Back to Basics: Workers’ Compensation Fraud in Missouri

March 2024

Amanda J. Richert

The Missouri Division of Workers’ Compensation (DWC) is responsible for overseeing benefits available to employees who become injured or ill on the job during the course of work-related activities. The benefits include payment of medical expenses along with compensation for lost wages and temporary or permanent disabilities. As we all know, these expenses are not insignificant. And, while most claims do involve legitimate accidents and injuries, the few that are fraudulent can negatively impact employers and insurers in a multitude of ways. As such, there must be a method for combatting the illegitimate claims.

In Missouri, the body that investigates allegations of fraudulent workers’ compensation claims is The Fraud and Noncompliance Unit (FNU). The FNU was created in 1993 by the General Assembly to investigate fraud and noncompliance of the Missouri Workers’ Compensation Act, Chapter 287 RSMo. (The Act). As of the writing of this article, the FNU is comprised of eight investigators, two supervisors, one support staff and one manager. The FNU is based in Jefferson City, Missouri, with three investigators assigned to the Kansas City area, two dedicated to St. Louis, two for Columbia and one investigator apiece dedicated to Cape Girardeau and Springfield.

Generally, fraud is a crime that involves knowingly deceiving or misleading others and misrepresenting facts for personal gain. The Act sets forth the specific definitions of what constitutes fraud in the context of workers’ compensation. Specifically, under 287.128.1, it is unlawful for any person to knowingly present or cause to be presented any false or fraudulent claim for the payment of benefit pursuant to a workers’ compensation claim. This also includes presenting multiple claims for the same occurrence with the intent to defraud, and/or knowingly assisting or conspiring with another to obtain fraudulent benefits. Depending upon the extent of the crime, claim fraud can result in a felony charge with fines punishable up to $10,000.00 or double the amount of the fraud, whichever is greater, as well as a potential prison sentence.

In cases where there is suspicion of fraud, an employee may:

• Claim to have been injured at work when it actually happened somewhere else;
• File multiple claims for the same injury;
• Exaggerate the seriousness of the injury to obtain specific medical treatment or restrictions; or
• Stage or fabricate at accident or injury that never happened at all.

Employers and insurers should take note of some red flags that might suggest a closer look at a claim is warranted. For example, consider suspicious timing. Is the injury reported on a Monday after a long weekend or vacation? Or perhaps the injury is reported after a Claimant catches wind of an impending termination or reprimand? Another red flag is when there are documented discrepancies on how the accident took place. Does the Claimant’s version of events continuously change or conflict with the history in the medical records or witness statements? Finally, consider the employee and their history. Is the employee frequently disgruntled? Do they have extreme hobbies or maybe even another job? While none of these considerations prove fraud in and of itself, the information might suggest a closer look at the claim is warranted or perhaps a call or email to the FNU.

Anyone can file a complaint with the FNU. All investigations conducted by the FNU are criminal and thus confidential in nature. As such, once a complaint has been filed attorneys and claims examiners are unable to get updates from the FNU concerning the status of their investigation or decision to prosecute. The claim with the DWC will continue and is not paused pending outcome of any FNU investigation or determination.

If the FNU’s investigation confirms a violation of the statute, the FNU presents their findings to the Director of the Division of Workers’ Compensation. The Director then decides whether or not to refer the case to the Missouri Attorney General for prosecution pursuant to 287.128.8 RSMo.

In 2022, the FNU conducted 389 investigations in 68 Missouri counties as well as the City of St. Louis. Interestingly, the FNU tracks data for who reports suspicions of fraud. In 2022, 7% of reports were from attorneys, 3% were from employers, 18% from employees, 12% from insurers, 2% from healthcare providers and a staggering 58% were from anonymous sources.

The FNU encourages employers and insurers to contact their office early if fraud is suspected. Complaints and concerns can be sent to fraudandnoncompliance@labor.mo.gov or by calling 1-800-592-6003. The Statute of Limitations for prosecution is three years from the date of discovery of the offense by an aggrieved party.