Workers Comp Zone


Does California’s workers’ comp system lack sufficient tools to deal with abuse by avaricious medical providers?

That’s a primary premise of a recent series by Christina Jewett, writing for The Center for Investigative Reporting. I’ve included links at the bottom of this post to three articles in the series which has been featured on

Within the last year we’ve seen an increase in nonprofit public interest group reporting on workers’ comp. The NPR/Pro Publica series was welcomed by many workers and applicant attorneys for its focus on how worker rights are being eroded in the workers’ comp system,

In my view the current Center for Investigative Reporting series is just as important. It reveals aspects of the California system that have been out of control. Until those aspects are addressed, it will be hard for worker advocates to shift the pendulum back.

Jewett does an excellent job of summarizing some of the most egregious recent examples of medical provider fraud in California. Many of those cases have been referenced in this blog over time, but Jewett does a good job of connecting dots and demonstrating how some doctors and ancillary providers have used workers comp to profiteer, ignoring the health and well being of the workers in their care.

A lien system that ran amok essentially aided and abetted some of the bad behavior. That’s not to say that all lien filers are abusers, but the system has been plagued with too many zombie liens and providers out to make a buck.

Much, though not all, of this problem has been in a handful of Southern California counties.

Lien reforms tightened things up for a while, but lien volume has been rising recently.

My last post detailed a number of practical measures that might help improve the comp system (see link below).

But I didn’t focus on some of the issues noted by Jewett.

She highlights how Medicare and states providing Medicaid under the ACA have more tools to control workers’ comp fraud than is available under the California workers’ comp system.

Her article, “Holes in Oversight Leave California Workers’ Comp Vulnerable to Fraud”, notes that:

“Leveraging the power to zip the wallet, the federal Affordable Care Act handed a particularly powerful fraud-fighting tool to state Medicaid agencies. They must stop paying a health care provider if they determine there is a “credible allegation of fraud.” Medical providers then can fight the determination in administrative courts.

No such rule exists in California’s workers’ compensation program.”

Further, she points out that

“Medicare officials know scammers can be brazen enough to steal patient identities, fabricate a sham medical office and bill for phantom care. As a result, the federal program has set up a system to check on medical offices.

Medicare uses its own data to determine whether classes of providers with track records of graft are medium or high risk, such as wheelchair merchants and home health agencies.

Both types of providers are visited when they initially open, three or five years later – depending on the industry – and whenever officials get a complaint. A government-contracted auditor interviews operators and takes a look behind the counter, according to Jason Weinstock, a former supervisory investigator for the U.S. Health and Human Services Department’s inspector general.

In California’s workers’ compensation system, no such data reviews or facility vetting occur on a regular basis. In fact, no central authority performs inspections to make sure medical firms are doing what they claim to do.”

One suggestion from Jewett is that workers could be empowered to identify billing fraud.

Medicare and many health insurers provide patients with a letter detailing what services have been billed and what was paid. In my experience, I can’t think of any insurer other than The Travelers which is sending an explanation of benefits paid to workers.

I’d be curious as to how this has worked out for The Travelers and whether they have uncovered fraud this way, how that has affected cases, and their assessment of the costs vs. benefits of such a notification letter.

Jewett also suggests than workers’ comp ban providers who have been convicted of fraud related charges:

“In Medicare, medical professionals may be banned from seeking money to see patients if they’ve been convicted of defrauding a health care program or fraud-related offenses.

But those banned providers have no problem starting a second career in California’s workers’ compensation system.”

She also notes that unlike workers’ comp, Medicare cracks down on ownership of clinics by those with fraud histories:

“Medicare doesn’t bar just doctors, pharmacists and chiropractors with histories of fraud. It also takes a look at who’s in charge.

Officials with the Department of Health and Human Services’ inspector general’s office will investigate clinic operators’ ownership and ban those with a 5 percent or greater stake who have a history of certain fraud convictions….”

Another possible solution to workers’ comp fraud suggested by Jewett is to “free the data”. Medicare data on physician billing practices has been released , but workers’ comp data is not available. More transparency of data might help.

These seem like good suggestions.

It’s in the interests of workers to root out abusers in the system.

Here is a link to Jewett’s article on holes in oversight:

Here is a link to her article (and an interesting podcast) titled “Billion Dollar Scam”:

And here is her article “Profiteering Masquerades as Health Care for California Injured  Workers”:

The CIR article “How California’s Health Care System for Workers Forgot About Fraud” is here:

And my recent post with ideas to improve the system is here:

Stay tuned.

Julius Young