California's Sonoma County gets $339K grant to fight workers' comp fraud

The Sonoma County District Attorney’s Office received a $339,173 grant from the California Department of Insurance that will be used to investigate and prosecute cases of workers’ compensation insurance fraud, the DA’s office reported.

Specifically, the money will be deployed to thwart instances of medical provider fraud, employer premium fraud and claimant fraud, all of which drive up workers’ compensation costs, Sonoma County DA’s Office reported. Some of the funds will also be used to conduct community outreach on how to prevent and report insurance fraud.

According to the Sonoma County DA, workers’ comp fraud schemes often require difficult and lengthy investigations and can range from employees faking injuries and employers asking workers not to file claims to doctors and lawyers paying off workers to make exaggerated claims so they can overcharge for unnecessary treatments. All of these schemes result in insurance companies picking up the tab, and eventually passing those costs to policyholders.

California fraud grants

The money is part of the $50.5 million in grants the CDI has awarded to 34 district attorney offices to fight fraud across the state and help educate the public. The funds come from California businesses, which are legally required to be insured or self-insured, according to the state’s insurance regulator.

“Insurance fraud continues to be a drain on our economy. Partnership between my department’s investigators and local law enforcement is crucial in fighting fraud and educating the public,” California Insurance Commissioner Ricardo Lara said in a release. “These annual grants continue to show my department’s long-standing commitment to investigating and working with our law enforcement partners to combat fraud and protect consumers, businesses, and the insurance marketplace.”

In addition to amplifying enforcement efforts, the grants will also be used for community outreach programs, according to the CDI, which noted these programs will educate consumers on their rights and the best anti-fraud practices.

CDI also awarded an additional $400,000 in grants to protect consumers from bad actors that aim to commit fraud through the sale of individual life and annuity products.

Annually, workers’ comp sees approximately $34 billion in fraud, according to the Coalition Against Insurance Fraud. Around $9 billion of that total comes from premium fraud, with the rest coming in the form of claims fraud.

Related:

• California’s workers’ comp benchmark rate lowered
• Miami contractor arrested for workers’ comp fraud, faces up to 180 years
• Construction firm accused of insurance fraud, underreporting payroll by over $4M

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