Bill would tax insurers to fund anti-fraud efforts

Insurers operating in California could see an increase in taxes to fund the state's anti-fraud efforts if a bill passed by the state legislature becomes law.

In some cases, A.B. 2138 would double insurers' annual assessment to 20 cents per member to help local district attorneys investigate and prosecute health fraud.

From 2007 to 2010, the California Department of Insurance (CDI) received more than 6,000 claims of potential health and disability fraud, but district attorneys could only investigate 656 of those claims. The state's weak investigatory efforts stem from a lack of funding that the bill, which was sponsored by Insurance Commissioner Dave Jones, would provide, reported LifeHealthPro.

"I am pleased that the State Legislature passed this bill giving local communities the necessary resources to fight the growing problem of insurance fraud," Jones said Wednesday in a statement. "This type of fraud hurts everyone from policyholders to providers, and, unfortunately, it is becoming more sophisticated. I applaud Assembly Member Blumenfield for authoring this important anti-fraud legislation."

The bill now awaits Gov. Jerry Brown's signature. "I urge Governor Jerry Brown to sign this bill giving the Department and local law enforcement the tools to better combat this disturbing crime, especially in light of federal healthcare reform," Jones added.

To learn more:
- read A.B. 2138
- see the LifeHealthPro article
- check out the California insurance department statement

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