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In February, the California Department of Industrial Relations suspended seven medical providers from the California workers’ compensation system. The DIR was able to suspend these providers thanks to Assembly Bill 1244. This bill, which passed the California legislature in 2015, requires the Division of Workers’ Compensation administrative director to suspend any party convicted of fraud from participating in the California workers’ compensation system.
All seven providers were convicted of workers’ compensation fraud or suspended from Medicaid or Medicare programs for medical fraud. In total, these providers filed more than 8,500 liens through the California workers’ compensation system. According to the CA DIR, these liens add up to a total claim value of more than $59 million. Here are the convicted providers:
Another three providers received notifications of pending suspensions and are appealing those actions. Once a provider receives a notification, he or she has 30 days from the issue date to file an appeal.
Workers’ compensation exists to ensure the welfare of injured employees. While workers’ compensation benefits may not cover the total cost of a job-related illness or injury, they can provide much-needed financial relief from medical expenses and lost wages. Workers’ compensation provides funds to injured workers receiving care for their injuries, and the healthcare professionals who treat them.
When providers refer patients or provide unnecessary treatment, they can bill these services for their expenses. Some employers, such as Arguello above, receive kickbacks from the referrals they send to fraudulent healthcare providers. The provider will be able to bill a workers’ compensation service for the needless treatment, then pay the referrer a “finder’s fee.”
Workers’ compensation fraud is a serious issue, and the expense it places on state and federal programs makes it difficult to increase the amount of financial support available for truly injured workers. Assembly Bill 1244 has been generally well-received and has afforded California with another layer of protection against workers’ compensation and health care fraud. AB 1244 requires the DWC administrative director to suspend any practitioners, physicians, or other medical care providers from participation in workers’ compensation systems following a conviction for fraud. These new measures should inspire confidence in California’s workers’ compensation system and deter future fraudulent practices.