The Workers' Compensation Daily News for Feb 09, 2012
Chiropractor Sentenced for Workers' Comp Fraud
Thu, 9 Feb 2012 08:03:08 - Pacific Time
Monterey County District Attorney Dean Flippo announced that a Salinas chiropractor was sentenced to 30 days in jail and fined $5,000 on three misdemeanor counts of workers' compensation fraud, According to the report in the Monterey Herald, Robert Schreiner, 59, was sentenced to three years probation by Judge Marla Anderson and was ordered to pay $1,977 in restitution to an insurance trust fund. Schreiner is eligible for a work alternative program, Flippo said.
The case originated in October 2006, when two employees of container business Smurfit-Stone complained to the District Attorney's Office that workers were being discouraged from opening workers' compensation claims at the Salinas plant. During the investigation, Flippo said, it was discovered that from 1999 through 2007, injured workers were being treated outside the workers' compensation system and managers were discouraging them from filing claims and receiving their benefits. The managers sent injured workers to various medical providers for treatment, then paid for treatment directly from the company.
One worker said he told Schreiner, who owns and practices at the California Chiropractic Center in Salinas, that he hurt his back and shoulder while working. Schreiner, he said, insisted his back problem was from carrying a backpack as a child. The worker indicated he still suffered from the injuries, Flippo said.
Smurfit-Stone paid for eight treatments. Schreiner tried to get the worker to pay for 52 more treatments. Read More...
Claimant Guilty in Fraud Case After Three Week Jury Trial
Thu, 9 Feb 2012 07:54:31 - Pacific Time
The Shasta County District Attorney's office announced that a jury found Tony Roey Stevenson guilty on three felony counts after a three week trial and four hours of deliberation. Stevenson was found guilty on charges of grand theft, committing insurance fraud and committing worker's compensation fraud Wednesday.
According to the story in the Record Searchlight, Stevenson was working at Crown Motors in Redding when he said he slipped and injured his back in February 2007, according to the DA. He began collecting worker's compensation benefits and returned to part time work, the DA said.
But his insurer discovered video of him racing go-karts at the Need 2 Speed indoor track in Redding, where he was also detailing his car and moving in ways that his injury, he claimed, wouldn't have let him, the DA said.Stevenson later on claimed he could no longer detail cars because of his injury, according to the DA.
Stevenson is due to be sentenced on April 13 and faces a maximum sentence of four-years, four-months in jail, The District Attorney is claiming $30,524 in restitution, including $8,907 is for the worker's compensation benefits he received and another $21,617 to cover the cost of his insurer's investigation. Read More...
Man Sentenced to 77 Months in Jail and $10.8 Million Restitution for Fraud
Wed, 8 Feb 2012 05:58:12 - Pacific Time
A Los Angeles-area man was sentenced yesterday to 77 months in prison for organizing and leading a medical clinic fraud scheme that used the stolen identities of physicians to submit more than $18.9 million in fraudulent claims to Medicare, the Department of Justice, the FBI and the Department of Health and Human Services (HHS) announced. Eduard Aslanyan, 38, of Sherman Oaks, Calif., was sentenced by U.S. District Judge Consuelo B. Marshall in the Central District of California. In addition to his prison term, Aslanyan was sentenced to three years of supervised release and was ordered to pay $10.8 million in restitution.
Aslanyan pleaded guilty in April 2011. He admitted that between March 2007 and September 2008, he established a series of fraudulent medical clinics in and around Los Angeles to defraud Medicare. Carolyn Vasquez, who previously pleaded guilty to conspiring with Aslanyan to defraud Medicare, recruited physicians to serve as the medical directors of Aslanyan’s fraudulent medical clinics. The physicians did not perform services at the clinics and were rarely present at the clinics. Physician assistants were hired by Aslanyan and Vasquez and were complicit in the fraud scheme at the clinics.
According to court documents, Aslanyan hired patient recruiters to find Medicare beneficiaries who were willing to provide the recruiters with their Medicare billing information in exchange for expensive, high-end power wheelchairs and other medical equipment which the patient recruiters told the beneficiaries they could receive for free. Often, the Medicare beneficiaries did not have a legitimate medical need for the power wheelchairs and equipment. The patient recruiters then provided the beneficiaries’ Medicare billing information to Aslanyan or brought the beneficiaries to Aslanyan’s clinics. Aslanyan paid the patient recruiters cash kickbacks in exchange for recruiting the Medicare beneficiaries. In court documents, Aslanyan admitted that he and Vasquez instructed and paid physician assistants who worked at his clinics to prescribe medically unnecessary power wheelchairs, medical equipment and diagnostic tests for the Medicare beneficiaries. The physician assistants used stolen identities of physicians who did not supervise them or work at the clinics.
According to court documents, Aslanyan profited from the scheme at his fraudulent medical clinics in several ways. Aslanyan admitted that he allowed fraudulent diagnostic testing facilities to use the Medicare billing information he purchased from patient recruiters to submit false claims to Medicare for tests ordered at the clinics. In exchange, the fraudulent diagnostic testing facilities paid Aslanyan cash kickbacks that were disguised as rent payments to Aslanyan. Aslanyan also profited from the scheme by selling fraudulent prescriptions and documents generated at his clinics to the owners and operators of fraudulent durable medical equipment (DME) supply companies, which used the prescriptions and documents to submit false claims to Medicare. Aslanyan also used the fraudulent prescriptions and documents to submit false claims to Medicare through his own fraudulent DME supply companies, Vila Medical Supply Inc. and Blanc Medical Supplies. According to court documents, as a result of Aslanyan’s conduct, he and his co-conspirators submitted approximately $18.9 million in fraudulent claims to Medicare.
Currently, Aslanyan is serving a three-year state sentence for assault. On Jan. 9, 2012, Judge Marshall sentenced Vasquez to 60 months in prison for her role in the fraud scheme and ordered her to pay more than $6.2 million in restitution to Medicare. A second co-defendant, David James Garrison, a physician assistant who worked at the fraudulent medical clinics with Vasquez and Aslanyan, is scheduled for trial on Feb. 7, 2012. Read More...
Workplace Homicides Decline
Wed, 8 Feb 2012 05:58:06 - Pacific Time
Although workplace violence is viewed as crimes committed by disgruntled coworkers and spouses, the reality is that homicides in the workplace resulting from robberies to the business are more common, but well below levels shown in the mid-1990s, according to a study by NCCI. In its new report, "Violence in the Workplace" featured in an article in Property Casualty 360. NCCI says that homicides account for 11 percent of workplace fatalities in private industry. Nonfatal assaults make up less than 2 percent of total nonfatal lost work-time (LWT) injuries and illnesses, but that share has been increasing.
From 1993 to 2009, the rate of workplace homicides fell 59 percent, while the overall rate of homicides fell 47 percent. However, the decline has slowed for both since 2000. From 2000 to 2009, workplace homicide rates fell 21 percent while homicide rates overall fell only 9 percent, according to NCCI. The decline is due largely to a drop in the homicide-incidence rate for taxi drivers. Work-related homicide rates for these workers are now comparable to those for high-risk retail workers such as service-station attendants and barbers. But while homicides due to robberies and similar criminal acts have fallen, they still make up 69 percent of all homicides in the workplace, the report shows.
By contrast, homicides committed by work associates—a Bureau of Labor Statistics category made up of both coworkers and customers—have increased to about 21 percent. This reflects an increase of violent acts by customers to 9 percent. The share of workplace homicides by coworkers has remained steady at about 12 percent—with the actual number of such homicides in the range of 50-60 in recent years. Men and older workers have a disproportionately high share of workplace homicides since they are more likely to be employed in the occupations at highest risk of homicides, according to the report. Read More...
Court of Appeal Says Lien Collection Company is Administrator not Assignee
Tue, 7 Feb 2012 05:08:45 - Pacific Time
Anastasia Jenkins filed a workers’ compensation claim against her employer, whose workers’ compensation insurance carriers became insolvent during the pendency of the proceedings. CIGA was obliged to assume their obligations. Medical services were rendered to Jenkins by Oracle Imaging, N-Care and Nations Surgery Center. Each of the medical providers had separately entered into a "Collection Agreement" with Pinnacle Lien Services, pursuant to which Pinnacle was to provide "exclusive collection services" for accounts "assigned" to Pinnacle by the "client" medical provider. Under the agreements, Pinnacle had the discretion to negotiate the amount and terms of payment, subject to approval of the medical provider if the negotiated amount fell below specified percentages.
CIGA took the position that the claims of the medical providers submitted by Pinnacle were specifically excluded from coverage by Insurance Code section 1063.1, subdivision (c)(9), which provides that covered claims do not include "(B) a claim by a person other than the original claimant under the insurance policy in his or her own name . . . and does not include a claim asserted by an assignee or one claiming by right of subrogation, . . ." This issue was submitted for decision and the WCJ concluded that the liens were not barred. The WCAB agreed and denied reconsideration. The WCAB opined that CIGA had failed to prove that legal title to the medical providers’ claims had been transferred to Pinnacle, and therefore there was no assignment but only a delegation of the task of collection to Pinnacle. The Court of Appeal sustained the WCAB in the unpublished opinion of CIGA v WCAB and Next Enterprises.
"An assignment for collection vests legal title in the assignee which is sufficient to enable him to maintain an action in his own name, but the assignor retains the equitable interest in the thing assigned." In determining whether an assignment has been made, "the intention of the parties as manifested in the instrument is controlling." Established rules of contract interpretation apply in workers’ compensation proceedings.
The Court of Appeal noted that reading each agreement in its entirety makes clear that the medical providers retained full ownership of their accounts receivable, retained the right to terminate their relationships with Pinnacle and pursue collection efforts themselves, and maintained the right to approve certain settlement amounts. The Court noted that the agreements refer to "CLIENT’s accounts," not "Pinnacle’s accounts." In other words, under the agreements the medical providers retained control of the accounts receivable and the authority to collect. The agreements establish that the medical providers only transferred to Pinnacle the task of collecting their accounts receivable, for a fee and Pinnacle served in the role of an administrator. Pinnacle was hired to provide collection services, nothing more. The medical providers did nothing to extinguish their rights to receive payments directly from CIGA. The record supports the finding that the medical providers did not assign their claims to Pinnacle. Thus they were not barred from proceeding against CIGA.
Read More...
DEA Takes Aim At Mainstream Pharmacies
Tue, 7 Feb 2012 05:08:38 - Pacific Time
The Drug Enforcement Administration said on Monday it raided two CVS pharmacies over the weekend as part of an effort to curb the abuse of prescription painkillers and other potentially addictive substances according to a report in Reuters Health. The action, which occurred on Saturday, came one day after the agency suspended the license of drug distributor Cardinal Health Inc, prohibiting it from shipping such products from its facility in Lakeland, Florida. Cardinal immediately obtained a restraining order allowing it to continue shipments pending a hearing on February 13. Florida's drug enforcers have been cracking down on pharmacies for several years, but this is the first time they have targeted a major chain.
Mark Trouville, special agent in charge of DEA's Miami bureau, said at a press conference that last year the two pharmacies, located 5.5 miles apart in Sanford, about 30 miles south of Orlando, ordered 3 million doses of the painkiller oxycodone. That compares to an national average of 69,000. Trouville said the pharmacies either knew, or should have known, that a large number of the prescriptions it filled were not issued for a legitimate medical purpose. Red flags the pharmacies should have recognized included misspelled drug names, irregular dosing instructions and phony telephone numbers on prescriptions, he said. In some instances, four or five people dropped off identical prescriptions from the same doctor at the same time, paid for by one person.
CVS Caremark Corp said that it was "disappointed" in the DEA's action." CVS/pharmacy is unwavering in its compliance with and support of the measures taken by federal and state law enforcement officials to prevent drug abuse and keep controlled substances out of the wrong hands," it said in an emailed statement. The company said that that last fall, with the knowledge of the DEA, it had informed a small number of Florida physicians that it would no longer fill the prescriptions they write for controlled narcotics. As a result, distributions of oxycodone to the two Florida stores that were raided have decreased by about 80 percent in the last three months from the prior three months. CVS said it is cooperating with the DEA. In the meantime, "we remain committed to ensuring that all our customers, including customers of the two pharmacies, get the medications they need, including controlled substances."
Two other pharmacies were also served last week with suspension orders, but Trouville said they gave up their registrations rather than fight the matter in court. Under DEA rules, those pharmacies are not publicly identified.
Florida is at the epicenter of the national crisis of illegal prescription drug use. Seven people in the state die each day as a result of prescription drug abuse, more than from heroin, cocaine and methamphetamine combined, Trouville said. Read More...
Floyd, Skeren and Kelly’ Announces 2012 Employment Law Conference
Mon, 6 Feb 2012 05:11:25 - Pacific Time
Floyd, Skeren and Kelly LLP, is pleased to announce its 2012 Employment Law Conference scheduled for March 14, 2012 from 9:00 am to 4:30 pm at the Los Angeles Marriott Burbank Airport Hotal. This is an advanced course designed for employers, supervisors, managers, and any other professionals associated with human resources and employment law.
The conference will cover important workplace topics such as:
(1) The crucial overlap between workers' compensation and the FEHA/ADA, including medical leave, reasonable accommodation, the interactive process, benefit continuation, fitness-for-duty examinations, and return-to-work issues;
(2) the California Family Rights Act, including leave requirements, notification obligations, eligibility criteria, definition of a serious health condition, medical certification, intermittent leave issues, benefits, reinstatement, and required forms;
(3) An overview of the new legislation in effect as of January 1, 2012, including legislation related to Consumer Credit Reports; E-Verify; gender identity and expression; health benefits during pregnancy leave; the Wage Theft Prevention Act; and, a review of the most significant employment cases for 2011;
(4) Tips on controlling an employer’s unemployment insurance tax rate, including the four elements required to successfully establish a misconduct defense;
(5) A discussion of the 5 steps that can help reduce workers’ compensation costs including understanding the correct procedures regarding MPN notices, and properly completing the Workers’ Compensation Claim Form and Employer’s Report of Occupational Injury and Illness;
(6) A review of recent case law and legislation related to social media, including sites such as Facebook, Twitter and Linkedin, in addition to a look at how recent NLRB advisory letters on social media may provide guidance on workplace policies and procedures; and,
(7) An overview of the recent cases and legislation on employee misclassification, in addition to the five most common mistakes employers make when classifying individuals as independent contractors or classifying employees as exempt from overtime.
For further Conference or registration information please visit the Conference Website. Read More...
Job Site Death Leads to License Suspension
Mon, 6 Feb 2012 05:11:19 - Pacific Time
State officials have suspended the license of the builder of a Milpitas, Calif., home where a carpenter was buried alive last weekend. The Contractors State License Board said Friday that it suspended the general building contractor license of US-Sino Investment Inc. because the company had failed to comply with state workers' compensation insurance laws. The board says though licensed contractors are required to carry workers' compensation insurance for all employees, US-Sino Investment had an exemption claiming it had no employees. However the job site had many construction workers most of whom were from Mexico and were undocumented.
The top building inspector for Milpitas says a building permit for the 5,800-square-foot home was issued in August of last year. There were a number of inspections including one on Jan. 17th in which the contractor was given a corrections list. On Wednesday, Jan. 25, the city issued a stop work order and on Saturday, Jan. 28, the unsafe conditions proved deadly. Carpenter Raul Zapata died Saturday when he was buried in a 12-foot trench at the worksite.
Earlier this week, officials with the California Occupation Health and Safety Administration said the company lacked a proper permit for its work on the 5,800-square-foot home. Milpitas officials issued a stop-work order three days before the accident because of concerns over a rain-soaked hillside. "They just ignored our stop-work notice," said Keyvan Irannejad, Milpitas' chief building official. "When we got there, we didn't know they'd been working."
The contractor, U.S. Sino Investment has successfully completed a number of million dollar projects in Fremont including one on the market for $1.2 million. Investigators are attempting to interview the responsible company official, Richard Liu who is currently out of the country in China. There are several agencies investigating this incident, including those from the city and the state, and the district attorney is reviewing this case for possible criminal charges. Read More...
Providers' Suit Against UR Vendor Survives AntiSLAPP Motion
Fri, 3 Feb 2012 06:51:04 - Pacific Time
Workers' Compensation reform has provided employers with multiple layers of control over benefits and medical care. One process, the Utilization Review, was created to provide a scheme for determining if a request for authorization for medical care meets standards of evidence based medicine.
But a lawsuit filed by Electronic Waveform Lab, Inc., the developer and Manufacturer of the H-Wave® Instrument, alleges that Utilization Review (UR) doctors and EK Health, a large provider of UR services to insurance companies, have conspired to deny coverage for the H-Wave device, disparaged the device to others, and intimidated prescribers. The Complaint alleges Violation of the Cartwright Act, Intentional Interference with Prospective Economic Advantage, and Defamation/Trade Libel.
And this week, their suit moved a step forward. The Utilization Review defendants moved to strike the entire complaint under the California AntiSLAPP statute. Under California law, to survive such a motion, the plaintiff must prove, among other things, that there is a probability that they will prevail with their suit.
After reviewing the evidence submitted by the plaintiff, Superior Court Judge Michael L. Stern denied the utilization review defendants' AntiSLAPP motion. The Court found that "plaintiff has offered sufficient evidence to show a probability it will prevail at trial on its claims." In so finding, the court noted that: "Plaintiff furnishes several declarations from physicians' offices regarding statements by certain defendants maligning the H-Wave Treatment"...For example, numerous declarants testified under oath that defendants made "disparaging statements that the H-Wave device would never be authorized and no review was necessary." In addition, the court received expert testimony from Susan Honor-Vangerov the former Manager of State of California Division of Workers' Compensation Medical Unit. According to Judge Stern, Ms. Honor's expert testimony demonstrated "that the defendants' actions go beyond their review capacity and outside their opinion-rendering or decision-making powers."
Officials from the company say that this case has industry wide ramifications for those organizations who seek to control the utilization review process beyond the statutory rules.
H-Wave's counsel, Nicholas Roxborough and Joseph Gjonola of Roxborough, Pomerance, Nye and Adreani are thrilled with the outcome of this motion. Removing unwarranted barriers to providing evidence based treatment modalities such as the H-Wave will help allow injured employees to return to work. Read More...
Exclusive Remedy Does Not Bar Emotional Distress in Sexual Harassment Case
Fri, 3 Feb 2012 06:09:17 - Pacific Time
Melissa Routh filed a complaint in Kern Superior Court, naming the Kern County Probation Department as the sole defendant. The complaint alleges that Routh was sexually harassed and then subjected to discrimination and retaliation when, after reporting the sexual harassment, her complaint was ignored, one of the harassers was given a job promotion, and she was subjected to the internal affairs investigations and demoted. Routh further alleges her termination was a pretext for retaliating against her reports of sexual harassment and requested reassignment, and that the Department’s actions caused her emotional distress.
The Department filed a motion for summary judgment or summary adjudication. With respect to her claim of intentional infliction of emotional distress, the Department asserted the conduct of its employees was not extreme and outrageous, and the claim was barred by the exclusivity provisions of the Workers’ Compensation Act. The trial court granted summary judgment on this claim, finding it was barred by the Workers’ Compensation Act. Routh appealed.
The Court of Appeal in the unpublished opinion of Melissa Routh v Kern County Probation Department concluded that if any of Routh’s FEHA claims survive summary judgment, Routh’s cause of action for intentional infliction of emotional distress is not subject to the exclusivity provisions of the Workers’ Compensation Act. (See Accardi v. Superior Court (1993) 17 Cal.App.4th 341, 347, 352.) This is so because such a claim, if based upon the employer’s harassment or discrimination, is "founded upon actions that are outside the normal part of the employment environment.’" (Murray v. Oceanside Unified Sch. Dist. (2000) 79 Cal.App.4th 1338, 1363.)
However, the Court went to to say that an intentional infliction of emotional distress cause of action requires a showing of extreme and outrageous behavior beyond all bounds of decency. The conduct must have been committed with the intention of causing, or reckless disregard of the probability of causing, emotional distress, and the plaintiff must have suffered severe emotional distress. "Behavior may be considered outrageous if a defendant (1) abuses a relation or position which gives him power to damage the plaintiff’s interest; (2) knows the plaintiff is susceptible to injuries through mental distress; or (3) acts intentionally or unreasonably with the recognition that the acts are likely to result in illness through mental distress."
The Court concluded that given an employee’s fundamental, civil right to a discrimination free work environment, by its very nature, discrimination in the work place is outrageous conduct as it exceeds all bounds of decency usually tolerated by a decent society. Accordingly, if properly pled, discrimination will constitute the outrageous behavior element of a cause of action for intentional infliction of emotional distress.
The summary judgment with respect to Routh’s causes of action for retaliation, discrimination, wrongful discharge in violation of public policy and intentional infliction of emotional distress was reversed. Read More...
Past Week News Archive
Funding Bill Seeks to Address Drug Shortages: Thu, 2 Feb 2012 07:01:30 - Pacific Time: Read More...
San Francisco Factory Fined $700K For Ammonia Leak: Thu, 2 Feb 2012 06:52:30 - Pacific Time: Read More...
California Workers’ Comp Insurers Returns Improved in 2010: Wed, 1 Feb 2012 05:42:32 - Pacific Time: Read More...
DWC Posts Report on Alternative Dispute Resolution/Carve Out Program: Wed, 1 Feb 2012 05:42:26 - Pacific Time: Read More...
DWC Disability Accommodation Regulations Are Effective Feb. 18: Tue, 31 Jan 2012 06:39:48 - Pacific Time: Read More...
Liberty Mutual Annual Workplace Safety Index Shows Lower Costs: Tue, 31 Jan 2012 06:25:38 - Pacific Time: Read More...
Serious and Willful Misconduct Award Upheld: Mon, 30 Jan 2012 06:27:22 - Pacific Time: Read More...
Contractor Faces 57 Felony Counts: Mon, 30 Jan 2012 06:27:14 - Pacific Time: Read More...
Firefighter Loses Post Injury Discrimination Case Against LA County: Fri, 27 Jan 2012 11:17:45 - Pacific Time: Read More...
No Subrogation When Employer Has Exclusive Possession Of Accident Site: Fri, 27 Jan 2012 11:15:29 - Pacific Time: Read More...