Every Canadian workers’ compensation system regulator has to deal with the problem of fraud. Fraud comes in many forms and is typically defined as “a wrongful or criminal deception intended to result in financial gain.” Fraud always has an element of deliberate deception to secure unfair personal gain. Fraud can be a civil wrong, a criminal wrong or both. In the workers’ compensation context, there are clear rules about proper reporting of workplace accidents and material change by employers, workers and medical practitioners. However, temptation looms whenever money is available under workers’ compensation systems.
Each stakeholder in the worker’s compensation system may be a party to fraud. For example, an employer may seek to pay a worker “under the table” to stay at home and not report a claim, for the unlawful purpose that it wants to avoid the adverse effect on its experience rating system if it reports the workplace accident.
Workers may commit compensation fraud by claiming an injury occurred at work when it happened at the hockey arena or ski hill for the unlawful purpose of getting workers’ compensation when it would not otherwise be available.
There are also cases where medical practitioners or other health-care providers engage in workers’ compensation fraud. For example, when medical practitioners have a cap by their government medical program on fees, they may be tempted to characterize a medical examination and treatment of a worker as arising from a workplace injury, in order to avoid that income affecting the cap on government medical paid services. Doctors may become co-conspirators with workers, or employers, in perpetrating a fraud on the system. Finally, medical practitioners may commit fraud by conspiring with workers to report non-occupational injuries as work-related.
Every workers’ compensation statute and board across Canada prohibits both innocent and intentional false reporting of accidents. Legitimate disputes may occur regarding whether a worker’s injury was sustained at work, whether the worker is able to return to modified duties or whether the employer reported the accident in a timely fashion. Fraud, however, involves an intentional access to the workers’ compensation benefits without a legitimate basis.
Making or participating in a fraudulent claim is an offence under provincial workers’ compensation legislation and the Criminal Code, section 380. Since Canadian employers exclusively fund the workers’ compensation system, fraud costs them millions of dollars in premiums, which impacts business profitability. Fraud also undermines confidence and integrity in the system.
To stop or significantly reduce workers’ compensation fraud in Canada, all stakeholders must consider the following:
Speak up: Employers — and employer associations — need to become more engaged in the enforcement of workers’ compensation anti-fraud provisions. They also need be more vocal and demand more rigorous scrutiny of workers’ compensation claims. Fraud hurts everybody because it takes money from a system that is legitimately set aside for injured workers.
Better investigations: Workers’ compensation boards need to use more sophisticated investigation techniques to detect fraud. There appears to be a general reluctance on the part of workers’ compensation boards across Canada to hire staff with police investigative backgrounds, establish appropriate enforcement branches and scrutinize workers, employers and physicians who are defrauding the system. Leadership in these key areas of enforcement needs to be improved in all workers’ compensation boards across Canada. Recently, the Workplace Safety and Insurance Board of Ontario has been cracking down on fraudulent claims.
Public awareness: A public information and media campaign is needed to stop workers’ compensation fraud — it is not a “victimless crime.” For example, in the instances when a worker is not injured at work or is able to return to work on modified duties but refuses to do so, there needs to be open, public disapproval of that practice. A public awareness campaign would provide greater appreciation of the costs to employers, workers and the community of workers’ compensation fraud.
Whistleblower bounties: Workers’ compensation boards across Canada should consider a “whistleblower bounty/reward” program. Individuals who report workers’ compensation fraudsters (employers, workers or physicians) to the applicable enforcement branch would receive an appropriate bounty or reward if the tip results in prosecution and conviction of a fraudster. This initiative is being introduced later this year by the Ontario Securities Commission to prevent securities fraud. The volume of workers’ compensation claims far exceeds the more isolated instances of securities fraud, which tends to be white-collar crime. While these two systems may be different, they are similarly affected by the integrity and confidence in their respective systems. A whistleblower bounty/reward program is an innovative concept whose time has come in the prevention and reduction of workers’ compensation fraud in Canada.
All these suggestions can go a long way to addressing the problem. Workers’ compensation boards across Canada, together with employers who fund the workers’ compensation system and workers who benefit from it, all need to help stop fraud. Fundamentally, those who perpetrate a fraud on workers’ compensation systems in Canada are taking money from employers and workers for their own illegitimate benefit. Fraud, by any other name, is still fraud.
This article originally appeared in the August/September 2016 issue of COS.
Norm Keith, an OHS lawyer and consultant, is a partner at Fasken in Toronto. He can be reached at (416) 868-7824 or firstname.lastname@example.org
, or visit www.ehslaw.ca
for more information.