Fraud warnings advised for workers’ comp checks

Couldn’t hurt, but do warnings help?

Fraud warnings printed on workers’ comp and disability checks are effective in discouraging fraud by workers, some experts say, so much so that they recommend extending the same approach to documents in the occupational health clinic.

The warnings have been used on checks by some insurers for years, but it is unclear just how effective they are. Some critics have questioned how well the warnings actually discourage fraud, but two organizations battling workers’ comp fraud recently have come out in favor of the warnings. Howard Goldblatt, director of government affairs for the Coalition Against Insurance Fraud in Washington, DC, says the group supports the warnings even though there is little evidence about effectiveness.

"We hear anecdotal evidence about people being turned away from fraud when they see the warning on the back of the check, but we don’t know," he says. "One concern is that, to be effective, the worker would have to have the check in hand already, see the warning, and decide not to cash it."

That may seem unlikely, so Goldblatt suggests the same type of warning may be more effective on other documents. Some states already require the worker to sign periodic statements attesting that they are eligible to continue receiving benefits and not participating in any type of fraud. Because those statements require a proactive declaration that is not directly tied to a check, the worker must make a conscious effort to lie when returning the declaration, rather than just ignoring the warning as he or she cashes a check.

States want individualized warnings

But on the other hand, there appears to be no downside from printing a fraud warning on the workers’ comp and disability checks, Goldblatt says. The only thing that troubles anti-fraud experts is the recent effort by some states to require a standardized warning on all such checks issued in the state.

Mandating specific language can be problematic because most insurers process checks from central sites and would be hard pressed to make sure checks going to one state have the proper warning on them and checks going to another state have a different warning on them.

"We think it’s fine if states want to mandate that there be some warning against fraud, but we’re hoping we can convince the states to allow for discretion on the part of the insurers to allow similar language as long as it meets the meaning of the state’s required warning," he says.

Currently, 24 states require fraud warnings on insurance forms or checks, and two-thirds allow insurers to use warnings that are very similar to the state’s suggested warning.

Another group fighting insurance fraud also endorses fraud warnings, with the same caveat that there is little evidence of effectiveness but they can’t hurt. The Alliance of American Insurers in Downers Grove, IL, says the warnings on checks may provide a weekly reminder to the worker. Kirk Hansen, director of claims, says the warnings "can mitigate loss to some degree and minimize malingering. If it cuts that down even a little, the warnings are worth it."

That idea could be extended further by using the same sort of fraud warnings on other documents within the occupational health system, Hansen suggests.

He sees no legal or ethical reason not to pass on such warnings to the worker at every opportunity, and he notes that employers may be pleased to see that a health provider is working diligently to discourage malingering. The earlier the warning is provided, the more effective it will be, he says.

"I could see the fraud warnings on many other documents — any document that the claimant will come in contact with or have reasons to read or submit to the insurance company," Hansen says. "The origin of a fraudulent claim is sometimes right there in the doctor’s office, so if you can put a stop to it then, the fraud may never get to the point where a check is sent with a warning."


Howard Goldblatt, Director of Government Affairs, Coalition Against Insurance Fraud, 1010 Vermont Ave. N.W., Washington, DC 20005. Telephone: (202) 393-7330.

Kirk Hansen, Director of Claims, Alliance of American Insurers, 3025 Highland Parkway, Suite 800, Downers Grove, IL 60515-1289. Telephone: (630) 724-2100.