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$34.9 Million Awarded in Grants to Combat Worker’s Comp Fraud

17 Aug

Workers comp fraud is a large crime in America today. Tens of billions of dollars in false claims and unpaid premiums are stolen every year. Scams are forcing premiums higher — draining business profits and costing honest workers their pay and jobs.

Contrary to what most people believe, workers’ compensation fraud is more that just an employee exaggerating his medical condition or working for cash while supposedly disabled. While these things do occur, employers are also committing fraud by underreporting their payrolls to receive lower premiums and health care providers are billing for services they’ve never performed. Workers compensation fraud is costing the industry and citizens of our state billions of dollars each year.

Just recently, Insurance Commissioner Dave Jones awarded $34.9 million in grants to 37 district attorney offices representing 42 counties in California to combat workers’ compensation insurance fraud.

“These grants will assist district attorneys across the state in uncovering workers’ compensation fraud schemes and prosecuting those who take advantage of the system,” Jones said in a statement.

Do you have any questions about Insurance Fraud? Please don’t hesitate to contact us at CalWorkSafety.com or email us at dondressler1@hotmail.com.

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Warning Signs for Employers Red Flags of Work Comp Fraud

6 Jun

There are several “red flags” that are common in workers’ compensation claim fraud. While none on its own is necessarily cause for alarm, the presence of two or more should raise suspicions and trigger an investigation.
1) Monday morning report of injury. The alleged injury occurs first thing on Monday morning, or the injury occurs late on Friday afternoon but is not reported until Monday.
2) Employment change. The reported accident occurs immediately before or after a strike, job termination, layoff, end of a big project, or the conclusion of seasonal work.
3) Suspicious providers. An employee’s medical providers or legal consultants have a history of handling suspicious claims, or the same doctors and lawyers are used by groups of claimants.
4) No witnesses. There are no witnesses to the accident and the employee’s own description does not logically support the cause of the injury.
5) Conflicting descriptions. The employee’s description of the accident conflicts with the medical history or injury report.
6) History of claims. The claimant has a history of a number of suspicious of litigated claims.
7) Treatment is refused. The claimant refuses a diagnostic procedure to confirm the nature or extent of an injury.
8) Late reporting. The employee delays reporting the claim without a reasonable explanation.
9) Claimant is hard to reach. The allegedly disabled claimant is hard to reach at home.
10) Changes. The claimant has a history of frequently changing physicians, addresses or jobs.
We believe that vigilant employers can nip most fraud in the bud with a tight workers comp management program that focuses on preventing injury, treating employers fairly and compassionately when injuries do occur and closely monitoring the recovery process until return-to-work on full or transitional duty. By actively demonstrating vigilance repeatedly, opportunistic fraudsters may think twice and sophisticated fraudsters may choose an easier target. Here are some best practices:
• Zero tolerance message. Educate employees about their rights and responsibilities under workers comp, and be clear that your intention is to care for anyone who is injured on the job, but that you aggressively prosecute fraud as a crime.
• Publicize your return-to-work program. Establish and reinforce a goal of recovery and return-to-work for any work-related injuries.
• Train supervisors. Your supervisors should understand workers comp and their role in the process. They should understand the employer/employee rights and responsibilities and what to do if an injury occurs. They should be alert for red flags.
• Aim for same-day injury reporting. Train employees to report injuries immediately when they occur.
• Conduct accident analyses. As soon as possible after a work injury or near miss, gather facts and witnesses while things are fresh. This will also set the stage for getting to the root cause and taking any remedial actions to prevent future occurrences.
• Set the tone at point of injury. Escort an injured worker to the treating physician in your network. Remind them of rights / responsibilities and that you will be monitoring their recovery.
• Keep in close touch with out-of-work injured employees. Let the employee know how important they are to the team. Have transitional work available that conforms with any restrictions and establish a return to work date.
• Work with your insurer. Be familiar with “red flags” and report any suspicious activity immediately.

State Fund Announces Work Comp Rate Increase for 4/1/15 – Some employers up to 17.5%

4 Feb

The State Compensation Insurance Fund in California is boosting its workers’ comp rates effective April 1st and it says insured employers will be paying based upon the overall average some 9% more under the modifications. Some employers however will be hit harder than others as State Fund is boosting tier A and B rates by 5%, dropping the 6% group discounts and increasing territorial surcharges in southern California 6.5% for Los Angeles and 4.8 for the rest of the area.
That means that effectively, a tier A or B account which is currently in a group and located in Los Angeles could see an increase of 17.5%. Accounts in Los Angeles not in a group will see increases of 11.5%.
State Fund, California’s market of last resort, is also increasing its requirements for schedule credits and debits to $25,000 and increasing minimum premiums by 25%.
All this is at a time when many employers are being hit hard by dramatic increases in their experience modifications, due to changes in the rating process in California.

Thanks to the Workers’ Compensation Executive for the news flash. http://www.wcexec.com

Workers’ Compensation Insurers Routinely Misclassify Payroll

22 May

The California Workers’ Compensation Insurance Rating Bureau (WCIRB) is finding that workers’ compensation insurers are often assigning the wrong payroll classification to their policies. In a recent WCIRB report about the large risk validation program, where the WCIRB is testing policies larger than those covered by the regular test audits of the Bureau, 13.3% of the time the largest premium policies have the wrong payroll classifications in use.
Up to now, these large policies (usually with premiums of over $1 million per year or higher) have been exempt from the regular audit program of the WCIRB because the assumption has been that larger policies were more accurate than smaller ones. That turns out to be false. In fact, in audits of 219 large policies, the WCIRB found $1.9 billion in premium had been reported in the wrong classifications. That means that approximately one in seven workers’ compensation policies, big or small, have the wrong payroll classifications being applied.
Employers need to take notice of this error rate. There is a good chance that your policy has the wrong class codes being applied, and that the premium auditor who is billing you is making a mistake as well. When in doubt, ask someone to review your classifications and your premium audits. The money you save could be your own.
Don Dressler Consulting assists employers with workers’ compensation classification issues and premium audit matters. Just contact us by email at DonDressler1@hotmail.com for information or help.

Tree-Trimming Fatality At Three Frogs, Inc Prompts Cal/OSHA Big Fines

17 Apr

Cal/OSHA recently issued citations with proposed penalties of $91,865 to Three Frogs, Inc., a La Mesa-based real estate investment company following the investigation of a fatal tree-trimming accident. A 42-year-old employee was killed last November when he was struck by a large section of a 60-foot-tall eucalyptus tree he was helping to remove from the employer’s property.

The employee had been working as a general construction laborer at various properties owned by Three Frogs for approximately three months when the accident occurred; neither he nor any of the other construction laborers employed by Three Frogs had experience or training needed to safely cut down a tree of that size.
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Why should an employer take care of a worker injured on the job? Because doing so saves money, and the data proves it!

15 Mar

Hard cold numbers prove the value of taking care of an employee injured on the job.  For California, if a work injury can be treated by workers’ compensation medical care only, the average cost of a claim is $1,156. (Data is based on the latest report for complete year statistics of the Workers’ Compensation Insurance Rating Bureau.)

However, if the employee can’t return to work the next day, and receives “temporary disability” payments, the average cost per claim jumps to $15,041. This increase in costs clearly shows the value of an aggressive return to work program, and a “day of injury” protocol in taking care of the physical and emotional needs of an injured employee.

If an injured employee experiences any, even minor, permanent disability, the average cost per claim triples to $41,313.  Major permanent disability claims average $140,021 per claim and permanent total disability claim costs soar to an average of $109,922,270 per claim – yes that is $109 million per claim on average.  Death claims only average a cost of $43 million each.  

Contact Don Dressler Consulting and CalWorkSafety for help in keeping injured workers on the job.  Our Nurse Consultant is doing great work in this area and our experience consulting staff can help with safety programs to prevent the injuries in the first place.

Visit our websites at www.DonDressler.com and www.CalWorkSafety.com

Even One Injury Can Raise Your Ex Mod

14 Apr

It is becoming increasingly clear in 2013 that recent changes in the California workers’ compensation experience modification process are severely hurting small employers, who have even 1 work injury reported. A single claim can push an employer’s experience mod up by 15 to 25 %, or more. Now that the first $7,000 of each claim are used in the “primary” loss portion of the experience modification, up from just $2,000 in past years, a single work injury can increase future workers’ compensation premiums by 3 to 4 times the dollar cost of the claim, according to UC Berkeley researcher Frank Neuhasuer and others.
And experience mods being reported in 2013 are showing this impact. The increases are so high that the Workers’ Compensation Insurance Rating Bureau has met recently to consider limiting the impact of one claim. The problem, however, is that many times, what appears to be multiple claims really is just an attorney for an injured worker taking advantage of filing two different claims, one for a “specific’ injury such as an injured shoulder, and a second claim for “cumulative trauma” over the work life of the employee. In truth, these are not two claims, but the lawyer’s effort to magnify injuries to obtain more money for himself and the worker.
Employers, in self-defense, need to consider “post offer pre employment physical exams”, immediate and through accident investigations, and full cooperation with their workers’ compensation claims personnel.