Top 5 Workers' Comp Fraud Schemes

February 14, 2020

According to the National Insurance Crime Bureau, fraud costs insurers and employers over $7 billion a year. Studies show 10 percent or more of all property/casualty insurance claims are fraudulent. The most common fraud schemes are:



1.   Fraudulent billing and billing codes. The provider bills for visits or services that never happened or bills separately the workers’ comp insurer and the patient’s health insurance for the same incident, also known as double-billing or double-dipping.



2.   Unnecessary treatments. The provider does provide services, but the services are not related to the claim.



3.   Illegal kickbacks. When providers receive payments in exchange for a referral.



4.   Soliciting on behalf of colleagues. Providers work with runners, cappers or steerers, to direct injured workers to a certain medical provider.



5.   Pharmaceuticals and medical equipment. Pharmacies bill for brand-name prescriptions but the patient receives generic drugs or is billed for medical equipment that was never utilized.



Medical fraud perpetrators may be single providers but may also act as part of organized crime rings conducting multimillion-dollar schemes. Data and new technologies are helping carriers to identify these schemes and watch out for new potential frauds. But employers and other stakeholders also need to be aware of these practices.



If you would like more information, please contact us! 



 

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