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The Truth About Worker’s Comp Fraud in the Hospitality Industry

The Truth About Worker’s Comp Fraud in the Hospitality Industry

Updated June 14, 2021 Originally published October 02, 2020
Julian Alexander

The Truth About Worker’s Comp Fraud In The Hospitality Industry http://blog.onsite-physio.com/workplace-wellness-programs/the-truth-about-workers-comp-fraud-in-the-hospitality-industry @onsitephysio

Insurance is a way for everyone to put money aside in case of emergency. After a while that big pile of money starts to look very tempting. Fraud happens across the board in the insurance industry.

One quarter of all insurance fraud is related to worker’s compensation. We talk about fraud most often in terms of employees who fake injuries. But the problem is actually more of a two headed monster.

Employee fraud that includes:

  • Injuries with no witnesses
  • Delayed reporting in injuries
  • Delayed medical reporting/missing appointments
  • Injury out of work
  • Multiple claims
  • Injuries occurring when employee is fired

Employer fraud includes:

  • Denial of legitimate claims
  • Delays in issuing disability payments
  • Incorrect classification of workers as independent contractors
  • Not buying insurance for employees
  • Penalizing employees who make claims

Health Care Provider Fraud

Health care professionals are immune when it comes to fraud. There have been many cases of corrupt medical clinics. They team up with dishonest attorneys and process paperwork without providing treatment. Other scams include over-billing, unneeded tests and procedures.

The truth is these kinds of fraudulent acts aren’t limited to the hospitality industry. But as a high risk business there is an increase likelihood that things like this will happen.

The problem with insurance is no one likes that it's needed. When it comes to fraud people don’t truly understand what it costs everyone. 1 in 4 Americans are okay about defrauding an insurance company. 

1 in 4 construction workers are paid under the table or off-book to avoid paying premiums. It’s estimated that 10% of all claims are fraudulent. That accounts for billions of dollars in lost money and translates to increased premiums overall.

The good way to approach fraud prevention is with intervention. It’s easy to step back once a claim is filed and take the employee’s word for it that the treatment is taking place. Take the time to discuss the particulars of the injury and get regular updates from the treatment professional.

If you do this you’ll ensure that the employee is getting the treatment that they need. This will also discourage employees from missing appointments and extending their time away from work. As a check for other kinds of fraud you should do frequent internal checks. Look at your claims processes. Check out the medical providers and always be aware of who your company deals with regarding claims. Fraud is going to happen, but with diligence and vigilance you can keep it to a minimum.

Housekeeper in a hotel who is happy about her return-to-work rates


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