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Conning Washington State's Workers' Comp

Posted by Foster Law on May 18, 2015

How defrauding Washington’s workers comp system hurts consumers and their wallets.

Contrary to popular belief, workers' compensation fraud goes beyond a solitary employee exaggerating their workplace injury or working under the table for cash while receiving disability payments. While those things do happen, employers are also committing fraudulent acts by under-reporting their payrolls to obtain lower premiums and health care providers charging for services they have never performed.

Workers compensation fraud is costing the businesses and citizens of Washington state billions of dollars every year.

  • 1 in 4 Americans think it's okay to defraud insurers
  • $4.35 million dollars of insurance premium fraud was discovered in 2009
  • Between 2005 and 2009, $25 billion in disability payments were based on fraud
  • Workers compensation fraud costs the industry $5 billion annually
  • The average household pays $200-$300 extra per year in premiums to offset the cost of fraud

So now that we have a better idea of how this is financially draining Washington State's workers' comp system, let's talk about what workers' compensation fraud is.

What is workers' compensation fraud?

“A worker in Washington State pleaded guilty to stealing more than $14,000 in disability benefits after he was videotaped racing BMX bikes.”- WA Dept. L&I

In Washington State there are three different types of workers' compensation fraud.

Injured Worker Fraud

Examples of Claim Fraud:

  • Not injured at work (or not injured at all)
  • Appears to have been injured, but no one else witnessed the accident
  • Gives conflicting stories as to how the injury occurred

Examples of Unfair Benefits Fraud:

  • Participate in recreational or other activities inconsistent with alleged injury
  • Claim dependents that are not in his/her legal custody
  • Claim a spouse when not married

Examples of Disability Fraud:

  • Be working while on disability
  • Be receiving unemployment benefits while on disability
  • Be working and being paid "under the table" while receiving disability benefits

Examples of Health Care Provider Fraud

  • Billing for exams of patients who were never examined
  • Billing for treatment of patients who were never treated
  • Duplicate billing in order to receive payment from different insurance carriers for the same medical treatment
  • Bundling unnecessary medical services with necessary services

Examples of Employer Fraud

  • Under-reporting the number of employees
  • Misclassifying employees as independent contractors
  • Misrepresenting the nature of the work performed by the employee
  • Falsely informing an employee that workers' compensation benefits are only available if he or she has been employed for six months or more.

Workers' compensation fraud takes place when someone deliberately makes a false statement or hides information in order to obtain workers' compensation benefits or prevents another from collecting benefits to which they might be entitled.

“A Spanaway woman that claimed she was too disabled from a job-related injury to work was caught operating a local restaurant while receiving over $56,000 in injured worker benefits.” – WA Dept. L&I

What is workers' compensation?

Workers compensation insurance provides wage replacement and medical benefits to employees injured on the job or that have suffered from an occupational illness or disease. In some cases, without the assistance of workers compensation benefits, the employee would be unable to receive medical treatment, eat, pay bills or survive.

How much does workers' compensation fraud cost Washington consumers?

Aside from the cost in lost jobs and profit, lower wages and benefits, and higher costs for services and premiums, workers' compensation fraud amounts to $7.2 billion per year across the United States, according to the National Insurance Crime Bureau.

“A former drywall contractor in Walla Walla, Washington has been found liable for unpaid workers' comp premiums, interest, and late fees totaling over one million dollars. The contractor owes L&I more than $615,000 in premiums, $102,000 in late penalties, and $296,000 in interest, totaling over $1, 013, 00.00.” 

We Can Help with Your Workers' Compensation Claim in Seattle

If you have suffered a work-related injury or illness and are seeking workers' compensation benefits, please contact Foster Law, PC to schedule a free initial consultation. We are attorneys in Seattle, Washington with specific expertise in workers' compensation law and can help ensure that you receive the benefits you deserve. Call 206-682-3436 or fill out our online contact form for more information.

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