Disability and Healthcare Fraud

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 an 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 for 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 2021-22, the Fraud Division identified and reported 614 suspected fraud claims, assigned 65 new cases, and made 28 arrests and 62 referrals to prosecuting authorities. The potential loss of these cases amounted to $203,377,734.

District Attorneys' Disability and Healthcare Program

In Fiscal Year 2021-22, 10 counties received funding totaling $6,081,000 through the Department's Disability and Healthcare Insurance Fraud Grant Program. The district attorneys reported 256 investigations and 36 arrests, which also included a majority of Fraud Division arrests. District attorneys prosecuted 116 cases involving 196 defendants with chargeable fraud totaling $925,940,880, which resulted in 37 convictions and $10,240,830 in restitution ordered by the courts.

Disability Insurance Fraud Assessment Grant Program Regulations