Workers’ compensation insurance fraud harms everyone. It poses tremendous financial costs on employers, insurers, and employees. There have long been serious concerns about the extent of the workers’ compensation fraud problem in California. According to a report from Business Insurance, insurers are now making a renewed push to stop the fraud. In this article, our Sacramento workers’ compensation defense attorneys highlight some of the key details raised in the report on workers’ compensation fraud.

Workers’ Compensation Fraud is a Multi-Billion Dollar Per Year Problem in California—and Rising

The latest estimates from the California Department of Insurance find that workers’ compensation fraud costs our state between $1 billion and $3 billion per year. The nationwide annual cost of workers’ compensation fraud may be as high as $30 billion. Even more alarming, the report from Business Insurance states that the problem is getting even worse. The cost of workers’ compensation fraud is still rising in California.

The COVID-19 pandemic may have led to an increase in fraudulent claims. While total workers’ compensation claims were actually down in California during the past two years—likely due to periods of high rates of remote work—the number of referrals for workers’ compensation fraud actually spiked significantly in our state.

Workers’ Compensation Fraud Takes Many Different Forms

One of the core challenges of combating workers’ compensation is that it is not just ‘one thing.’ Workers’ compensation fraud actually takes a wide range of different forms. A number of different parties could commit or facilitate workers’ compensation fraud, including individual employees, doctors that submit false medical records, and employers that fail to pay their claims. Common examples of workers’ compensation fraud include:

  • Employees misrepresenting or exaggerating injuries;
  • Employees faking the extent of losses;
  • Doctors facilitating/encouraging false claims; and
  • Employers understating payroll to reduce workers’ compensation premiums.

Insurers are Renewed a Strong Push to Stop Workers’ Compensation Fraud

Business Insurance reports that insurance companies in California are putting a strong emphasis on identifying and stopping workers’ compensation fraud. A study citing the report estimates that as many as 10% of all workers’ compensation claims may be fraudulent. Of course, every workers’ compensation fraud case is different. The costs associated with investigating and challenging workers’ compensation fraud can vary based on several factors. It is crucial that insurers have a proper legal strategy in place to protect their interests against fraudulent workers’ compensation claims. An experienced workers’ compensation defense lawyer can help you determine the best course of action.

Call Our California Workers’ Comp Fraud Lawyers Today

At Yrulegui & Roberts, our Central California workers’ compensation defense attorney is standing by, ready to advocate for your interests. If you believe that you were subject to workers’ compensation fraud, we can help. Contact our law firm right away for a confidential, no commitment case review. We provide workers’ compensation defense services in Sacramento and throughout Central California, including in Fresno, Salinas, Clovis, Sacramento, Folsom, Bakersfield, Firebaugh, and Kettleman City.