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Workers' Compensation Fraud

Fraud costs the Workers' Compensation system millions of dollars each year. Employers, employees, insurance carriers, and Texas consumers pay the cost of fraud in lost jobs and profit, lower wages and benefits, and higher costs for services and premiums.

Filing false Workers' Compensation claims is punishable with a substantial fine and imprisonment. Any employee who knows of a coworker who is abusing the workers' compensation system or has filed a false workers' compensation claim should call 1-800-241-5689. You will not be asked to identify your name and the call will not be recorded. This is an anonymous call to our insurance company.

Insurance companies have many red flags to identifying Worker's Compensation fraud and will investigate any accident they suspect may be fraudulent. They may deny or reduce benefits whenever a claim is found to be fraudulent or an employee is found to be abusing the workers' compensation system. In many states, insurance fraud is a serious crime punishable by both imprisonment and fines.

The following is considered Workers' Compensation fraud or abuse

1. Faking an accident or injury.

2. Exaggerating the seriousness of an accident or injury.

3. Taking more time off than is really needed to recover.

4. Attempting to collect benefits for an injury that is not job-related.

5. Submitting false or exaggerated medical bills for payment.

6. Working at another, equally demanding job while collecting workers' compensation benefits.

•  Conspiring with, or being persuaded by, another person to do any of the above.

Fraud Indicators

Fraud indicators do not mean fraud has occurred, but they may require a closer review of the claim or application.

Employer fraud indicators include but are not limited to:

  • Classification codes not consistent with duties normally associated with the employer's type of business, for example, a construction company that reports mainly clerical classifications
  • Payroll information on the insurance application inconsistent with payroll reported to the Texas Workforce Commission (formerly Texas Employment Commission, TEC)
  • Much larger premium paid for the previous year's policy
  • Small payroll reported by a large company or employee leasing company
  • Frequent addition and cancellation of coverage, especially if several business entities appear to be owned or controlled by the same person or group.

Employee fraud indicators include but are not limited to:

  • Injuries that have no witness other than the worker
  • Injuries occurring late Friday or early Monday
  • Injuries not reported until a week or more after they occur
  • Injuries occurring before a strike or holiday, or in anticipation of lay off or termination
  • Injuries occurring where the worker would not usually work
  • Injuries not usually occurring in the particular job description, for example, a secretary injured when lifting a heavy object
  • Worker observed in activities inconsistent with the reported injury
  • Worker history of workers' compensation claims
  • Conflicting diagnosis from subsequent treating doctors
  • Any evidence of working elsewhere while drawing benefits.
Attorney/health care provider fraud indicators include:
  • Receiving bills or explanation of benefits for services from health care providers, insurers or attorneys that seem unnecessary or fictitious
  • "Boilerplate" medical reports, or reports that are merely copies of previously submitted reports
  • Treatment dates on holidays for non-emergency situations
  • Bills from a health care provider or attorney that present an unreasonable amount or hours per day
  • Complaints from the worker that the attorney is "never" available although the attorney files fee affidavits for services
  • Attorney relationship with a health care provider that appears to be a partnership in handling workers' compensation claims.

When people abuse Workers' Compensation benefits, we all pay. Your company is charged higher insurance premiums, which increases our expenses and lowers profitability. The best way to safeguard against fraud is to prevent accidents from happening. If you are aware of fraud, speak up by calling the Fraud Hotline.


If you are in need of legal advice or services, or simply wish to speak to an attorney who has successfully handled a Workers' Compensation case in your state, you may use this Free Online Consultation Form.

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