Workers’ compensation fraud is a serious issue in California. According to the Collation Against Insurance Fraud, fraudulent claims cost everyone money, even consumers. This is because the costs of paying claims get passed down until eventually it is the consumer who is paying for them through higher prices everywhere they go.
Common fraud issues involve employees and employers. Employees may try to pretend that an injury is worse than it is, especially if the injury is not one that can easily be tracked through diagnostics. For example, it is difficult to judge pain through tests, so an employee may claim excruciating pain as a result of an injury when the pain was only minor or no longer exists. Employers, on the other hand, may omit information or report false information on insurance applications in an attempt to get lower premiums. However, it is not only employees and employers who are trying to cheat the system.
Medical professionals may make claims for treatments and services they never provided. They may say an injury is more serious than it really is in order to be able to bill for more services than are actually necessary. There have even been cases of fake medical providers who set up clinics for the purpose of making workers’ compensation claims.
According to the California Department of Insurance, workers in the state do not have to prove someone else was at fault to make a claim because of the state’s no-fault system. This can make it tempting to commit fraud, so the state had to establish some system to help reduce issues. The Workers' Compensation Fraud Program helps to track, uncover and prosecute fraud.