A Great Workers' Comp Fraud Story (California) (California)

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A Great Workers' Comp Fraud Story (California) (California)

Postby 50Cal20 on Fri Jul 30, 2010 9:50 pm

As an instructor of workers' compensation law I have a great story to share that you won't hear any where else. I have asked over 1,200 students in more than 40 seminars to participate a simple "yes or no" one-question survey. The results were astounding at 1,200-0. But before I asked the survey question I asked my students if they were 1) Always honest with claimants. 2) mostly honest with claimants, 3) sometimes honest with claimants, or 4) never honest with claimants. The students responded evenly between answer No. 1 and 2. I then asked the survey question. The question was, "Do you know of or heard about any workers' compensation claims adjuster being arrested for workers' compensation fraud for "lying" to an injured worker?" Remember, we are not talking about being arrested for theft or embezzlement. We are talking about "lying to a claimant." The answer was unanimous. Nobody knows of or heard about a claims adjuster ever being arrested for lying. Yet, 50% of the 1,200 students I polled said that they "sometimes lie."

In workers' compensation if an injured employee lies just once to a claims adjuster it must be reported to ICU for a fraud investigation and possible prosecution. The media is full of stories of injured employees being prosecuted for fraud for lying to adjusters, but not vice-versa.

In a most amazing case that happened a few years ago, a claims adjuster got caught red-handed lying to an employee. The unrepresented employee entered into an agreement with the adjuster to have a P&S report rated by both the DEU and a private rater. The two ratings would be shared and the parties would then settle the case by splitting the difference between the two ratings. The employee was to request a DEU rating and adjuster was to solicit a private rating. After the DEU rating was served on both parties the employee asked the adjuster to serve a copy of the private rating so that they could split the difference and settle the case. The adjuster flat out lied and sent the employee a letter stating that a private rating was never obtained. The employee was then asked to settle based on the DEU rating, less PD advances. A printout showing the amount of PDA's paid to date was sent to the employee but the printout also included an itemization of all TD and expenses paid in the claim. There in print was a record of payment to a private rater with all the details, including date of payment, amount, check number, and reason for payment. The employee then sent a simple 9-word letter to the adjuster saying, "Please send me a copy of your private rating." Once again, in writing the adjuster denied ever obtaining a private rating. The employee then filed an Application and had a subpoena issued to the private rater, where the private rating of course came in higher than the DEU rating.

The employee reported the case to the Dept. of Insurance who sent an investigator to interview the adjuster. When asked for an explanation the adjuster said that the actions were attributed to a "lapse of judgment" which in civil matters is the same thing as pleading no contest in a criminal case. What do you think the penalty was? The adjuster's employer did not lose their license, nor was it suspended. The adjuster was not arrested for fraud. The company did not even receive a warning. Instead the Dept. of Insurance issued a letter to the employee finding no evidence of wrongdoing! Like I said this is an amazing story!

The moral of the story: Adjusters do not get prosecuted for fraud for lying to claimants.
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