Workers’ Comp Fraud—The Other Side of the Coin

There’s an insurance industry radio ad campaign currently running, containing the following warning: Don’t commit Workers’ Comp insurance fraud or you’ll end up in jail and you will shame your family. It’s clearly aimed at injured workers. I get it.

What the public generally does NOT see is the other side of the coin…when insurance companies overstep their bounds and infringe on injured workers’ rights (happens all the time—sometimes with bad results, especially when injured workers are unrepresented .)
This happened to my client and me YESTERDAY:
My client, a nurse’s aide, was receiving weekly Workers’ Comp checks for a severe back injury (she now needs surgery for it) that she incurred at work. At the last hearing, the insurance company attorney for the employer accused my client of fraud and told the Judge they were stopping her benefits because they have a private eye who followed her and videotaped her doing something bad (presumably, working while collecting comp checks.) They were ordered to produce the investigator and his evidence. My client flatly denied committing fraud. A mild-mannered woman, she has been beside herself with stress because of this fraud allegation. She could not understand it. Luckily, in this country, you get to face your accuser in court, face-to-face. At the next hearing (yesterday) , I made a simple request: call in both my client and the investigator into the courtroom and let the investigator look at my client, face-to-face. When they were called in, the Judge asked the private eye: “Is this the woman you have been following?” The investigator turned red. ” No, Your Honor, it isn’t, “we must have been following the wrong person.”
You simply can’t make this stuff up. I got my client’s benefits reinstated (she was crying with relief, she could not understand what she had done wrong) but unfortunately there is no penalty against an insurance company for such shoddy work and behavior……………
Call us if you have questions about Workers’ Comp or Social Security Disability benefits!

What the Workers Comp Insurance Company Is REALLY Concerned About

Workers’ Comp in New York State is constantly changing. Recently, I was asked by union officials to give a second legal opinion about a situation where a union member (not my client) had been accused of Workers’ Comp (WC) fraud. Lately, insurance companies are raising such fraud charges against workers more and more often, regarding the issue known as “PAST MEDICAL HISTORY”, and that is what happened in the case I was asked to review.

When individuals  are injured at work in New York State, those workers often assume that someone is looking out for their best interests and that somehow the system will automatically do the following: a) pay all of their work injury medical bills without a problem; b) pay them without a problem; and c) inform them of their rights.

However, this is what I find ACTUALLY happens after a work-related accident: the insurance company is concerned only with the well-being of the insurance company, not the injured worker. It  looks for ways to NOT pay the worker.

Although it is perfectly reasonable for WC insurance companies to try to weed out fraud, it appears to me that these companies spend almost all of their time doing this type of anti-fraud investigation at the expense of  doing other things to help workers.

Workers’ Comp Insurance companies ALWAYS  —ALWAYS—-DO THE FOLLOWING AS A MAIN FOCUS OF “DEFENDING THE CLAIM” soon after anyone is injured on the job:

1. Review the claimant’s written statements and claim forms after the work injury word by word to determine if the worker ADMITTED, OR DENIED, EVER HAVING  ANY PRIOR INJURIES—-EVER!

2. Review the medical reports from claimant’s own treating doctors plus the questionnaire given by the insurance company doctor to determine if the worker ADMITTED OR DENIED EVER HAVING ANY PRIOR INJURIES—-EVER .

3. If the insurance company determines that the injured worker omitted any mention of ANY prior injury that he or she actually had, (and believe me, they check this, without fail) FRAUD is often immediately charged against that worker. Yes- almost every omission of a prior injury is considered fraudulent by insurance companies even though the law says that this is not the standard by which to judge. (The law actually only says that forgetting about revealing a prior injury is a fraud if the omission is “knowing” and “material.”)

4.  If found guilty, a worker can be charged with a felony. However, the more common penalty is permanent loss of Workers’ Comp money (but not medical)  benefits in that particular case.

The problem here is that injured workers can be careless without being fraudulent. I have confronted my own clients when thay omit mentioning prior injuries to the insurance company or even to their own doctor. I have heard the following excuses, none of which are valid, among others:

1. I didn’t understand that the form I filled out was asking about previous injuries I had that were not the same as my current injury.

2. I thought they knew about the previous injuries because the previous injuries were for the same employer so I didn’t mention them.

3. I didn’t think mentioning my prior injuries was important.

ALL of my clients receive a complete explanation of this issue verbally and in writing when they retain us AND sign a paper that says that they understand it. I do not allow my clients to go forward without an education that basically says: NEVER EVER OMIT MENTIONING ANY PRIOR INJURIES YOU EVER HAD TO ANYONE IN THE WORKERS’ COMP SYSTEM!!!

If claimants would simply follow this rule, and be forthright about all prior injuries , discovering fraud would become less of a main focus of the WC insurance companies. Often, I find, clients APPEAR to be fraudulent when their omissions are simply the result of carelessness. But the insurance companies always assume the worst about injured workers.

Workers’ Comp Fraud: Employers (Not Employees) Are A Huge Problem

District Attorney, New York County

For Immediate Release March 25, 2014

DA VANCE: GRAND JURY RECOMMENDS SIGNIFICANT CHANGES TO PREVENT WORKERS’ COMPENSATION INSURANCE FRAUD

Empanelled at Request of Manhattan DA’s Office, Grand Jury Finds Evidence of Workers’ Compensation Insurance Premium Fraud Costing New York Nearly $500 Million Annually

Report Released on 103rd Anniversary of Greenwich Village Triangle Shirtwaist Factory Fire

Manhattan District Attorney Cyrus R. Vance, Jr., today announced that a New York State Supreme Court Grand Jury has issued a report examining the vulnerability of New York’s workers’ compensation insurance system to fraud and misuse. The Grand Jury’s report stemmed from investigations by the District Attorney’s Money Laundering and Tax Crimes Unit into false information provided to the New York State Insurance Fund in connection with applications for, and audits of, workers’ compensation policies.

 

Taking into account a June 2013 report of the Fiscal Policy Institute and other estimates, New York City’s construction industry in 2011 cost the City and State approximately $500 million based on worker misclassifications. The largest component of the loss was unpaid workers’ compensation premiums, with personal income tax, withholding, unemployment insurance, and various other business taxes accounting for the remainder.

Premium fraud affords wrongdoers an improper competitive advantage over all law-abiding businesses, makes workers vulnerable by depriving them of important protections and benefits, and deprives New York State and New York City of substantial revenue. Every lost dollar must be made up by a dollar increase somewhere else, usually by a cost-shifting phenomenon that affects us all. Every law-abiding employer is a victim of this criminal conduct, as is every hard-working employee, every consumer, and every honest taxpayer

Workers’ Compensation Myths Exploded

Workers’ Comp Myths: Let Me Explode a Few
Everyone knows what Workers’ Comp is, but unless you deal with it every day, you only know what you’ve read in the media or heard from others in casual talk. Here are some common Workers’ Comp myths, and my “myth busters.”

  • Myth #1: If I file for Workers’ Comp, I’m suing my employer.
    Mythbuster: Nope. Workers’ Comp is a benefit, not a lawsuit. Similarly, when you file for unemployment benefits, you’re not suing your employer either. Workers’ Comp actually protects employers from being sued directly.
  • Myth #2: Everyone on Workers’ Comp is a fraud.
    Mythbuster: Workers’ compensation fraud does happen, but is actually very uncommon, despite what you may have seen on TV or in newspapers. The vast majority of New York workers’ compensation claims are made by honest working people just like you, who are actually hurt at work.
  • Myth #3: You cannot be fired if you are on Workers’ Compensation.
    Mythbuster: The law actually says that you cannot be fired BECAUSE you are on Workers’ Comp. But if your employer has another, valid reason, such as that you need to be replaced so the company’s work can get done, usually you CAN be fired while out on comp.
  • Myth #4: You must be out of work to file for Workers’ Comp.
    Mythbuster: Not at all. The only requirements to file are that you are an employee who was injured while working, and that the job CAUSED the injury. Plenty of my comp clients never lost a day from work.
  • Myth #5: My boss will process all of the forms for me if I get hurt at work.
    Mythbuster: Unh-uh. Don’t depend on your employer to file all of the required forms for you. One required form, a “C-3” form, is neither filed by your employer or with your employer. YOU must file it. Yes, YOU, the injured worker, must file this with New York State yourself!

So, did you believe some of these common myths? Not to worry! Dan is here!

Workers Compensation Wrongdoing: Part II

In my previous blog about what people think about when they hear the words “Workers’ Compensation,” (fraud is part of the thought process of many,) I mentioned attorney Leonard Jernigan’s “Top 10 Fraud cases.” (They are employer fraud cases.)Well here is a recent blog of his that complements my earlier piece on the subject of “comp fraud.” It is so good that I repost it here verbatim (Note: The tactics described by Jernigan below are used by insurance carriers every day. They are a routine experience for injured workers.)

“As a workers’ compensation attorney I find it interesting that many people in the public question the disability status of injured workers. Let’s assume for the moment that you have sustained an injury on the job and you’ve been out of work for 5 months after back surgery. When you are unable to return to work quickly, the insurance industry has a lot of tools at its disposal to verify your disability status. They can pour over your medical records, pre- and post-injury, looking for any piece of evidence to deny your claim. They can send your file to lawyers who review medical records and recorded statements to potentially attack your credibility and honesty. They can hire a nurse to attend your appointments and speak with the physician and the staff, as well as obtain information directly from you. They can do background searches on you to see if you have a criminal or civil record. Obviously they will check to see if you ever filed a workers’ compensation claim before. They will also do social media and Internet searches on you and your family members (Facebook, Twitter, LinkedIn, etc.). They also can hire private investigators to follow you and your family around and take video recordings of your activities. With all these resources at the disposal of the insurance company, it’s hard to believe that many cases of employee fraud slip through the system.

A private investigator pretended to be a potential buyer and spent an hour or more going through the house.

We have one client recently who was followed by several private detectives for more than a year. They not only followed him around, but also followed his wife and son, who have no workers’ compensation claim. Another client had to sell his house because of his disability. A private investigator pretended to be a potential buyer and spent an hour or more going through the house. Does the concept of “Big Brother” come to mind? Are you concerned about invasion of privacy, particularly for family members, friends, and others who may be seen in such videos? We always tell our clients such activity may occur so don’t be alarmed by it, but that isn’t too comforting to people who are struggling through health issues, who have depression and anxiety problems, and who are sensitive to privacy concerns.

It would be interesting if the roles were reversed and employers who underpay premiums by misclassifying the status of their employees, who fail to purchase insurance required to protect their workers, and who don’t follow proper safety regulations that cause injury, were followed this closely by employees or regulators who administer the workers’ compensation program. I have no doubt that these employers and insurance representatives would be outraged.”

Workers’ Comp Wrongdoing: What comes to mind?

When one brings up the topic of wrongdoing in a Workers’ Comp setting, many (especially here in Long Island) will first think about the infamous Long Island railroad case where many LIRR retirees filed claims for disability that were described, in a word, as fraudulent. Mention the words Workers’ Comp fraud, and most people think first, I believe, of phony claims FOR Workers’ Comp. But what about the many employers who fail to cover their employees for Workers’ Comp each year, or underreport payroll, misclassify workers or do other bad things?

What I never understand is why, and correct me if I’m wrong, stories of phony claims by workers are always given the headlines and come to mind more readily than cases of employer fraud. (An attorney named Leonard Jernigan comes out each year with a blog called “Top 10 Workers’ Compensation Fraud Cases” of the previous year. Jernigan’s #1 in 2012, for instance, is the “Operation Dirty Money” case in Florida where a construction company—an employer— scammed $70,000,000 from the Workers’ Comp system in Florida.)

It just seems to me that for some reason, worker fraud is somehow “sexier” news for the newspapers and other media, than employer fraud when in fact, both exist, both are bad and both should be equally condemned. Just thinking aloud, but I’m still not sure why this imbalance, I believe, continues to exist in people’s minds .