By: Claire Brookins
Employers, carriers and third-party administrators across all industries share a common interest in workers’ compensation claims when it comes to fraud. Let’s face it, fraud is a source of great frustration and costs the insurance industry millions of dollars every year.
Fraud is an ongoing issue that has consistently been at the forefront in defending workers’ compensation claims and is an issue that significantly impacts all industries across the board. A finding of fraud can save employers and carriers significant amounts of money and plays a vital role in reducing overall exposure in a claim. A successful fraud finding can also play a vital role in moving claims toward full and final settlement.
Proving that an injured worker has committed fraud under New York State Workers’ Compensation Law is not an easy task, and often requires large amounts of time, money and other resources to secure the evidence needed in order to be successful. In many instances, this acts as a deterrent to pursuing fraud. However, when these efforts lead to success, there is no doubt that it was worth every penny.
Given the time and resources employers and carriers invest into trying to prove fraud, it is important to find an experienced advocate who is willing to devote the necessary time and effort it takes to achieve a successful outcome.
Fraud in New York State workers’ compensation claims is governed by Workers’ Compensation Law Section 114-a. This law provides that a claimant may be disqualified from receiving certain compensation benefits if the claimant knowingly made material misrepresentations in order to obtain benefits or in order to influence any determination regarding the receipt of any benefits. These misrepresentations could include an omission of a relevant fact or exaggeration of symptoms to a treating provider or independent medical examiner. Fraud may also be based upon other factors such as a claimant’s failure to disclose work activities or relevant information regarding prior accidents or a pre-existing medical condition. Some common methods carriers use to prove fraud is surveillance, investigations of claimants’ social media accounts, and obtaining a claimant’s prior medical records.
In the past 18 months, I have handled three fraud claims spanning three different industries: the hotel and hospitality industry; aerospace industry; and the consumer goods industry. Despite the vast differences between these types of employers, they had one common interest: stopping fraudulent claimants in their tracks. Each resulted in a finding of fraud and lifetime bans were imposed upon each claimant from receiving any further indemnity benefits in their respective claims, which led to a total savings of almost a half million dollars based upon the projected value of future lost wage benefits of all three claims.
The New York State Workers’ Compensation Board found that all three claimants knowingly made material misrepresentations to their healthcare providers as well as the carriers’ independent medical examiners. They were found to have exaggerated their symptoms in order to influence the doctors’ opinions regarding level of disability and work capacity. Each case presented its own unique set of circumstances and challenges, yet led to the same result through extensive investigations and testimony from investigators and medical professionals. One claimant took it a step further and was also working while cashing workers’ compensation checks. The claimant’s work activities were not only confirmed through an investigator’s surveillance but also through investigation of the claimant’s public Facebook posts and online company reviews. This helped secure a finding of fraud that was deemed to be so egregious that he was permanently banned from receiving any further lost wage benefits in his claim.
In each of these cases, our strategy focused on coordinating surveillance, securing records, investigating social media accounts, and laying the proper foundation that is necessary for building a viable fraud case. The opportunity to tackle such a significant issue is typically only done once during the lifetime of a claim, making it even more important to find an experienced litigator who is willing to invest the time to ensure a successful outcome.