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CA Department of Insurance
CA Department of Insurance
CA Department of Insurance

Disability and Healthcare Fraud

Disability and Healthcare Insurance Fraud Program

Health insurance fraud is a significant problem for health insurance policyholders because it drains resources out of the system causing otherwise unnecessary premium increases. California Insurance Code Section 1872.85(a) provides funding for the Disability and Healthcare Fraud Program through annual special purpose assessment to be determined by the Commissioner: not to exceed 20 cents ($0.20) for each insured person in California who is covered by an individual or group insurance policy it issues. This funding supports criminal investigations statewide by the Fraud Division and prosecution by district attorneys of suspected fraud involving disability and healthcare.

This program area includes suspected fraudulent claims involving: claimant disability other than workers' compensation, dental claims, billing fraud schemes, immunization fraud, unlawful solicitation, durable medical equipment, and posing as another to obtain benefits.

During fiscal year 2017-18, the Fraud Division identified and reported 590 SFCs, assigned 84 new cases, and made 40 arrests and 38 referrals to prosecuting authorities. Potential loss amounted to $172,409,998.

Healthcare Settlement

During fiscal year 2017-18, the Fraud Division identified and reported 55 SFCs, assigned 22 new cases, made 18 arrests and 18 referrals to prosecuting authorities. Potential loss amounted to $92,352,459.

District Attorneys' Disability and Healthcare Program

In fiscal year 2017-18, 11 counties received funding totaling $5,700,000 through the Department's Disability and Healthcare Insurance Fraud Grant Program. The district attorneys reported 280 investigations and 62 arrests, which also included a majority of Fraud Division arrests. District attorneys prosecuted 82 cases involving 120 defendants with chargeable fraud totaling $97,685,552, which resulted in 34 convictions and $6,108,770 in restitution ordered by the courts.

District Attorneys' Disability and Healthcare Supplemental Program (Settlement)

As the result of a one-time Qui-Tam settlement, the Department received $4,000,000 to be awarded over four years, through an annual competitive process, available to those counties receiving a Disability and Healthcare Insurance Fraud Grant. These funds are to be used solely for the enhanced investigation and prosecution of cases involving healthcare/medical providers that have the potential to have great impact on disability and healthcare insurance fraud.

Fiscal year 2017-18 was the fourth year of this award; five counties received funding totaling $1,000,000 through the Disability and Healthcare-Supplemental Insurance Fraud Grant Program. The district attorneys reported 64 investigations and 7 arrests. District attorneys prosecuted 20 cases involving 38 defendants with chargeable fraud totaling $9,529,443, which resulted in seven convictions and $487,093 in restitution ordered by the courts.


Disability Insurance Fraud Assessment Grant Program Regulations

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