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An Injury to One is an Injury to All

October 1, 2002

Worker's Compensation Fraud in Pennsylvania

Expressed opinion by Michael A. Kerstetter, PFIW Dauphin County

Fraud perpetrated on injured workers by an employer/worker's compensation insurance company is a huge problem for an individual filing a worker's compensation claim.  The fraud can happen in several ways:

1. When the injury occurs the employer will ask the worker not to file an injury report.  An injured worker is guided to his/her HMO for medical treatment and the employer either pays the workers wages or allows unemployment to be collected while the worker is in recovery.
2. The employer flat out refuses to file an injury report with the State Labor & Industry Department.
3. The employer/workers compensation insurance company submits fraudulent information during claim hearings or submits the fraudulent information to a third party which will make an impact on the claim.
4. The employer/worker's compensation insurance company denies that a worker related injury occurred when they knew for a fact that it did happen.  This causes a long and expensive litigation which runs up the cost of workers compensation claim.
5. The employer/worker's compensation insurance company hires a private investigator to do surveillance on an injured worker.  The wrong person is videotaped but it is still allowed to used against the injured worker.
6. False investigative reports and surveillance videotapes are sent to the injured workers treating physician turning the physicians against the injured worker.
7. The employer/worker's compensation insurance company file a false Independent Medical Examination report in a workers compensation claim hearing.  This is usually done in an old claim.
8. The employer/worker's compensation insurance company solicits a false Physical Capacities Evaluation from a doctor who never examined the injured worker.

When this type of fraud is committed there is absolutely no where for an injured worker to file a complaint.  If the worker's compensation referee does not recognize the evidence or practice as fraudulent then it is allowed to occur.  The Worker's Compensation Bureau says that it is up to the worker's compensation referee as to whether the fraudulent action of the employer/worker's compensation insurance company rises to the standard of fraud.  Most referees do not recognize any unethical action perpetrated on an injured worker by an employer/worker's compensation insurance company to be an act of fraud.  As a matter of fact a lot of the referees think it is funny.  Here is what the worker's compensation act says about fraud in a claim:

Section 1102. A person, including, but not limited to, the employer, the employee, the health care provider, the attorney, the insurer, the State Workmen's Insurance Fund and self insured’s, commits an offense if the person does any of the following: Section 1102

Worker's Compensation referees do not recognize fraud and the Worker's Compensation Bureau refused to hold them accountable when they do not uphold the fraud portion or the worker's compensation act.  Injured workers are told that the Worker's Compensation Bureau has no control over it's referees.  Well, who's overseeing them to make sure they are complying with the worker's compensation act and not imposing their personal spin on each claim.  There is no place to file a complaint with the Worker's Compensation Bureau when a referee is way out of line.  This is supposed to be the job of the Worker's Compensation Bureau's Chief of Adjudication.  Instead the Worker's Compensation Bureau tells you to file an appeal if you were not happy with the referee's handling of the claim and the decision handed down.  This drives up the cost of worker's compensation again with additional litigation when all that is required is to hold the referees to the standard of ethics they were sworn to.  Injured workers are not unhappy with the decisions, they are unhappy that fraud was allowed to be perpetrated on them and a tainted decision is handed out as a result of that fraud.

Injured workers along with the Pennsylvania Federation of Injured Workers have tried to get an investigation into this practice at all levels of the Pennsylvania government.  Every legislator was notified about this issue by the PFIW Dauphin County Chapter and to date has received no response from anyone about the issue.  No one has responded to our numerous requests for an investigation into the way fraud against injured workers is being handled by the Workers Compensation Bureau.  Injured workers and the PFIW get sent all over the Pennsylvania government from one agency to another and when it is all done, none of them will take a complaint of fraud.  Injured workers, the PA Federation of Injured Workers and other injured worker advocates have brought this issue up at the Pennsylvania Worker's Compensation Advisory Council.  We got a response from the Director of the Worker's Compensation Bureau.  Unfortunately the response did not address the fact that the fraud is still excepted as evidence and made a part of the permanent record in the claim and is used against the injured worker time and time again with out any way to remove it from the record.  Here is the Director of the Worker's Compensation Bureau's response to the issue of fraud committed against injured workers:

Provable fraud is a criminal offense for which an individual or corporation (considered a natural person by statue) can be prosecuted by any prosecuting authority having jurisdiction to do so.  In Pennsylvania, the prosecuting authority would be the district attorney in the county where the fraudulent conduct was actually committed and, possibly, the Office of the Attorney General, particularly its Insurance Fraud Task Force.

Any individual who believes conduct rises to the level that probable cause for fraud exists should set up a meeting, either with the proper prosecuting authority or the local police of the jurisdiction where the alleged offense was committed, to review the evidence and discuss the merits of the case.  The prosecuting authority has the power to determine whether the state will file criminal charges of its own violation or if it will approve of an individual filing a private criminal complaint.  Once approval to file charges is granted, a preliminary hearing is held after which a district justice from the local magisterial district binds over prima facie cases to county court.  Ultimately, a judge determines whether fraud was committed in a bench trial or a jury determines it if the defendant requests a trial by jury.

The sentence on might expect in a fraud case depends on the sentencing guidelines for the offense and the prior record of the person convicted.  Unfortunately, I cannot tell you how many employers or insurance companies are prosecuted for fraud each year since we do not bring the prosecutions - in fact, we don't even "count" the complaints that are misdirected to us that we attempt to redirect to the proper party.

Injured workers and the PFIW approached Attorney General Mike Fisher for help.  The Attorney General said they did not have jurisdiction to investigate and prosecute.  Mike Fisher was shown the section 1109 of the worker's compensation act that gave him jurisdiction and his response was this:

The office of the Attorney General will not investigate or prosecute fraud perpetrated on an injured worker by an employer/worker's compensation insurance company but they would be glad to investigate and prosecute fraud perpetrated by an injured worker.

The Pennsylvania government in a partnership with the insurance industry has shut out an injured worker from filing a fraud complaint.  There is absolutely no where to file such a complaint.  If you are filing a complaint against an injured worker there are many places to do that.  Pennsylvania has a website to report insurance fraud but it is run by all insurance personnel and funded by insurance company funds.  Where is the fairness in that!  Pennsylvania is supporting corporate greed at every level.

Where is the fraud protection for the injured worker?

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Last modified: 04/29/08