Calif. State Sen. Poochigian Introduces Bill to Streamline Workers’ Comp Fraud Enforcement

May 24, 2004

California State Senator Chuck Poochigian (R-Fresno) has introduced a bill designed to streamline workers’ compensation fraud enforcement by enhancing district attorneys’ tools to aggressively prosecute fraud and abuse.

SB X4 18 would redesign the state’s current system by shifting the Department of Insurance’s (DOI) workers’ comp investigations and the associated resources to local district attorneys, requiring DOI to establish clear, consistent and equitable funding and operating criteria, and strengthening the DOI’s data collection and analysis capabilities.

“Since district attorneys are the ones tasked with prosecuting workers’ compensation fraud, they should be empowered with the resources they need to do their job and clamp down on offenders,” said Poochigian. “By allocating fraud enforcement funding to locally-elected district attorneys, this bill will enhance local accountability and increase efficiency.”

Poochigian authored SB 899 earlier this year, which should reportedly help to significantly reduce fraud and abuse by increasing objectivity, inserting nationally recognized medical guidelines into the system, streamlining the process, and overhauling how permanent disability is calculated.

However, a recent report from the California State Auditor clearly suggests that additional legislative action is needed to streamline workers’ comp fraud enforcement and to aggressively prosecute fraud and abuse that is so prevalent in the system.

California employers are assessed roughly $30 million annually that is earmarked to fight fraud in the workers’ comp system, but the audit reportedly shows that much of this money is being used inefficiently and getting tied up in bureaucracy.

Currently, up to 60 percent of fraud enforcement funding goes to the DOI which performs investigations on cases before referring them to local district attorneys. The remaining 40 percent of fraud funds are distributed to local district attorneys, who often must perform their own investigations on any referrals from the state and determine whether to prosecute.

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