Controlling workers' compensation costs is an ongoing challenge for businesses today, and trucking companies are no exception. Protecting your trucking fleet against workers' comp fraud is an important part of that effort.
Just how much of a problem is workers’ comp fraud? According to industry experts, a very significant one, with worker's comp ranked among the fastest growing areas of insurance fraud, accounting for about a quarter of all instances of fraud and costing businesses about $7.2 billion every year.
A small percentage of that fraud – and a very small percentage of overall claims filed – can be attributed to false workers' comp claims. The bigger problem is that nearly 25 percent of lost time claims are exaggerated – an issue commonly referred to as malingering by insurance and risk management industries. So how can you combat workers' comp fraud? Here are three tips that can help reduce your risk.
Trucking is a physically demanding industry, and effective screening during the hiring process is essential to reducing workers' comp fraud as well as decreasing your number of workplace injuries. While most trucking fleets have some aspects of pre employment screening covered, such as background and driving record checks, pre-work medical exams, and drug screens, many are not yet using Physical Abilities Testing (PAT) to ensure that the workers they hire are capable of meeting the physical demands of their jobs.
Why is this important? Not only are these jobs physically demanding, but trucking fleets are also confronted with a serious shortage of new drivers entering the industry to replace a rapidly aging workforce. This means that the job candidate pool is older and less healthy as compared to average applicants 10 or 20 years ago. In fact, truckers are as a group some of the unhealthiest people in the country, with an average lifespan of just 61 years. An older, less healthy candidate pool means higher risk of injuries among new hires and more workers' compensation claims – and thus more opportunities for workers' comp fraud.
Implement an Effective Return-To-Work Program
Implementing a solid, effective return-to-work program in your workplace reduces the odds of an injured employee staying out of work longer than they should, whether the delay is due to intentional malingering or inaccurate return-to-work evaluations. How so? An effective program will use functional ability testing – based on the actual demands of the job – to make return-to-work determinations, providing an accurate, objective evaluation of whether or not employees recovering from injury are physically capable of returning to full duty. If the employee’s abilities don’t match the job demands, a functional evaluation can provide the basis for a solid transitional duty plan, allowing that worker to ease back into the workforce and make steady progress towards a return to full productivity.
Know Common Claims Fraud Red Flags
While the vast majority of claims are valid, a small percentage of workers will attempt to take advantage of the workers' comp system. According to Protective Insurance, experience shows that when two or more of the red flag factors outlined here are present, a claim may be fraudulent. However, they stress that these factors are not proof of fraud, but simply indications that a claim may warrant a closer look.
Other measures you can take to protect your trucking fleet against workers' compensation fraud include keeping in close contact with workers after an injury, since employer inattention is a big factor in malingering cases, and educating your workers on just how fraud hurts them – taking resources from your business that could be better applied to wages and benefits, etc. While these tips will not eliminate your risk, they can go a long ways towards reducing fraud as well as your overall workers' comp costs.