Workers’ compensation insurance fraud — what it is and how to avoid it

Aug. 29--OXNARD, Calif. -- Workers' compensation insurance fraud, one of the most complex crimes to prove, is increasing in Southern California and the state, experts say.

Insurance company veterans and law enforcement teamed up Thursday at Heritage Square Hall in Oxnard to tell employers how critical their actions can be when workers report injuries.

The topic is relevant and timely for Barkley Insurance & Risk Management, which hosted the event.

"We've seen a rise in the cost of litigated claims over the last five years," President Griffin Barkley said after the event. "We've also seen a rise in the frequency of claims."

Workers' compensation fraud is "one of the most challenging crimes we face," said Ventura County District Attorney Greg Totten, who spoke to the audience.

"It's a (significant) problem we've got that impacts insurers, insurance companies, businesses and legitimate claimants," Totten said.

But workers' compensation claims also are highly misunderstood, or perceived, as fraud, he said. Actual fraud, which is considered a crime, accounts for a small percentage of cases because proving it requires scrutinizing medical records.

Workers' compensation fraud cases are "some of the most complex and costly in the criminal justice system," says the website for the fraud unit under Totten's office.

Totten was joined by his senior deputy district attorney, Tom Johnson.

Also there were fraud specialists from Woodland Hills-based Zenith Insurance Co., which deals exclusively in workers' compensation insurance. Zenith Insurance experts walked audience members through the basics of dealing with workers' injury discussions before they turn into official claims.

Robert Taylor, a former Los Angeles deputy sheriff and now a manager of Zenith Insurance's special-investigations division, compared fraud with workers' compensation insurance claims.

"Filing a claim is not a criminal act," Taylor said. Lying is the crime, he added.

"Workers don't have the right to lie to get benefits they are not entitled to," Taylor said.

Ignoring doctors' instructions after an injury also is not fraud, Taylor said. People are often poor patients and do not follow directions completely or exactly.

A patient who intentionally misleads or lies to a doctor about an injury could be committing fraud, he said.

So what should employers do if a worker says he or she has been injured in an incident?

The employer should give the worker the paperwork to file a claim, the experts said. The employer should not act like a doctor or cop and refuse to provide a claim form because of disbelief.

"Not reporting is the worst thing to do," said Jonathan Lindsay, Zenith's senior vice president.

During the investigation, "Don't treat them as criminals," said Rulia Hernandez, assistant vice president for Zenith. Investigate the incident, not the employee.

Workers are more likely to provide information right after an incident, Totten said, and it will be more accurate than what his office can glean one or two years after a claim has been filed.

"What you do at the outset is vitally important," Totten said.

Taylor stressed that employers and even health care providers make investigators' jobs harder when they record wrong or insufficient information after an injury.

Johnson had a clear warning for owners of businesses that involve dangerous work, such as packinghouses and farms: Be sensitive to those activities.

"You are in treacherous waters in these safety issues," Johnson said.

Staving off compensation litigation from employees may be as simple as getting to know them when they join the company, Lindsay said.

Employers may well want to take that advice. According to Taylor, Southern California is "the most challenging workers' compensation insurance fraud district in the country."

___

(c)2014 Ventura County Star (Camarillo, Calif.)

Visit Ventura County Star (Camarillo, Calif.) at www.vcstar.com

Distributed by MCT Information Services