Workers Compensation anti-fraud liens

For years California has had an unfortunate and expensive tumor growing in it’s budget: worker’s compensation fraud.

Some of the biggest cases make headlines – like last year when a ring was uncovered that was allegedly responsible for $40 million in fraudulent claims. That story cited a staggering 13,000 patients and 27 insurers as victims.

Beginning January 1, 2017, the anti-fraud effort was bolstered by two bills (SB 1160 & AB 1244) which dealt with automatic triggers on liens during investigations and suspension of perpetrators from the system [after being convicted].

Late last month, the California Department of Industrial Relations issued a public update which included tangible numbers…and they didn’t disappoint. The most staggering figure is the dismissal of 292,000 liens which totaled about $2.5 billion. For a bit of perspective, that’s more than what Physician, Hospital and Pharmaceutical services cost the system in 2015 (not including settlements for future payouts).

In addition to this, they reported that 465,000 liens have been automatically stayed as a result of SB 1160 during the course of a criminal prosecution. 33,000 more liens are up for consolidation for various reasons, and 30,000 liens have been voluntarily dropped by or on behalf of suspended providers.

And one last piece of justice – over 225 medical providers are now excluded from the workers compensation system following issuance of a suspension order.

Christine Baker was the Director of the California Relations Department and a driving force behind the anti-fraud efforts. She had this to say of the report, “DIR’s anti-fraud efforts have allowed us to remove fraudulent providers and their claims for payment from the system, with the aim to improve services and reduce premium costs”.

As of late March, Christine Baker has resigned her position at DIR following 34 years of service. The unexpected news came as a shock to the industry.

John Rosenbaum is a Workers Compensation and Personal Injury lawyer based in Orange County, California. If you are in need of legal services or advice, contact our offices today for a 100% free consultation.

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