WORKERS’ COMPENSATION: Anti-Fraud Efforts Hurt Employees

      California's decade-long fight against workers' compensation fraud has been a "boon for business and a burden for workers," as insurers and employers have "cut costs while workers have lost benefits," the Los Angeles Times reports. The state's efforts are part of a national trend to "save money for employers and insurers at the expense of workers." Across the nation, benefits have been scaled back to the point that some workers no longer receive coverage for work-related injuries. The Times notes that the anti-fraud efforts have escalated despite the fact that little evidence has been provided that shows workers lie about their injuries. Rand Corp. economist Robert Reville said, "Most thoughtful people who do a lot of research in workers' comp would come to the conclusion that there is not a lot of fraud in the system. By making a claim that there was a lot of fraud, I think they (insurance carriers) were benefiting at workers' expense (and) discouraging workers from filing claims." Insurers and employers have saved billions of dollars over the last decade, as state legislatures have passed laws making workers' compensation claims harder to prove. So far, more that two-thirds of states, including California, have made workers' compensation fraud a felony. Some states have lowered payments for partial but permanent disabilities, while others require workers to prove that their injuries were work-related, rather than the result of a pre-existing condition. In addition, other states have reduced compensation for repetitive stress injuries and other have barred mental stress compensation, unless the stress is the result of a physical injury. Experts attribute a drop in the number of claims to these changes, but others believe factors beyond the anti-fraud campaign are involved. A recent study in Michigan found that only one in four workers suffering from repetitive stress injuries filed claims. Some workers cited fear of being fired, losing a promotion or being "thought ill of" by their co-workers and managers as reason not to file claims. According to Boston University Professor Leslie Boden, the anti-fraud efforts have created a stigma around workers' compensation, with those filing a claim viewed as "malingerers or cheats" rather than hard working employees who have been injured (Rohrlich/Larrubia, 8/7).

Investigate the Hand that Feeds?
      Meanwhile, the Los Angeles County district attorney's office, in charge of investigating fraud cases, has been working with a "potential built-in conflict of interest," as it accepts private money to pay for public prosecution of alleged workers' compensation cases, the Los Angeles Times reports. The money comes from the state's employers, and is then doled out by employers and insurers for anti-fraud efforts. Those funds are supposedly used to investigate fraud on all levels -- employers, insurance companies and employees. However, according to a review of the district attorney's office, decisions regarding who to investigate and who to prosecute "consistently favored those who provided them with the money." Authorized by the state Legislature, the use of private funds has been challenged by defense attorneys to no avail. Appellate courts frequently side with prosecutors that there is no conflict of interest. Despite audits by the state Department of Workers' Compensation that show cases of insurers shortchanging injured workers, the district attorney's office has never prosecuted an insurer for workers' comp fraud. District attorney officials contend that they never investigated because they were unaware of the audits, which are available on the Web site www.dir.ca.gov/dwc/au dit.html. Still, the district attorney's office denies that there is any conflict of interest, noting that insurance companies merely "direct their attention to possible cases" and "have a say in how the funds are handed out." Although the D.A.'s office contends that it would look into cases of insurer fraud if given adequate evidence, some workers' compensation lawyers maintain that their referrals have fallen on deaf ears. Larry Stern, president of the Southern California Applicant Attorneys Association, said, "I must live on a different planet. Applicant attorneys have given up writing to the D.A.'s office because they don't respond. ... It's a waste of 33 cents" (Rohrlich/Larrubia, 8/6).