MASSACHUSETTS is offering free jewelry (handcuffs), photos (mug shots), and room and board (prison) to workers caught bilking their employers with fake injury claims.
The tongue-in-cheek ad campaign is the public face of a high-powered crackdown. The Bay State is one of a handful of states leading a successful crusade against workers' compensation fraud -- a growing crime that costs Americans billions each year.
Since 1991, Massachusetts has obtained 86 criminal convictions. That compares with just 13 workers' comp convictions over the previous 80 years. The law-enforcement push is lauded by local businesses, which are pocketing savings on insurance.
Last year, for the first time, Massachusetts employers saw a 10 percent drop in workers' comp premiums, according to John L. Ciardi, assistant attorney general for Massachusetts.
''Huge amounts of money are put into health care insurance and it attracts both the sophisticated and the bumbler,'' Mr. Ciardi says. ''Very unsophisticated people can still make lots of money in the system.''
$100 billion problem
Bogus injury claims, illegal billing, and kickbacks from medical laboratories in Massachusetts and around the country, make up nearly 10 percent -- $100 billion -- of all health-care transactions, according to a recent report by the US General Accounting Office.
Consequently, law-enforcement agencies in Massachusetts, California, and Ohio are among the states putting a higher priority on stemming insurance fraud than in years past.
Workers' compensation is one of a raft of worker safety laws enacted in the early part of the century after a series of high-profile factory accidents. But in recent years, the system of paying workers for on-the-job injuries has come under fire, mainly from the business community, who sees it as corrupt and costly.
Some fraud schemes are as simple as that of a St. Paul, Minn., man who collected $179,000 of his father's workers' comp checks, even though his father died 20 years ago. But fraud has become increasingly sophisticated in the Computer Age, says Laura Krauss, general counsel of the Massachusetts Insurance Fraud Bureau.
The latest trend is the participation of doctors and employers themselves, Ms. Krauss says. According to a 1992 study by the National Health Care Anti-Fraud Association, 43 percent of health care fraud cases were the result of fraudulent diagnoses; 34 percent were for billing of services never rendered. But recent cases show that fraud schemes run the gamut:
*In Woodland Hills, Calif., a laborer was arrested last month for suspicion of fraud. Investigators say the man concealed an 11-year history of back injuries from doctors and employers in order to collect $226,000 in new job-related injury claims.
*In Seal Beach, Calif., the owner of a network of temporary employment agencies was ordered to pay $5.5 million last month after bilking insurance companies of millions in workers' compensation. The man set up phony businesses, paid small premiums for fewer workers than he had, but then made huge workers' comp claims.
*In Melrose, Mass., a chiropractor has been charged with running a workers' comp mill from 1987 to 1993. Investigators say he found people who were already injured, overtreated them, and defrauded insurance companies of approximately $800,000 in workers' comp and other claims. The state fraud bureau spent a year building its case against the chiropractor, who pleaded not guilty and awaits trial on criminal charges.
Inevitably, it's the honest consumer who pays the price of fraud, Krauss says, as insurance companies raise rates to cover costs. And in an age of computerized billing and rising health care costs, fraud schemes will become more common, she adds, raising the cost of doing business in Massachusetts.
Private cops help
In pursuing fraud, the state Attorney General's office relies heavily on the Massachusetts Insurance Fraud Bureau, a private agency funded by the insurance industry that has official investigative powers.
The bureau, with 28 investigators and access to 35 outside computer databases, is a welcome sight for insurance companies, which foot the bill for every claim.
But politically, the crackdown can be dicey with business and labor lining up on different sides.
''Legislative seats have been won and lost on the workers' compensation issue,'' said William Hager, president of the Boca Raton, Fla.-based National Council on Compensation Insurance at a recent conference of insurers. Some states still lack adequate policing of workers' comp cases, he said, but ''something close to a normal marketplace has been restored in most states.''
The Bay State's tough antifraud program hasn't been without controversy. Many labor advocates decry the poster campaign that promised ''free jewelry'' (handcuffs) for those caught in the act of fraud. The ad campaign is ''offensive'' because it focuses on workers, says attorney George Morrissey, who represents employees in workers' comp cases.
''I have an older client who has worked for 40 years and never had a claim until a few months ago,'' Mr. Morrissey says. ''He felt intimidated'' by the posters, and did not feel sure that he would get a fair hearing from the state agency that would be looking into his claims.
But Rodrigo Gavilanes, a supervisor at a candy store in Cambridge, Mass., says the workers' comp system needs to be better enforced.
Mr. Gavilanes, who testified for his company at a workers' comp hearing in Boston recently, says he is sympathetic to people who really deserve compensation, ''but some people try to claim accidents that never happen.''
''The woman in this case claimed she got a hernia lifting 50-pound boxes. But it turns out she injured herself while practicing karate,'' he says. ''Why should the company pay for that?''