General / overarching principles

Overview

Workers compensation fraud can take many forms, and is not limited to fraudulent acts committed by workers.

Insurers have a responsibility to prevent, detect and respond to fraud. SIRA also has a role in preventing, detecting and responding to fraud. SIRA has powers to prosecute under various legislation.

This guidance considers the different types of fraud and insurers and SIRA's respective roles in preventing, detecting and responding to fraud.

Fraud in the workers compensation system

What is fraud?

According to section 192E of the Crimes Act 1900, any person who, by any deception, dishonestly:

• obtains property belonging to another, or
• obtains any financial advantage or causes any financial disadvantage,
• is guilty of the offence of fraud.

Section 235A of the Workplace Injury Management and Workers Compensation Act 1998 (1998 Act) deals with fraud on the workers compensation scheme. It provides that a person who by deception obtains, or attempts to obtain any financial advantage in connection with the workers compensation scheme is guilty of an offence if the person knows or has reason to believe that the person is not eligible to receive that financial advantage.

In the workers compensation system fraud can take a variety of forms. These are described below.

Worker fraud

Examples of worker fraud include knowingly:

• claiming for an injury that didn't occur at work
• failing to notify return to work or change in income
• making multiple claims relating to the same injury
• making false or overstated travel and/or expense claims
• falsifying medical certificates
• supplying false or misleading information in relation to a claim.

Employer fraud

Examples of employer fraud include knowingly:

• failing to take out workers compensation insurance
• conspiring with a worker to support a false claim
• supplying false information to obtain or renew a policy
• falsifying documents like a certificate of currency
• deliberately underestimating wages or worker numbers
• failing to pass on workers compensation benefits, and
• working with others to supply false documents in respect of any aspect of a claim.

Provider fraud

Examples of provider fraud include knowingly:

• billing for consultations that didn't occur
• billing for services that weren’t provided
• providing false or misleading information on a medical certificate or other documents
• providing receipts for individual consultations when group rehabilitation has occurred
• requesting a worker to sign more than one certificate of capacity for one consultation.

Insurer fraud

Examples of insurer fraud include:

• setting up fake claims
• knowingly processing fake invoices.

Insurers and fraud

Insurers should have systems and processes in place to:

• prevent fraud - proactively putting into place measures and controls designed to help reduce the risk of fraud from occurring at the outset
• detect fraud - designing and implementing controls to uncover instances of fraud or potential fraudulent behaviour
• respond to fraud – taking action to mitigate the impact of fraudulent activity and pursue prosecution when appropriate.

The action taken when responding to fraud will depend on the individual circumstances but may include:

• disputing liability on a claim
• raising an overpayment against a worker or provider
• reporting a provider to their professional association
• ceasing to use a particular provider
• amending insurer systems and processes
• referring to SIRA for possible prosecution action.

SIRA and fraud

SIRA’s risk-based approach to fraud will determine the response to reported fraud. SIRA will focus its efforts on those incidents where the risk and potential for harm is the greatest.

In most situations, the fraud can be addressed at the insurer level, however SIRA may become involved, for example where prosecution (worker or employer) or criminal charges (provider) may be appropriate.

Insurers should contact SIRA to report workers compensation fraud they have identified and investigated by:

• calling the Customer Service Centre on 13 10 50
• emailing [email protected], or
• writing to Compliance, Investigations & Prosecutions, Locked Bag 2906, Lisarow NSW 2252.