What Fraud Looks Like
Claimant fraud trends have been on the rise in recent years, reflecting current economic conditions. Claimant fraud occurs when false or exaggerated injury claims, such as those not received on the job, are filed. The National Insurance Crime Bureau (NICB) reports that as the economy has deteriorated over the last several years, the number of suspicious or questionable claims has increased. For instance, the NICB states that the number of questionable claims related to workers' compensation increased 71 percent between the first quarter of 2008 and the first quarter of 2009 alone.

Equally troublesome is the impact increased medical costs have had on workers' compensation. Traditionally, 60 percent of injury claim amounts covered the indemnity payment while the remaining 40 percent covered medical costs. Today, the relationship has reversed, illustrating how dramatically medical costs have risen, while frequency and indemnity payments have decreased.

Such a significant increase in medical costs can be partially attributed to a rise in provider fraud, when medical or treatment providers exaggerate treatments for minor injuries or bill for treatments not actually provided. The increased involvement of organized crime can drive up medical costs as well. Such crime can include storefront clinics where no treatment is rendered or durable medical equipment providers that do not supply equipment to patients.