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Heidi K. Hengel is an associate attorney with our Bay Area office. In adition to workers' compensation defense, Ms. Hengel's experience includes civil litigation in San Jose and criminal defense in San Francisco. She graduated from the University of Wisconsin - Madison in 2005 with a major in Political Science and minor in Women's Studies. She attended Golden Gate University School of Law in San Francisco, graudating with honors in May 2008 and receiving the Outstanding STudent Award for her graduating honors program class. She was also nominated as a Rising STar attorney in Super Lawyer Magazine in 2009. Ms. Hengel is certified to practice before all Federal and State courts in California.

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Workers' Compensation Daily News for Oct 31, 2014

WCAB Affirms WCJ Order For Lien Claimant to Appear
Thu, 30 Oct 2014 12:57:56 - Pacific Time
Ana Diaz filed an Application for Adjudication of Claim for injuries allegedly sustained to her right shoulder, right arm, right hand fingers, and lower back. Some of the alleged injuries were accepted by Zenith Insurance Company as industrial, and her claim was resolved by Compromise and Release approved on April 30, 2014.

Several outstanding lien claims remained unresolved, and the matter was set for lien conference on August 6, 2014. Hearing representative Javier Jimenez appeared at the lien conference on behalf of lien claimant California Imaging, who filed a lien for photocopying services. Zenith contended that California Imaging was not a properly licensed professional photocopier as required by the Business and Professions Code.

Hearing representative Javier Jimenez was unable to respond to defendant's contention and unaware of lien claimant's licensing status; was unable to explain billing characterized by the WCJ as "less than clear"; and was generally unable to respond to inquiries regarding the issues in dispute and appeared unfamiliar with the file. Mr. Jimenez advised the WCJ that his only authority .was to set the matter for lien trial. When asked by the WCJ to identify the person most knowledgeable at California Imaging regarding. 'the licensing and billing issues, Mr. Jimenez named Maria Rubio Trujillo, and further stated that Trujillo advised him that the "proper" name of lien claimant California Imaging is actually San Diego Imaging.

The WCJ then continued the lien conference to August 22, 2014, and ordered Trujillo to personally appear "in order to explain lien claimant's billing, address the licensing issue, and explain the relationship between California Imaging and San Diego Imaging to determine the true identity of the lien claimant." Trujillo's petition for reconsideration and for removal followed.

Trujillo contends in her petition that she has unspecified personal and family responsibilities as well as work duties that would be "severely and unreasonably impacted" in unspecified ways by her personal appearance in Oxnard, and contends in essence that the Order was an abuse of discretion and a product of bias against her and/or lien claimant California Imaging by the WCI.

The WCAB dismissed the petition for reconsideration as there was no final order subject to reconsideration, and denied removal in the case of Diaz v Sambrailio.

The Workers' Compensation Appeals Board and individual WCJs have broad power to do all things necessary or convenient to fully adjudicate the disputed issues and to ascertain the substantial rights of the parties and carry out justly the spirit and provisions of the Labor Code. This includes the inherent power to control the WCAB's practice and procedure to prevent frustration, abuse, or disregard of its processes which in tum includes the power to order the personal appearance of parties at hearings (Rule 10240( d); Henkel v. State Comp. Ins.Fund (2010) 38 Cal. Workers' Comp. Rptr. 218 (ADJ4197101, Appeals Board Panel Opinion)).

Rule l 0770.1 subdivision (e), provides in relevant part. that every party or representative appearing at a lien conference or lien trial "shall have sufficient knowledge of the lien dispute(s) to inform the Workers'. Compensation Appeals Board as to all relevant factual and/or legal issues in dispute." As explained by the WCJ in his Report, the representative for lien claimant California Imaging was unable to respond to reasonable inquiries regarding the licensing issue, nor was he able to provide more basic information such as an explanation or clarification of the disputed billing. Because the representative was unable to comply with Rule 10770.1 (e), the WCJ was unable to meaningfully discuss the issues with the parties or determine whether there were disputes that required a lien trial. It was within the WCJ's discretion to continue the matter to another date and to require lien claimant's person most knowledgeable to appear, so that a meaningful conference could be held. The Order for Trujillo to personally appear was not arbitrary, capricious, unreasonable, or improperly motivated. Read More...

Healthcare Risk Managers Discuss Administration of Comp Medical Benefits
Thu, 30 Oct 2014 12:57:46 - Pacific Time
A panel discussion at the American Society for Healthcare Risk Management's annual conference in Anaheim this month covered the advantages and disadvantages of self administration of health care benefits for injured workers in the health care industry. According to the report in Business Insurance, self-administration of workers compensation claims can be a favorable option for health care organizations to track how their workers are being treated. At the same time, workers comp claims managers said third-party administrators can aid health systems that manage comp claims in multiple states.

Patrick Venditti, executive director of BJC Corporate Health Services in St. Louis, the risk management division of St. Louis-based BJC HealthCare, said the nonprofit health care provider used a TPA to manage workers comp claims before 2005. But it moved to administering its own workers comp claims because it allowed the parent of 12 hospitals and other medical facilities to effectively treat injured workers and reduce its costs, while the TPA previously focused primarily on costs, he said. "Being in a health care setting," Mr. Venditti said, "we are aligned with our physicians, we get to know a lot of physicians within the system." The health care provider is self-insured, and has 28,000 employees and about 5,000 volunteers eligible for workers comp, he said. "So we partnered with them and the goals that we have are aligned to get the best care we can for those patients."

Dan Nicholson, director of integrated disability management at Sutter Health in Sacramento, California, agreed that self-administration has been favorable for his company, which is self-insured and has about 50,000 employees. "When you're self administered in a health care setting, your goal is patient care," Mr. Nicholson said. "That's..... drilled down to the people in our claims staff because we're all there to facilitate care at the bedside. And to do that effectively, we need to make sure our injured clinicians get good, effective medical treatment and they get back to work as soon as practical."

Suzann M. Bylund, senior director of associate risk management programs at Ascension Risk Services in St. Louis, the risk management division of Ascension Health, said the health care provider's workers comp claims are administered by Sedgwick Claims Management Services Inc. Sedgwick has adjusters who work exclusively on Ascension claims at the health system's offices, and Ms. Bylund said they are treated as part of the Ascension staff. Working with a large TPA has helped Ascension manage the nuances and legal changes in workers comp systems across the country, Ms. Bylund said. The health system, which is self insured, has 155,000 employees in 23 states and Washington. "We've found it to work very well just because of the sheer size of the program," she said.

Mr. Nicholson said organizations that use TPAs to manage workers comp claims should follow Ascension's example by integrating TPA claims handlers with internal staff. "Make sure that you treat your claims staff like they were one of your own employees," he said. "Treat them well, recognize them when they do good work... and don't manage them with a hammer because it doesn't work."

Mark Walls, vice president of communications and strategic analysis for St. Louis-based workers comp insurer Safety National Casualty Corp., moderated the panel Read More...

Researchers Find Genetic Role and Treatment for Post-Traumatic Arthritis
Wed, 29 Oct 2014 09:43:53 - Pacific Time
Researchers at Western University have identified a specific gene that plays a key role in the degradation of cartilage in osteoarthritis (OA). The study, published online in the journal Arthritis and Rheumatology showed that when the gene, PPARdelta, was removed from cartilage the progression of post-traumatic osteoarthritis was considerably slowed. Study co-author Frank Beier, PhD, a professor in the Department of Physiology and Pharmacology at Western's Schulich School of Medicine and Dentistry, says this promising new research may be the first step to identifying new treatments. "What this tells us is that this gene is an important player in the pathogenesis of the disease and therefore might be a potential therapeutic target," Beier said.

According to a report by the Arthritis Alliance of Canada, more than 4.5 million adult Canadians currently live with OA, and it is estimated that it drives $10 billion in direct health care costs. Post-traumatic osteoarthritis, which is triggered by a specific injury, makes up 10 to 15 per cent of all cases of the disease and affects a younger, more active portion of the population.

"The current thinking is that what happens in those first hours after injury can have long-term impact," Beier said. "This research shows that we might have a window that we could give these drugs right after the injury happens and maybe slow the onset of the cartilage degradation associated with osteoarthritis."

These research findings may also help to explain the link between obesity and OA. It has long been known that obesity is one of the major risk factors for OA, and the conventional thinking was that the link was associated with the increased load on the joints. However, recent evidence suggests that chemical signals circulating in the body contribute to osteoarthritis risk in obese patients. Beier says that because PPARdelta is activated by fatty molecules, lipids from a high-fat diet could directly activate the pathway that allows PPARdelta to break down cartilage in the animal model.

"This also suggests that in the future, modulation of PPARdelta through diet changes, as opposed to drugs, could also be a strategy to prevent Osteoarthritis," Beier said.

Apportionment of permanent impairment in California Workers Compensation is based upon causation. Genetic research seems to be creating more and more opportunities to develop theories upon which apportionment can be based. Read More...

Berkeley City Council Studies Comp Costs
Wed, 29 Oct 2014 09:43:46 - Pacific Time
The Berkeley city auditor presented a report to Berkeley City Council intended to help the Berkeley Police Department reduce its injuries and workers’ compensation claims, which cost BPD $2.4 million in fiscal year 2013. The Daily Californian reports that this study - initiated by the city auditor’s office as part of an annual risk assessment plan - recommended several ways that BPD could more efficiently document injuries, including sharing information with the human resources department and redefining how injuries are classified in reports. The new practices would help city management and BPD identify trends and develop measures to prevent future injuries, according to the report.

"Lowering the cost of claims will involve leadership, resources and better data," said City Auditor Ann-Marie Hogan, who commissioned the report. "Our audit clearly demonstrates the ways in which data collection and use of that data can be improved, and city management is committed to making those changes."

A contractor recently hired by the city found that BPD is among police departments with the lowest number of both dollar losses and claims when compared with five other police departments with similar characteristics and operations.

The audit is part of an effort to reduce workers’ compensation costs throughout the city. According to a Sept. 30 report by the city manager, in fiscal year 2013, the city spent more than $6 million on workers’ compensation and filed 200 new claims. Berkeley reduced its costs by 18 percent for fiscal year 2014, saving $1.1 million and filing 23 fewer claims. The report attributes the difference to several factors, including "aggressive and sustained emphasis" on employee safety training. "Resources will be needed to do the extra work required to improve systems and outreach to employees," Hogan said in an email. "With steadily shrinking available resources for the police department and all city departments, it will be a challenge to make the time available to complete the work."

Of the $2.4 million in BPD’s costs, approximately $1.9 million was paid to the city’s workers’ compensation fund, which acts as a type of insurance fund for current and past claims. The remaining $500,000 was spent on payroll costs for BPD employees on leave for injury.

While the audit was not aimed at reducing workers’ compensation fraud, Hogan said data gathered with the improved methods can help identify trends that could indicate fraudulent claims.

BPD currently classifies injuries in 14 different causal categories, including lack of skill or stress. Last year, the most frequent injuries sustained were during detention, arresting and booking procedures and from exposure to illness.

Some of the report’s recommendations, such as a citywide written guidance for reporting injuries, have been partially implemented, while all are expected by 2015. Read More...

Castro Valley Orthopedist Arrested on 31 Fraud Related Felonies
Tue, 28 Oct 2014 10:10:08 - Pacific Time
Castro Valley orthopedic surgeon, Douglas J. Abeles, M.D., surrendered on an arrest warrant obtained by the Alameda County District Attorney's Office for his role in an insurance fraud scheme occurring out of his East Bay business office. He has been charged with 31 felony offenses following an investigation that was conducted jointly by the Alameda County District Attorney's Office and the California Department of Insurance.

Medical Board records do not show any disciplinary actions against him and also do not reflect that he is board certified in any specialty. He currently has unfettered rights to practice medicine. According to his website drabeles.com, "Abeles specializes in Sports Medicine, Spine Surgery, and General Orthopaedics. He completed fellowships at Georgetown University-Virginia Sports Medicine Institute and also USC-Rancho Los Amigos Spine Surgery in 1995. His residency was completed in 1993 at the prestigious New York Medical College-Brooklyn-Queens (previously known as Catholic Medical Center). He also rotated on the spine and pediatric services at the Hospital for Joint Disease in 1992".

The Criminal Complaint filed by authorities against Abeles and his office manager, Gabriela Cuevas, alleges that for several years he falsely and fraudulently billed insurance companies for medical services that were not provided. While Abeles, had an orthopedic medical practice in Castro Valley, he also owned and operated at least four medically-related businesses from an office located at the Castro Valley-Hayward border. These businesses included drug testing urine analysis for medical offices that contracted with him. It was through this business that he allegedly fraudulently billed insurance companies for lab reports.

Abeles allegedly formed Physicians RX Network, Inc. ("PRXN") in 2005 in a location other than his medical office. PRXN contracted with physicians in regards to the dispensing of prescribed drugs, including prescription compound creams, billing the insurance companies on behalf of the physicians for these drugs. In late 2010, Abeles went into the Urine Analysis ("UA") business, forming Redwood Laboratory Management, LP and Redwood Laboratory Associates, LLC ("RLM"). RLM contracted with physicians in regards to urine drug testing of patients and billing insurance companies on behalf of the physicians for this drug testing.PRXN and RLM operated in the same office and the two businesses overlapped and shared. In May of 2011, Abeles formed another business, PRXN Toxicology, LLC.

Abeles hired Gregg Gorski to be a sales representative, Roxanne Cecot to be the billing supervisor and Larry Davis to be the Chief Operating Officer of PRXN. All three had complained about improprieties in PRXN billings, particularly about over-billing insurance companies for prescription drug compounds. Roxanne Cecot learned that Douglas Abeles told the receptionist at PRXN and another PRXN employee to over-ride the billing software at PRXN and manually increase the prices When Roxanne Cecot complained to Abe!es about the billing improprieties Abeles allegedly replied "Screw them until they catch on." Abeles allegedly sent an email that said "if any employee further implies any wrong doing to anyone they are to be let go immediately on grounds of insubordination and liable. We cannot operate a successful company with this kind of mutiny .... "'

One document allegedly sent to insurance companies was was called a "Urine Toxicology Review'' report and it purported that the physician that ordered the urine test spent forty-five minutes reviewing medical records that had been submitted for the physician's review by PRXN. This activity allegedly did not take place and the billing was fraudulent  In March of 2013, Gabrieia Cuevas' work computer was seized pursuant to a court ordered search. There were over 10,200 of these UTR's stored in her computer.

Abeles posted $355,000 bail and Gabriela Cuevas was released on her own recognizance. Arraignment is scheduled for Monday, November 3, 2014.

.Any medical professional or insurance company that believes it may have been a victim to this fraud is asked to contact the Alameda County District Attorney's Office, Alameda ADA Teresa Drenick: Teresa.drenick@acgov.org Facebook Twitter @AlamedaCountyDA. Phone: 510-272-6280. Read More...

WCAB Rules Sub-Rosa Film Admissible Despite "No Trespassing" Signs.
Tue, 28 Oct 2014 10:10:02 - Pacific Time
Jonathan Duong sustained an industrial injury to his spine while employed by the Automobile Club of Southern California. The sole issue framed for trial on a discovery dispute was defendant's request for an order permitting it to provide surveillance videos to medical-legal evaluators, pursuant to Qualified Medical Evaluator Regulation 35(d). Applicant asserted that the films violate his right to privacy and, therefore, are not admissible and should not be provided to the doctors.

An investigator testified that he conducted surveillance of the applicant by following him first along the street and later by entering the driveway to a Mobile Home Park; that he entered and parked in the visitor parking space; that he entered onto the property three times and each time parked in the same location; that he filmed applicant entirely from the car; that there were no signs regarding private property or trespassing that he observed from the street when he entered the driveway; and that he understood that the Mobile Home Park was not applicant's place of residence. He also filmed him inside an Albertson's grocery store.The only evidence admitted at trial was a photograph containing an Albertson's logo and the words, "NO Videotaping, Photography, Audio Taping, anywhere on store premises without prior consent."

The owner of the Mobile Home Park; testified that that there are two signs at each entrance that read "Invitees and Guests Only. No Trespassing. Violators will be Prosecuted;" that there are also signs that say "Private Property;" that he did not invite the investigator onto the property; that he does not know if anyone else invited the investigator; that he did not give permission to the investigator to film on the property; that he did invite applicant to visit his property; that he is applicant's adoptive father; that his unit is the fifth mobile home from the street; and that there is guest parking as you enter into the park from the street.

The WCJ excluded the sub-rosa video evidence finding that "the filming was accomplished in a manner that violated the rules of both properties and the surveillance company itself." In her Report, the WCJ added that ''there is an important policy consideration to be factored in where the evidence is obtained in a manner which violates posted rules and company policies." The WCAB granted reconsideration and removal and reversed the ruling in the panel decision of Duong v. Automobile Club of Southern California. It issued a new Findings and Order ruling that that the sub-rosa video is admissible and ordering that it may be provided to any medical-legal evaluator or treating physician.

The panel reasoned that applicant did not establish any statutory restriction that prevents defendant's private investigators from obtaining sub-rosa video in apparent violation of rules posted by private property owners. (Cf. Lab. Code, § 435 (prohibiting employers from making video recordings of employees in limited circumstances); Pen. Code, § 6470) (prohibiting secret videotaping of persons in various stages of undress).)

The WCAB went on to state that "We are not persuaded by the argument that defendant violated Civil Code section 1708.84 (the so-called "anti-paparazzi" statute), where subsection (g) creates an exception for private investigators attempting to capture surveillance video of suspected fraudulent conduct. More importantly, Civil Code section 1708.8 addresses civil tort liability for the invasion of privacy. The proceedings before us do not pertain to civil tort liability but rather the admissibility of evidence before the Appeals Board. Therefore, Civil Code section 1708.8 appears to be inapplicable." It went on to state that "we do not agree that applicant had a reasonable expectation of privacy" in either the parking lot of the Mobile Home Park or inside of Albertson's. Generally, there is no reasonable expectation of privacy in settings where activities are conducted in an open and accessible space, within the sight and hearing of the general public or of customers or visitors to that open and accessible space, or in areas of commercial premises that are open to the public.

In this case, the private investigator filmed applicant in the parking area of a Mobile Home Park and inside an Albertson's grocery store. Applicant did not reside at the Mobile Home Park but was there visiting his adoptive father. There is no evidence that the Mobile Home Park is a gated community, that the general public is excluded by the use of a gate or security, or that the parking area is somehow shielded from view of the street. This is especially true where members of the public can freely drive into the common parking area and where the parking area of the home he was visiting was only five (5) houses from the street. "We find even Jess expectation of privacy at Albertson's where applicant was filmed in a commercial area open to the public."
Read More...

Return-to-Work Supplement Program Pays $5000 Benefit
Mon, 27 Oct 2014 09:35:59 - Pacific Time
The Department of Industrial Relations (DIR) has posted proposed changes to the California Code of Regulations to implement the Return-to-Work Supplement Program, one of the workers’ compensation reforms mandated by SB 863. This program is intended to provide supplemental payments to workers whose permanent disability benefits are disproportionately low in comparison to their earnings loss. Public hearings on the proposed regulations have been scheduled on December 8, 2014 from 10 a.m. to 3 p.m. at 1515 Clay Street in Oakland and on December 9, 2014 from 1:30 p.m. to 4:30 p.m. at 320 West 4th Street, Suite 500 in Los Angeles. Members of the public may also submit written comment on the regulations until 5 p.m. on December 9, 2014. The notice, initial statement of reasons, and text of the proposed regulations can be found on the DIR website.

Under the proposed regulation, to be eligible for the benefit, an individual must have a work related injury that results in an inability to return to the work they were doing at the time of the injury. The regulation further requires that an individual who receives the Return-to-Work Supplement may not receive a second Return-to-Work Supplement unless that individual returns to the work force and suffers an additional injury that prevents that individual from continuing in that job. The Supplemental Job Displacement Benefit voucher triggers the application process for the Return-to-Work Supplement Program.

An individual who receives the Supplemental Job Displacement Benefit under Labor Code section 4658.7 because that individual cannot return to the job they were performing when they were injured receives a voucher evidencing the promise to make payments under section 4658.7. That voucher is on a form mandated by 8 C.C.R. § 10133.32. Section 25104 of the proposed regulations requires that the voucher include a notice that the individual may be eligible for the Return-to-Work Supplement and is intended to advise those individuals who may wish to apply for the Return-to-Work Supplement about the program and how to get additional information. The section also provides that the Director will arrange for publication of this notice targeted at those who have already received a voucher. Claim adjusters will have to use the new voucher 30 days after the regulations become effective.

An application for the Return-to-Work Supplement must be received by the Return-to-Work Supplement Program within one year from the date the Voucher was served on the individual or within one year from the effective date of these regulations, whichever is later. The application shall be made on the electronic form on the Department of Industrial Relations web site and shall include a declaration under penalty of perjury that the information provided is true and correct. Section.25l08 establishes a time frame of 60 days for reviewing applications and for making a decision on an application. It also provides for the method of notifying applicants of the decision.

The Return-to-Work Supplement Program will provide a supplement of $5,000.00 to each eligible individual who submits a complete application by the deadline. The payment will be made within 25 days of the date the decision of the Director on the application and will be paid in one lump sum. Payment shall be made directly to the individual and is not assignable before payment. The amount of this supplement may be adjusted by the Director from time to time based on further studies conducted by the Director in accordance with Labor Code section 139.48 and or based on consideration of the number of anticipated recipients.

Labor Code section 13 9.48 requires that appeals of decisions concerning the Return-to-Work Supplement be handled at the Workers' Compensation Appeals Board trial level. Section 25110 establishes a time frame for such appeals and allows the Return-to-Work Supplement Program to correct errors or otherwise modify decisions. Read More...

DWC Posts Revised Copy Service Regs for Public Comment
Mon, 27 Oct 2014 09:35:45 - Pacific Time
Following a public hearing on July 1 and a review of comments from a previous 15-day public comment period, the Division of Workers’ Compensation (DWC) has made additional revisions to its Copy Service Fee Schedule regulations. Members of the public are invited to present written comments regarding the proposed modifications to dwcrules@dir.ca.gov until 5 p.m. on Saturday, November 8. Proposed revisions include:

1) Reinstating authorizations into the fee schedule to avoid a loophole that would have allowed for billing outside of the schedule. Additionally, authorizations have been defined including stating the specific uses and limitations on the type of information to be disclosed and a specific date after which the provider is no longer authorized to disclose the information.
2) Clarifying the regulations regarding records obtained from the Workers’ Compensation Insurance Rating Bureau (WCIRB) and Employment Development Department (EDD). Claims adjusters will not be liable for subpoenaed records from the WCIRB and EDD when such records can be obtained without a subpoena at lower cost. Twenty dollars is allowed for records from EDD and $30 allowed for records from WCIRB.
3) Replacing the requirement that professional photocopier certificates be attached to each bill with supplying professional photocopier registration numbers.

The public can access WCIRB coverage information for employers for the past five years for free online. For coverage information beyond the past five years, the WCIRB charges $10 per year of coverage requested by way of a Coverage Research Service request. Over the last several years, the WCIRB has seen a marked increase in the number of subpoenas received requesting coverage information for cases before the WCAB. The number jumped from a low of approximately 1,300 in 2010 to a record high of 4,000 in 2013, 90% of which were to determine the identity of the insurer for a specific employer as of a specific date and which is readily available to the public at no cost on the WCIRB’s coverage website. The impact of the cost of these subpoenas on the system is a concern, particularly in view of the comment in Martinez v. Terrazas (2013) 78 Cal. Comp. Cases 444, 447, fn. 3 (Appeals Board en banc) that "in the context of a subpoena to recover costs associated with a subpoena to the WCIRB, the copy service would need to establish the expenses were incurred to prove or disprove a contested claim and that they were reasonable and necessary at the time incurred." In that case, the parties participated in an agreed medical evaluation before the subpoena was served on the WCIRB requesting coverage information. Consequently, it appeared to the court that the identity of the employer’s insurer had been identified prior to the subpoena for coverage information being requested and was therefore not necessary.

In regards to EDD records, Unemployment Insurance Code section 2111 provides that EDD is only authorized to provide EDD records only if EDD has an existing lien in the WCAB case. If EDD does not have a lien, then no records can be provided, even if EDD receives a subpoena. If EDD has a lien, the records can be obtained for free upon request from the injured worker’s attorney. Attorneys can also request records with an Authorization signed by the injured worker for $15. Read More...

Pacific Hospital CEO Sues Plaintiff Attorneys in $50 Million Defamation Case
Fri, 24 Oct 2014 08:03:56 - Pacific Time
Michael D. Drobot, Chief Executive Officer of Pacific Hospital of Long Beach, filed a $50 million dollar defamation lawsuit against a group of plaintiff's attorneys who he alleges have falsely claimed in broadcast comments that he and Pacific Hospital of Long Beach directed surgeons to install "counterfeit'' screws in "thousands'' of spinal-surgery patients.

The lawsuit, filed in Orange County Superior Court alleges that lawyers Brian Kabatek and Robert Hutchinson and the law firms of Kabateck Brown Kellner, Cotchett Pitre and McCarthy and Knox Ricksen made false claims in press statements "in an effort to disparage Michael D. Drobot and Pacific Hospital of Long Beach's good name and reputation, and disrupt business operations for their own personal benefit."

According to his press release Drobot claims "I never envisioned filing a lawsuit against a group of attorneys,,'' said Drobot. "But these allegations are malicious and, most importantly, patently false. Not only do they portray me as someone I am not, but they needlessly create incredible anxiety for hundreds of former patients at Pacific Hospital. We did not compromise patient care at PHLB.''

The lawsuit alleges that Kabateck, during a July television interview with Fox 11, made multiple false and defamatory statements about "counterfeit'' and "unsterilized'' screws used on a patient during two 2010 surgeries. Several weeks later, attorney Hutchinson allegedly made many of the same defamatory remarks in a radio interview on CBS 2. The lawsuit alleges that the lawyers made the remarks as a solicitation for patients to join in their pending lawsuits against Drobot and Healthsmart Pacific, Inc. Among their claims: that Michael D. Drobot bribed government officials with money and prostitutes to sell and install the counterfeit screws into patients.

Drobot blasted the defamatory remarks in his defamation lawsuit, affirming under oath in a verified complaint that he and Pacific Hospital of Long Beach "never purchased or used any non-FDA-approved screws or other related parts made with non-FDA-approved materials for use in PHLB spinal surgeries.''

According to Drobot "Defendants made up the aforementioned false and defamatory statements broadcast on television, radio and Internet out of whole cloth,'' the lawsuit alleges. "Ironically, Defendants' false and defamatory statements likely will cause many PHLB spinal surgery patients to request and possibly undergo wholly unnecessary spinal surgeries simply to determine whether they, too, have received 'counterfeit' screws from PHLB.''

In February 2014, Drobot pled guilty to government allegations that he paid kickbacks to surgeons for referring patients to Pacific Hospital of Long Beach. The criminal case did not include allegations of providing counterfeit parts or devices to patients.

Hutchinson, in an interview with the Long Beach Press Telegram said the lawsuit is an attempt to intimidate him and other attorneys named, and to intimidate patients from coming forward in a pending lawsuit against Drobot and the company that previously owned Pacific Hospital. "(Drobot is) an admitted felon," Hutchinson said. "This raises the issue of how can we defame someone when their own actions have tainted them far worse than any comments. He should know it’s not going to work." The lawsuit is characteristic of a Strategic Lawsuit Against Public Participation, commonly known as SLAPP, used to try and censor, intimidate or silence critics by hampering them with legal costs until they abandon their criticism, Hutchinson said.

Drobot, 69, of Corona del Mar, was charged by the U.S. Attorney’s Office with orchestrating a conspiracy from 1997 to 2013 in which tens of millions of dollars in illegal kickbacks were paid to doctors, chiropractors, marketers and others who referred patients to the former Pacific Hospital for spinal surgery. Prosecutors said that Drobot also paid $28,000 in bribes to state Sen. Ron Calderon, D-Montebello, to support legislation delaying or limiting changes in workers’ compensation laws that would have directly affected Drobot’s scheme. The hospital submitted more than $500 million in fraudulent bills between 2008 and last year. Much of the total was paid by the California workers’ compensation system, according to the U.S. Attorney’s Office. Drobot pleaded guilty in April to counts of conspiracy and payment of kickbacks for his activities in the scheme, and he faces 10 years in prison when he is sentenced in October 2015. Read More...

LA Probation Officer Arrested for Altering RTW Slip
Fri, 24 Oct 2014 08:03:49 - Pacific Time
Cynthia Wesley, 46, of Claremont, was arrested by Los Angeles Sheriff's Deputies on two felony counts of insurance fraud after allegedly altering workers' compensation documents and illegally collecting $1,036 in disability payments.

"Falsifying documents to receive unearned disability payments is a serious offense," said Commissioner Dave Jones. "The fact that Wesley was a trusted member of law enforcement adds insult to injury in this case. We will investigate and bring to justice anyone that commits insurance fraud, regardless of where they are employed."

An investigation by the California Department of Insurance Fraud Division revealed Wesley, a Los Angeles probation officer, filed an altered workers' compensation return to work slip. Wesley submitted a workers' compensation form extending her total temporary disability period. The same altered documents were submitted to her supplemental disability insurance company.

Wesley was double dipping and received three months of fraudulent disability benefits from the Los Angeles County Probation Department and her supplemental disability insurance policy. Wesley's insurer was unaware of the over payment and the altered documentation until notified by department investigators.

If convicted Wesley faces a max sentence of five year, eight months in county jail. Read More...

Past Week News Archive


Security Firm With Statewide Government Contracts Fakes Comp Insurance: Thu, 23 Oct 2014 11:14:34 - Pacific Time: Read More...


DWC Seeks Nominations for Community Service Award: Thu, 23 Oct 2014 11:14:27 - Pacific Time: Read More...


Report Claims Ebola Pandemic Poses Low Risk For Comp Carriers: Wed, 22 Oct 2014 11:33:27 - Pacific Time: Read More...


Orders For Witness "Hits" Adds 10 Counts to 50 Count Fraud Case: Tue, 21 Oct 2014 12:54:35 - Pacific Time: Read More...


SCIF Obtains Terminating Sanctions in Discovery Dispute With Employer: Tue, 21 Oct 2014 12:54:28 - Pacific Time: Read More...


Feds Now Target Executives in Healthcare Fraud Cases: Mon, 20 Oct 2014 13:01:39 - Pacific Time: Read More...


Two Dozen Civil Suits Filed Against Drobot Related Local Hospitals: Mon, 20 Oct 2014 13:01:32 - Pacific Time: Read More...


"Prehabilitation" Saves $1,215 Per Patient: Fri, 17 Oct 2014 09:38:14 - Pacific Time: Read More...


Bowling Scores Convict Janitor With Shoulder Injury: Fri, 17 Oct 2014 09:38:07 - Pacific Time: Read More...


Fraud Investigations Now Include Medical Coding Companies: Thu, 16 Oct 2014 09:49:20 - Pacific Time: Read More...