The Fraud We Face in Workers’ Compensation in California

In the past, insurance companies have paid for their mistakes through bad faith lawsuits in the area of Tort Law. However, policies written in the area of Workers’ Compensation are subject to what is termed the “Exclusive Remedy”. The concept of the Exclusive Remedy was to protect both the employer, as well as, the injured workers of California. It was established as a “No Fault” rule to provide immediate medical attention for those injured without subjecting the employer to lawsuits outside the workers’ compensation system. A great idea, if only they would keep their part of that historic bargain!

However, in the name of profit, insurance defense attorneys have exploited the Exclusive Remedy, turning it into a shield from prosecution for the insurance carrier, while allowing the them to act with limited financial exposure when applying fraud and deceptive business practices to the claim and benefit delivery process.

Insurance companies have spent billions of dollars in their effort to bamboozle and convince our lawmakers that injured workers represent the largest liability to the industry, not due to the claims made, but as a result of rampant worker fraud. While stuffing their coffers full of profit [in Billions] they profess to be concerned for the public and the great expenses passed on to employers, citizens, and the government.

The net result is we are now watching the lives of too many injured workers being ruined; they’re losing their homes, marriages are falling apart, and some even have been driven to commit suicide, suffering in indescribable excruciating pain as they face the unconscionable and illegal behavior of claim examiners, adjusters, private investigators, and defense attorneys.

The insurance industry has developed a subculture of like minded individuals who help facilitate the wholesale use of fraud within the workers’ compensation system; tools used by insurance companies to support their fraud.

On its face, the development of Utilization Review was a good thing. It was to assist in providing the proper treatment to the injured worker, while acting as “checks-and-balances” for medical providers who would “over-prescribe”; it was designed to prevent medical fraud and to keep doctors honest, not workers.

The establishment of the AME physician was also a good idea, but instead of objective, unbiased doctors, the insurance industry has aggressively recruited physicians of lesser quality, competence, and those willing to prostitute their credentials. For the most part, AME physicians are burnouts, washouts, or physicians who no longer wish to treat patients. They have also succumbed to the easy money of the insurance industry.

The same is true for the private investigators that have aligned themselves with the insurance industry. However, it is not the “Mom-and-Pop” Investigative Companies; it is the so-called “Nationwide Firms” that the insurance companies depend so heavily upon. Here again is the industry at work; as a continuation of the insurance industry business plan, many of these large PI Firms are comprised of former insurance company executives, claim examiners, adjusters, and supervisors with a single focus to provide profit retention services.

Moreover, many of the individuals in the field, currently investigating claims, are not truly Private Investigators. Most field personnel are untrained, uneducated, and UNLICENSED and are trained by insurance company representatives to perform a single function. Much like an assembly line worker, today’s private investigator is only a small part of the team insurance companies employ to eliminate legitimate injury claims.

Vocational Rehab is another fraud tool used by the insurance industry. The insurance company has found a way to manipulate the restrictions and limitations of an injured worker, provide minimal information, and receive yet another fraudulent document to “stuff” a claims file with.

Insurer Fraud requires the complicit behavior of many outside vendors, lawyers, and doctors. Without the cooperation of these individuals or entities the fraud could not continue to go unchecked.

The biggest failure in the workers’ compensation system is our legislative and regulatory bodies charged with providing and protecting. It would appear that providing and protecting has been utilized in the best interest of the insurance companies; after all who pays the most to be protected and provided for?

Ray Polly is a private investigator licensed by the California Department of Consumer Affairs - Bureau of Security and Investigative Services with 30 years of experience. He has over 60,000 hours of surveillance and investigative experience related to Worker’s Compensation, Liability (BI/PI), and undercover investigations in the areas of Employee Theft, Loss Prevention, and Workplace Drug Abuse. He has assisted the California Department of Insurance, the Department of Justice, and the California Highway Patrol in the criminal prosecution of insurance fraud by individuals, organized gangs, and legal and medical professionals. Polly was recently featured in a Call Kurtis news feature on KOVR CBS 13 in Sacramento. For further information about the California Insurer Fraud Task Force, visit their website.