Division of Workers’ Compensation Fraud Unit

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Workers’ compensation fraud increases system costs, which results in higher insurance premiums for Texas employers and drains resources from the system that could be allocated to providing benefits for injured employees. DWC is charged with administering and regulating the workers’ compensation system to ensure that employees receive the benefits they deserve at a reasonable cost for Texas employers.

What is workers’ compensation fraud?

Workers’ compensation fraud occurs when someone willfully makes a false statement or conceals information in order to receive workers’ compensation benefits or prevents someone from receiving benefits to which they might be entitled. Workers’ compensation fraud is usually motivated by greed.

Why do people commit workers’ compensation fraud?

People who normally would not engage in criminal behavior commit workers’ compensation fraud because they:

Perceive it as a victimless crime perpetrated against a faceless insurance company.
Hope to make up for premiums they have paid in the past.
Think many people inflate or falsify insurance claims.
Believe they will not get caught.
See it as a quick and easy way to make money.

Who pays for workers’ compensation fraud?

Workers’ compensation fraud is not a victimless crime. The Coalition Against Insurance Fraud estimates that more than $80 billion in fraudulent insurance claims are made annually (this includes all insurance lines including workers’ compensation fraud). All Texans pay for workers’ compensation fraud through higher costs of goods and higher premiums.

Help us find and stop criminals who try to take advantage of the system.

Click on the following links for details on how to help find and stop workers’ compensation fraud:

What we investigate
Workers' compensation fraud indicators
Reporting workers’ compensation fraud
Workers’ compensation fraud stats
Contact us

What we investigate

Employee fraud

An employee who is drawing benefits because he/she is supposed to be unable to work and is working full time at an unreported job
An employee fakes an injury in order to collect benefits

Health care fraud

A health care provider assists the employee in a fraudulent scheme
A health care provider bills for services not provided

Premium fraud

An employer misrepresents the amount of payroll or classification of employees in order to obtain a lower premium
An employer avoids a higher insurance risk modifier by transferring employees to a new business entity rated as a lower risk category

Insurance carrier fraud

An adjuster creates bogus claims and pays herself through those claims

Attorney fraud

An attorney inflates billing records to increase billable hours
An attorney bills for services not rendered

Workers' comp fraud indicators

Fraud by employees

Injury that has no witness other than the employee
Injury occurring late Friday or early Monday
Injury not reported until a week or more after it supposedly occurred
Injury occurring before a strike or holiday, or in anticipation of termination
Injury occurring in a location where the employee would not normally work
Injury that is inconsistent with normal job duties
Employee observed in activities inconsistent with the reported injury
Employee history of workers' comp claims
Conflicting diagnoses from subsequent treating providers
Evidence of employee working elsewhere while drawing benefits

Fraud by employers

Classification codes inconsistent with duties normally associated with the employer's type of business (e.g. a construction company reporting mainly clerical classifications)
Payroll information on the insurance application inconsistent with payroll reported to the Texas Workforce Commission
Much larger premium paid for the previous year's policy
Unusually small payroll reported by a large employer or employee leasing company
Frequent additions and cancellations of coverage, especially if several business entities appear to be owned or controlled by the same person or group

Fraud by health care providers

Bills or explanation of benefits for services from health care providers that seem unnecessary or fictitious
"Boilerplate" medical reports, or reports that are merely copies of previously submitted reports
Treatment dates on holidays for non-emergency situations
Bills that represent an unreasonable amount of billable hours per day

Fraud by insurance carriers

"Boilerplate" forms and documents in file
Limited documents in a claim file
No supervision oversight needed or requested on a claim

Fraud by attorneys

Attorney Fee bills seem unnecessary or fictitious
"Boilerplate" fees
Billable hours on holidays for non-emergency situations
Attorney Fee bills that represent an unreasonable amount of billable hours per day
Complaints from the employee that the attorney is rarely available although the attorney files fee affidavits for services
Attorney relationship with a health care provider that appears to be a partnership in handling workers' compensation claims

Fraud statistics

WC fraud cases archive by fiscal year
WC fraud cases current fiscal year
News releases

Workers’ compensation fraud cases archive by fiscal year
Activity	FY2016	FY2017	FY2018	FY2019	FY2020	FY2021	FY2022
Reports received	1,624	1,600	1,525	2,078	1,584	1,303	1,323
Cases opened for investigation	29	180	170	156	134	68	68
Cases referred for prosecution	11	16	29	9	6	2	2
Convictions	1	1	14	8	10	16	7

Workers’ compensation fraud cases current fiscal year per month
FY2023	Sep ’22	Oct ’22	Nov ’22
# fraud reports received	184	167	122
# of fraud investigations resolved	4	7	5
# of successful prosecutions	1	1	1

News releases

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