At the 2019 California Self-Insurers Annual Conference, a panel discussed fraud in California Workers’ compensation. The speakers were:
- James Riddle – President and CEO, JLR Investigations
- John Riggs – Senior Manager Workers’ Compensation, The Walt Disney Company
- Jennifer Snyder – Head Deputy District Attorney Los Angeles
According to one the panelists, these are what they consider the top sources for fraud in workers compensation.
Statistically speaking this is the leading source of workers’ compensation fraud. This includes failure to secure workers’ compensation coverage and intentionally misclassifying workers as independent contractors. Intentionally misclassifying workers’ into safer occupations is also a source of employer fraud.
Intentionally underpaying employees including paying less than minimum wage, not paying overtime, and many other violations. This impacts workers’ compensation because it results in payroll figures being understated which results in inadequate premiums being charged.
Applicant Attorney Fraud
There have been several attorney indicted for fraudulent referral schemes where the attorney and physicians had arrangements to refer people to each other to create claims where there was really not a workplace injury. This is a huge issue with CT claims in Southern California.
Cost Shifting Non-Industrial Injuries
It’s very easy to pursue any orthopedic injury under California Workers’ compensation because of the prevalence of CT claims. The system allows you to pursue coverage for non-specific injures under workers’ compensation. This is too often abused and used as a way to get medical coverage that does not have co-payments and deductibles. California has a low threshold where a 1% aggravation of a pre-existing condition can result in a compensable claim.
Pharmacy sales reps for years have been working to get physicians to prescribe more of their medications. Some of these uses are off-label for the medication. Compound medications are also abused.
When considering fraud in the workers’ compensation system, it is important to consider the societal costs of the fraud, not just the financial costs. The reason things like UR and other control measures exist is to prevent fraud. Workers’ with legitimate injuries are inconvenienced because of others who are trying to defraud the system. State prosecutors pursue these cases in criminal court and focus on the societal costs of the fraud. Fraud is corrosive and erodes the trust in institutions.
Every criminal fraud prosecution starts with a material lie.What is that material lie and how did that lie impact the claim? If you are taking a deposition and you think there is fraud, ask the question that makes the fraud clear. Don’t try to be slick and circle around the issue. Ask them if they can do the things you know they can do based on your investigation.
To file charges, the prosecutor needs sufficient admissible evidence to prove the case beyond a reasonable doubt. Law enforcement must investigate the case and witnesses must testify and explain what they know. Documents cannot speak for themselves.
Juries also want to know why people do something so it is important to come up with a motive. That motive can be as simple as greed but knowing things like they had performance issues or wanted to take a vacation and lacked the available days can help firm up their motive for the fraud. Show the juries not only what was done, but why they did it.
Keep the goals of justice in mind. Search for the truth. Present the truth. Seek justice. Keep it simple. Do the right things for the right reasons.