Workers' Compensation Board

Comparison of Workers' Compensation Fraud Detection and Prosecution Systems in New York and Other States

It is estimated by industry experts that 10 to 20 percent of all workers' compensation claims may be fraudulent. We compared the workers' compensation fraud detection and prosecution systems in New York and 32 other states in order to determine whether any of the practices used by the other states can be applied in New York. We found that, while many of the practices used in New York are also used in the other states, certain practices from the other states could potentially be used to improve the anti-fraud efforts in New York. For example, unlike New York, other states have developed centralized databases of workers' compensation claims that can be analyzed to identify patterns of fraud and abuse that would otherwise escape detection. We suggest that New York policymakers consider implementing potentially useful features of the anti-fraud efforts in other states. We also suggest that consideration be given to modifying the process used to set workers' compensation insurance rates so that insurers have incentives to implement fraud control measures. We further suggest that performance measures be developed for evaluating the effectiveness of New York' efforts to prevent, detect and prosecute workers' compensation fraud.

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