Ruling concerns fraudulent denial of workers’ compensation claims

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A federal court’s ruling concerning workers’ compensation claims and denial of benefits could have consequences in New Jersey as well. It was held by the court that too often injured workers were denied such claims because insurance companies and doctors conspired together by coming up with fraudulent medical reports that were favorable to the employer’s insurance company and unfavorable to the worker’s claim.

The Racketeer Influenced and Corrupt Organizations Act (RICO) was put into place to prevent parties from working together to circumvent liability. The federal court has now ruled that workers denied workers’ compensation claims based upon a conspiracy between the doctor and the insurance company could then bring a claim based under RICO against their employer and employer’s insurer.

There is some controversy over whether workers can bring RICO claims under such circumstances. It has been debated as to whether RICO should be used for more than damages to business and/or property. Since this area of law is so difficult to comprehend, anyone with questions would be strongly advised to contact an attorney experienced in workers’ compensation law to provide an analysis.

What is of significance concerning this lawsuit would be the added layer of complexity to an area of law that many feel is already wrapped up in too much red tape. Also, it’s important to note that employers and insurance companies will place obstacles in the way of workers attempting to seek compensation for injuries they have received at the workplace.

Oftentimes it seems like the deck is stacked against workers injured on the job. Yet the federal case demonstrates that injured workers do need to understand that they do have other options for recovery.

Source: Business Insurance, “Workers denied comp benefits can sue for RICO violations,” by Sheena Harrison, April 15, 2012