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How does CA deal with workers’ compensation fraud?

For employers in California, workers’ compensation fraud can be a real issue. Fortunately, the state recognizes just how damaging this type of fraud can be to businesses and the public at large, and as a result has devised methods for dealing with workers who engage in nefarious practices regarding workplace injuries.

According to the California Department of Insurance, the Workers' Compensation Fraud Program was created in 1991 to address workers who are alleged to have reported false injuries or exaggerated the effects of existing ones. In just a one year span California’s fraud division was responsible for the arrest of 240 workers suspected of fraud, and estimates that possible losses could have amounted to $277,032,462. Additionally, the district attorney’s office was involved in 1,409 fraud cases during that same time period, which culminated in the conviction of 650 individuals.

The Fraud Assessment Commission is responsible for creating methods of funding so that suspected fraud can be reviewed and subsequently prosecuted. Insurers that believe fraud has occurred are responsible for making reports to the proper authorities, which are then reviewed to determine whether there is a basis for moving forward. Workers’ compensation fraud is considered a felony, and consequently carries heavy penalties for those convicted.

Many different people can be involved in workers’ compensation fraud. While workers themselves are responsible for making false claims, they can be backed up by others to help support their allegations of injuries. This can include doctors, who sometimes support unfounded claims by offering unnecessary treatments. Fraud can have financial ramifications outside of the business world, as costs are usually distributed to tax payers.  

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