New Tactics to Reduce Workers Comp Fraud

New strategies to help reduce workers com fraud are something to watch. There is about $32 billion per year in workers comp fraud, according to the Coalition Against insurance Fraud. There are three main forms of fraud: claim, premium, and provider. The article “New Tactics to Watch for Workers Comp Fraud” by Nina Luckman discusses the different ways that fraud can occur, along with the ways to reduce that fraud. One of the kinds of fraud the author talks about is misclassification. Something like misclassifying an employee for a lower premium cost, is fraudulent, but can also be a simple mistake. This misclassification can not only affect one employee, but multiple, and even the whole company. Paying employees under the table to reduce premium is also another way employers participate in employer fraud. What happens when something happens to that employee? Another kind of fraud discussed is claimant fraud. One single claim by an employee claiming one thing but found doing something to contradict their claims.

One of the new strategies that has helped to reduce fraud is a special online investigation technique involving AI pattern recognition technology, social media searches, exception reports, all in addition to the work of actual human beings. This kind of investigative technique can be built into the underwriting and claim intake process for companies. Regulatory controls provided by carriers for their insured can help hold insureds more accountable. Right now, the lack of investigative focus on fraud means that there is still fraud happening withing companies. These kinds of technique help to reduce loss and fraudulent activity that can be prevented.

Read the details here:

 Luckman, N. (2022, September 8). New tactics to watch in workers' comp fraud investigations. Risk & Insurance. Retrieved September 12, 2022, from https://riskandinsurance.com/new-tactics-to-watch-in-workers-comp-fraud-investigations/