- DME Supplier Paid $227K in Kickbacks in $5.9M Fraud Caseon July 9, 2025 at 1:17 PM
Jacobo Melcer, a Bonita resident and businessowner, pleaded guilty in federal court admitting that he conspired with others to defraud Medicare of millions of dollars and to pay unlawful kickbacks for patient referrals.
According to his plea agreement, Melcer submitted more than $5.88 million in false and fraudulent claims to Medicare through his ownership and operation of two durable medical equipment (DME) companies, which sold orthotics – including back, wrist, and knee braces – to Medicare beneficiaries.
Melcer admitted that in operating the DME companies, he paid unlawful kickback payments to multiple companies for the referral of Medicare beneficiaries and prescriptions for DME, knowing that the prescriptions were signed by physicians who had no legitimate doctor-patient relationship with the beneficiary and had not conducted a legitimate medical evaluation of the beneficiary.
In total, Melcer admitted that he paid more than $227,000 in kickbacks, and fraudulently billed Medicare $5,885,382 and was paid $3,479,303. As part of his guilty plea, Melcer agreed to forfeit and pay restitution in the amount of $3,479,303.
Melcer further admitted that he created and sold two DME companies to a co-conspirator for the sole purpose of putting the ownership under a nominee owner to conceal the true ownership from Medicare due to Medicare suspending the co-conspirator as a Medicare provider and the co-conspirator’s inability to continue to submit claims to Medicare.
Melcer’s sentencing is scheduled for October 10, 2025. The case is being prosecuted by Assistant U.S. Attorney Blanca Quintero of the Southern District of California.
- Northridge Insurance Broker Sentenced for $3.7M Policy Scamson July 9, 2025 at 1:16 PM
A woman was sentenced to 50 months in federal prison for defrauding a lender out of $3.7 million by submitting bogus applications for fine art insurance policies for commercial clients, but instead using the money for herself.
Tonja Van Roy, 59, of Las Vegas, but who formerly operated a Northridge-based insurance agency, was sentenced by United States District Judge Stephen V. Wilson, who also ordered her to pay $1,880,237 in restitution.
Van Roy pleaded guilty on January 6 to one count of wire fraud.
According to court documents, Van Roy owned and ran Pegasus Insurance, a Northridge company that specialized in insurance policies covering art collections. From January 2021 to December 2023, Van Roy created and submitted dozens of fraudulent finance agreements to AFCO Credit Corp., a Lake Forest, Illinois-based provider of insurance premium finance, purportedly to finance insurance policies she claimed to have sold to art galleries.
Van Roy made up the insurance policy numbers she used and forged the electronic signatures for fictitious insureds. She used the borrowed money to fund her lifestyle, which included payments on dozens of credit cards. When the loans from AFCO came due, Van Roy submitted additional fraudulent finance agreements to AFCO, and used the proceeds from the new loans to make it appear as though the old loans had been repaid.
“[Van Roy] embarked on a sophisticated, multiyear scheme to borrow fraudulently over $3.7 million dollars using her insider’s knowledge of the insurance industry,” prosecutors argued in a sentencing memorandum. “[She] has more than 25 years of experience working as an insurance agent, during which time she sold countless insurance policies and worked for many different insurance agencies before founding her own; she had an expert’s understanding of the industry, which allowed her to manipulate her victims and avoid detection for years.”
Homeland Security Investigations and the California Department of Insurance investigated this matter.
Assistant United States Attorney Andrew Brown of the Major Frauds Section prosecuted this case.
- WCAB Denies Reconsideration of Psyche Claim Take Nothingon July 8, 2025 at 2:46 PM
Framee Jones while employed during the period November 7, 2023, through January 26, 2024, as an Occupational Therapy Assistant by Vista Knoll Specialized Care, claimed to have sustained injury arising out of and in the course of employment to her psyche.
This matter proceeded to trial over four days, concluding on March 6, 2025. Multiple employer witnesses testified about the incidents in which applicant alleged had caused her an industrial psychiatric injury. Multiple employer witnesses all agreed that Jones was good at her job as an Occupational Therapy Assistant (OTA). However, the witnesses also stated to the Court that her moods were unpredictable, she created an environment in which everyone would “walk on eggshells”, she was more excitable than average, and she could be snappy. On the last day of trial, the matter was submitted.
The WCJ found applicant had not met her burden of proof establishing an industrial injury and issued an Order that applicant take nothing.
The WCAB denied reconsideration of the take nothing in the panel decision of Jones v Vista Knoll Specialized Care - ADJ19555636 (June 2025).
Labor code § 3208.3 states that in order to establish industrial causation of a psychiatric injury, an injured worker must show by a preponderance of the evidence that actual events of employment predominantly caused the psychological injury. (Lab. Code, § 3208.3(b)(1).
The WCJ relied on the analysis of Verga v. WCAB, (2008) 159 Cal.App.4th 174, 73 CCC 63 in deciding this case. In Verga, the court of appeal agreed with the WCAB in concluding that the disdainful reactions of a supervisor and co-workers to an employee's mistreatment of them do not constitute "actual events of employment" for which the employee can obtain worker's compensation benefits for the psychological stress that the employee experiences because of those disdainful reactions to her inappropriate conduct.
Jones attempts to distinguish that the worker in Verga received across the board negative reviews regarding her attitude and performance, while in the current matter every employer witness had nice things to say about her.
The WCJ noted that however "what Petitioner fails to acknowledge is that the standard in Verga establishes that in order to prevail, the worker needs to show 'objective evidence of harassment, persecution, or other basis for the alleged psychiatric injury.' "
The WCAB panel denied reconsideration, stating that it has "given the WCJ’s credibility determinations great weight because the WCJ had the opportunity to observe the demeanor of the witnesses. (Garza v. Workmen’s Comp. Appeals Bd. (1970) 3 Cal.3d 312, 318-319 [35 Cal.Comp.Cases 500].) Furthermore, we conclude there is no evidence of considerable substantiality that would warrant rejecting the WCJ’s credibility determinations. (Id.) Thus, we do not disturb the WCJ’s conclusions."
- Healthline.com Resolves Website Tracking Violations for $1.55Mon July 8, 2025 at 2:46 PM
The California Attorney General announced a settlement with website publisher Healthline Media LLC, resolving allegations that its use of online tracking technology on its health information website, Healthline.com, violated the California Consumer Privacy Act (CCPA).
An investigation by the California Department of Justice (DOJ) found that Healthline failed to allow consumers to opt out of targeted advertising and shared data with third parties without CCPA-mandated privacy protections - including data suggesting that a person may have a serious health condition.
The proposed settlement, pending final approval from the court, includes $1.55 million in civil penalties and strong injunctive terms, including a novel term that prohibits Healthline from sharing article titles that reveal that a consumer may have already been diagnosed with a medical condition - banning the company from engaging in these types of data transmissions.
Healthline.com is a health and wellness information website that is one of the top 40 most visited websites in the world. Healthline generates revenue by showing ads - some of which are personally targeted at the reader. To maximize ad revenue, Healthline allows online trackers, like cookies and pixels, to communicate data about readers to advertisers and other third parties.
Healthline shared data that could uniquely identify the consumer, in addition to the title of the article they were reading. Some titles indicated that the reader may have already been diagnosed with a serious illness, such as “You’ve Been Newly Diagnosed with MS. What’s Next?” And because these online trackers run invisibly in the background in the first milliseconds when a webpage loads, consumers often have no idea how many online trackers might be running. In Healthline’s case, dozens of trackers were sharing consumer data with numerous third parties.
The complaint alleges Healthline violated the CCPA and the Unfair Competition Law by:
- - Failing to opt consumers out of the sharing of their personal information for targeted advertising. The CCPA gives consumers the right to opt-out of the sale or sharing of their personal information for certain targeted advertising. Businesses and website publishers must honor these requests, including requests submitted through the Global Privacy Control. Healthline continued to share data with some third parties involved in advertising, even for consumer who exercised their right to opt -out.
- - Violating the Purpose Limitation Principle. Under the CCPA, a business’s use of personal information is limited to the purposes for which the personal information was collected or processed or another disclosed, compatible purpose. Healthline violated this principle by sharing article titles suggesting a consumer may have already been diagnosed with a specific medical condition to target advertising at the consumer.
- - Failing to maintain CCPA-required contracts. Healthline had not ensured its advertising contracts contain privacy protections for readers’ data required by the CCPA. Instead, Healthline had assumed, but not verified, that the third parties had agreed to abide by an industry contractual framework.
- - Deceiving consumers about privacy practices. The Unfair Competition Law prohibits deceptive business practices. Healthline.com featured a “consent banner” that did not disable tracking cookies, despite purporting to do so if a consumer unchecked a box.
Under the settlement Healthline is required to ensure that its opt-out mechanisms work correctly; must stop disclosing information that can link a specific consumer to a specific article title that suggests that consumers have been diagnosed with a disease; must maintain a CCPA compliance program that, among other things, mandates that Healthline audits its contracts for specific, required privacy terms or confirm that third parties have signed an industry contractual framework that includes those terms; and maintain accurate online disclosures and privacy policy.
- Convicted SoCal Comp Fraudster Charged in New $270M Fraud Sweepon July 1, 2025 at 2:42 PM
The Justice Department announced the results of its 2025 National Health Care Fraud Takedown, which resulted in criminal charges against 324 defendants, including 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals, in 50 federal districts and 12 State Attorneys General’s Offices across the United States, for their alleged participation in various health care fraud schemes involving over $14.6 billion in intended loss.
And reaching across the country, the U.S. Attorneys office for the Central District of California announced that an Orange County man, who's name might have a familiar ring to the worker's compensation community, has just been charged via federal criminal complaint with submitting nearly $270 million in fraudulent claims to Medi-Cal, over an 11-month span, for expensive prescription drugs containing generic ingredients that were not medically necessary and, in many instances, not provided to the purported recipients.
66 year old Paul Richard Randall is now charged with health care fraud, a felony that carries a statutory maximum penalty of 10 years in federal prison.Randall made his initial appearance in United States District Court in Los Angeles on Friday and was ordered jailed without bond. His arraignment is scheduled for July 17.
Randall has a long criminal history as he reportedly began his career as a hospital marketer in the mid-1990s after serving a stint in federal prison for racketeering. He was convicted of the felony in 1993 for deals that involved buying wooden shipping pallets on credit and reselling them without paying the original vendors, and was sentenced to a 21-month term. After serving time in the Terminal Island federal correctional facility in Long Beach harbor, Mr. Randall went into business with Michael D. Drobot, the owner of Pacific Hospital of Long Beach.
Drobot pleaded guilty to criminal charges related to paying more than $20 million in kickbacks and bribing California state Sen. Ron Calderon to preserve a loophole in state law that enabled him to charge insurers sky-high prices for spinal hardware used at the Pacific Hospital of Long Beach. The FBI has said the kickbacks-for-surgeries scam is believed to be the largest in California history.
After a business dispute between the two men, Randall moved to Tri-City Regional Medical Center in Hawaiian Gardens in 2008, a hospital eight miles away that then focused on bariatric surgery. Tri-City, which is a nonprofit institution, paid Mr. Randall more than $3.2 million between 2008 and July 2011 as a business-development consultant. Mr. Randall recruited some of the same spine surgeons to Tri-City that he earlier introduced to Mr. Drobot at Pacific Hospital.
By August 2011, Mr. Randall said, he was back to doing spine-surgery marketing work for Mr. Drobot at Pacific Hospital of Long Beach. Randall reportedly said he signed a $100,000-a-month marketing agreement with Mr. Drobot – technically between Mr. Drobot’s spinal-implant distributorship and a Randall marketing firm – under which Mr. Randall was to provide services such as “recruiting surgeons to the medical staff of hospitals that use” implants Mr. Drobot distributes. Drobot disputed signing such an agreement.
Randall pleaded guilty on April 16, 2012 to conspiracy to commit mail fraud. Randall admitted recruiting chiropractors and doctors to refer patients to Tri-City in exchange for kickbacks. Randall’s guilty plea in 2012 and agreement to cooperate in “Operation Spinal Cap” suggest he provided information to federal investigators, potentially implicating others in the Pacific Hospital and Tri-City schemes.
However, his 2017 arrest for violating pre-sentencing release terms in the Tri-City case and subsequent fraud allegations indicate continued criminal activity. A judge denied bail on October 23, 2017, ordering Randall to remain in custody at the Santa Ana city jail until sentencing. His sentencing was advanced to November 17, 2017, from December 22, 2017. Prosecutors sought a sentence of 37 to 46 months in prison, plus restitution.
Randall incorporated a company, Pharma Pro Solutions, in 2016, which was implicated in a scheme to defraud the University of California’s Student Health Insurance Plan (UC SHIP). The scheme allegedly stole student health plan ID numbers to bill $12 million for compound drugs over six months starting in October 2016. The Regents of the University of California amended a civil complaint in July 2017, filed in Los Angeles County Superior Court, alleging Randall’s involvement. The scheme involved recruiting students to apply for positions selling topical creams, requiring them to provide UC SHIP numbers and fill out health history forms, or offering payments for participating in “clinical trials” of pain creams.
Also, in what may be characterized as a federal lawsuit pieced together from evidence that exists across existing criminal and civil litigation, 14 AIG insurance related companies sought restitution from nearly 30 named defendants who it claims fraudulently or illegally made claims for payment for providing worker’s compensation treatment on cases where AIG entities provided coverage. The 22 page federal lawsuit filed on October 31, 2017 listed Paul Richard Randall as one of the named defendants.
According to an affidavit filed with the newest complaint, Randall, Kyrollos Mekail, 37, of Moreno Valley, and Patricia Anderson, 57, of West Hills, took advantage of Medi-Cal’s suspension of its requirement that health care providers obtain prior authorization before providing certain health care services or medications as a condition of reimbursement. The suspension of the prior authorization requirements was part of an ongoing transition of Medi-Cal’s prescription drug program to a new payment system.
Through a business called Monte Vista Pharmacy, Randall and his co-schemers allegedly exploited Medi-Cal’s prior authorization suspension by billing Medi-Cal tens of millions of dollars per month for dispensing high-reimbursement, non-contracted, generic drugs through Monte Vista Pharmacy. Some prescription medications purportedly were to treat pain and included Folite tablets, a vitamin available over the counter.
Normally, these high-cost reimbursement medications would have required prior authorization under Medi-Cal’s old payment system. Medication involved in this scheme was medically unnecessary, frequently was not dispensed to patients, and procured by kickbacks.
From May 2022 to April 2023, Monte Vista billed Medi-Cal more than $269 million and was paid more than $178 million for 19 expensive, non-contracted drugs containing low-cost, generic ingredients that were not medically necessary, not provided, or both.
Randall and others then allegedly laundered their illicit proceeds by transferring the proceeds of the Medi-Cal fraud scheme to a third party to pay kickbacks to Anderson, to promote the fraud scheme and to conceal and disguise the transfers from detection by law enforcement.
Relatedly, Anderson was charged in a two-count information charging her with health care fraud for her role in the scheme which was unsealed last week. Mekail pleaded guilty to criminal charges in August 2024 and awaits sentencing.
As a result of the national takedown, the government seized more than $245 million in cash, luxury vehicles, cryptocurrency, and other assets as part of the coordinated enforcement efforts. As part of the whole-of-government approach to combating health care fraud announced today, the Centers for Medicare and Medicaid Services (CMS) also announced that it successfully prevented more than $4 billion from being paid in response to false and fraudulent claims and that it suspended or revoked the billing privileges of 205 providers in the months leading up to the Takedown.
- Five No.Cal. Defendants Charged in Health Care Fraud Sweepon July 1, 2025 at 2:42 PM
United States Attorney for the Northern District of California announced criminal charges against five defendants in connection with allegations that they defrauded Medicare and other federal health care benefit programs and illegally diverted drugs.
The charges filed in federal court are part of the Department of Justice’s 2025 National Health Care Fraud Takedown. The charges stem from various schemes, including a doctor who submitted unnecessary claims for medical equipment, individuals who ran or participated in fraud schemes to obtain money from federally funded health insurance programs through false claims, and a nurse who diverted pain medication for his own use.
The California charges are part of a strategically coordinated, nationwide law enforcement action that resulted in criminal charges against 324 defendants for their alleged participation in health care fraud and illegal drug diversion schemes that involved the submission of over $14.6 billion in alleged false billings and over 15 million pills of illegally diverted controlled substances. The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled to line their own pockets, and the Government, in connection with the Takedown, seized over $245 million in cash, luxury vehicles, and other assets.
The following individuals were charged in the Northern District of California:
- - Vincent Thayer, 41, of San Jose, California, was charged by indictment with wire fraud, health care fraud, and aggravated identity theft in connection with a $68 million medical office visit scheme. As alleged in the indictment, Thayer owned Patient Payment Agent, which did business as My Community Testing, and was a purported COVID-19 testing money. Through this company, Thayer caused the submission of approximately $68,205,233 in false and fraudulent claims to Medicare, Medicaid, and the HRSA COVID-19 Uninsured Program, of which approximately $11,751,819 was paid, for office visits purportedly performed by medical professionals but that never occurred. Thayer also misappropriated the identity of a doctor to enroll his company in Medicare and Medi-Cal (California’s Medicaid program).
- - Sevendik Huseynov, 47, a national of Azerbaijan currently residing in Sunnyvale, California, and the owner and CEO of Vonyes, Inc. in Sunnyvale, California, was charged by criminal complaint and arrested on June 26, 2025. The complaint alleges that the defendant committed health care fraud through a scheme to submit fraudulent claims to Medicare Advantage Organizations (“MAOs”) on behalf of unsuspecting beneficiaries for durable medical equipment (“DME”). The complaint alleges that Huseynov, from January 15, 2025, through June 16, 2025, through his entity Vonyes, submitted more than 7,200 claims to at least eight separate MAOs offering Medicare Part C benefit plans, and that those claims sought reimbursement of more than $137 million for DME such as back braces, knee braces, and wrist braces. The complaint alleges that certain of the purported beneficiaries contacted by law enforcement were not aware of the DME prescriptions and did not need the prescribed DME. The complaint also alleges that a healthcare provider listed as a referring physician on many billing claims had never prescribed DME supplied by Vonyes and that the patients listed on those claims were not his patients. The complaint also alleges that a review of bank records for Vonyes and Huseynov did not show any purchases of actual DME. At least $761,037.63 was paid to Vonyes, into accounts controlled solely by Huseynov, from MAOs during the scheme.
- - Clinton Johnson Christian, 38, of Fairfield, California, was charged by indictment with tampering with consumer products and intentionally obtaining controlled substances through deception and subterfuge in connection with diverting a controlled substance for his personal use. As alleged in the indictment, Christian accessed a machine that held hydromorphone by falsely stating a patient needed the controlled substance, removed a vial of hydromorphone, extracted the hydromorphone and re-filled the vial with saline before replacing the vial and cancelling the patient’s order.\
- - Dr. Yasmin Pirani, 46, of British Columbia, Canada, was charged by indictment with health care fraud and false statements related to health care matters in connection with a $35.2 million telemedicine fraud scheme. As alleged in the indictment, in exchange for payments from a telemedicine company, Dr. Pirani signed prescriptions for DME that was medically unnecessary, for Medicare beneficiaries with whom she lacked a pre-existing doctor-patient relationship, without a physical examination, and without any conversation with the beneficiary or based solely on a short telephonic conversation. Dr. Pirani falsely diagnosed Medicare beneficiaries with certain conditions to support the DME prescriptions and falsely attested that the information in medical records was accurate, concealing that she did not have any interaction with the Medicare beneficiaries or that the interaction was brief and telephonic. The telemedicine company solicited illegal kickbacks and bribes from DME suppliers in exchange for DME prescriptions signed by Dr. Pirani, and the DME suppliers billed Medicare approximately $32.5 million based on Dr. Pirani’s prescriptions.
- - Patrick Omeife, 33, of Ghana, was charged by indictment with two counts of concealment money laundering in connection with a scheme to launder approximately $33,765 that was fraudulently disbursed from a federal COVID-19 relief program and intended for an optometrist whose identity had been stolen. As alleged in the indictment, Omeife, falsely purporting to be a covert agent of the U.S. government, began an online romantic relationship with a woman and requested that the woman use her bank account to receive his salary. This woman provided Omeife with her bank account information, and her account was used in a September 2020 fraudulent application for funds from the COVID-19 Provider Relief Fund (“PRF”). The PRF provided funds to health care providers that were financially impacted by COVID-19. Based on the fraudulent September 2020 application, the PRF disbursed approximately $33,765 intended for the optometrist into the woman’s bank account. At Omeife’s direction, the woman converted the funds to Bitcoin cryptocurrency and transferred the Bitcoin to Omeife’s cryptocurrency account. Omeife repeatedly provided identifying information to his cryptocurrency exchange, to include his Republic of Ghana driver’s license and “selfie” photographs of his face and bare upper body, depicting a distinctive tattoo on his chest of the Bitcoin currency symbol. Numerous additional fraudulent PRF applications connected to the application made in the optometrist’s name resulted in at least $1.6 million of fraudulent disbursement of funds related to COVID-19 relief programs.
The Northern District of California, in particular, worked with the Department’s Criminal Division and Health Care Fraud Unit and the U.S. Department of Health and Human Services Office of Inspector General; the Federal Bureau of Investigation, and the FDA Office of Criminal Investigations.
- SoCal Healthcare Clinic Operator Sentenced for $20M Fraudon June 30, 2025 at 12:18 PM
A Southern California healthcare clinic operator, Oscar B. Abrons III, has been sentenced for his involvement in a prescription medication diversion scheme that defrauded Medi-Cal, the state’s Medicaid program, of more than $20 million.
Abrons was sentenced by the Orange County Superior Court to four years in jail and stipulated that the loss to the Medi-Cal program exceeded $20 million. A restitution hearing will be held to determine the loss amount owed by Abrons.
Abron’s co-conspirators, Steven Derrick Fleming and Mohamed Waddah El-Nachef, were previously sentenced. Fleming was sentenced to five years in state prison, and El-Nachef was sentenced to a five-year local custody sentence and surrendered his medical license. As part of his sentence, El-Nachef also paid $2.3 million in restitution. At the time of his arrest in 2020 El-Nachef had stipulated to disciplinary charges filed in 2019 with the California Board of Medicine and had been placed on seven years probation. El-Nachef was also suspended from participating in the workers’ compensation system as a physician, practitioner, or provider on February 23, 2023 by an order of the Administrative Director of the DWC.
El-Nachef was charged in March 2020 with a half-dozen felony counts, including executing a scheme to defraud Medi-Cal, making a fraudulent claim for a health benefit, filing a fraudulent insurance benefit claim, conspiring in the unauthorized practice of medicine and grand theft, with sentencing enhancement allegations for aggravated white- collar crime between $100,000 to $500,000 and aggravated white-collar crime exceeding $500,000.
Fleming and Abrons jointly operated God’s Property, an unlicensed clinic where Medi-Cal beneficiaries were paid cash in exchange for obtaining medically unnecessary prescriptions for HIV medications, antipsychotics and controlled substances, which were then sold to buyers on the illicit market.
Fleming and Abrons, alongside Mohamed Waddah El-Nachef, an Orange County medical doctor, carried out the diversion scheme from June 23, 2014, to October 1, 2016. During this time, El-Nachef became the top prescriber of HIV medications in the state. As a result of the scheme, Medi-Cal suffered an estimated loss of over $20 million.
The prosecution of these individuals was carried out by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA). DMFEA works to protect Californians by investigating and prosecuting those responsible for abuse, neglect, and fraud committed against elderly and dependent adults in the state, and those who perpetrate fraud on the Medi-Cal program.
The Division of Medi-Cal Fraud and Elder Abuse receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $69,244,976 for Federal fiscal year (FY) 2025. The remaining 25 percent is funded by the State of California. FY 2025 is from October 1, 2024, through September 30, 2025.
- CWCI Finds Independent Medical Reviews Are Trending Upon June 30, 2025 at 12:18 PM
After declining steadily from 2018 through 2022, the number of Independent Medical Review (IMR) decision letters issued in response to California workers’ comp medical disputes is now trending up, increasing in 2023, 2024, and the first quarter of 2025 according to the California Workers’ Compensation Institute (CWCI), though the uphold rate for medical service modifications and denials remains close to 90%.
CWCI’s latest review of IMR activity and outcomes examined 1.57 million IMR decision letters issued from 2015 through March of this year in response to applications submitted to the state after a Utilization Review (UR) physician modified or denied a workers’ comp medical service request. As in prior reviews, CWCI tracked the number of letters issued each quarter; determined the distribution and uphold rates for disputed treatment requests by type of medical service (and the distribution and outcomes of pharmaceutical IMRs by major drug group); measured IMR response times; and calculated the percentage of IMRs associated with high-volume physicians.
IMR, introduced in 2013, was expected to reduce medical disputes by helping to ensure that workers’ comp treatment met evidence-based medicine standards, but it was not until 2019 that the number of IMR disputes began a steady decline, with the number of IMR decision letters falling by 31% from the peak level of 184,385 in 2018 to 127,215 in 2022. That decline coincided with a reduction in the number of job injury claims during the pandemic and a drop in the number of pharmaceutical disputes after the state added Pain Management and Opioid Guidelines to its Medical Treatment Utilization Schedule (MTUS) in late 2017 and adopted the MTUS Drug Formulary in January 2018. More recent data, however, show IMR letter volume rose 2.9% in 2023 and 8.2% in 2024, and initial results for this year show the trend accelerating, with 38,393 IMR decision letters in the first 3 months of 2025, 13% more than in the same period last year.
Even with the increase in IMR volume, the median IMR response time (from receipt of the application to the date of the decision letter) was 32 days in 2024, the same as in 2022. Furthermore, 25% of the letters were issued within 28 days, and 75% were issued within 38 days, all within the time allotted to the state’s Independent Medical Review Organization to confirm the eligibility of the application; request, receive, and process medical records; assign the case to a physician reviewer; and issue a decision.
Disputes over prescription drug requests represented 30.6% of all IMRs in the first quarter of this year – more than any other type of medical service, but down from 33.4% in 2024 and 50.7% in 2015. Much of that decline was due to the reduction in IMRs involving opioid requests, which dropped from 32% of all pharmaceutical IMRs in 2018 to 18.6% in the first quarter of this year. With prescription drugs representing a declining share of the IMR disputes, the percentage of IMRs involving disputes over other medical services has increased, with physical therapy disputes accounting for 13.6% of IMRs in the first quarter of 2025, injection disputes accounting for 12.9%, and disputes over durable medical equipment, prosthetics, orthotics and supplies accounting for 9.7%.
A small number of physicians continue to drive much of the IMR activity, as the top 1% of requesting physicians (81 doctors) accounted for 42.2% of the disputed service requests that underwent IMR in the 12 months ending on March 30 of this year, and the top 10 individual physicians accounted for 10.9% of the disputed requests. CWCI found that 7 of the providers on the latest top 10 list were also on the top 10 list the prior year.
IMR outcomes remain stable, as IMR physicians upheld 89.1% of UR doctors’ treatment modifications or denials in the first quarter of 2025 compared to 88.0% in 2024. As in the past, uphold rates varied by type of service, ranging from 77.4% for evaluation/management services to 92.9% for acupuncture.
CWCI members and subscribers will find a more detailed summary of IMR experience through March 2025 in Bulletin 25-09 at www.cwci.org. Institute members can also access updated IMR slides under the Research tab.
- Class Action Against Employer Can be Decertified at Any Timeon June 26, 2025 at 12:55 PM
Plaintiff Joanne Allison, a former registered nurse (RN), brought the underlying class action against her former employer, Dignity Health, alleging claims for unpaid work, meal period and rest break violations, as well as derivative claims.
Allison filed a motion for class certification on behalf of RNs who worked at three Dignity’s hospitals - St. John’s Regional Medical Center in Oxnard, CA, St. John’s Pleasant Valley Hospital in Camarillo, CA and Mercy General Hospital in Sacramento - since June 1, 2014. She also sought certification of subclasses for certain claims, including meal period violations and rest break violations.
Allison asserted that a “facial review of RN timecards” showed most RNs experienced meal periods that failed to comply with law. Her expert identified all work shifts eligible for one or more meal periods and then “identified each instance where the time records reflected a Sample Class Member’s meal period was either missed, late, or short/interrupted.” After “accounting for premiums paid” based on Dignity’s payroll data, the expert opined that over 70 percent of relevant shifts had a non-compliant meal period with an unpaid premium.
Allison averred that this evidence established a rebuttable presumption of class-wide liability under the Supreme Court case of Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58 (Donohue). Moreover, because Dignity admitted it did not record the reason for any given non-compliant meal period - instead it required class members to self-report and to apply for a premium payment - Allison contended the lawfulness of placing the burden on employees to keep meal break records was a common question.
Allison based her noncompliant rest break claim (and, to some extent, her meal period claim) on purported interruptions from work-issued communication devices - i.e., Vocera devices and Spectralink devices. She asserted “Dignity’s policy required RNs to wear these devices at all times . . . even during breaks,” giving rise to a common question whether this resulted in unlawful off-the-clock interruptions. As common proof to establish Dignity’s class-wide liability under this theory, Allison’s expert opined that a “comparison of Vocera log ins with RN timecards show[ed] nearly 70% of employees in the Vocera sample were using the device while clocked-out in [Dignity’s] timekeeping program.”
In opposing certification, Dignity argued individual inquiries predominated the meal period claim despite Allison’s use of Dignity’s time- clock records as class-wide proof.
The trial court granted in part and denied in part Allison’s motion for class certification during a class period of June 1, 2014 to January 13, 2022. The court explained that Dignity’s showing that RNs “sometimes were able to take uninterrupted breaks” was insufficient to defeat the predominance of common issues.
Nineteen months after the initial certification order, Dignity moved to decertify the class on grounds that post-certification discovery refuted the trial court’s prior predominance findings. In opposition to the motion, plaintiffs argued Dignity failed to satisfy its threshold burden to show “new law or new evidence showing changed circumstances” since the certification order. Plaintiffs also countered that the post-certification evidence further demonstrated the propriety of class treatment.
Following a hearing, the trial court granted the decertification motion. As a threshold matter, the trial court ruled the “large number of new declarations” as well as “plaintiffs’ efforts at a statistical analysis” constituted new evidence. And, in light of such new evidence, it determined “there [was] no good reason to ignore other evidence,” and therefore it considered the entire record. The court determined that “ ‘commonality’ ” was not the central issue; rather, “[t]he problem is the ‘predominance’ issue, as individual issues swamp the common issues.” The trial court also expressed concern that plaintiffs’ trial plan betrayed fatal flaws to continued class status.
The Court of Appeal affirmed in the published case of Allison v. Dignity Health CA1/4 - A169225 (June 2025)
Class actions are permitted “when the question is one of a common or general interest, of many persons, . . . and it is impracticable to bring them all before the court . . . .” (Code Civ. Proc., § 382.) Our Supreme Court has articulated that to proceed as a class action there must be “the existence of an ascertainable and sufficiently numerous class, a well-defined community of interest, and substantial benefits from certification that render proceeding as a class superior to the alternatives.” (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004,1021.) “ ‘In turn, the “community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.” ’ ” (Ibid.)
A class “can be decertified at any time, even during trial, should it later appear individual issues dominate the case,” (Macmanus v. A. E. Realty Partners (1987) 195 Cal.App.3d 1106, 1117), decertification is appropriate “ ‘only where it is clear there exist changed circumstances making continued class action treatment improper.’ ” (Green v. Obledo (1981) 29 Cal.3d 126, 148.)
Our Supreme Court’s decisions “clearly contemplate the possibility of successive motions concerning certification” based on evidence uncovered in post-certification discovery. (Occidental Land, Inc. v. Superior Court (1976) 18 Cal.3d 355, 360 (Occidental).)
"Here, the trial court expressly found there was new evidence, referencing 'a large number of new declarations,' plus 'plaintiffs’ efforts at a statistical analysis.' Indeed, following certification, Dignity deposed 44 class members from the three hospitals at issue."
- WCRI Study Explores Promises and Challenges of AI for WorkCompon June 26, 2025 at 12:55 PM
A new study from the Workers Compensation Research Institute (WCRI) examines how stakeholders view the promises and challenges of artificial intelligence (AI) in the workers’ compensation system.
“In recent years, interest in the role of artificial intelligence in workers’ compensation has grown rapidly,” said Sebastian Negrusa, vice president of research at WCRI. “This study is an important step toward understanding how stakeholders are approaching the opportunities and risks associated with these emerging technologies.”
To develop the study, WCRI researchers conducted semi-structured interviews with 34 leaders across 20 organizations - including employers, insurers, medical providers, worker advocates, and regulators - supplemented by informal discussions. They also reviewed literature and regulations on AI developments and applications.
The key questions asked in the interviews included:
- - How do you define AI and its role in the economy and the workers’ compensation system?
- - Where do you see the value of AI tools for your job, your organization, and the system?
- - What challenges and risks do you foresee with broader AI adoption, and how can these be mitigated?
By outlining current and emerging uses of AI in workers’ compensation and identifying risks and potential guardrails, the study, Artificial Intelligence in Workers’ Compensation: An Overview of Promises and Challenges, aims to provide a common language for stakeholders and inform policy discussions to promote responsible AI use that improves injured workers’ recovery and experience.
The authors of the study are Bogdan Savych and Vennela Thumula.
- DME Supplier Paid $227K in Kickbacks in $5.9M Fraud Caseon July 9, 2025 at 1:17 PM
Jacobo Melcer, a Bonita resident and businessowner, pleaded guilty in federal court admitting that he conspired with others to defraud Medicare of millions of dollars and to pay unlawful kickbacks for patient referrals.
According to his plea agreement, Melcer submitted more than $5.88 million in false and fraudulent claims to Medicare through his ownership and operation of two durable medical equipment (DME) companies, which sold orthotics – including back, wrist, and knee braces – to Medicare beneficiaries.
Melcer admitted that in operating the DME companies, he paid unlawful kickback payments to multiple companies for the referral of Medicare beneficiaries and prescriptions for DME, knowing that the prescriptions were signed by physicians who had no legitimate doctor-patient relationship with the beneficiary and had not conducted a legitimate medical evaluation of the beneficiary.
In total, Melcer admitted that he paid more than $227,000 in kickbacks, and fraudulently billed Medicare $5,885,382 and was paid $3,479,303. As part of his guilty plea, Melcer agreed to forfeit and pay restitution in the amount of $3,479,303.
Melcer further admitted that he created and sold two DME companies to a co-conspirator for the sole purpose of putting the ownership under a nominee owner to conceal the true ownership from Medicare due to Medicare suspending the co-conspirator as a Medicare provider and the co-conspirator’s inability to continue to submit claims to Medicare.
Melcer’s sentencing is scheduled for October 10, 2025. The case is being prosecuted by Assistant U.S. Attorney Blanca Quintero of the Southern District of California. - Northridge Insurance Broker Sentenced for $3.7M Policy Scamson July 9, 2025 at 1:16 PM
A woman was sentenced to 50 months in federal prison for defrauding a lender out of $3.7 million by submitting bogus applications for fine art insurance policies for commercial clients, but instead using the money for herself.
Tonja Van Roy, 59, of Las Vegas, but who formerly operated a Northridge-based insurance agency, was sentenced by United States District Judge Stephen V. Wilson, who also ordered her to pay $1,880,237 in restitution.
Van Roy pleaded guilty on January 6 to one count of wire fraud.
According to court documents, Van Roy owned and ran Pegasus Insurance, a Northridge company that specialized in insurance policies covering art collections. From January 2021 to December 2023, Van Roy created and submitted dozens of fraudulent finance agreements to AFCO Credit Corp., a Lake Forest, Illinois-based provider of insurance premium finance, purportedly to finance insurance policies she claimed to have sold to art galleries.
Van Roy made up the insurance policy numbers she used and forged the electronic signatures for fictitious insureds. She used the borrowed money to fund her lifestyle, which included payments on dozens of credit cards. When the loans from AFCO came due, Van Roy submitted additional fraudulent finance agreements to AFCO, and used the proceeds from the new loans to make it appear as though the old loans had been repaid.
“[Van Roy] embarked on a sophisticated, multiyear scheme to borrow fraudulently over $3.7 million dollars using her insider’s knowledge of the insurance industry,” prosecutors argued in a sentencing memorandum. “[She] has more than 25 years of experience working as an insurance agent, during which time she sold countless insurance policies and worked for many different insurance agencies before founding her own; she had an expert’s understanding of the industry, which allowed her to manipulate her victims and avoid detection for years.”
Homeland Security Investigations and the California Department of Insurance investigated this matter.
Assistant United States Attorney Andrew Brown of the Major Frauds Section prosecuted this case. - WCAB Denies Reconsideration of Psyche Claim Take Nothingon July 8, 2025 at 2:46 PM
Framee Jones while employed during the period November 7, 2023, through January 26, 2024, as an Occupational Therapy Assistant by Vista Knoll Specialized Care, claimed to have sustained injury arising out of and in the course of employment to her psyche.
This matter proceeded to trial over four days, concluding on March 6, 2025. Multiple employer witnesses testified about the incidents in which applicant alleged had caused her an industrial psychiatric injury. Multiple employer witnesses all agreed that Jones was good at her job as an Occupational Therapy Assistant (OTA). However, the witnesses also stated to the Court that her moods were unpredictable, she created an environment in which everyone would “walk on eggshells”, she was more excitable than average, and she could be snappy. On the last day of trial, the matter was submitted.
The WCJ found applicant had not met her burden of proof establishing an industrial injury and issued an Order that applicant take nothing.
The WCAB denied reconsideration of the take nothing in the panel decision of Jones v Vista Knoll Specialized Care - ADJ19555636 (June 2025).
Labor code § 3208.3 states that in order to establish industrial causation of a psychiatric injury, an injured worker must show by a preponderance of the evidence that actual events of employment predominantly caused the psychological injury. (Lab. Code, § 3208.3(b)(1).
The WCJ relied on the analysis of Verga v. WCAB, (2008) 159 Cal.App.4th 174, 73 CCC 63 in deciding this case. In Verga, the court of appeal agreed with the WCAB in concluding that the disdainful reactions of a supervisor and co-workers to an employee's mistreatment of them do not constitute "actual events of employment" for which the employee can obtain worker's compensation benefits for the psychological stress that the employee experiences because of those disdainful reactions to her inappropriate conduct.
Jones attempts to distinguish that the worker in Verga received across the board negative reviews regarding her attitude and performance, while in the current matter every employer witness had nice things to say about her.
The WCJ noted that however "what Petitioner fails to acknowledge is that the standard in Verga establishes that in order to prevail, the worker needs to show 'objective evidence of harassment, persecution, or other basis for the alleged psychiatric injury.' "
The WCAB panel denied reconsideration, stating that it has "given the WCJ’s credibility determinations great weight because the WCJ had the opportunity to observe the demeanor of the witnesses. (Garza v. Workmen’s Comp. Appeals Bd. (1970) 3 Cal.3d 312, 318-319 [35 Cal.Comp.Cases 500].) Furthermore, we conclude there is no evidence of considerable substantiality that would warrant rejecting the WCJ’s credibility determinations. (Id.) Thus, we do not disturb the WCJ’s conclusions." - Healthline.com Resolves Website Tracking Violations for $1.55Mon July 8, 2025 at 2:46 PM
The California Attorney General announced a settlement with website publisher Healthline Media LLC, resolving allegations that its use of online tracking technology on its health information website, Healthline.com, violated the California Consumer Privacy Act (CCPA).
An investigation by the California Department of Justice (DOJ) found that Healthline failed to allow consumers to opt out of targeted advertising and shared data with third parties without CCPA-mandated privacy protections - including data suggesting that a person may have a serious health condition.
The proposed settlement, pending final approval from the court, includes $1.55 million in civil penalties and strong injunctive terms, including a novel term that prohibits Healthline from sharing article titles that reveal that a consumer may have already been diagnosed with a medical condition - banning the company from engaging in these types of data transmissions.
Healthline.com is a health and wellness information website that is one of the top 40 most visited websites in the world. Healthline generates revenue by showing ads - some of which are personally targeted at the reader. To maximize ad revenue, Healthline allows online trackers, like cookies and pixels, to communicate data about readers to advertisers and other third parties.
Healthline shared data that could uniquely identify the consumer, in addition to the title of the article they were reading. Some titles indicated that the reader may have already been diagnosed with a serious illness, such as “You’ve Been Newly Diagnosed with MS. What’s Next?” And because these online trackers run invisibly in the background in the first milliseconds when a webpage loads, consumers often have no idea how many online trackers might be running. In Healthline’s case, dozens of trackers were sharing consumer data with numerous third parties.
The complaint alleges Healthline violated the CCPA and the Unfair Competition Law by:
- - Failing to opt consumers out of the sharing of their personal information for targeted advertising. The CCPA gives consumers the right to opt-out of the sale or sharing of their personal information for certain targeted advertising. Businesses and website publishers must honor these requests, including requests submitted through the Global Privacy Control. Healthline continued to share data with some third parties involved in advertising, even for consumer who exercised their right to opt -out.
- - Violating the Purpose Limitation Principle. Under the CCPA, a business’s use of personal information is limited to the purposes for which the personal information was collected or processed or another disclosed, compatible purpose. Healthline violated this principle by sharing article titles suggesting a consumer may have already been diagnosed with a specific medical condition to target advertising at the consumer.
- - Failing to maintain CCPA-required contracts. Healthline had not ensured its advertising contracts contain privacy protections for readers’ data required by the CCPA. Instead, Healthline had assumed, but not verified, that the third parties had agreed to abide by an industry contractual framework.
- - Deceiving consumers about privacy practices. The Unfair Competition Law prohibits deceptive business practices. Healthline.com featured a “consent banner” that did not disable tracking cookies, despite purporting to do so if a consumer unchecked a box.
Under the settlement Healthline is required to ensure that its opt-out mechanisms work correctly; must stop disclosing information that can link a specific consumer to a specific article title that suggests that consumers have been diagnosed with a disease; must maintain a CCPA compliance program that, among other things, mandates that Healthline audits its contracts for specific, required privacy terms or confirm that third parties have signed an industry contractual framework that includes those terms; and maintain accurate online disclosures and privacy policy. - Convicted SoCal Comp Fraudster Charged in New $270M Fraud Sweepon July 1, 2025 at 2:42 PM
The Justice Department announced the results of its 2025 National Health Care Fraud Takedown, which resulted in criminal charges against 324 defendants, including 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals, in 50 federal districts and 12 State Attorneys General’s Offices across the United States, for their alleged participation in various health care fraud schemes involving over $14.6 billion in intended loss.
And reaching across the country, the U.S. Attorneys office for the Central District of California announced that an Orange County man, who's name might have a familiar ring to the worker's compensation community, has just been charged via federal criminal complaint with submitting nearly $270 million in fraudulent claims to Medi-Cal, over an 11-month span, for expensive prescription drugs containing generic ingredients that were not medically necessary and, in many instances, not provided to the purported recipients.
66 year old Paul Richard Randall is now charged with health care fraud, a felony that carries a statutory maximum penalty of 10 years in federal prison.Randall made his initial appearance in United States District Court in Los Angeles on Friday and was ordered jailed without bond. His arraignment is scheduled for July 17.
Randall has a long criminal history as he reportedly began his career as a hospital marketer in the mid-1990s after serving a stint in federal prison for racketeering. He was convicted of the felony in 1993 for deals that involved buying wooden shipping pallets on credit and reselling them without paying the original vendors, and was sentenced to a 21-month term. After serving time in the Terminal Island federal correctional facility in Long Beach harbor, Mr. Randall went into business with Michael D. Drobot, the owner of Pacific Hospital of Long Beach.
Drobot pleaded guilty to criminal charges related to paying more than $20 million in kickbacks and bribing California state Sen. Ron Calderon to preserve a loophole in state law that enabled him to charge insurers sky-high prices for spinal hardware used at the Pacific Hospital of Long Beach. The FBI has said the kickbacks-for-surgeries scam is believed to be the largest in California history.
After a business dispute between the two men, Randall moved to Tri-City Regional Medical Center in Hawaiian Gardens in 2008, a hospital eight miles away that then focused on bariatric surgery. Tri-City, which is a nonprofit institution, paid Mr. Randall more than $3.2 million between 2008 and July 2011 as a business-development consultant. Mr. Randall recruited some of the same spine surgeons to Tri-City that he earlier introduced to Mr. Drobot at Pacific Hospital.
By August 2011, Mr. Randall said, he was back to doing spine-surgery marketing work for Mr. Drobot at Pacific Hospital of Long Beach. Randall reportedly said he signed a $100,000-a-month marketing agreement with Mr. Drobot – technically between Mr. Drobot’s spinal-implant distributorship and a Randall marketing firm – under which Mr. Randall was to provide services such as “recruiting surgeons to the medical staff of hospitals that use” implants Mr. Drobot distributes. Drobot disputed signing such an agreement.
Randall pleaded guilty on April 16, 2012 to conspiracy to commit mail fraud. Randall admitted recruiting chiropractors and doctors to refer patients to Tri-City in exchange for kickbacks. Randall’s guilty plea in 2012 and agreement to cooperate in “Operation Spinal Cap” suggest he provided information to federal investigators, potentially implicating others in the Pacific Hospital and Tri-City schemes.
However, his 2017 arrest for violating pre-sentencing release terms in the Tri-City case and subsequent fraud allegations indicate continued criminal activity. A judge denied bail on October 23, 2017, ordering Randall to remain in custody at the Santa Ana city jail until sentencing. His sentencing was advanced to November 17, 2017, from December 22, 2017. Prosecutors sought a sentence of 37 to 46 months in prison, plus restitution.
Randall incorporated a company, Pharma Pro Solutions, in 2016, which was implicated in a scheme to defraud the University of California’s Student Health Insurance Plan (UC SHIP). The scheme allegedly stole student health plan ID numbers to bill $12 million for compound drugs over six months starting in October 2016. The Regents of the University of California amended a civil complaint in July 2017, filed in Los Angeles County Superior Court, alleging Randall’s involvement. The scheme involved recruiting students to apply for positions selling topical creams, requiring them to provide UC SHIP numbers and fill out health history forms, or offering payments for participating in “clinical trials” of pain creams.
Also, in what may be characterized as a federal lawsuit pieced together from evidence that exists across existing criminal and civil litigation, 14 AIG insurance related companies sought restitution from nearly 30 named defendants who it claims fraudulently or illegally made claims for payment for providing worker’s compensation treatment on cases where AIG entities provided coverage. The 22 page federal lawsuit filed on October 31, 2017 listed Paul Richard Randall as one of the named defendants.
According to an affidavit filed with the newest complaint, Randall, Kyrollos Mekail, 37, of Moreno Valley, and Patricia Anderson, 57, of West Hills, took advantage of Medi-Cal’s suspension of its requirement that health care providers obtain prior authorization before providing certain health care services or medications as a condition of reimbursement. The suspension of the prior authorization requirements was part of an ongoing transition of Medi-Cal’s prescription drug program to a new payment system.
Through a business called Monte Vista Pharmacy, Randall and his co-schemers allegedly exploited Medi-Cal’s prior authorization suspension by billing Medi-Cal tens of millions of dollars per month for dispensing high-reimbursement, non-contracted, generic drugs through Monte Vista Pharmacy. Some prescription medications purportedly were to treat pain and included Folite tablets, a vitamin available over the counter.
Normally, these high-cost reimbursement medications would have required prior authorization under Medi-Cal’s old payment system. Medication involved in this scheme was medically unnecessary, frequently was not dispensed to patients, and procured by kickbacks.
From May 2022 to April 2023, Monte Vista billed Medi-Cal more than $269 million and was paid more than $178 million for 19 expensive, non-contracted drugs containing low-cost, generic ingredients that were not medically necessary, not provided, or both.
Randall and others then allegedly laundered their illicit proceeds by transferring the proceeds of the Medi-Cal fraud scheme to a third party to pay kickbacks to Anderson, to promote the fraud scheme and to conceal and disguise the transfers from detection by law enforcement.
Relatedly, Anderson was charged in a two-count information charging her with health care fraud for her role in the scheme which was unsealed last week. Mekail pleaded guilty to criminal charges in August 2024 and awaits sentencing.
As a result of the national takedown, the government seized more than $245 million in cash, luxury vehicles, cryptocurrency, and other assets as part of the coordinated enforcement efforts. As part of the whole-of-government approach to combating health care fraud announced today, the Centers for Medicare and Medicaid Services (CMS) also announced that it successfully prevented more than $4 billion from being paid in response to false and fraudulent claims and that it suspended or revoked the billing privileges of 205 providers in the months leading up to the Takedown.
- Five No.Cal. Defendants Charged in Health Care Fraud Sweepon July 1, 2025 at 2:42 PM
United States Attorney for the Northern District of California announced criminal charges against five defendants in connection with allegations that they defrauded Medicare and other federal health care benefit programs and illegally diverted drugs.
The charges filed in federal court are part of the Department of Justice’s 2025 National Health Care Fraud Takedown. The charges stem from various schemes, including a doctor who submitted unnecessary claims for medical equipment, individuals who ran or participated in fraud schemes to obtain money from federally funded health insurance programs through false claims, and a nurse who diverted pain medication for his own use.
The California charges are part of a strategically coordinated, nationwide law enforcement action that resulted in criminal charges against 324 defendants for their alleged participation in health care fraud and illegal drug diversion schemes that involved the submission of over $14.6 billion in alleged false billings and over 15 million pills of illegally diverted controlled substances. The defendants allegedly defrauded programs entrusted for the care of the elderly and disabled to line their own pockets, and the Government, in connection with the Takedown, seized over $245 million in cash, luxury vehicles, and other assets.
The following individuals were charged in the Northern District of California:
- - Vincent Thayer, 41, of San Jose, California, was charged by indictment with wire fraud, health care fraud, and aggravated identity theft in connection with a $68 million medical office visit scheme. As alleged in the indictment, Thayer owned Patient Payment Agent, which did business as My Community Testing, and was a purported COVID-19 testing money. Through this company, Thayer caused the submission of approximately $68,205,233 in false and fraudulent claims to Medicare, Medicaid, and the HRSA COVID-19 Uninsured Program, of which approximately $11,751,819 was paid, for office visits purportedly performed by medical professionals but that never occurred. Thayer also misappropriated the identity of a doctor to enroll his company in Medicare and Medi-Cal (California’s Medicaid program).
- - Sevendik Huseynov, 47, a national of Azerbaijan currently residing in Sunnyvale, California, and the owner and CEO of Vonyes, Inc. in Sunnyvale, California, was charged by criminal complaint and arrested on June 26, 2025. The complaint alleges that the defendant committed health care fraud through a scheme to submit fraudulent claims to Medicare Advantage Organizations (“MAOs”) on behalf of unsuspecting beneficiaries for durable medical equipment (“DME”). The complaint alleges that Huseynov, from January 15, 2025, through June 16, 2025, through his entity Vonyes, submitted more than 7,200 claims to at least eight separate MAOs offering Medicare Part C benefit plans, and that those claims sought reimbursement of more than $137 million for DME such as back braces, knee braces, and wrist braces. The complaint alleges that certain of the purported beneficiaries contacted by law enforcement were not aware of the DME prescriptions and did not need the prescribed DME. The complaint also alleges that a healthcare provider listed as a referring physician on many billing claims had never prescribed DME supplied by Vonyes and that the patients listed on those claims were not his patients. The complaint also alleges that a review of bank records for Vonyes and Huseynov did not show any purchases of actual DME. At least $761,037.63 was paid to Vonyes, into accounts controlled solely by Huseynov, from MAOs during the scheme.
- - Clinton Johnson Christian, 38, of Fairfield, California, was charged by indictment with tampering with consumer products and intentionally obtaining controlled substances through deception and subterfuge in connection with diverting a controlled substance for his personal use. As alleged in the indictment, Christian accessed a machine that held hydromorphone by falsely stating a patient needed the controlled substance, removed a vial of hydromorphone, extracted the hydromorphone and re-filled the vial with saline before replacing the vial and cancelling the patient’s order.\
- - Dr. Yasmin Pirani, 46, of British Columbia, Canada, was charged by indictment with health care fraud and false statements related to health care matters in connection with a $35.2 million telemedicine fraud scheme. As alleged in the indictment, in exchange for payments from a telemedicine company, Dr. Pirani signed prescriptions for DME that was medically unnecessary, for Medicare beneficiaries with whom she lacked a pre-existing doctor-patient relationship, without a physical examination, and without any conversation with the beneficiary or based solely on a short telephonic conversation. Dr. Pirani falsely diagnosed Medicare beneficiaries with certain conditions to support the DME prescriptions and falsely attested that the information in medical records was accurate, concealing that she did not have any interaction with the Medicare beneficiaries or that the interaction was brief and telephonic. The telemedicine company solicited illegal kickbacks and bribes from DME suppliers in exchange for DME prescriptions signed by Dr. Pirani, and the DME suppliers billed Medicare approximately $32.5 million based on Dr. Pirani’s prescriptions.
- - Patrick Omeife, 33, of Ghana, was charged by indictment with two counts of concealment money laundering in connection with a scheme to launder approximately $33,765 that was fraudulently disbursed from a federal COVID-19 relief program and intended for an optometrist whose identity had been stolen. As alleged in the indictment, Omeife, falsely purporting to be a covert agent of the U.S. government, began an online romantic relationship with a woman and requested that the woman use her bank account to receive his salary. This woman provided Omeife with her bank account information, and her account was used in a September 2020 fraudulent application for funds from the COVID-19 Provider Relief Fund (“PRF”). The PRF provided funds to health care providers that were financially impacted by COVID-19. Based on the fraudulent September 2020 application, the PRF disbursed approximately $33,765 intended for the optometrist into the woman’s bank account. At Omeife’s direction, the woman converted the funds to Bitcoin cryptocurrency and transferred the Bitcoin to Omeife’s cryptocurrency account. Omeife repeatedly provided identifying information to his cryptocurrency exchange, to include his Republic of Ghana driver’s license and “selfie” photographs of his face and bare upper body, depicting a distinctive tattoo on his chest of the Bitcoin currency symbol. Numerous additional fraudulent PRF applications connected to the application made in the optometrist’s name resulted in at least $1.6 million of fraudulent disbursement of funds related to COVID-19 relief programs.
The Northern District of California, in particular, worked with the Department’s Criminal Division and Health Care Fraud Unit and the U.S. Department of Health and Human Services Office of Inspector General; the Federal Bureau of Investigation, and the FDA Office of Criminal Investigations. - SoCal Healthcare Clinic Operator Sentenced for $20M Fraudon June 30, 2025 at 12:18 PM
A Southern California healthcare clinic operator, Oscar B. Abrons III, has been sentenced for his involvement in a prescription medication diversion scheme that defrauded Medi-Cal, the state’s Medicaid program, of more than $20 million.
Abrons was sentenced by the Orange County Superior Court to four years in jail and stipulated that the loss to the Medi-Cal program exceeded $20 million. A restitution hearing will be held to determine the loss amount owed by Abrons.
Abron’s co-conspirators, Steven Derrick Fleming and Mohamed Waddah El-Nachef, were previously sentenced. Fleming was sentenced to five years in state prison, and El-Nachef was sentenced to a five-year local custody sentence and surrendered his medical license. As part of his sentence, El-Nachef also paid $2.3 million in restitution. At the time of his arrest in 2020 El-Nachef had stipulated to disciplinary charges filed in 2019 with the California Board of Medicine and had been placed on seven years probation. El-Nachef was also suspended from participating in the workers’ compensation system as a physician, practitioner, or provider on February 23, 2023 by an order of the Administrative Director of the DWC.
El-Nachef was charged in March 2020 with a half-dozen felony counts, including executing a scheme to defraud Medi-Cal, making a fraudulent claim for a health benefit, filing a fraudulent insurance benefit claim, conspiring in the unauthorized practice of medicine and grand theft, with sentencing enhancement allegations for aggravated white- collar crime between $100,000 to $500,000 and aggravated white-collar crime exceeding $500,000.
Fleming and Abrons jointly operated God’s Property, an unlicensed clinic where Medi-Cal beneficiaries were paid cash in exchange for obtaining medically unnecessary prescriptions for HIV medications, antipsychotics and controlled substances, which were then sold to buyers on the illicit market.
Fleming and Abrons, alongside Mohamed Waddah El-Nachef, an Orange County medical doctor, carried out the diversion scheme from June 23, 2014, to October 1, 2016. During this time, El-Nachef became the top prescriber of HIV medications in the state. As a result of the scheme, Medi-Cal suffered an estimated loss of over $20 million.
The prosecution of these individuals was carried out by the California Department of Justice’s Division of Medi-Cal Fraud and Elder Abuse (DMFEA). DMFEA works to protect Californians by investigating and prosecuting those responsible for abuse, neglect, and fraud committed against elderly and dependent adults in the state, and those who perpetrate fraud on the Medi-Cal program.
The Division of Medi-Cal Fraud and Elder Abuse receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $69,244,976 for Federal fiscal year (FY) 2025. The remaining 25 percent is funded by the State of California. FY 2025 is from October 1, 2024, through September 30, 2025. - CWCI Finds Independent Medical Reviews Are Trending Upon June 30, 2025 at 12:18 PM
After declining steadily from 2018 through 2022, the number of Independent Medical Review (IMR) decision letters issued in response to California workers’ comp medical disputes is now trending up, increasing in 2023, 2024, and the first quarter of 2025 according to the California Workers’ Compensation Institute (CWCI), though the uphold rate for medical service modifications and denials remains close to 90%.
CWCI’s latest review of IMR activity and outcomes examined 1.57 million IMR decision letters issued from 2015 through March of this year in response to applications submitted to the state after a Utilization Review (UR) physician modified or denied a workers’ comp medical service request. As in prior reviews, CWCI tracked the number of letters issued each quarter; determined the distribution and uphold rates for disputed treatment requests by type of medical service (and the distribution and outcomes of pharmaceutical IMRs by major drug group); measured IMR response times; and calculated the percentage of IMRs associated with high-volume physicians.
IMR, introduced in 2013, was expected to reduce medical disputes by helping to ensure that workers’ comp treatment met evidence-based medicine standards, but it was not until 2019 that the number of IMR disputes began a steady decline, with the number of IMR decision letters falling by 31% from the peak level of 184,385 in 2018 to 127,215 in 2022. That decline coincided with a reduction in the number of job injury claims during the pandemic and a drop in the number of pharmaceutical disputes after the state added Pain Management and Opioid Guidelines to its Medical Treatment Utilization Schedule (MTUS) in late 2017 and adopted the MTUS Drug Formulary in January 2018. More recent data, however, show IMR letter volume rose 2.9% in 2023 and 8.2% in 2024, and initial results for this year show the trend accelerating, with 38,393 IMR decision letters in the first 3 months of 2025, 13% more than in the same period last year.
Even with the increase in IMR volume, the median IMR response time (from receipt of the application to the date of the decision letter) was 32 days in 2024, the same as in 2022. Furthermore, 25% of the letters were issued within 28 days, and 75% were issued within 38 days, all within the time allotted to the state’s Independent Medical Review Organization to confirm the eligibility of the application; request, receive, and process medical records; assign the case to a physician reviewer; and issue a decision.
Disputes over prescription drug requests represented 30.6% of all IMRs in the first quarter of this year – more than any other type of medical service, but down from 33.4% in 2024 and 50.7% in 2015. Much of that decline was due to the reduction in IMRs involving opioid requests, which dropped from 32% of all pharmaceutical IMRs in 2018 to 18.6% in the first quarter of this year. With prescription drugs representing a declining share of the IMR disputes, the percentage of IMRs involving disputes over other medical services has increased, with physical therapy disputes accounting for 13.6% of IMRs in the first quarter of 2025, injection disputes accounting for 12.9%, and disputes over durable medical equipment, prosthetics, orthotics and supplies accounting for 9.7%.
A small number of physicians continue to drive much of the IMR activity, as the top 1% of requesting physicians (81 doctors) accounted for 42.2% of the disputed service requests that underwent IMR in the 12 months ending on March 30 of this year, and the top 10 individual physicians accounted for 10.9% of the disputed requests. CWCI found that 7 of the providers on the latest top 10 list were also on the top 10 list the prior year.
IMR outcomes remain stable, as IMR physicians upheld 89.1% of UR doctors’ treatment modifications or denials in the first quarter of 2025 compared to 88.0% in 2024. As in the past, uphold rates varied by type of service, ranging from 77.4% for evaluation/management services to 92.9% for acupuncture.
CWCI members and subscribers will find a more detailed summary of IMR experience through March 2025 in Bulletin 25-09 at www.cwci.org. Institute members can also access updated IMR slides under the Research tab. - Class Action Against Employer Can be Decertified at Any Timeon June 26, 2025 at 12:55 PM
Plaintiff Joanne Allison, a former registered nurse (RN), brought the underlying class action against her former employer, Dignity Health, alleging claims for unpaid work, meal period and rest break violations, as well as derivative claims.
Allison filed a motion for class certification on behalf of RNs who worked at three Dignity’s hospitals - St. John’s Regional Medical Center in Oxnard, CA, St. John’s Pleasant Valley Hospital in Camarillo, CA and Mercy General Hospital in Sacramento - since June 1, 2014. She also sought certification of subclasses for certain claims, including meal period violations and rest break violations.
Allison asserted that a “facial review of RN timecards” showed most RNs experienced meal periods that failed to comply with law. Her expert identified all work shifts eligible for one or more meal periods and then “identified each instance where the time records reflected a Sample Class Member’s meal period was either missed, late, or short/interrupted.” After “accounting for premiums paid” based on Dignity’s payroll data, the expert opined that over 70 percent of relevant shifts had a non-compliant meal period with an unpaid premium.
Allison averred that this evidence established a rebuttable presumption of class-wide liability under the Supreme Court case of Donohue v. AMN Services, LLC (2021) 11 Cal.5th 58 (Donohue). Moreover, because Dignity admitted it did not record the reason for any given non-compliant meal period - instead it required class members to self-report and to apply for a premium payment - Allison contended the lawfulness of placing the burden on employees to keep meal break records was a common question.
Allison based her noncompliant rest break claim (and, to some extent, her meal period claim) on purported interruptions from work-issued communication devices - i.e., Vocera devices and Spectralink devices. She asserted “Dignity’s policy required RNs to wear these devices at all times . . . even during breaks,” giving rise to a common question whether this resulted in unlawful off-the-clock interruptions. As common proof to establish Dignity’s class-wide liability under this theory, Allison’s expert opined that a “comparison of Vocera log ins with RN timecards show[ed] nearly 70% of employees in the Vocera sample were using the device while clocked-out in [Dignity’s] timekeeping program.”
In opposing certification, Dignity argued individual inquiries predominated the meal period claim despite Allison’s use of Dignity’s time- clock records as class-wide proof.
The trial court granted in part and denied in part Allison’s motion for class certification during a class period of June 1, 2014 to January 13, 2022. The court explained that Dignity’s showing that RNs “sometimes were able to take uninterrupted breaks” was insufficient to defeat the predominance of common issues.
Nineteen months after the initial certification order, Dignity moved to decertify the class on grounds that post-certification discovery refuted the trial court’s prior predominance findings. In opposition to the motion, plaintiffs argued Dignity failed to satisfy its threshold burden to show “new law or new evidence showing changed circumstances” since the certification order. Plaintiffs also countered that the post-certification evidence further demonstrated the propriety of class treatment.
Following a hearing, the trial court granted the decertification motion. As a threshold matter, the trial court ruled the “large number of new declarations” as well as “plaintiffs’ efforts at a statistical analysis” constituted new evidence. And, in light of such new evidence, it determined “there [was] no good reason to ignore other evidence,” and therefore it considered the entire record. The court determined that “ ‘commonality’ ” was not the central issue; rather, “[t]he problem is the ‘predominance’ issue, as individual issues swamp the common issues.” The trial court also expressed concern that plaintiffs’ trial plan betrayed fatal flaws to continued class status.
The Court of Appeal affirmed in the published case of Allison v. Dignity Health CA1/4 - A169225 (June 2025)
Class actions are permitted “when the question is one of a common or general interest, of many persons, . . . and it is impracticable to bring them all before the court . . . .” (Code Civ. Proc., § 382.) Our Supreme Court has articulated that to proceed as a class action there must be “the existence of an ascertainable and sufficiently numerous class, a well-defined community of interest, and substantial benefits from certification that render proceeding as a class superior to the alternatives.” (Brinker Restaurant Corp. v. Superior Court (2012) 53 Cal.4th 1004,1021.) “ ‘In turn, the “community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.” ’ ” (Ibid.)
A class “can be decertified at any time, even during trial, should it later appear individual issues dominate the case,” (Macmanus v. A. E. Realty Partners (1987) 195 Cal.App.3d 1106, 1117), decertification is appropriate “ ‘only where it is clear there exist changed circumstances making continued class action treatment improper.’ ” (Green v. Obledo (1981) 29 Cal.3d 126, 148.)
Our Supreme Court’s decisions “clearly contemplate the possibility of successive motions concerning certification” based on evidence uncovered in post-certification discovery. (Occidental Land, Inc. v. Superior Court (1976) 18 Cal.3d 355, 360 (Occidental).)
"Here, the trial court expressly found there was new evidence, referencing 'a large number of new declarations,' plus 'plaintiffs’ efforts at a statistical analysis.' Indeed, following certification, Dignity deposed 44 class members from the three hospitals at issue." - WCRI Study Explores Promises and Challenges of AI for WorkCompon June 26, 2025 at 12:55 PM
A new study from the Workers Compensation Research Institute (WCRI) examines how stakeholders view the promises and challenges of artificial intelligence (AI) in the workers’ compensation system.
“In recent years, interest in the role of artificial intelligence in workers’ compensation has grown rapidly,” said Sebastian Negrusa, vice president of research at WCRI. “This study is an important step toward understanding how stakeholders are approaching the opportunities and risks associated with these emerging technologies.”
To develop the study, WCRI researchers conducted semi-structured interviews with 34 leaders across 20 organizations - including employers, insurers, medical providers, worker advocates, and regulators - supplemented by informal discussions. They also reviewed literature and regulations on AI developments and applications.
The key questions asked in the interviews included:
- - How do you define AI and its role in the economy and the workers’ compensation system?
- - Where do you see the value of AI tools for your job, your organization, and the system?
- - What challenges and risks do you foresee with broader AI adoption, and how can these be mitigated?
By outlining current and emerging uses of AI in workers’ compensation and identifying risks and potential guardrails, the study, Artificial Intelligence in Workers’ Compensation: An Overview of Promises and Challenges, aims to provide a common language for stakeholders and inform policy discussions to promote responsible AI use that improves injured workers’ recovery and experience.
The authors of the study are Bogdan Savych and Vennela Thumula.