California to Crack Down on Workers’ Comp Fraud

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SACRAMENTO — California is moving to crack down on bad actors in the workers’ compensation system following a report that an estimated $1 billion has been embezzled from the state program.

A new law requires the workers’ compensation director to suspend hospitals, doctors and other medical providers from the system if they have been convicted of any wrongdoing related to health care fraud.

Gov. Jerry Brown announced Friday he signed AB1244. It will take effect on Jan. 1.

It follows an April report by The Center for Investigative Reporting that some doctors and administrators scam the system by performing unnecessary procedures or routinely falsify bills.

State and federal prosecutors say in the report that gaps in state oversight compromise the system and state agencies can’t adequately pressure care providers.