SELECTED INDICATORS IN WORKERS’ COMPENSATION: A REPORT CARD FOR CALIFORNIANS
During the past decade, there has been a dedicated and rapidly growing campaign in the State against workers’ compensation fraud. This report on the nature and results of that campaign is based primarily on information obtained from the CDI Fraud Division, as well as applicable Insurance Code and Labor Code sections and data published in periodic Bulletin[s] of the CWCI.
Suspected Fraudulent Claims
Suspected Fraudulent Claims (SFC) are reports of suspected fraudulent activities received by CDI from various sources, including insurance carriers, informants, witnesses, law-enforcement agencies, fraud investigators, and the public. The number of suspected fraudulent claims represents only a small portion that has been reported by the insurers and does not necessarily reflect the whole picture of fraud since many fraudulent activities have not been identified or investigated.
According to the CDI Fraud Division, the number of suspected fraudulent claims increased near the end of fiscal year 2003-04. Several reasons for this increase include:
The extensive efforts to provided training to the insurance claim adjusters and the Special Investigative Unit (SIU) personnel by the Fraud Division and District Attorneys.
Changing submission of SFCs by filling out FD-1 Form electronically through the Internet.
The Department has promulgated new regulations to help insurance carriers step up their anti-fraud efforts and become more effective in identifying, investigating, and reporting workers' compensation fraud. A work plan to increase the number of audits performed by the Fraud Division SIU Compliance Unit has been established and continues with an aggressive outreach plan to educate the public on anti-fraud efforts and how to identify and report fraud. This has ensured a more consistent approach to the oversight and monitoring of the SIU functions with the primary insurers as well as the subsidiary companies
Finally, CDI is strengthening its working relationship with the WCIRB to support the Department's anti-fraud efforts
For fiscal year 2005-06, the total number of SFCs is reported at 8,489.