Insurance Code § 1871.4 – Workers’ Compensation Fraud
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Insurance Code § 1871.4 – Workers’ Compensation Fraud
Insurance Code – INS
DIVISION 1. GENERAL RULES GOVERNING INSURANCE [100 – 1879.8]
( Division 1 enacted by Stats. 1935, Ch. 145. )
PART 2. THE BUSINESS OF INSURANCE [680 – 1879.8]
( Part 2 enacted by Stats. 1935, Ch. 145. )
CHAPTER 12. The Insurance Frauds Prevention Act [1871 – 1879.8]
( Chapter 12 added by Stats. 1989, Ch. 1119, Sec. 3. )
ARTICLE 1. False and Fraudulent Claims [1871 – 1871.10]
( Article 1 added by Stats. 1989, Ch. 1119, Sec. 3. )
California Law
1871.4.
(a) It is unlawful to do any of the following:
(1) Make or cause to be made a knowingly false or fraudulent material statement or material representation for the purpose of obtaining or denying any compensation, as defined in Section 3207 of the Labor Code.
(2) Present or cause to be presented a knowingly false or fraudulent written or oral material statement in support of, or in opposition to, a claim for compensation for the purpose of obtaining or denying any compensation, as defined in Section 3207 of the Labor Code.
(3) Knowingly assist, abet, conspire with, or solicit a person in an unlawful act under this section.
(4) Make or cause to be made a knowingly false or fraudulent statement with regard to entitlement to benefits with the intent to discourage an injured worker from claiming benefits or pursuing a claim.
For the purposes of this subdivision, “statement” includes, but is not limited to, a notice, proof of injury, bill for services, payment for services, hospital or doctor records, X-ray, test results, medical-legal expense as defined in Section 4620 of the Labor Code, other evidence of loss, injury, or expense, or payment.
(5) Make or cause to be made a knowingly false or fraudulent material statement or material representation for the purpose of obtaining or denying any of the benefits or reimbursement provided in the Return-to-Work Program established under Section 139.48 of the Labor Code.
(6) Make or cause to be made a knowingly false or fraudulent material statement or material representation for the purpose of discouraging an employer from claiming any of the benefits or reimbursement provided in the Return-to-Work Program established under Section 139.48 of the Labor Code.
(b) Every person who violates subdivision (a) shall be punished by imprisonment in a county jail for one year, or pursuant to subdivision (h) of Section 1170 of the Penal Code, for two, three, or five years, or by a fine not exceeding one hundred fifty thousand dollars ($150,000) or double the value of the fraud, whichever is greater, or by both that imprisonment and fine. Restitution shall be ordered, including restitution for any medical evaluation or treatment services obtained or provided. The court shall determine the amount of restitution and the person or persons to whom the restitution shall be paid. A person convicted under this section may be charged the costs of investigation at the discretion of the court.
(c) A person who violates subdivision (a) and who has a prior felony conviction of that subdivision, of former Section 556, of former Section 1871.1, or of Section 548 or 550 of the Penal Code, shall receive a two-year enhancement for each prior conviction in addition to the sentence provided in subdivision (b).
The existence of any fact that would subject a person to a penalty enhancement shall be alleged in the information or indictment and either admitted by the defendant in open court, or found to be true by the jury trying the issue of guilt or by the court where guilt is established by plea of guilty or nolo contendere or by trial by the court sitting without a jury.
(d) This section may not be construed to preclude the applicability of any other provision of criminal law that applies or may apply to a transaction.
(Amended by Stats. 2011, Ch. 15, Sec. 212. (AB 109) Effective April 4, 2011. Operative October 1, 2011, by Sec. 636 of Ch. 15, as amended by Stats. 2011, Ch. 39, Sec. 68.)
California Law Summary
This statute criminalizes fraudulent activities related to California’s workers’ compensation system. It applies to employees, employers, healthcare providers, and others who knowingly engage in deceitful practices to obtain or deny workers’ compensation benefits.
Prohibited Conduct Includes:
Making or causing to be made a knowingly false or fraudulent material statement or representation to obtain or deny compensation.
Presenting or causing to be presented a knowingly false or fraudulent written or oral statement in support of or opposition to a claim.
Knowingly assisting, abetting, conspiring with, or soliciting another person to commit any of the above acts.
Making or causing to be made a knowingly false or fraudulent statement regarding entitlement to benefits with the intent to discourage an injured worker from claiming benefits or pursuing a claim.
Making or causing to be made a knowingly false or fraudulent material statement or representation to obtain or deny benefits or reimbursement provided in the Return-to-Work Program.
Making or causing to be made a knowingly false or fraudulent material statement or representation to discourage an employer from claiming benefits or reimbursement under the Return-to-Work Program.
Penalties:
Imprisonment in a county jail for up to one year, or in state prison for two, three, or five years.
A fine not exceeding $150,000 or double the value of the fraud, whichever is greater.
Restitution, including for any medical evaluation or treatment services obtained or provided.
A person convicted under this section may also be charged the costs of investigation at the court’s discretion.
Enhancements:
An individual with a prior felony conviction under this section, or related statutes such as former Section 556, former Section 1871.1, or Sections 548 or 550 of the Penal Code, shall receive a two-year enhancement for each prior conviction in addition to the standard sentence.
Purpose
To deter and penalize fraudulent practices that undermine the integrity of the workers’ compensation system, ensuring that benefits are reserved for legitimate claims.
Application
Violations of § 1871.4 can significantly impact personal injury cases, especially when fraudulent claims are involved. Such violations can lead to criminal charges, affect the credibility of claimants, and result in the denial of benefits.
