by David Burgess


The Workers’ Compensation Division of the Department of Consumer & Business Services (DCBS) investigates allegations of statute or administrative rule violations in an effort to minimize abuse of the workers’ compensation system. The division investigates complaints involving abuse or fraud by medical providers, insurers, employers, and claimants. This report summarizes the division’s complaint investigation activity from July 1, 1997 through June 30, 1998 (FY98).

Investigations initiated
In FY98, 244 investigations into complaints of abuse or fraud were initiated averaging 20 per month. This is a 15.6 percent increase from the 211 investigations initiated in FY97. Until FY98 the number of investigations opened had been decreasing every year since FY93, when a high of 342 investigations were initiated.

Figure 1 Abuse complaint investigations
 Figure 1 note

The most frequent complaints received were improper processing by the insurer or medical provider (32 percent; an increase of 18 percentage points since FY97), worker collecting workers’ compensation benefits when working or able to work (28 percent; an increase of 5 percentage points since FY97), and employer pressure not to file a claim (17 percent; an increase of 8 percentage points since FY97). Other complaints included: failure to or improper reporting of claims-related documents by either the employer, insurer, or medical provider (7 percent; a decrease of 23 percentage points since FY97), harassment (5 percent; a decrease of 1 percentage point since FY97), and improper billing (3 percent; unchanged since FY97). All other complaints accounted for 9 percent of the total
investigations initiated.

Table 1 Nature of abuse complaints, FY97-98

Subject of investigations initiated
Thirty-one percent (75) of the 244 complaints initiated in FY98 were against workers. This represents an increase of 2 percentage points from FY97. Most of the complaints against workers, 92 percent, were for collecting workers' compensation when able to work. Twenty-nine percent (70) of the FY98 investigations were employer related; 53 percent of these complaints were investigations into allegations of employers pressuring employees not to file claims. Twenty percent (49) of the total FY98 complaints were against insurers; 67 percent of those complaints were for improper claims processing. All medical providers accounted for 9 percent (23) of the initiated investigations; 76 percent of these involved complaints of improper claims processing. Self insured employers were the subject of 7 percent (18) of the 244 complaints; 61 percent of those complaints also involved improper processing.

Table 2. Subject of abuse complaints, FY97-98

Investigations closed
In FY98, 287 investigations of abuse or fraud complaints were closed compared to 194 closures in FY97. An average of 24 complaint investigations were closed each month in FY98. Compared to FY97 average closed investigations increased by 8 per month. These complaints were closed either by disposition (60 percent) or referral (40 percent). Of the 173 disposed complaints, 32 percent were retained for future reference and pattern development, 31 percent were unfounded, 20 percent were given a letter of reprimand or warning, 11 percent were issued a notification letter, and five percent were issued a penalty.

Forty percent (114) of the investigations were closed by referral. Sixty-one percent (70) of these referrals were made to the insurer (or self-insurer). Complaints referred to the insurer most often consisted of claimant fraud such as collecting workers’ compensation benefits when able to work (94 percent). Nine percent of the referrals were made to MCOs, 10 percent were made to another division within the Department of Consumer & Business Services, 10 percent were made to other sections within the Workers’ Compensation Division (WCD), and 6 percent were made to other state agencies.

Table 3. Investigations closed FY98











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This document was originally published in August 1999.
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