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The Department of Industrial Relations (DIR) today issued a progress report on its anti-fraud efforts, including updates on the suspension of 227 medical providers from treating California’s injured workers and the dismissal of 292,000 illegitimate liens with claims valued at over 2.5 billion dollars. 

“DIR’s anti-fraud efforts have allowed us to remove fraudulent providers and their claims for payment from the system, with the aim to improve services and reduce premium costs,” said DIR Director Christine Baker.  “Our fraud prevention work also involves identifying fraudulent activity through data analytics and defending anti-fraud laws in court.”

Christine Baker at DisneyTheater in Anaheim on April 23, 2012.  Photo by Lonce Lamonte, all rights reserved.  

DIR’s efforts to eliminate medical provider fraud and illegitimate liens were bolstered by two new laws effective January 1, 2017.

• SB 1160 requires DIR to automatically stay liens belonging to providers who have been indicted or charges with crimes until the disposition of criminal proceedings.
• According to this provision, 465,000 liens filed by or on behalf of criminally charged providers have been automatically stayed. 
• AB 1244 requires the Division of Workers’ Compensation (DWC) Administrative Director to suspend any medical provider, physician or practitioner from participating in the workers’ compensation system when convicted of fraud.
• DWC has adopted provider suspension regulations and has suspended 227 medical providers

More detail on DIR’s fraud prevention efforts has been posted online, including information on suspended providers and dismissed liens. 

DIR’s Anti-Fraud Unit operates within the Office of the Director.  The unit identifies providers who are subject to suspension and assists with lien dismissals, stays and consolidations.  Anti-Fraud Unit research and investigative work uses data analytics to aid criminal prosecutors throughout the state and its attorneys handle legal challenges to anti-fraud laws. 

At the direction of the Secretary of the California Labor and Workforce Development Agency, DIR and the Department of Insurance convened working groups in 2016 to gather stakeholder input and evidence of fraudulent activity in the workers’ compensation system.  DIR issued a report in January 2017 on the recommendations to combat fraud and provided an update on anti-fraud activities.

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Lonce Lamonte, journalist, lonce@adjustercom.com, and the California Department of Industrial Relations' Newsline; dir.ca.gov