Independent Medical Examiners: The Secret Advantage in a Workers’ Comp Claim

A delivery driver reports hurting a shoulder while carrying a heavy package on the job. For months, the driver sends the insurer medical updates from a treating provider, but there is little sign of progress. Growing concerned, a claims manager at the insurance company arranges for an independent medical examination with a board-certified orthopedic specialist.

The exam confirms his suspicion: The claimant shows near-normal range of motion and appears to exaggerate the symptoms. Because the IME’s findings contrast sharply with the treating provider’s reports, the carrier can make a defensible decision, saving prolonged claims costs and setting the stage for a potential fraud investigation.

This scenario, while hypothetical, illustrates the inherent value of an IME in workers’ compensation defense. As claims move toward formal dispute or litigation, IMEs provide objective insights that help assess the validity of a claim and root out the growing problem of workers’ comp fraud.

It’s helpful to consider a few emerging IME trends and examine why claims managers should be proactive in requesting these essential evaluations.

Fraught with Fraud

Workers’ comp fraud continues to run rampant, costing insurers an estimated $35 to $44 billion annually, according to an analysis from Conning earlier this year. The larger the state, the bigger the problem. New York, which is currently juggling multiple high-profile fraud cases, provides a good example: A racketeering suit filed in June alleging staged construction accidents and fraudulent medical treatments on the part of a personal injury law firm and dozens of medical providers.

Fighting large-scale fraud requires strategic interventions, which IMEs provide. These exams, conducted by a non-biased doctor hired by either a carrier or their legal counsel, assess the health of injured workers and review their treating physicians’ records to determine the proper level of disability.

Common Misconceptions

While IMEs are effective, some claims professionals have been reluctant to conduct them. One reason is cost. A thorough IME can cost several hundred to several thousand dollars, depending on the type of exam and the specialist involved. While that may seem expensive, it pales in comparison to the exorbitant costs of workers’ comp fraud.

A second reason claims and risk managers may shy away from IMEs is if they have had a negative experience. Historically, IMEs varied in quality, with some exams—especially those requested by claimants—occurring in settings that raised concerns about their professionalism and objectivity. But as instances of fraud have grown over the past few years, the quality of IMEs has improved, with claims professionals setting higher expectations around physician qualifications and exam settings.

Keeping Costs Down

An IME alone is a powerful weapon against fraud, but the process is most impactful when combined with a few other instruments. A holistic approach to fraud prevention includes:

Expanding qualified healthcare provider networks. Insurers understand having a robust panel of credible providers—generalists and specialists—helps injured workers receive the best care while also shielding insureds from fraud risks. To this end, at Jones Jones, we are seeing an increased focus on matching workers with properly credentialed doctors, such as having a board-certified neurologist examine claimants who report concussion or nerve damage. Expanded provider panels enhance credibility, combat overly exaggerated disability findings and lower the costs of claims.

Encompassing diagnostic testing. Falsified imaging studies, such as X-rays, MRIs and CT scans, are some of the many tools fraudsters use. As more workers’ comp claims turn into RICO (Racketeering Influenced and Corrupt Organizations Act) cases, savvy insurers are asking independent radiologists to perform their own scans and compare them against those provided by the claimant’s doctors. This practice can help identify scans manipulated either by old-school tech tools (like photo editing software) or newer innovations (AI-generated deepfakes).

Conducting increased surveillance. We have all seen caught-on-camera videos of allegedly injured workers hiking, lifting heavy objects and completing other challenging tasks they claim they are medically unable to perform. While this type of surveillance has been around for years, claims adjusters are expanding their use of the technique, both by recording the IME exam itself and what happens immediately before and after. This type of surveillance can capture instances like a claimant throwing their crutches into the bushes once they walk out the door of the doctor’s office and walking to their car unassisted.

Be Proactive

When it comes to finding new ways to trick insurance companies, fraudsters never rest. The same should be true of claims and risk managers trying to combat fraud. Staying ever-ready means developing proactive IME strategies. Start with these five steps:

Partner with the right IME physicians. Seek doctors who stay on top of the latest treatments and standards of care. Here again, a specialist may be a wise choice over a generalist, depending on the case. A claimant reporting symptoms of long COVID, for example, should receive an exam by a pulmonologist who will ensure the right type of testing (such as a pulmonary function test, a breathing test and a chest X-ray) is conducted.

Keep an open mind on cost. Take a big-picture view of IME-related expenses in relationship to the potential cost of the claim. If you suspect fraud, it is always worth the money to hire a medical expert who can help you identify it sooner than later.

Document everything. Conduct thorough background checks on all claimants to verify their identities. Keep meticulous medical records, both from tests you order and from exams ordered by the claimant’s providers.

Stay on top of emerging IME trends. Not sure which doctors are best for your claimants? Ask your adjusters for their opinion. Network with local physicians and healthcare organizations. Stay informed of new developments in medical care and disease management, including trends that directly impact workers’ compensation cases, such as pharmaceutical use and drug weaning.

Embrace a medical-legal mindset. As insurers sharpen their focus on preventing fraud and reducing the cost of workers’ comp claims, we are seeing claims managers and adjusters partner with experts in the legal and IME space. An IME vendor that understands the latest medical treatment guidelines can keep your organization protected while ensuring injured workers receive the best care possible.

Protect Your Company From Fraud

Workers’ comp fraud isn’t going away. But it doesn’t have to damage your company’s reputation or its bottom line. Combining expert-led IMEs with multiple other tools—and enlisting the right partners—will keep you a step ahead of fraudsters and contain escalating claims costs.

Jones is an operations partner with Jones Jones LLC. A fourth-generation attorney, Jones has been with the firm for five years.