How to Handle a Workers’ Compensation Claim Investigation

Your worker’s compensation claim may be investigated for fraud. Here’s how to get through the investigation and preserve your benefits.

If you are injured at work, you can file a workers’ compensation claim with your employer’s insurer. The insurance company will typically contact you within a few weeks to confirm your benefits.

In some cases, an insurance company may decide to investigate your claim. Insurers investigate workers’ comp claims when they suspect that a worker lied about an injury or took another job while collecting benefits.

Providing false statements about a workplace injury is workers’ compensation fraud, which is a criminal offense in every state.

If you believe you may be under investigation, contact a workers’ compensation lawyer and take steps to protect yourself from an intrusive investigation.

When is a Workers’ Comp Claim Investigated?

A workers’ compensation investigation may be initiated because the employer or insurer doesn’t believe your injury report, doubts that you were actually injured while at work, or suspects you are somehow trying to beat the workers’ compensation system to collect money.

Claims based on false information are considered workers’ compensation insurance fraud.

Specific acts that give rise to fraud cases include workers:

  • Intentionally lying to collect workers’ compensation benefits
  • Exaggerating their injuries
  • Secretly working another job while collecting benefits
  • Claiming an injury was work-related when it really wasn’t

You don’t commit workers’ compensation fraud just because you collect benefits for an extended period of time. Every state’s workers’ comp laws say that an injured worker doesn’t have to return to work until their doctor authorizes it.

However, insurance companies don’t like to pay extended benefits. The adjuster may launch an investigation just to see if they can find an excuse to terminate your claim.

Scenarios Where a Worker is Investigated

In some cases, an employer may receive direct evidence of workers’ comp fraud. Maybe, for example, an employer observes an employee running on the job after returning to work on a restricted basis for a “severe ankle injury.”

In most cases, it’s not that easy to spot a fraudulent claim. Employers often look for certain red flags that may suggest a worker committed fraud.

Red flags suggesting a fraudulent claim include:

  • The claimant is a disgruntled worker
  • The injured worker is a new employee
  • There are no witnesses to the workplace accident
  • The injured employee gives inconsistent accounts as to how an injury occurred
  • A witness’ version of how an accident took place differs significantly from the injured employee’s version

Adjusters often suspect fraud if they have difficulty contacting a claimant. The difficulty may suggest that the employee is working another job while collecting workers’ comp benefits. This situation is often referred to as “double-dipping.”

How Claim Fraud Investigations Work

Once you suffer a work-related injury, you’ll file a workers’ compensation claim with your employer. Your employer then sends the claim to its insurance company for an evaluation.

The adjuster will generally approve your claim if there is evidence that you were actually injured while in the course of your employment.

But if the adjuster suspects that you didn’t experience a workplace injury, or began a separate job after collecting benefits, they will start to investigate your claim.

The goal of the investigation is to determine whether you have a legitimate claim or if you’re workers’ comp claim is fraudulent.

Insurers typically don’t conduct an investigation just to make your life miserable. Their job is to make sure you don’t receive benefits if you’re not entitled to them. Investigations also help protect a state’s workers’ compensation system and prevent the rise of insurance costs.

Length of a Workers’ Comp Investigation

There is no set time frame for how long a fraud investigation will take. In some cases, an investigation is over in a few days. In others, it can take over a year to complete.

The length of an investigation usually depends on the skills and experience of the investigator and the number of details in a claim.

Workers’ Comp Investigator Tactics

Workers’ comp investigators will use different tactics when probing into a potentially fraudulent claim.

Some investigator tactics include:

  • Video surveillance of a claimant
  • Electronic surveillance
  • Background checks
  • Research of an injured worker’s medical records
  • Interviews of the claimant or the claimant’s co-workers, family members, and friends

Online or electronic surveillance involves monitoring an injured worker’s social media accounts. The investigator is looking for pictures or comments suggesting an injury never took place or is less severe than reported. This can include pictures of the injured worker doing physical activities that shouldn’t be possible with their reported injury.

For example, if you claim that you hurt your knee on the job but later post pictures on social media of you skiing, there’s a good chance your injury isn’t real.

Work-issued devices are fair game. If you’re off work from an injury, but carry a work-issued cell phone or tablet, the employer may have a policy that states it can monitor the device. For example, an investigator can install an app on the phone to track a worker’s movements.

Direct observations involve watching (and potentially filming) the injured employee when they’re out in public view. This type of monitoring is legal since the investigator is not watching the worker while they’re in a private location.

As with monitoring social media, an investigator is trying to observe you performing acts that you couldn’t perform if your injury was real.

You may claim that you suffered a lower back injury while trying to lift a heavy object at work. But if an investigator sees you at a local park, playing and lifting your kids in the air, they have potential evidence of workers’ comp fraud.

How to Get Through a Claim Investigation

The best way to pass a workers’ compensation investigation is to avoid one altogether.

A worker can avoid an investigation by providing honest statements as to how a workplace injury occurred. Further, employees should support their claims with concrete and reliable evidence.

Evidence that helps show a workplace injury includes:

  • Detailed medical records
  • Doctor statements
  • Workplace surveillance footage
  • Witness statements
  • Photos of your injury
  • Journal entries that help describe the extent of your injuries

Avoid Activities That May Raise Questions

Exercise caution. The insurance company doesn’t have to tell you if your claim is under investigation or if you are under surveillance.

Stay away from social media. Don’t post pictures or comments. Be mindful if you attend a social function. Friends or acquaintances may post pictures or videos of the event and “tag” you.

If you are out of work for more than a few weeks, it’s best to assume that the insurance company may have someone watching you. Pictures of you unloading groceries from the car won’t reveal that you were in terrible pain and you just wanted to spare your pregnant wife from the chore.

Sometimes even legitimate claims come under investigation because of some misunderstanding. Avoid doing anything that may make an investigator misinterpret the extent of your injuries.

Consequences for Failing an Investigation

You can suffer serious repercussions if you fail a workers’ compensation investigation. For starters, your employer’s insurance company will deny your claim and you won’t receive benefits.

Even worse, workers’ compensation fraud is a criminal offense. If you fail an investigation, you can get arrested and charged with a crime.

Most states categorize workers’ comp fraud as a felony. Fraud committed by government employees is a federal crime.

If convicted of workers’ comp fraud, penalties can include:

  • Custody in prison for up to five years
  • A fine of $150,000 or double the amount of the fraud, whichever is greater

Case Summary: Postal Worker Pleads Guilty to Workers’ Comp Fraud

Cathy Cashwell was a U.S. Postal Service worker when she filed a workers’ comp claim in 2004. In her claim, Ms. Cashwell alleged that she suffered a shoulder injury at work and could no longer perform several of her duties, such as carrying bags of mail and lifting mail trays.

Ms. Cashwell’s claim also stated that she could not reach items, grip things, sit, or engage in similar activities. Her claim was approved, and she began collecting workers’ comp benefits in 2005.

Cashwell was still collecting workers’ comp disability payments on September 23, 2009, when she appeared on the game show, The Price is Right. During the televised appearance, she spun “the Big Wheel” twice.

Cashwell raised both arms in the air during the first spin and grabbed the wheel with both hands. On the second spin, she reached her left arm in the air and grabbed the wheel with her left hand.

As a result of her appearance, investigators began looking into Ms. Cashwell’s workers’ comp claim. The investigation found that she performed activities on several occasions that she claimed she could not engage in because of her workplace injury.

The investigation produced photographs of Cashwell lifting furniture and carrying groceries. Further, evidence came to light that showed Cashwell ziplining with her husband during a Carnival Cruise vacation, all while still collecting workers’ comp for an allegedly disabling shoulder injury.

Ms. Cashwell eventually pled guilty to federal workers’ compensation fraud charges. She was sentenced to three years of probation.

If you think you might be under investigation for filing a fraudulent workers’ comp claim, contact a skilled workers’ compensation attorney for legal help.

A lawyer can help you gather evidence that supports your claim, and speak to investigators on your behalf. Most importantly, an experienced attorney will work to protect the workers’ comp benefits that you deserve.

Most workers’ comp lawyers provide free consultations. You can get your immediate questions answered free of charge.

Dustin Reichard, Esq. is an experienced attorney with 20 years of work in the legal field. He’s admitted to the Illinois State Bar and the Washington State Bar. Dustin has worked in the areas of medical malpractice, wrongful death, product liability, slip and falls, and general liability. Dustin began his legal career as a JAG... Read More >>