D.A. O’Malley Gets $3.2M Grant to fight Insurance Fraud

By Robert M. Arnold, J.D. Insurance fraud is ever present and generally spreading throughout American society. Organizations and individuals tend to engage in criminal conduct during periods of economic downturns and high employment. Although hard times might seem to offer excuse, fraud is illegal at any time and causes injury to rightful claimants, consumers, businesses and ultimately taxpayers. On October 4, 2012, California Insurance Commissioner Dave Jones announced a $3.2 million grant to Alameda District Attorney’s Office to fight Workers’ Compensation, Disability and Health, and Automobile Insurance Fraud. The funds are awarded by the Insurance Commissioner to District Attorney’s to prosecute these types of fraud. In September Governor Jerry Brown signed A.B. 2138, which increases funding to local district attorneys across the state, for the investigation and prosecution of Disability and Health insurance fraud. “I am pleased today to announce this grant to the Alameda District Attorney.” said Commissioner Jones.” “Insurance Fraud, of all kinds, and at all levels, severely impacts our businesses as well as those who live and work in Alameda County,” says District Attorney Nancy E. O’Malley. “These grant funds will be put to excellent use in our efforts to investigate and prosecute insurance fraud. Auto claims are the fastest growing segment of fraud, because  15 to 20 percent of auto claims are fraudulent. Workers’ compensation fraud harms insurers, employers and employees by contributing to higher premiums and undermining the perceived legitimacy of compensation claims. Health insurance, however, presents more complex fraud issues for insurers, policyholders and the public at large, because there are more ways to cheat. Health and disability fraud are believed to add billions of dollars in annual cost, waste and abuse; and, it contributes nothing to better health care. President Obama, during his “polite” debate, stated “his administration recovered about $50 billion for Medicare, as a result of correcting fraudulent and abusive practices.” California attorney general Kamala Harris is also aggressively combating fraud and abuse. On September 13, 2012, the Wall Street Journal reported Harris launched broad investigations into whether growing consolidation among hospital and doctor groups is pushing up the price of medical care.  Additionally, according to an August 9, 2012 article in Bloomberg.com, attorney general Harris filed suit, in state court, seeking to recover more than $4.3 million that was diverted from veterans’ programs.
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