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               Integrated Disability Management

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     Workers' Comp  

    Fraud

     

    Workers’ Compensation fraud occurs when someone receives workers’ compensation benefits or prevents someone from receiving benefits to which they might be entitled. Payments made for workers’ compensation benefits, if stemming from fraud, divert funds from our classroom. Any suspicion of workers’ compensation fraud will be investigated. The information reported is confidential. Suppose the activity rises to the level of fraud. In that case, it will be reported to the State of California Department of Insurance and the Los Angeles City District Attorney’s office, as state law requires.

        

             LAUSD Workers' Compensation   

                                       

     

                                                 Sedgwick                                       

               

                     Office of Inspector General           

     

  • Frequently Asked Questions

     
     
    1. What is workers' compensation fraud?
    Knowingly telling a lie in order to obtain workers' compensation benefits. Workers' compensation fraud is a crime and if it can be proven that a person told a lie to collect benefits, the District Attorney's office will be notified and will proceed with criminal prosecution. If an investigation uncovers evidence of malingering or exaggeration of symptoms, this would be considered abuse and not fraud. Such an investigative finding would result in termination of benefits, but not criminal prosecution.
    2. What is the difference between fraud and abuse?
    Both fraud and abuse represent substantial and unnecessary costs to the District. The main difference is that fraud is a crime, prosecuted by the District Attorney, and punishable by fine, imprisonment or both.
     
     FRAUD  ABUSE
    •  Clear intent to misrepresent facts or fabricate injuries
    •  Taking advantage of the system
    •  Unlawful to make any knowingly false or fraudulent statement(s) or material misrepresentations for the purpose of obtaining
    •  Exaggeration of symptoms
    •  Crime punishable by law
    •  Just as costly as fraud and probably more prevalent
     
    3. What are some red flags of potential fraud?
    Fraud can be committed by any party to a workers' compensation claim. Employee red flags:
    • Employees pending disciplinary action
    • Claim filed around time of discipline, layoff, or completion of seasonal or temporary work
    • Employee is vague, inconsistent, or refuses to cooperate in accident investigation
    • Monday morning/Friday afternoon injury
    • Unusually familiar with workers' compensation system
    • Seasonal injuries
    • Employee has had multiple prior injuries
    • No witness to accident
    • Employee cannot be reached at home during work hours
    • Employee has a side job, second job or business
    • Employee has had prior injuries or medical treatment not work-related
    • Employee is out of illness time but is seeking time off from work
    • Employee has no visible signs of injury (cut, bruise, scratch, etc)
    4. What happens when a suspected fraud tip is reported to Sedgwick's Special Investigation Unit (SIU)?
    The SIU will investigate. The investigation may involve taking statements from witnesses or it could involve surveillance depending on the nature of the suspected fraud and information obtained. If the investigation uncovers proof of fraud, the matter is submitted to the LA District Attorney for further investigation and prosecution.
    5. What is the penalty for workers' compensation fraud?
    Pursuant to section 1871.4 of the Insurance Code, penalty can be up to 5 years imprisonment or fine of up to $150,000 and restitution of monies defrauded.
    6. Can I report fraud anonymously?
    Yes, you can report suspected fraud anonymously to any of the following numbers:
    • Workers' Compensation Fraud Hotline                                                                                          
             (866) 247-2287 ext. 73271
    • Division of Risk Management and Insurance Services, Workers' Compensation Department    
             (213) 241-3138
    • Office of the Inspector General Fraud Hotline                                                                             
             (866) 528-7364
    7. I reported a suspected fraud. Will I receive a status update on the suspected fraud tip I submitted?
    The Special Investigation Unit (SIU) will acknowledge all tips received if contact information is provided. Every suspected fraud tip is carefully reviewed; however, in order to protect the integrity of the investigation and maintain confidentiality, the SIU will not provide updates or a status of the investigation.