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Workers' Comp Fraud Bill

March 23, 1993

In the March 5 editorial ("Reform It, Don't Just Fiddle Around"), you criticized my recently introduced legislation which cracks down on workers' compensation fraud. Interestingly, you did not attack the legislation as unnecessary or poorly conceived. Instead, you labeled it "piecemeal" and implied that it was merely a substitute for more comprehensive reform. I assure you, nothing is farther from the truth.

It bears noting that the Assembly Finance and Insurance Committee is in the midst of a series of hearings seeking to craft a "comprehensive" workers' compensation reform bill. I have given my entire support to this effort.

My measure was never meant to supplant these efforts. I took great pains in unveiling the proposal to assure all parties that this was not my intent. I testified to both the Assembly Finance and Insurance Committee and a joint meeting of the Senate Judiciary and Industrial Relations committees to explain the bill's details and to urge them to pass more comprehensive legislation to complement my measure.

Finally, the merits of my proposed legislation, AB 1300, are beyond dispute. The Little Hoover Commission has recently reported that as much as 30% of workers' compensation costs are due to fraud. Insurance Commissioner John Garamendi believes the portion is at least 20%. If we can wipe fraud out, it will do more to save California employers in workers' compensation costs than the more "comprehensive" reforms currently being debated. The reason is simple. Elimination of fraud means no claims being filed--i.e., no doctor bills, no vocational rehabilitation, no attorney fees, no temporary disability payments. It is complete and absolute savings.

The measure will cut out these fraudulent claims that constitute a major cause of increased premiums:

* It gives district attorneys the power to grab all illicit fees gained by "mill" operators. They can keep these recovered fees to go after more fraud.

* It establishes a bounty hunter provision to give incentive to persons to sue fraudulent workers' comp providers.

* It restricts medical-legal exams to one per side and requires a 60-day waiting period before such exams can take place. This provision will ensure that mills (which usually conduct five to seven exams per injured worker) will be wiped out.

* It makes it a felony to give kickbacks and rebates to workers' compensation adjusters.

* Mandates that all workers' compensation doctors swear, under penalty of perjury, that information in their reports is true. False statements can then be prosecuted under felony perjury laws.

As even your editorial had to acknowledge, cracking down on fraud is paying off. Real savings are being achieved and more can be realized if AB 1300 is passed into law. That is my intent.


Speaker of the Assembly

D-San Francisco

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