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National Insurance Crime Bureau

How Workers' Compensation Fraud Games the System

When an injury happens on the job, workers’ compensation is the safety net that protects employees from the burden of lost wages and hospital bills. While most of us see workers’ compensation as something to use in an emergency, some fraudsters see this as easy money.  

The scheme is simple: fake or exaggerate an injury, file a claim with your insurance company, collect cash, and enjoy the benefits of being employed without going to work. Scammers can reap the rewards of workers’ compensation fraud for months.  

Workers’ compensation fraud isn't just for dishonest employees looking to get rich quick. Crooked doctors and lawyers seek out employees and recruit them into schemes known as "medical mills." 

Medical mills are run by some attorneys and doctors who find willing clients through the use of scouts or "runners”. Once the client is on board, attorneys coach them through the claims process and send them to doctors who pay the attorney for the referral. These fraudulent doctors inflate claims for bigger payouts by charging for services they didn’t provide or lying about the claimant's injury. Once the money is awarded, the attorney and the doctor take their cut.  

Surprisingly enough, even some employers have been known to take advantage of workers’ compensation. In instances of premium fraud, employers try to dodge insurance costs by under- reporting the number of workers they oversee or by manipulating employee work codes. For additional information on how workers’ compensation fraud works and who it hurts, take a look at this NICB brochure

As the American workplace changes, new schemes are popping up every day, and it's more important than ever to stay one step ahead of criminals looking to make a score. That's why the National Insurance Crime Bureau (NICB) is excited to announce our new Workers' Compensation Fraud Virtual Conference

Split into two phases, the first from October 27th through October 29th and the second from November 3rd through November 5th, the conference features topics relevant to both veterans of the industry and those new to the world of insurance fraud. Sessions will include presentations on: 

  • The ins and outs of how workers’ compensation is intended to function and how fraud disrupts this system 
  • Utilizing the power of surveillance, including tips on proper pre-planning and the effective use of video evidence 
  • Open-source intelligence and the public data assets readily available to investigators 
  • An overview of how premium fraud occurs and how it is prosecuted 
  • A case study that showcases the advantages of utilizing data analytics in an investigation 
  • The increased legalization of medical marijuana and its impact on the insurance world 
  • The growth of telehealth and how fraudsters are exploiting this emerging industry for personal gain 
Workers' Comp Blog

In addition to the topics above, NICB will be hosting a panel of industry experts examining how current trends in provider fraud affect carriers and attract the attention of prosecutors. 

A full schedule of events can be found here.  

Right now, NICB members can attend nine sessions for just $100, but there are also group discounts available. Register Now and secure your seat! 

Anyone with information concerning insurance fraud or vehicle theft can report it anonymously by calling toll-free 800.TEL.NICB (800.835.6422) or submitting a form on our website.

About the National Insurance Crime Bureau: Headquartered in Des Plaines, Ill., the NICB is the nation's leading not-for-profit organization exclusively dedicated to preventing, detecting and defeating insurance fraud and vehicle theft through data analytics, investigations, learning and development, government affairs and public affairs. The NICB is supported by more than 1,400 property and casualty insurance companies and self-insured organizations. NICB member companies wrote over $525 billion in insurance premiums in 2019, or more than 82% of the nation's property-casualty insurance. That includes more than 95% ($241 billion) of the nation's personal auto insurance. To learn more visit www.nicb.org.