While most employees are honest, the small percentage of those who commit fraud or abuse can cost a company thousands of dollars—typically falling anywhere between $2,000-$50,000—and that’s just the direct costs alone, according to the Coalition Against Insurance Fraud (1).
We sat down with Bradley A. Powell, Managing Member of Droder & Miller to talk about challenges faced by employers today when it comes to creating a safe workplace while also preventing workers’ comp fraud. Powell joined the firm in 1986 as a civil trial attorney, working primarily with insurance companies throughout the nation.
Knowing most claims are legitimate, here we look at some of the dynamics you can be aware of when managing safety and workers’ comp.
Reduce Claims By Promptly Responding to All Incidents
The challenge for employers begins when a person claims to have been injured. “The investigation has to take place immediately,” explains Powell. “That includes making certain that an incident did occur, and whether the employee was injured as a result of that incident.”
This process includes taking statements from the claimant, as well as any witnesses, taking photographs, videotape and obtaining all of the information from the accident scene.
The period of time immediately following the alleged incident is a critical time for employers to collect as much accurate information as possible. “Every single claim is an internal investigation,” says Powell, so employers can think about the process as evidence collection.
What was the nature of the injury that occurred? Did the injury occur as a result of something specific at work—or did someone, for example, play basketball on Sunday then claim to be injured at work? We are not evaluating the nature of the injury alleged, at this point; only the medical professional can do that. “We don’t have the ability to make that determination, at that time; a medical professional does,” explains Powell.
Fraudulent claims and otherwise, your workers’ comp process is critically dependent on this ability to promptly collect information.
“As an attorney, my tool is evidence, and I can’t help the employer [if there is litigation in court] if I don’t have evidence and complete and accurate information,” explains Powell.
Deter Fraudulent Claims With a Consistent Process
Prior to any injury or accident, an employer has the opportunity to set up processes and procedures to make sure every situation is dealt with in a consistent manner. “We want consistency. We want efficiency, and we want fairness,” explains Powell.
“What we do, is we establish a safety program, and in that program, when somebody claims that they’ve been injured at work, we have people that are going to investigate it immediately.”
Again, that’s where more evidence comes into play—statements from witnesses, photographs, videos, etc. If they are claiming (or someone is claiming) that there is faulty equipment, then you’re able to test the equipment. Or, for example, if a person is alleging that he is in pain and he has been injured, you are going to make certain that they get the proper medical treatment.
The more consistent this series of steps can be, the more successful the employer will be in handling the claim, regardless of whether the claim ultimately is determined to be appropriate or not. (Process consistency also helps employees obtain the medical treatment they need)
“If we’re consistent, we will be successful. When my clients are extremely successful, it is because they are very consistent. Do they win every time [in hearings]? No. But when we have the evidence, it’s a 95 percent success rate.”
“The problem really is when organizations aren’t consistent in the way they collect and manage workers’ comp, safety, and other general liability and insurance reports,” explains Powell.
Take Steps to Become More Consistent
Consistency matters across all areas of the process, including:
- Collecting information and evidence for claims
- Ensuring individuals receive appropriate medical treatment
- Enabling the individual to get back to work
- Communication—with the employee
- Measures taken to prevent future incidents/accidents
Employers should make certain that members of the safety department, human resources department, and other management personnel know what the investigation procedures are and how to implement them in a timely, accurate, and consistent manner.
Powell can’t emphasize enough how much all workers need to know—and be equipped with the right tools—so that they can act in the best interest of all involved when an incident occurs.
Dramatically Reduce Time from Incident to Resolution
Ensure consistency in your process and collect the evidence you need immediately on the scene with iReportSource. Capture pictures, videos, and witness statements in the first hour when they are more accurate. Learn more about iReportSource here.
“The automated OSHA reporting is worth the price alone, but it gives you so much more.’ –Joe Arway Holland Roofing
Come back next week to read part two in our series with Powell, where he breaks down 3 costly mistakes he sees employers make when managing workers’ comp.
Workers Compensation Claim Management