New Tactics to Watch in Workers’ Comp Fraud Investigations

Workers’ compensation fraud takes three main forms -- claim fraud, premium fraud and provider fraud -- and the effects on honest employers and employees can be devastating.

New analysis from the Coalition Against Insurance Fraud found the combined fraud burden for the workers’ comp line weighs in at $32 billion per year. Luckily, new investigation efforts based on the growth of our online lives can help mitigate the damage.

Between the three types of workers’ comp fraud, employer fraud far exceeds employee fraud, despite the focus on false claims in an often adversarial system, while Medicare fraud far exceeds both.

The Coalition Against Insurance Fraud numbers out employer premium fraud at $23 billion of the total. Typically, employers game the system by misclassifying employees or methods of underreporting payroll through ‘under the table’ pay arrangements.

For executives in the business, the lopsided understanding of how fraud occurs in the comp system comes down to public imagination.