your company and your bottom line.