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New bill to give work comp fraud investigators more power

Workers’ compensation fraud is still a pervasive issue in the state of California. In a number of posts we have highlighted the drains on the state’s work comp system and shown that fraud could lead to criminal sanctions. While it is a necessary function, the state does not necessarily allocate many resources towards investigating fraud.

A new bill introduced before the assembly will create an anti-fraud division within the state’s Division of Workers’ Compensation. According to a businessinsurance.com report, Assembly Bill 1697 would amend the state’s labor code to enable the Division to investigate fraud on a larger scale. 

Essentially, the Division would create a repository and clearinghouse on work comp fraud data, would be the point of contact between other state agencies investigating fraud, and ensure the sharing of data between different state agencies; to name a few.

These changes would help law enforcement agencies as well as private industry work in concert to expose fraud and prevent future scams. Limiting the number of dollars from getting into the wrong hands helps ensure that those who really need workers’ compensation benefits may receive them.

The Committee on Insurance is scheduled to hear arguments this week. It remains to be seen how legislators will react to the bill or what questions they may have as. If the committee makes very few changes, chances are that the bill will be passed on to the assembly floor for full consideration.

In the meantime, if you are an employer and suspect you have an employee who is committing workers’ comp insurance fraud, we invite you to contact us.

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