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Healthy Concern

Don't let workers' comp fraud cripple your business.

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This story appears in the April 1997 issue of Entrepreneur. Subscribe »

Workers' compensation fraud costs the insurance industry $5 billion every year, according to the National Insurance Crime Bureau in Palos Hills, Illinois, an organization that investigates insurance fraud. "The hidden cost of workers' compensation fraud is the higher premiums and the way it slows down the process for everyone," says J.C. Benton of the state-run Ohio Bureau of Workers' Compensation Fraud Division in Columbus. Benton notes that of all workers' compensation claims, 5 percent to 15 percent contain some element of fraud.

"Fraud is pervasive, whether from faking an injury or exaggerating the extent of an injury," agrees Gregory Blaies, an attorney in Ft. Worth, Texas, who defends employers and insurance carriers in workers' compensation cases. Blaies has seen cases of people living off the system who, by age 30, have racked up a dozen claims with a dozen different employers. Lower back problems and other soft tissue damage is easy to fake and difficult to disprove. Most doctors are sympathetic to patients who appear to be in pain and are more inclined to prescribe time off from work than to declare there's nothing wrong and risk a malpractice suit should an injury worsen.

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