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  • July 2023
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Protecting the Right People: Exposing fraud in disability claims

  • Lawrence (Larry) Ryan
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Disability Insurance Fraud Detection and Prevention
In Brief
The fight against fraud in disability claims requires constant vigilance and cooperation among all stakeholders. Working together we can better combat fraudulent activity and protect the resources meant for those individuals facing real challenges in their daily lives.

Disability insurance plays a crucial role in ensuring that individuals with genuine impairments receive the support they need to navigate life's challenges. Unfortunately, amid the legitimate cases exists the disconcerting problem of fraudulent disability claims.

These deceptive practices not only drain valuable resources but also undermine the integrity of the system, jeopardizing the assistance available to those who genuinely require it. In this article, we provide an overview of the issue of fraud in disability claims, its implications, and the measures taken to combat this growing concern.

Common Schemes and Consequences

Fraudulent disability claims impose a heavy burden on society, with consequences that extend beyond mere financial loss. When individuals falsely claim disabilities, they divert limited resources from those who truly need them, hindering the provision of essential services and support. Additionally, such fraudulent activities erode trust in the system, leading to skepticism and increased scrutiny of genuine disability claims. The repercussions are far-reaching, affecting both the individuals who rely on these benefits and the broader social fabric.

Fraudulent disability claims manifest in various forms, with some of the most prevalent schemes including:

  • Malingering: Claimants exaggerate or fabricate their symptoms, impairments, or limitations to portray a more severe disability.
  • False Documentation: Fraudsters forge medical records, test results, or physician statements to support their disability claims. This can not only deceive insurers but also undermine the trust placed in healthcare professionals.
  • Unreported Income: Claimants conceal their employment or income status and continue to receive disability benefits while working “under the table” or earning additional, unreported income.

Detection and Prevention

Detecting fraud in disability claims is no easy task, as those involved often craft elaborate stories and submit false documentation to support their cases. However, various methods have been employed to identify and expose these deceptive practices. Disability insurers, government agencies, and law enforcement authorities have joined forces to implement comprehensive investigation procedures, incorporating advanced technology, data analysis, and human expertise. Additionally, increased collaboration among different stakeholders, such as employers and insurance companies, plays a vital role in identifying discrepancies and validating legitimate claims.

Efforts to combat disability claim fraud encompass both prevention and deterrence strategies. Public education campaigns raise awareness about the wider social consequences of fraudulent practices, discouraging individuals from engaging in such activities. Additionally, stringent documentation requirements and rigorous verification procedures have been implemented to ensure the accuracy and legitimacy of claims. By strengthening internal controls, improving information sharing, and fostering cooperation among relevant agencies, governments and industry organizations strive to create an environment where fraudsters face significant obstacles and consequences for their actions.

While the battle against fraudulent disability claims is crucial, it is equally important to strike a balance between efficiency and fairness.

Streamlining the claims process, reducing administrative burdens, and expediting legitimate cases help ensure that those who genuinely require support receive it promptly. Equally vital is safeguarding the rights and privacy of claimants during investigations, maintaining an impartial approach throughout the entire process.

A Call to Action

The fight against fraud in disability claims is an ongoing battle that requires constant vigilance, utilization of advanced technology, and cooperation among all stakeholders involved. By unmasking fraudulent practices, implementing robust verification measures, and promoting public awareness, we can work towards safeguarding the integrity of disability support systems. In doing so, we protect the resources meant for those in genuine need, foster public trust, and ensure that the support reaches those who rely on it the most—individuals facing real challenges in their daily lives.

Learn more about ways to prevent insurance fraud at the 11th annual RGA Fraud Conference on August 15-17, 2023 – the premier cross-discipline fraud event for the industry. This year's virtual conference features leading experts from around the world.

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Meet the Authors & Experts

Larry Ryan
Lawrence (Larry) Ryan
Vice President, Group Re Operations