WCIRB Studied Impact of Medical Fraud Enforcement in California

October 17, 2018

The Workers’ Compensation Insurance Rating Bureau of California has released a study that shows the impact of medical provider fraud on the system, and it finds that efforts by the state as well as local district attorneys and insurer special investigative units to identify and prosecute provider fraud are believed to have contributed to the reduction in medical costs in the system.

WCIRB researchers examined the impact that increased efforts to identify and prosecute provider fraud may be having on the California workers’ comp system.

The Impact of Medical Fraud Enforcement on California Workers’ Compensation Study uses data from the WCIRB’s medical transaction database to analyze the volume and type of medical services that were performed by providers who were subsequently indicted or suspended for fraud (“Indicted Providers”).

Read the full report on Insurance Journal’s Research and Trends section.

Other findings include:

  • Within the California workers’ compensation system, more 7 percent of total medical payments were made to indicted providers, who rendered more than 4 percent of the medical services in the second half of 2012. By the second half of 2017, the shares of both medical payments and transactions to these indicted providers had fallen by over two thirds.
  • The total medical payments to indicted providers peaked in 2013, when 23 percent of medical lien payments, 14 percent of pharmaceutical payments and 4 percent of payments for other medical services were made to these Providers.
  • Since 2013, the share of total payments to Indicted Providers declined across all types, but the proportion of medical lien payments to these providers increased by 130 percent from 2013 to 2017.
  • Except for medical liens, the time between when a service was provided and when the payment was made was considerably longer for Indicted Providers than for other, non-indicted providers.

The WCIRB has planned a WCIRB Research Forum webinar to discuss the findings of the study as well as the WCIRB’s Cumulative Trauma Study.

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