Nebraska Department of Insurance

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Department of Insurance - Insurance Fraud Prevention Division

NEBRASKA DEPARTMENT OF INSURANCE

INSURANCE FRAUD PREVENTION DIVISION
941 O Street, Suite 400
Lincoln, NE 68508-3639

Workers' Compensation Fraud Hints

It is important to remember that the hints listed below are merely possible "red flags" that there may be some evidence consistent with an insurance fraud scheme. Any one or two of these by themselves, may not raise your suspicion; however, when you have several of these hints present or a pattern begins to emerge, you should investigate further or forward your suspicion to the Insurance Fraud Prevention Division.

Misrepresentation of the true Named Insured by the use of a trade name, D/B/A title or name of subsidiaries.
Use of the "Other States" private disability policies.
The claimant frequently changes physicians or medical providers.
The claimant changes physicians when a release for work has been issued.
The claimant has a history of reporting subjective injuries.
A review of a rehabilitation report muscular with callused hands and grease under the fingernails.
A surveillance or "tip" reveals the totally disabled worker is currently employed elsewhere.
After injury, the injured worker is never home, or a spouse/relative who answers the phone says the injured worker "just stepped out."
Return calls to the claimant's residence have strange or unexpected background noises which indicate it may not be a residence.
The claimant has several other family members also receiving workers' compensation benefits or other "social insurance" benefits, such as unemployment.
The claimant demands quick settlement decisions of commitments.
The claimant is unusually familiar with workers' compensation claims handling procedures and laws.
The claimant is consistently uncooperative.
The accident occurs late Friday afternoon or shortly after the employee reports to work on Monday.
The accident is unwitnessed.
The claimant has leg/arm injuries at odd times, such as at lunch hour.
Fellow workers hear rumors circulating that the accident was not legitimate.
The accident occurs in an area where the injured employee would not normally be.
The task that caused the accident is not the type that the employee should be involved in; i.e., an office worker who is lifting heavy objects on a loading dock.
The accident occurs just prior to a strike, job termination, layoff, or near the end of the employee's probationary period.
The employer's first report of injury contrasts with the description of the accident set forth in the medical history.
The details of the accident are vague or contradictory.
The accident is not promptly reported by the employee to a supervisor.
The claimant's attorney is known for handling suspicious claims.
The attorney lien or representation letter is dated the day of the reported accident.
The same doctor/lawyer combination previously known to handle the same kind of injury.
The claimant's attorney complains to the carrier's CEO at the home office to press for payment.
The claimant initially wants to settle with the insurer but later retains an attorney and files increased subjective complaints.
There is a pattern of occupational type claims for "dying" industries, such as black lung disease or asbestosis.
There is wholesale claim handling by law firms and multiple class action suits.
The claimant's attorney threatens further legal action unless a quick settlement is made.
There are a high number of applications from a specific firm.
The claimant's attorney inquires about a settlement or buyout early in the life of the claim.
The same health car provider has been seen previously regarding suspicious claims.
The employer is suspicious about a particular health car provider.
The medical provider repeatedly calls the patient back for treatment.
The claimant writes unsolicited statements about how much better they are, but treatment continues and they don't return to work.
The health care provider keeps the "medical" open.
The claimant receives unauthorized treatment with a questionable emergency.
Treatment for workers' compensation injuries immediately follows first-time visit to this medical provider.
Medical services that involve the patient being in the provider's office for more than one hour at a time, especially on a frequent basis over a long period of time.
The same medical provider always bills for extra time, extra body parts, and/or special considerations.
Unexpected high costs (special supplies, home therapies, diagnostic testing) begin very early for a minor injury, soft tissue, and subjective findings.
Frequent dates of service.
The claimant submits no transportation bills or the patient is elsewhere on the same day that medical treatment is billed.
The claimant gets authorization after the first treatment or through an attorney.
Medical providers steer claimants to attorneys.
The medical provider bills through an attorney.
The medical provider is reluctant to communicate with the carrier but initiates calls to a claimant attorney.
The insurer receives a demand from an attorney for referral to a specific medical provider.
A single medical provider with a high percentage of claimants with attorneys, especially if the same attorney.
The medical provider always shares patients with the same "other" provider.
The medical provider refers claimants unnecessarily to specific other providers and gets something in return (ping-ponging).
A specific provider prescribes unnecessary supplies and/or care.
Medical records consist of pre-fab reports.
Medical records consist of "canned" notes.
There are missing dates of service.
There are non-sequential notes or lot numbers on invoices.
Medical records show different handwriting on same dates of service.
Medical records show different ink on same dates of service.
The same ink and handwriting covering a lengthy period of time on medical records.
When medical records are requested, insurer is advised that the records are lost, stolen, or burned.
Progress notes consistently reflect high degree of pain on each visit while stating "progressing as planned" or "good improvement."
There are conflicting medical reports; i.e., independent medical examinations, emergency room report vs. subsequent office visits, operative reports vs. anesthesia reports, pathology reports vs. consent forms.
Anesthesia time doesn't match surgery report.
Pathology report conflicts with the diagnosis.
Inconsistent diagnosis to treatment.
Inconsistent findings between providers.
Medical bills are submitted for Sundays and holidays.
Dates of service on billing forms are listed in nonchronological order (double billing).
Consistent improper billing practices, such as unbundling, upcoding, and/or double billing.
Inflated bills and unnecessary care to "run-up" costs and prompt an early settlement.
Insurer receives bills from same two providers for services consistently provided on same dates of service, especially if dates of service are frequent, services are similar in nature, claimants seen repeatedly, and physical locality is the same or in close proximity.
Billing workers' compensation carrier and another insurer full charge for "same" services.
The medical provider holds bills and submits them all at one time, especially if submitted through an attorney.
The same provider bills for primary and assistant surgeon.
Changing billing patterns are noticed which indicates the medical provider may be fishing for a company who isn't savvy to improper billing.
Medical provider changes codes for on-going care when prior codes were disallowed. This may indicate the provider is looking for ways to maximize returns.
Medical provider submits bills with "odd" coding for services previously billed correctly.
The medical provider frequently uses unusual codes.
There is evidence of the same provider with different Federal tax numbers.
The doctor's signature is very legible.
The claimant's address on the bill is different from the mailing address for benefits.
Medical providers bill or harass claimants for "unpaid" bills.
The medical bills show excessive referrals, yet there is no apparent serious injury.
The medical bills show excessive referrals to specific providers.
The medical bills show excessive early referrals for psychiatric testing.
The medical bills reflect a retroactive disability or postdated maximum medical improvement dates.
The medical bills reflect inflated impairment ratings.
Workers' compensation claims contain white-out.
Workers compensation claims are photocopies.

In addition to the hints listed above regarding workers' compensation fraud, insurance industry personnel also should be aware that dishonest adjusters have been known to create phony claimants and collect small payments they themselves have authorized. Adjusters can also increase benefits to an existing claimant for a kickback on part of the increase.

Note that when benefits extend over several years, unscrupulous employers can use the system to supplement the wages paid to injured workers who can legitimately return to work. The employer conspires with the employee to return to work, collect his/her workers' compensation benefits, and collect the difference in pay from the employer.

In addition, dishonest agents collect the premium from employers for workers' compensation benefits and pocket the premium rather than turning it over to the insurer. Sometimes, crooked agents certify phony insurance policies and premium finance agreements to defraud a premium finance company.

Finally, a leasing company may falsify the number of client companies for which the leasing company provides workers' compensation coverage. The leasing company profits by collecting more in alleged premiums than they pay to their insurance carrier while certifying coverage to all their client companies. In order for the scheme to work, a delicate balance must be maintained by the lessor between those client companies actually insured and those whose insurance is phony.