Workers’ Compensation Fraud
SB 3832 Sponsored by Sen. Bill Brady (R-Bloomington)
SUPPORT
One of the key components of the 2005 changes to the workers’ compensation law agreed to by business and labor was establishing civil and criminal penalties for fraud related to workers’ compensation and the establishment of a fraud investigation unit at the Illinois Department of Insurance. Unfortunately, the budget for the fraud unit has been dramatically cut for from $900,000 when first established to $485,000 in FY 2010.
The follow-through to prosecute cases has been very limited. The 2009 report from the Fraud Unit indicates that 35 cases of alleged fraud were referred for prosecution in 2008. However, only four of these referred cases resulted in indictments in 2008. An additional nine were added for the first six months of 2009.
Problem: Lack of prosecution by state’s attorneys.
Solution: Creation of special prosecutors at the Illinois Department of Insurance’s workers’ compensation fraud unit. Requires within 30 days that the Attorney General or the applicable State’s Attorney to provide a written reason with the basis for the decision not to prosecute. (page 32 and pp 34/35)
Problem: The filing of alleged fraud complaints is chilled by requiring the complaintant’s name to be reported to the employer or employee.
Solution: Eliminates the revealing of the complainant when the report of fraud is received by the Fraud Unit. Retains that the name be provided when an investigation is not referred for prosecution. (pp 33/34)
Problem: There is a lack of information about fraud convictions.
Solution: Similar to law in California, requires certain information of persons convicted of workers’ compensation fraud be posted on the DOI website and provided to IWCC Advisory Board. (pp 35/36/37)
Problem: Illinois Appellate Court decision disallows The Workers’ Compensation Commission from recalling a case that has been later found to involve fraud.
Solution: Allows the Commission to recall a settlement or decision when fraud has been determined to have been committed related to the case. (pp 17/18)
Problem: Lack of prosecution & conviction blocking attempts to seek civil remedies.
Solution: Clarifies that attempts to secure civil remedies are not barred. (page 37)
In addition, the State’s commitment to support the fight against fraud must be reaffirmed. The Fraud Unit’s budget at the Division of Insurance needs to be restored for FY 2011from $485,000 to the agreed budget of $900,000. Also, the staff at the Fraud Unit must be provided state employee status. They are currently contracted staff which has contributed to turnover of investigators.
Courtesy of Jay Dee Shattuck
