California Workers' Compensation System Vulnerable to Fraud

In many ways, scamming the program meant to heal California’s injured workers is too easy. Whether it be in the form of individuals siphoning funds out of the state by posing as caregivers or medical vendors simply by sending a letter to the state without any vetting, or from dishonest providers running up bills worth tens of thousands of dollars for unnecessary tests and equipment, the state’s workers’ compensation system is rife with flaws and vulnerabilities for scammers to exploit. In fact, numerous state and federal prosecutors throughout the state estimate that more than $1 billion has been stolen from the state due to fraud. But why is this the case, and how did this happen?

  1. Lack of centralized power: One of the biggest reasons why workers’ compensation fraud has gone relatively unchecked is due to a division of power. Lawmakers make rules, the Department of Industrial Relations administers the program, judges issue orders, medical boards oversee doctors, and more than 300 different insurers and self-insured employers decide which claims to be paid. With so many hands involved in the process, when fraud occurs, nobody assumes responsibility.
  2. Inadequate vetting of sham facilities: While Medicare combats fraud by periodically visiting medical offices and auditing their operations, California has no such system. There is no central authority who performs inspections of facilities to ensure that medical firms are doing what they claim to do, or if they are even real. This oversight has allowed some to set up fake companies and bill the state for bogus services, oftentimes for years without any sort of questioning.
  3. No way to report phony billing: Unlike Medicare, injured workers do not receive any sort of explanation of benefits or summary of services that they have received, causing workers to be left in the dark to any fraudulent treatments that they may be being billed for. As such, workers have no way of reporting fraud to authorities.
  4. No banning of fraudulent providers: Health care providers and medical professionals who are convicted of defrauding a health care program are permanently banned from seeking money to see patients from Medicare. Unfortunately, no such banning system is in place for workers’ compensation.
  5. Billing data is not made public: In the summer of 2015, Medicare released millions of records detailing the billing histories of physicians across the country in a move to promote smarter spending and better care, leading to a several doctors being outed for fraud as a result. This level is transparency is sorely missing from California’s workers’ compensation system, as it could deter questionable practices and help expose potential fraud situations.

When considering the massive holes in the workers’ compensation system, it is no wonder why so many have abused the program over the years. Unfortunately, these vulnerabilities have also made it considerably harder for honest injured workers to receive the benefits they deserve. If you have been injured at work, contact the Santa Ana workers’ compensation attorneys at Ufkes & Bright. With more than 50 years of experience and a proven history of success, our team of skilled advocates can help take the guesswork out of your workers’ compensation claim and maximize your chances of securing the results you need.

Call (714) 909-2609 or schedule a no-cost case review today to discuss your situation.

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