Will Poizner Get at the Fraud Against Workers in Workers' Comp?

Saturday, August 25, 2007 | 0

By Sam Gold

We hear so much in the news about how workers' compensation fraud is taking billions and billions of dollars from our economy, especially those employers who purposely misrepresent the true occupations of their employees. You've probably heard the story about the roofing company with 45 clerical employees and one roofer. Workers' compensation premiums are based on risk and exposure to risk; the higher the risk, the higher the premiums.

Just last week, a 42-page report from the Committee on Health and Safety and Workers' Compensation said this cheating means honest employers in a whole array of high-risk blue-collar fields could be paying up to eight times more for workers' compensation insurance than they should.

Renowned UC Berkeley survey researcher Professor Frank Neuhauser, who co-authored the committee's report, said the fraud rate has shot up from 6% in 1996 to about 19% in 2002 -- the most recent year for which he could get the various statistics used in the calculations.

But where is the real fraud? I mean the fraud that brings this system to its knees. It's fraud that is perpetrated by some employers and insurance companies against their employees, whose only crime is that they were injured on the job. It's fraud that gums up the workers compensation courts with frivolous litigation. And it's getting worse as times goes by. It's supposed to be a no-fault system, or at least that's what they say.

Is Mr. Neuhauser wearing rose-colored glasses or is it that no one cares enough about the plight of California's injured workers to compile these statistics. These white-collar criminals are so used to being protected by the "exclusive remedy" provisions of the state Labor Code and litigation privilege that they simply commit the most heinous criminal acts with no regard for who they injure, because they know that they will always skate.

Arnold Schwarzeneggers's so-called workers' compensation reform of 2004 stripped the teeth out of any meaningful penalties that could be assessed against the insurance companies for violations and infractions of the workers' compensation law. Now it's all gums, and the insurance industry is reaping billions of dollars in profits off of the backs of the occupationally disabled.

Earlier this year, Insurance Commissioner Steve Poizner invited a group of injured workers up to his office where they brought him up to date on the fraud that they experience on a daily basis. C Poizner made it clear that he has a zero tolerance for fraud, no matter where it comes from, and will prosecute any case of merit brought to his attention.

That was eight months ago. Since then, several of those injured workers have brought cases to the attention of his investigative staff. We don't know of any case on record where the Department of Insurance has prosecuted an insurance carrier for perpetrating fraud against an injured worker. And why should they? They're too busy handing out Fraud Assessment Commission money to district attorneys around the state to prosecute injured workers.

In all of these statewide committees including Poizner's blue ribbon fraud task force, how come there is not one representative of the interests of California's injured workers? After all, they are the primary stakeholders in this system created by our former progressive Governor Hiram Johnson nearly a century ago.

Workers' Compensation fraud committed by injured workers by the industry's own admission is less than 1%. So where is the other 99% and why aren't we hearing about it? What we see and hear in the mainstream radio, television and print media is usually the other way around. Who is doing anything to change that?

Workers Compensation is no longer about truth and justice, nor is it about fairness and equity, it's simply about money and power and what it will buy. A sad anthem for California in the 21st Century.

Will Commissioner Poizner keep his word and wipe out this festering problem? Time will tell. Let's give him some breathing room and see what he does. The ball is now in his court. It's time for action, not rhetoric.

Sam Gold is an injured worker who created a television program on the California workers' compensation system. Injured On The Job (www.injuredonthejob.tv) is produced at state-of-the-art video production facilities in San Francisco and Sacramento, and exposes that fraud and corruption in a manner that the television viewer can easily understand. He also maintains the Web site Californians Injured at Work. This column first appeared on the Web site http://www.californiaprogressreport.com.

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