In Brief: Legislature Passes Insurance Fraud Fund Bill

A bill expected to boost funding to fight healthcare fraud in California has been passed by both the Assembly and Senate and is awaiting the signature of Gov. Jerry Brown.

AB 2138, authored by Assemblyman Bob Blumenfeld, a Los Angeles Democrat, would increase the current annial surcharge on health and disability insurers from 10 cents per insured life to 20 cents, which is expected to raise an additional $4 million a year.

Seventy percent of the money would be doled among local district attorneys – up from 50% – to better prosecute healthcare and disability fraud. The remaining 30% would go to the fraud division of the California Department of Insurance, down from the 50% the agency currently receives.

“I am pleased that the State Legislature passed this bill,” said Insurance Commissioner Dave Jones, whose agency sponsored the legislation. “This type of fraud hurts everyone from policyholders to providers, and, unfortunately, it is becoming more sophisticated.”