Workers' Compensation Fraud

by Anna Glendenning | More from this Blogger

14 Sep 2007 09:13 AM

Insurance fraud is not a victimless crime, we all eventually pay for this crime because insurance companies pass along the cost to policyholders. The National Insurance Crime Bureau estimated that during the year of 2000 workers' compensation insurance fraud was the fastest-growing insurance crime in the United States costing the insurance industry $5 billion per year. Insurance fraud is often a white-collar crime committed by medical clinics, law offices and even in the case of workers compensation even employers.

Insurance fraud is often carried out by organized crime groups. Doctors, lawyers employers and individuals often work together and even recruit claimants to actively engage in the criminal fraud. All insurance fraud eventually hurts every person. Many people may be aware of someone engaging in some kind of insurance fraud and often turn a blind eye, there is a common "get the insurance company" attitude that goes along with this sort of criminal behavior.

Small business is profoundly hurt by workers compensation fraud. The costs of this type of insurance for a small business can be the difference between success and failure for some small businesses. Every person should take personal offense to those who commit insurance fraud, and ignoring it is one of the reasons so many people are able to get away with it.

As difficult as it may be each person should take responsibility and report any insurance fraud they may see happening. This series on Workers Compensation Fraud will outline some of the red-flags co-workers, employers and doctors may want to be looking our for. While there isn't a perfect way to detect and identify workers compensation fraud and concrete proof can be difficult to come by there are clear red flags.

One state that has taken serious action to reduce insurance fraud is California which established The Workers' Compensation Fraud Program in 1991 with the passage of Senate Bill 1218 (Chapter 116). This law made workers' compensation fraud a felony, and required insurers to report suspected fraud and established a enforcement procedures and funding.

During Fiscal Year 2004-05, the California Fraud Division received 6,492 suspected fraud cases and made 178 arrests, submitted 219 cases to District Attorneys for prosecution and prevented a potential loss amount of over $387,507,663. The evidence proves California's aggressive anti-fraud campaign has played a major role in reducing insurance crime and has helped to lower workers' compensation premiums employers pay.

This series will include the Red Flags for Workers Compensation fraud in the following:

• Worker and Claimants
• Health Care Providers, and
• Employers

Glossary of Insurance Terms:

A | B | C | D | E | F | G | H | I | J-K | L | M | N | O | P | Q-R | S | T | U-V | W-Z

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Learn more about Anna Glendenning

Anna Glendenning is a mother of four. Two biological children grown and out of college, and two siblings and adopted together in 2003. Anna's Personal Website http://www.adoptiveparentsnetwork.

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