Illinois workers and medicalproviders seeking to defraud workers’ compensation funds could face obstacles under Gov. Rod Blagojevich’s proposed plan.

Blagojevich proposed a fraud squad to investigate workers’ compensation fraud during his Feb. 4 State of the State address.

Blagojevich also wants to take a tougher stand against workers’ compensation fraud by making it a felony, said Gerardo Cardenas, Chicago press secretary for the governor’s office.

Illinois businesses deal with 300,000 workers’ compensation cases every year, with more than 20 percent of cases ending up in litigation, he said.

The DeKalb area has about 680 new workers’ compensation claims annually, said Sue Piha, manager of research and education for the Illinois Workers’ Compensation Commission.

Among the four types of workers’ compensation fraud, medical provider fraud and insurer fraud are the most common, Cardenas said.

“We are going to work with businesses and trade unions so we can efficiently fight this, Cardenas said.

State Rep. Bob Pritchard (R-Hinckley) said he is delighted the governor realizes workers compensation fraud is a problem.

There are a number of reasons why businesses are leaving Illinois and fraud is one of them, Pritchard said. If the high cost of insurance can be reduced, it will be a step in the right direction.

Reducing fraud in Illinois may also have positive ramifications in other states if they adopt similar legislation, said Frank Scafidi, director of public affairs for the National Insurance Crime Bureau.

“It is a positive step for everyone when you have the chief executive of a state trying to stop fraud,” he said. “Without support at this level, some of these knuckleheads would still try to game the system.”

Scafidi said reducing fraud would require solid legislation, serious enforcement and prosecution for offenders.