Sacramento, CA – Insurance Commissioner Dave Jones recently announced that Governor Jerry Brown has signed AB 2138, authored by Assembly Budget Committee Chair Bob Blumenfield (D-San Fernando Valley). The bill, sponsored by Commissioner Jones and the Department of Insurance, would increase funding made available to local district attorneys to investigate and prosecute health and disability insurance fraud throughout California.
“The Governor’s signature on this bill ensures that local communities will receive needed resources to fight the escalating problem of insurance fraud in California,” said Commissioner Jones. “The individuals perpetrating this type of fraud have become more sophisticated with their efforts. This funding will aid local district attorneys as they adapt to keep pace with this increasing criminal activity.”
In May 2009, CDI’s Advisory Task Force on Insurance Fraud, which included law enforcement officials, insurance industry representatives, and consumer advocates, completed a comprehensive report of the anti-fraud insurance programs in California. The report found, among other things, that the health and disability insurance lines had insufficient policy assessments to support a statewide anti-fraud effort. This led to the recommendation for increased funding that AB 2138 provides.
From 2007 to 2010, CDI received more than 6,000 health and disability-suspected fraudulent claims statewide. Only a fraction of those claims were referred to local district attorneys. Only 656 investigations ensued from these claims, resulting in 221 arrests and 184 convictions with an annual average of $223 million in chargeable fraud.
“Health and disability insurance fraud has become a growing problem for California’s health care delivery system and economy,” said Commissioner Jones. “This funding will lead to additional fraud-fighting tools that will be vital as we continue to implement federal health care reform. I applaud Assembly Member Blumenfield for authoring this important anti-fraud legislation and thank Governor Jerry Brown for signing it.”
AB 2138 will go into effect on January 1, 2013.