WORKERS’ COMPENSATION FRAUD REPORTING CALIFORNIA SENATE BILL 1242
(Passed in September of 2022 and effective January 1, 2023)
SB 1242, Committee on Insurance. Insurance.
(1) Existing law establishes a Fraud Division within the Department of Insurance to investigate fraudulent claims. Existing law requires an insurer that reasonably believes or knows that a fraudulent claim is being made to send a prescribed form and additional information about the fraudulent claim to the Fraud Division within 60 days after the determination by the insurer that the claim appears to be a fraudulent claim.
This bill would instead require an insurer to send that form and information within 60 days after it has determined, after the completion of an investigation, that it reasonably suspects or knows an act of insurance fraud may have occurred or might be occurring.
When determining if a claim is viable to be assigned for investigation, the Apex SIU will evaluate the information provided from your referral. If there are questions, Apex SIU may contact you to ask additional questions. Typically, we will assess your referral to obtain information to answer some or all of the following questions:
1. What facts caused the reporting party to believe insurance fraud occurred or may have occurred?
- Describe what the reporting party did to confirm their suspicion.
- Indicate whether the applicant made a misrepresentation to a doctor(s) or during a deposition(s) and the date(s) the misrepresentation occurred.
2. What are the suspected misrepresentations, and who allegedly made them?
3. How is the alleged misrepresentation(s) material? How do they affect the claim or transaction?
- Summarize the financial impact of the misrepresentation here and how it changed your decision on the claim or transaction.
4. Who are the pertinent witnesses to the alleged misrepresentation, and what documentation exists?
- If there is any Surveillance (Subosa) video, describe whether it was taken near the dates of medical examinations or depositions, how much subrosa video was obtained, and how the sub-rosa video contradicts the applicant.
5. Include a statement as to whether or not the investigation is complete.
Other Factors to Consider when addressing the five synopsis questions listed above:
If Employee Was Working While Collecting TTD
- Explain how the reporting party can show that the claimant was advised of their obligation to report any other source of income or any change in their earning status while collecting TTD
- If the applicant was receiving TTD while working for another employer, state the name of the other employer and whether the other employer was interviewed.
- If interviewed, document the interview results and whether payroll records were obtained from the other employer.
If Denial of Past Medical or Claim History is a factor
- Describe whether past medical/claim history file(s) were obtained, whether there is any medical/claim history to the same body part and how a denial of past medical/claim history is material to this claim.
If Malingering may be Present
- Describe any evidence the reporting party may have that contradicts the applicant/claimant’s physical restrictions and how the malingering is material to the claim?
