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 From March 4-6, 2010, the American Bar Association’s Tort Trial & Insurance Practice Section, the Workers' Compensation & Employer's Liability Committee and the Section of Labor & Employment Law Workers' Compensation Committee convened their annual conference entitled "National Trends & Emerging Issues in Workers' Compensation" on March 4-6 at the lovely Pointe Hilton @ Tapatio Cliffs in Phoenix, Arizona. Michael Fish of Fish Nelson LLC, presided over the conference as Chair of the Committee.
Some of the nation's best legal practitioners in the field of workers' compensation assembled to discuss emerging legal and medical issues, many of which are of national importance to practicing attorneys in workers' compensation and related areas of law as well as all state legislative bodies. Such topics included erosion of the exclusive remedy doctrine, new definitions of physical injury, ADA.FMLA.WC, mediation strategies, negotiation tactics, and fraud.
During the conference, California workers' compensation defense attorney, Charlene L. Usher, Esq. of the Usher Law Group P.C., moderated a panel titled “Fraud –Everybody Is Doing it – What is the cost? How Do You Spot It? which provided a comprehensive analysis of the different types of workers’ compensation fraud, the latest cases related to fraud and strategies and tactics to conduct effective surveillance and investigation. The fraud panelists included North Carolina attorney Leonard Jernigan, Karyn Smithson-Hughes Western Regional Workers’ Compensation Claims Manager for Nestlé USA and Jodi Harris Regional Manager for Blue Eagle Investigations.
Ms. Hughes of Nesle USA discussed the seriousness of fraud claims within the workers’ compensation industry stating that between 5% - 25% of claims made by employees can be considered suspect or having fraudulent elements and that workers’ compensation fraud has been estimated to cost $85 billion to $100 billion annually.
According to Ms. Hughes, workers’ compensation fraud is multi-faceted and not limited to claimant or employee fraud, but that the tremendous cost of fraud includes fraud by employers who either under state payroll, classify employees into safer occupational categories or fail to pay premiums. Ms. Hughes further noted that workers’ compensation fraud claims also included fraud by the medical providers who provide unnecessary treatment or bill for fictional treatment, which is a hot button topic of the current health care reform debate.
Jodi Harris of Blue Eagle Investigations stated that the key to fighting employee fraud in the workers’ compensation industry is to utilize experienced investigators with state of the art surveillance technology to verify employee injury and disability. According to Ms. Harris, for every $1 spent on surveillance, $9 is saved in claims payments.
The fraud panel concluded with an overview of the most recent high profile fraud cases prosecuted in 2009. The most significant was the indictment of Tam Vuong, owner of Labor Solutions, Inc. a temporary employment agency for 66 charges of wage and hour violations wherein the company collected approximately $20 million in revenues but only reported paying out $11 million in wages and the company failed to report cash payments to employees to the state and federal taxing authorities. The Labor Solutions case highlighted the impact of workers compensation fraud by employers and its impact on this down economy.
As noted by Judge E. R. Mills in the land mark workers’ compensation cases in the country, Singletary v. Mangham Construction, 418 So.2d 1138 (Fla. 1st DCA, 1982),"workers' compensation is a very important field of the law, if not the most important. It touches more lives than any other field of law. It involves the payments of huge sums of money. The welfare of human beings, the success of business, and the pocketbooks of consumers are affected daily by it."
It was the general concensus of everyone in attendance at the conference that more needs to be done in the workers’ compensation industry to curb the tide of fraud, which should also be a topic for the health care reform debate.
By Charlene L. Usher, Esq.
Managing Partner
Usher Law Group, P.C.
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