California has one of the most generous and positive whistleblower climates within the United States. Like many states, California has false claims act that allows insiders with knowledge of fraud against the state or any of its subdivisions (counties and municipalities) to bring a lawsuit in the name of the state and collect a generous reward if the suit is successful.
Unlike other states whose laws only extend to Medicaid (Medi-Cal fraud in California), California legislators enacted a special law to include fraud against private insurance. That makes California unique with its Insurance Frauds Prevention Act (“IFPA”).
This law allows anyone with knowledge of insurance fraud to file a claim. And the awards offered by IFPA are huge, up to 50% of whatever is recovered.
It isn’t just health insurance that is included. Claims can also be filed if they relate to workers compensation and auto insurance fraud.
The IFPA, located in section 1871.7 of the California Insurance Code, sets penalties of $5,000 to $10,000 per violation and permits recovery of triple damages. This combination means rewards can add up quickly.
Under the statute, whistleblowers (called relators) can receive between 30% and 50% of the amount of money recovered from the wrongdoer.
Much like the False Claims Act, recovering a whistleblower award under the Insurance Frauds Prevention Act first requires a sealed lawsuit be filed in court.
Common examples of insurance fraud include:
- Billing for services not performed
- Over billing
- “Upcoding” or billing for a level service higher than that actually performed
- Gaming workers comp rates by falsely changing worker classifications or reporting fewer employees
- Paying kickbacks to recruit patients or customers
California has also provided liberal anti-retaliation provisions to protect workers who step forward and report insurance fraud. Under the IFPA, workers who suffer retaliation can receive double back pay, interest, legal fees, reinstatement of seniority and special damages.
If you have original source (inside) knowledge about insurance fraud within California and are interested in receiving an award, give us a call For more information contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct). All inquiries are kept completely confidential and are protected by the attorney – client privilege.