California Targets Providers in Workers Comp Fraud, Sentry Execs Explain

After passing reforms aimed at reducing workers compensation costs in 2012, California legislators and workers compensation professionals are implementing more changes to the system, and this time, they are targeting provider fraud.

The high-profile prosecution of medical providers has highlighted the problem in California, said Vanessa Gillis, who is a unit manager for special investigations with Sentry Insurance in Sacramento.

“It’s been a wake-up call for people to see the exorbitant high costs of medical provider fraud within the workers compensation system. It has really captured the attention of many,” she said.

The current crackdown in California began with a workers comp reform bill enacted in 2012, experts said. The measure provided a framework for developing an anti-fraud strategy. It created an independent medical review process—a bill review—which served to build a body of data that made it easier to recognize fraud.

In 2016, lawmakers passed two more measures targeting fraud. One banned providers from treating patients within the workers comp system if the provider had been convicted and precluded from treating Medicare and Medicaid patients.

The other focused on the widespread liens filed in workers comp courts. It required medical providers to cite the legal authority they relied on to file their claims and banned providers who were charged with medical fraud from collecting lien dollars until their cases were closed.

Fraudulent providers “were basically taking unapproved medical care that insurers did not deem appropriate or medically necessary and, when they were denied payment, the providers would go to court and file a lien or often sold the rights to these liens to collection firms,” said Amanda Gualderama, West regional government affairs director at Sentry Insurance.