Fraud, waste, and abuse (FWA) is an unfortunate fact of life for workers’ compensation payers who must contend with a variety of issues that drive up costs, compromise care for injured workers, and undermine the workers’ compensation system.
Workers’ compensation insurance fraud costs are estimated to be $34 billion per year, with $25 billion attributed to employer fraud and $9 billion attributed to worker fraud. Employer fraud usually involves efforts to lower premiums, often by misclassifying or under-reporting employees. Worker fraud is when an employee misrepresents the facts of an injury in some way, such as exaggerating symptoms to prolong paid time off, making a claim for an injury that occurred outside of work, or faking an illness or injury altogether.
The third, and possibly most expensive, type of fraud that impacts workers’ compensation payers is healthcare/provider fraud.
Workers’ comp payers must provide all necessary medical care for injured workers, which makes them highly susceptible to healthcare system fraud, which is estimated to total $100 - $300 billion per year across public and private payers. And fraud is just one part of the FWA triangle that drives up healthcare and workers’ compensation costs across the country.
