From the August 2011 issue of Claims Magazine • Subscribe!

Calif. Allots $32M to Fight WC Fraud

Nearly $32 million in grants has been awarded to Calif. law enforcement to assist with the investigation and prosecution of workers’ compensation insurance fraud.

Workers’ compensation insurance fraud is a costly problem in California,” said Calif. Insurance Commissioner Dave Jones. “As the economy struggles to recover, fraud of this type creates an additional strain on the system. We must protect those injured workers who need care and compensation so they can return to work in a timely manner and bring to justice those who seek to cheat the system.”

Dave Althausen, deputy press secretary for the California Department of Insurance (CDI), said the most common workers’ comp schemes involve an employee filing a claim stating that he or she was injured on the job, then receiving treatment for the injury as well as workers’ compensation benefits, only to be seen performing everyday activities that would seem virtually impossible given the claimed injury.

“We have seen claimants coaching little league, lifting bags of equipment, and even landscaping houses,” Althausen said. “In the San Francisco Bay area earlier this year, a woman claimed she was injured on the job, was receiving treatment and workers’ compensation insurance payments, yet was seen competing in a 5K.”

This funding is awarded based on assessments of Calif. employers determined by the Fraud Assessment Commission on an annual basis. Recommendations are based on each county’s performance the previous year, and the overall decisions are influenced by Jones, the Fraud Assessment Commission, and the Workers’ Compensation Grant Review Panel.
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