“Clean-Up Legislation” enacted to combat fraud and abuses in lien practices

by David F. Mahjoubi (September 26, 2018)

The California Legislature has taken additional steps to combat fraud and abuses in lien practices not resolved by SB 863. One of the major issues was whether violators of workers’ compensation laws should be entitled to enforce their right to payments on liens. The Department of Industrial Relations (DIR) and its Division of Workers’ Compensation (DWC) announced recently that from 2011 through 2015, $600 million in liens were filed for treatment of injured workers covered by workers’ compensation insurance by providers who had been convicted of crimes or were under criminal indictment. According to the DWC, 17% of all liens filed between 2011 and 2015 were filed by providers with fraud indictments or convictions. In response to these statistics, the Legislature enacted two recent bills (AB 1244 and SB 1160) then followed up with clean-up legislation enacting AB 1422.