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Suspension of 227 CA Medical Providers Highlights the Need for Workers’ Comp Fraud Prevention

Posted on: March 29, 2018 by Signature Insurance Group

The California Department of Industrial Relations (DIR) recently shared their progress on current anti-fraud efforts involving workers’ compensation claims. The actions taken against fraudulent providers and claims included the suspension of 227 medical providers who now excluded from treating California’s injured workers as well as the dismissal of 292,000 liens with claims valued at over $2.5 billion for failure to file the required declarations.

According to the DIR report, the anti-fraud efforts have also resulted in:

  • 465,000 liens filed by or on behalf of criminally charged providers automatically stayed pending criminal prosecution,
  • 23,000 active and pending liens filed by or on behalf of 28 suspended providers consolidated for adjudication in special lien proceedings,
  • 10,000 active and pending liens processed for consolidation, and
  • 30,000 liens filed by or on behalf of suspended providers voluntarily dismissed.

Workers’ compensation insurance is designed to protect both employers and employees, but like any system with monetary reward, there are those who seek to manipulate it to their advantage. Statistics show that about one in every four insurance fraud claims in the United States is related to workers’ compensation. Claim-related workers’ compensation fraud typically occurs when an employee falsely claims an injury or illness at work, or exaggerates an existing injury or illness in an attempt to collect workers’ compensation benefits from their employer. However, that is clearly not the only way in which workers’ fraud compensation occurs.

Medical providers who commit workers’ compensation fraud seek to maximize their own income, thinking that they’re not harming anyone in the process. However, an increase in fraudulent medical providers can dilute the quality of service for legitimate victims of work-related injuries as well as contribute to increased premium costs for workers’ compensation insurance policies.

While the California DIR is cracking down on fraudulent medical providers, employers can take their own steps to help prevent them from falling victim to this type of workers’ compensation fraud as well. One way that businesses can help prevent workers’ comp fraud within their own organization is by partnering with an insurance provider that not only offers appropriate coverage, but also provides expertise in reviewing claims history to help spot any errors or suspect activity that can cause premiums to increase.

About Signature Insurance Group

Signature Insurance Group has been working since 1969 to provide comprehensive insurance solutions to individuals and businesses across the United States. We offer a range of insurance products and services in risk management, employee benefits, business insurance, and personal insurance, and we pride ourselves on our commitment to creating “Signature Relationships” with our clients where we commit to providing the best, most comprehensive service possible. To learn more about our goods and services, contact us today at (800) 464-3606.

Posted in: blog Workers Compensation