I’m tired (and angry) when I read or hear news stories about alleged employee fraud in workers’ compensation cases. At cocktail parties, seminars, and social gatherings, when I say I represent injured workers, a common retort is “How many are faking their claims?” I respond, as calmly as I can, that in my experience with thousands of workers over 35 years, only a handful have not been straightforward, and that, compared to instances of employer fraud (not insuring workers, calling them “independent contractors”, telling them to file injury claims under group health insurance, etc., etc.) employee fraud is a drop in the bucket.
The Department’s six year study of such claims concluded that the public perception of workers’ compensation fraud is exaggerated. The documented level of workers’ compensation fraud is minimal.
Much fanfare (primarily fueled by insurance carrier advertisements) accompanied the mid-1990’s enactment of a fraudulent claims reporting provision in the Wisconsin Worker’s Compensation Act. Since then the statute has required insurers to report suspected fraud to the Department of Workforce Development on their own initiative and, at the request of the Department, to investigate and report on cases of alleged fraud reported to the Department by the general public.
In over 6 years, district attorneys initiated prosecution in 17 cases in Wisconsin, obtaining conviction in 14.
Most fraud allegations are made anonymously, by telephone (608-261-8486), and from people who identify themselves as former friends or spouses, relatives, co-workers, or neighbors of the person alleged to be committing fraud. According to the Department summary report, “those allegations usually don’t pan out.”
After reviewing the results of an insurer’s investigation, the Department refers cases to local district attorneys for prosecution if there is a reasonable basis to believe that the case involves insurance fraud. The Department is also required to report to the legislature and the Governor, each year, regarding the number of allegations received in the prior year, the number of referrals the Department made for prosecution, and the results of those referrals.
The Department’s six year study of such claims concluded that the public perception of workers’ compensation fraud is exaggerated. The documented level of workers’ compensation fraud is minimal. When insurers recommend prosecution to the Department, the statute requires that the Department determine that there is a “reasonable basis to believe” that fraud has occurred before recommending prosecution to the local district attorney. Even if the Department does refer the case for prosecution, the local district attorney may still decline to prosecute based on a conclusion that fraud cannot be proved at the higher criminal standard – “beyond a reasonable doubt.”
In over 6 years, district attorneys initiated prosecution in 17 cases in Wisconsin, obtaining conviction in 14. During those years, insurers reported over 60,000 serious injuries in Wisconsin, statistically that is 3 cases in every 10,000.