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Jan. 24, 2007

L&I reports successful anti-fraud efforts in 2006

TUMWATER — The Department of Labor and Industries (L&I) said today that its fraud program collected $135 million in fiscal year 2006, a 29 percent increase over the previous year.

In addition, the department recovered another $33 million in the first quarter of fiscal 2007, ending in September. This was a 4 percent increase over the same quarter a year ago.

The collections amount to about $10 for every dollar spent on L&I’s Fraud Prevention and Compliance Program. Money recovered comes from fraud, as well as delinquent workers' compensation premiums and improper payments to health-care providers and workers.

In fiscal 2006, L&I also referred 20 cases for prosecution — seven employers, two health-care providers and 11 workers — and avoided an estimated $16 million in costs by uncovering and stopping payments being made as a result of fraud or abuse.

“Getting tough on fraud is the right thing to do, and we’re pleased our increased efforts are paying off,” said Carl Hammersburg, manager of the L&I program. “It’s important to protect the fairness and integrity of the workers’ compensation system, and to protect the economic vitality of the majority of businesses in Washington who follow the rules and pay their fair share for workers’ comp insurance.”

Hammersburg said the increased collections come for a variety of reasons, including:

• Stepping up fraud-fighting efforts in the construction industry to find contractors that are unregistered or not paying workers’ compensation insurance.
• Developing a new automated telephone system to make early contact with individuals owing money.
• Streamlining the audit process to make it less time-consuming for employers.
• Improving cross-program communications within L&I and with other state and federal agencies.

L&I’s fraud web site, www.Fraud.LNI.wa.gov, includes an online form for reporting fraud. Anyone who suspects fraud may also call L&I’s fraud hotline at 1-888-811-5974.

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Media contact : Barbara A. Davis, 360-902-4216 or daba235@LNI.wa.gov.

To view the 2006 Annual Fraud Report to the Legislature: Targeting Fraud and Abuse, go to www.Fraud.LNI.wa.gov where you will also find quarterly reports on L&I’s prevention and compliance efforts.