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Department of Industrial Relations Cracks Down on Workers’ Compensation Fraud

The California Department of Industrial Relations’ Division of Workers Compensation (DWC) and its Anti-Fraud Unit has suspended a total of 649 medical providers from the workers’ compensation system since 2017. Nearly 200 of those medical providers were suspended in the first eight months of 2022 alone.

Under CA Labor Code Section 139.21, the Anti-Fraud Unit can suspend medical providers if they are convicted of a crime involving fraud or abuse of the Medi-Cal, Medicaid, or Workers’ Compensation system. If convicted, a medical provider’s license may be suspended or revoked. As a result, suspended medical providers are unable to provide or obtain payment for any treatment, evaluation, or other service related to a workers’ compensation claim.

The filing of criminal charges against a medical provider triggers Labor Code Section 4615 which authorizes the DWC to impose a stay on any lien filed by a medical provider for medical services provided in a workers’ compensation claim. This stay prevents these criminally-charged medical providers from seeking payment for their services while the criminal case is pending. Currently, there are 86 medical providers facing criminal charges with 516,000 liens designated as stayed.

The Division of Workers’ Compensation has also initiated lien consolidation cases estimated at $75 million for those providers that were convicted of fraud-related crime in 2022. During these lien hearings, medical providers have the opportunity to prove the billings are legitimate and that the sanctions under Section 4615 have been erroneously imposed.

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