Workers' Compensation Applicant Fraud

As a reporting party, you have a legal obligation to refer insurance claims or transactions where you have reasonable belief that insurance fraud may have or might be occurring. Reasonable belief is defined as "a level of belief that an act of insurance fraud may have or might be occurring for which there is an objective justification based on articulable fact(s) and rational inferences therefrom."

After your claim/transaction has been referred to the California Department of Insurance (CDI), it will be reviewed by a supervisor to determine whether the claim/transaction should be:

  • Assigned for investigation
  • Referred to another agency
  • Closed due to a lack of resources
  • Closed due to a lack of evidence

When determining if a claim is viable to be assigned for investigation, the CDI supervisor will be evaluating the information provided from your referral. If there are questions, the CDI supervisor may contact you to ask additional questions. Your responses to the following questions are helpful when determining if a case rises to the level of an investigation:

  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 it was that 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 (Subrosa) video, describe whether it was taken near the dates of medical examinations or depositions, how much subrosa video was obtained and how does the subrosa video contradict 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 interviewed.
  • If interviewed, document the results of the interview 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?

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