News show, 20/20 recently aired a story about several workers’ compensation beneficiaries who were committing fraud. One woman, who was a former postal worker, claimed that she had so much should pain that shoulder could barely lift her arms. However, she was shown as a contestant on The Price is Right lifting her arms high enough to spin the iconic wheel. She also shared photos on Facebook of her zip-lining adventures. Such media stories of workers’ compensation fraud that air on television are usually amusing to viewers as they almost always depict the “injured” worker enthusiastically participating in a strenuous activity such as dancing, zip-lining, or wrestling; often making for “great TV”. However, these incidents are not at all amusing to the employers or insurance carriers who are providing the benefits for these employees. One estimate is that workers’ compensation fraud amounts to over $1 billion a year.
What is Workers’ Comp?
Workers’ compensation is available to employees who are injured while at work. In order to be approved for benefits, a physician must certify that the employee was indeed injured and unable to work. Benefits often include medical benefits and disability payments. Under Texas law, for example, an injured employee can receive workers’ compensation benefits for years. However, if the employee recovers from the injury he or she is required to inform the employer and the benefits will cease. Unfortunately, there are some employees who try to take advantage of the workers’ compensation program. They do so by faking an injury, faking the seriousness of an injury, or faking the continued existence of an injury. With some injuries such as back injuries, a doctor must to some degree rely on the patient’s report of his or her level of pain. If a patient continues to complain of pain that is so debilitating that he or she cannot work, then the doctor will continue to certify that the employee is entitled to workers’ compensation benefits.
Catching the “Frauds”
Because this type of fraud has become so widespread, employers and their insurers actively seek to catch employees who are fraudulently collecting benefits. The result is that more and more workers who are faking injuries are getting caught. Melody Tendayi, of Austin, Texas, was recently sentenced to deferred adjudication, 150 hours of community service and ordered to pay over $6000 in restitution when she was caught working while collecting worker’s compensation benefits. This is referred to as “double-dipping.” Terrance Hopkins of Tyler, Texas, was also recently caught double-dipping. Hopkins, a teacher, was receiving workers’ compensation benefits when he was caught working as a junior college coach.
In some cases, the employees are caught by accident when they post pictures or videos of themselves on social media sites engaging in activities that clearly show they are not disabled. In other cases, insurance companies or employers receive anonymous tips. In some instances, private detectives are dispatched by insurance companies to catch “cheaters”. If an insurer is suspicious that someone is faking an injury, a detective will follow that person and eventually videotape them jumping, zip-lining, playing the drums, golfing, playing basketball, or doing some other activity that they claim they are too injured to do.
Workers’ compensation fraud, Medicare fraud, and Medicaid fraud are huge problems. Such fraud impacts all of us as it causes increased insurance costs. Do you think that the penalties for workers’ compensation fraud and other types of insurance fraud should be increased and should jail time be mandatory?