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Workers' Compensation Daily News for Jul 26, 2016

Feds Pass Comprehensive Addiction and Recovery Act
Mon, 25 Jul 2016 08:35:44 - Pacific Time
Opioid abuse has come to the forefront as a serious public health issue. In fact, drug overdoses are now the leading cause of death in the United States, ahead of motor vehicle accidents and firearms. A number of federal legislative proposals have recently been introduced to address this crisis.

In near-apocalyptic terms, U.S. Sen. John Cornyn described the rising tide of American opioid abuse at a Senate Judiciary Committee hearing earlier this year. "Opioid prescription drug and heroin addiction is ripping away at the fiber of our homes and our communities in our nation," Texas' senior senator said. "It’s destroying families, increasing crime, making our communities less safe, hurting our economy, and robbing millions of Americans of their future."

The National Law Review reports that while the U.S. House passed several bills on the issue, the U.S. Senate passed its own measure, S.524, the Comprehensive Addiction and Recovery Act of 2016 (CARA Act). In a bipartisan effort, both the House and Senate appointed conferees to hammer out differences. Those appointed to the Conference included 35 House members (made up of 21 Republicans and 14 Democrats) including Representatives from -key Committees including the House Energy and Commerce Committee and the House Ways and Means Committee. The Senate had seven conferees. While addressing opioid abuse is bipartisan in nature, there was disagreement on process and content throughout the legislative process. One area of debate was funding for the bill.

The Act passed in the Senate by 90-2 after Democrats followed their colleagues in the House of Representatives and dropped calls for the legislation to include additional funding. Senate Majority Leader Mitch McConnell, called for Senate Democrats to pass the measure, citing support for the legislation by the National Association of Counties, the National League of Cities, the Fraternal Order of Police and more than 200 other groups.

CARA includes several provisions concerning the need for expansion of prevention and education on the misuse of prescription pain killers and heroin. Law enforcement agencies and first responders are permitted to distribute naloxone for the reversal of overdose. Evidence-based treatment and intervention programs for incarcerated individuals and those across the country will be implemented. There will be safe disposal sites for prescription medications to diminish the opportunity for ill use. The Act creates a medication assisted treatment program for pain management and expands states' drug monitoring programs to eliminate doctor shopping.

Now that CARA has passed and has been signed into law by the President, stakeholders will be watching closely for implementing rules, regulations, changes to incentive-based patient surveys, as well as any grant opportunities.

Further discussion of funding may arise as Congress discusses budgetary options in 2017and beyond.

"This is a historic moment, the first time in decades that Congress has passed comprehensive addiction legislation, and the first time Congress has ever supported long-term addiction recovery," said Sen. Rob Portman, a chief author of the legislation. "This is also the first time that we’ve treated addiction like the disease that it is, which will help put an end to the stigma that has surrounded addiction for too long." Read More...

Combining Medications Improve Fibromyalgia Outcomes
Mon, 25 Jul 2016 08:35:38 - Pacific Time
Fibromyalgia was initially thought to be a musculoskeletal disorder. Research now suggests it's a disorder of the central nervous system -- the brain and spinal cord. Researchers believe that fibromyalgia amplifies painful sensations by affecting the level and activity of brain chemicals responsible for processing pain signals.

Now researchers claim that combining pregabalin, an anti-seizure drug, with duloxetine, an antidepressant, can safely improve outcomes in fibromyalgia, including not only pain relief, but also physical function and overall quality of life. Until now, these drugs have been proven, individually, to treat fibromyalgia pain.

"Previous evidence supports added benefits with some drug combinations in fibromyalgia," researchers say. "We are very excited to present the first evidence demonstrating superiority of a duloxetine-pregabalin combination over either drug alone."

This trial compares a pregabalin-duloxetine combination to each monotherapy. Using a randomized, double-blind, 4-period crossover design, participants received maximally tolerated doses of placebo, pregabalin, duloxetine, and pregabalin-duloxetine combination-for 6 weeks.

Primary outcome was measured by daily pain (0-10); secondary outcomes included global pain relief, Fibromyalgia Impact Questionnaire, SF-36 survey, Medical Outcomes Study Sleep Scale, Beck Depression Inventory (BDI-II), adverse events, and other measures.

Based upon these measures, the evidence showed that combining pregabalin and duloxetine for fibromyalgia improves multiple clinical outcomes vs monotherapy.

This study is the latest in a series of clinical trials -- funded by the Canadian Institutes of Health Research (CIHR) -- that Dr. have been conducted on combination therapies for chronic pain conditions. By identifying and studying promising drug combinations, research is showing how physicians can make the best use of current treatments available to patients.

"The value of such combination approaches is they typically involve drugs that have been extensively studied and are well known to health-care providers," says Queen's University researcher Dr. Ian Gilron.

This new research was published in the journal Pain. Read More...

Feds Say "No" to Major Healthcare Mergers
Fri, 22 Jul 2016 08:59:06 - Pacific Time
The U.S. Department of Justice and attorneys general from multiple states and the District of Columbia filed litigation to block Anthem’s proposed acquisition of Cigna and Aetna’s proposed acquisition of Humana, alleging that the transactions would increase concentration and harm competition across the country, reducing from five to three the number of large, national health insurers in the nation.

The department and state attorneys general filed these two merger challenges in the U.S. District Court for the District of Columbia; The complaints allege that the two mergers - valued at $54 billion and $37 billion - would harm seniors, working families and individuals, employers and doctors and other healthcare providers by limiting price competition, reducing benefits, decreasing incentives to provide innovative wellness programs and lowering the quality of care.

Eleven states - California, Colorado, Connecticut, Georgia, Iowa, Maine, Maryland, New Hampshire, New York, Tennessee and Virginia - and the District of Columbia joined the department’s challenge of Anthem’s $54 billion acquisition of Cigna; Eight states - Delaware, Florida, Georgia, Iowa, Illinois, Ohio, Pennsylvania and Virginia - and the District of Columbia joined the department’s challenge of Aetna’s $37 billion acquisition of Humana.

The suit against Anthem and Cigna alleges that their merger would substantially reduce competition for millions of consumers who receive commercial health insurance coverage from national employers throughout the United States; from large-group employers in at least 35 metropolitan areas, including New York, Los Angeles, San Francisco, Denver and Indianapolis; and from public exchanges created by the Affordable Care Act in St. Louis and Denver. The complaint also alleges that the elimination of Cigna threatens competition among commercial insurers for the purchase of healthcare services from hospitals, physicians and other healthcare providers. The merger would eliminate substantial head-to-head competition in all these markets, and it would remove the independent competitive force of Cigna, which has been a leader in the industry’s transition to value-based care.

The lawsuit against Aetna and Humana alleges that their merger would substantially reduce Medicare Advantage competition in more than 350 counties in 21 states, affecting more than 1.5 million Medicare Advantage customers in those counties. Before seeking to acquire Humana, Aetna had pursued aggressive expansion in Medicare Advantage. Aetna, the nation’s fourth-largest Medicare Advantage insurer by membership, has nearly doubled its Medicare Advantage footprint over the past four years. Humana is the nation’s second-largest Medicare Advantage insurer by membership. The lawsuit also alleges that Aetna’s purchase of Humana would substantially reduce competition to sell commercial health insurance to individuals and families on the public exchanges in 17 counties in Florida, Georgia and Missouri, affecting more than 700,000 people in those counties. The lawsuit alleges that by buying Humana, Aetna would eliminate one of its strongest and most capable competitors in these markets.

Anthem, Inc. is headquartered in Indianapolis, Indiana. It is the nation’s second-largest health insurer and the largest member of the Blue Cross and Blue Shield Association. It holds the Blue Cross license in 14 states and provides health insurance to 39 million people. In 2015, Anthem reported over $79 billion in revenues.

Cigna Corp. is headquartered in Hartford, Connecticut. It is the nation’s fourth-largest health insurer. It operates in every state and the District of Columbia and provides health insurance to 15 million people. In 2015, Cigna reported $38 billion in revenues.

Aetna Inc. is headquartered in Hartford, Connecticut. It is the nation’s third-largest health insurer. It operates in every state and the District of Columbia and provides health insurance to 23 million people. In 2015, Aetna reported $60 billion in revenues.

Humana Inc. is headquartered in Louisville, Kentucky. It is the nation’s fifth-largest health insurer, operates in every state and the District of Columbia and provides health insurance to 14 million people. In 2015, Humana reported $54 billion in revenues. Read More...

Santa Barbara Contractor Pleads Guilty in Fraud Case
Fri, 22 Jul 2016 08:58:55 - Pacific Time
The Santa Barbara District Attorney announced that 59 year old Alberto Rodriguez, who lives in Santa Barbara, entered a plea to three felony counts and one misdemeanor count in Santa Barbara Superior Court.

The investigation into Rodriguez and his business, United Seal Coating and Slurry Seal, Inc., began in September of 2013 and was conducted by detectives from the California Department of Insurance along with investigators from the Santa Barbara County District Attorney's Office.

At the time, Rodriguez was performing numerous Public Works contracts for the University of California, Santa Barbara.

One of his workers was injured on the job and filed a workers' compensation claim. Rodriguez denied that the worker was his employee, which was later determined to be false. The investigation into the workers' compensation fraud charges led investigators to other criminal conduct by Rodriguez and his business.

Rodriguez's plead guilty to one felony count of fax fraud for filing a fraudulent tax return under Revenue and Taxation Code section 19705(a)(l); one felony count of Workers' Compensation Insurance Fraud under Insurance Code section 1871.4; one felony count of Supplying False or Fraudulent Payroll Documentation under Unemployment Insurance Code section 2117 .5; and one misdemeanor count of Labor Code section 1779.

Rodriguez will be sentenced on January 18, 2017. It is expected that he will be sentenced to one year in county jail and be ordered to pay restitution to the Employment Development Department in the amount of$65,164.06; The Franchise Tax Board, $24,298; State Compensation Insurance Fund, $77,114.48; and FirstComp Insurance, $2,496.54, for a total of $169,073.08. Read More...

HHS Proposes New Roadmap for Interoperability of Medical Records
Thu, 21 Jul 2016 09:09:59 - Pacific Time
Packaging medical records and moving them over to a PTP, or UR or IMR or the WCAB within the time constraints imposed by law is an incessant, repetitive, and time consuming task for claim administrators.

Yet many health industry experts say patients should not be finding data-sharing a challenge in 2015. In the era of such user-friendly Internet services as Facebook and Google, it is shocking to some that pertinent and sensitive medical information should still live in PDF files attached to emails, or be delivered by fax machine.

Calls for the digitization of health information, with a goal of lowering costs and delivering higher quality care, date back to the Clinton era. Former President George W. Bush also chose the issue as a personal passion project, noting in his 2004 State of the Union address that doctors could save more lives when armed with modern technology.

It was not until 2009, however, that President Obama signed a law that attempted to speed the transition from paper records to electronic records by offering doctors and hospitals incentive payments through Medicare and Medicaid if they used electronic medical records. The law, called the Health Information Technology for Economic and Clinical Health Act, or "HITECH Act," provided roughly $30 billion over 10 years for the payments. It took effect on January 1, 2011. The law supposedly provided incentives for providers to adopt electronic medical records, and as a result hospitals have spent millions, sometimes billions, on computer systems to facilitate the purpose of the HITECH Act..

"The government provided the funding, but private developers created the system," said Dena Mendelsohn, a health policy analyst with Consumers Union, based in San Francisco, "and the medical providers were incentivized to purchase the system. But nowhere in the conversation was it said that these systems had to talk with each other." There is a fancy word for this, it’s called interoperability. Mendelsohn said the inability to share health information across medical systems is slowing down the consumers’ ability to access high-quality health care. Patients who walk into a hospital are complete strangers.

But, what’s happened, experts say, is that private, competing companies sold proprietary software to hospitals that can’t talk with each other. Also, several of the largest electronic health records systems have prioritized billing and regulatory reporting over other aspects of care. And many hospitals are still wedded to "fee for service" models, which reward doctors for pricey procedures and tests, rather than patient outcomes. The medical record vendors are helping these hospitals thrive in the status quo and there is little incentive to share access to the records of those lucrative patients.

"These fee-for-service hospitals are fighting tooth and nail to retain patients - and the vendors are responding to these needs," said Dr. Bob Kocher, one of the key architects of the Affordable Care Act, and a partner who focuses on health care with Venrock, a Palo Alto venture capital firm. "They [some hospitals] have not wanted features that make it easier to share information."

Now the government is trying to address the interoperability problem. Through April 3, the U.S. Department of Health and Human Services was taking public comments on a new "roadmap" designed to approve more uniform technical standards for electronic records.

It’s a huge undertaking. Arien Malec, a former technology coordinator for the department, said most doctors are now using some type of electronic records, but overhauling the entire system will take time. "This is like 15 percent of the economy going from the Stone Age to the Internet age in five years," Malec said. "It’s like going from paper ledgers to online banking in five years. Wow, that would be painful."

The payoff of getting it right is big, experts say. Benefits of seamless electronic medical records including personalized medicine, better preventative care and accessing doctors and medical information through mobile devices such as smart phones and tablets. And for claim administrators, the movement of medical records from PTP to IMR may end up as easy as point and click. Read More...

Owners of San Jose Chiro Spa Sentenced for Billing Fraud
Thu, 21 Jul 2016 09:09:52 - Pacific Time
The owners and employees of a popular San Jose spa have been sentenced for health insurance fraud, after an investigation showed that they were billing insurance companies thousands of dollars for chiropractic treatments when in reality they were providing free "mani-pedis."

Code named "Operation Nail Polish," the year-long investigation by the Santa Clara County District Attorney’s Office and the California Department of Insurance revealed fraudulent billing to several insurance companies and large self insured employers resulting in over $7,000,000 in losses. It is the largest medical billing fraud case to be prosecuted in this county.

The investigation began in late 2012. An undercover investigator went into the Landess Avenue spa numerous times for manicures and pedicures. The employees took insurance information and then illegally charged the investigator’s insurance company for chiropractic treatments. The undercover investigator received eight free "mani-pedis." The insurance company was charged more than $2,000. The investigation uncovered that this illegal practice was being used for many other clients. The investigation estimated that about 90 percent of the spa’s practice was fraudulently billed.

The owners of San Jose Chiro Spa and two employees. Chiropractor Tracy Thu Khac Minh Le, 39, her husband Thanh Trung Tran, 38, and employees, Lillian Yenloan Be, 39, and Honggam Thi Tran, 37, all of San Jose, were arrested on May 21, 2014 and were each charged with eleven counts of health care insurance fraud.

On July 1, 2016, Tracy Le was sentenced to serve two years in county jail and to 24 years’ formal probation. Lillian Be was sentenced to serve six months in county jail and to 12 years’ formal probation. Honggam Tran was sentenced to serve 10 months in county jail and to 24 years’ formal probation. The three defendants were also ordered to pay $508,631.40 to Blue Shield of CA, $68,141.04 to HealthComp, $858,448.39 to Aetna, $2,752,501.37 to Optum, $3,117,813.95 to Anthem Blue Cross, and $2,427.79 to the Santa Clara County District Attorney's office.

"Non-therapeutic massages, facials, manicures and pedicures are great, but they are not medical treatments," prosecutor Christopher Kwok said. "Portraying them as medical treatments to get insurance reimbursement is a crime."
Read More...

Bristol-Myers Squibb Settles Kickback Case for $30 Million
Wed, 20 Jul 2016 07:50:07 - Pacific Time
The California Department of Insurance reached a $30 million settlement with pharmaceutical giant Bristol-Myers Squibb over allegations of drug marketing fraud and physician kickbacks. The settlement stems from charges in a whistleblower lawsuit filed by three former Bristol-Myers Squibb sales representatives. The California Department of Insurance joined the whistleblowers in the lawsuit.

This lawsuit was initially filed by former Bristol-Myers Squibb employees Michael Wilson and Lucius and Eve Allen, all of whom are represented by the law firm of Waters Kraus & Paul in Los Angeles. Lucius Allen is a former Los Angeles Lakers basketball player.

The plaintiffs alleged that Bristol-Myers Squibb violated the California Insurance Frauds Prevention Act by employing and using sales representatives for the purpose of defrauding private commercial health insurers by using kickbacks to procure patients or clients. The kickbacks were designed to increase physician prescriptions of several drugs produced by Bristol-Myers Squibb including Pravachol, used to lower cholesterol. As part of its alleged scheme, Bristol-Myers Squibb provided physicians and their families with gifts and cash to induce physicians to increase prescriptions for Bristol-Myers Squibb products.

Enticements included box suites at sporting events where physicians were provided tickets, food, drinks, and parking. Enrollment in a Lakers basketball camp for doctors and their children. Pre-paid golf outings at luxurious golf courses. Tickets for physicians and their families to see Broadway plays in California cities.Monetary incentives given to doctors responsible for prescription-drug decisions for formularies. Lavish dinners, resort hotel trips, and concert tickets, given to doctors who were large-volume prescribers, to induce more prescriptions in the future.

Insurers alleged to have been defrauded: Prudential, Cigna, Maxicare, Blue Cross/Blue Shield of California (name of entity at time lawsuit was filed), HMSA Health Plan Hawaii, Scan Health Plus, United Health Plan, CalOptima, Argus, Merck-Medco, PCS, Prosever, Express RX/Value RX/DPS, Caremark, MedImpact/MedCare, Envoy, Aetna Pharmacy Management, Pharmaceutical Care Net, Advance PCS, Rx America, Prescription Solutions, WellPoint Pharmaceutical Management, First Health, Save-Rx, PacifiCare, and Health Net.

Medications in kickback scheme included: Plavix, Pravachol, Monopril, Abilify, Glucovance, Metaglip, Glucophage, Glucophage XR, Cefzil, BuSpar, Serzone, Tequin, Pravigard, and Avapro.

In addition to the $30 million payment, the settlement agreement requires Bristol-Myers Squibb to affirm its commitment to abiding by California laws regulating its sales representatives' interactions with doctors, including compliance with pertinent provisions of the California Health and Safety Code and the California Insurance Frauds Prevention Act. Among other requirements, Bristol-Myers Squibb is required to utilize a Comprehensive Compliance Program that is in accordance with the Office of Inspector General's "Compliance Program Guidance for Pharmaceutical Manufacturers."

As required by the state's insurance whistleblower law, Bristol-Myers Squibb's settlement payment will be divided between the whistleblowers and the State of California. The state will receive $14.1 million, to be used to enhance the investigation and prevention of insurance fraud. Bristol-Myers Squibb did not admit to wrongdoing in the settlement agreement. Read More...

53 Big Name Wrestlers File Concussion Class Action
Wed, 20 Jul 2016 07:49:55 - Pacific Time
A class-action lawsuit against World Wrestling Entertainment was filed Monday on behalf of dozens of pro wrestlers.The suit alleges that the wrestlers incurred "long term neurological injuries" in the course of working for the company, while it "routinely failed to care" for them " in any medically competent or meaningful manner" and even "fraudulently misrepresented and concealed" the nature and extent of those injuries.

The 214 page complaint in the case of Laurinaitis et al v. World Wrestling Entertainment addressed the possibility of the company invoking a contact-sports exception for negligence liability by stating, "WWE wrestling matches, unlike other contact sports, involve very specific moves that are scripted, controlled, directed and choreographed by WWE. As such the moves that resulted in Named Plaintiffs' head injuries were the direct result of the WWE's actions."

The complaint alleges that the "wrestling moves that involve the occupational head trauma that causes CTE and associated diseases from the accumulated effects of TBIs [traumatic brain injuries] are the result of wrestling moves and maneuvers that were performed 'correctly' by the Plaintiffs," the lawsuit said. "In other words, the head trauma that has resulted in injury is the accumulated effect of many impacts to the Plaintiffs' heads that occurred on a regular, routine basis during their WWE career."

53 wrestlers including big names like "Superfly" Jimmy Snuka and Joe "Road Warrior Animal" Laurinaitis are the named plaintiffs. In 2015 Snuka was arrested for the 1983 death of his then-girlfriend Nancy Argentino, but he was ruled not mentally competent to stand trial just this past June.

The plaintiffs also include a number of former WWE stars from the 1980s and 1990s, including Ax and Smash of the tag team Demolition, Slick and King King Bundy, but you'll also find a few names like Sabu, Shane Douglas, and Chavo Guerrero Sr., all of whom wrestled for the bulk of their respective careers in different federations, some of which - including WCW and ECW - now fall under the WWE banner.

WWE superstars are classified as independent contractors, so unlike football or hockey, there's no union to represent them. The lawsuit makes the claim that the independent contractor designation is incorrect.

The WWE responded with a statement, saying (via Bloomberg) "This is another ridiculous attempt by the same attorney who has previously filed class-action lawsuits against WWE, both of which have been dismissed. A federal judge has already found that this lawyer made patently false allegations about WWE, and this is more of the same."

The lawyer in question, Massachusetts-based Konstantine Kyros, has previously filed lawsuits against the WWE, with similar claims. The company has succeeded in having some of those suits dismissed, but one involving former WWE wrestlers Vito LoGrasso and Evan Singleton is still being contested in court.

"Plaintiffs were professional wrestlers who were financially compensated to engage in an activity in which physical violence was a known and even purposeful part of the activity," U.S. District Judge Vanessa Bryant wrote in March, while dismissing complaints against the WWE brought by Russ McCullough, Matthew "Luther Reigns" Wiese, Ryan Sakoda and William Albert "Billy Jack" Haynes, all of whom were represented at least partially by Kyros. "They were injured by other participants in what the plaintiffs describe as a 'scripted' performance and thus in a manner that the plaintiff knew or should have reasonably anticipated."

The NFL and NHL have also seen class-action lawsuits related to players suffering brain injuries. In April, a federal judge upheld a settlement between the NFL and thousands of former players that could result in total payments of $1 billion. Read More...

Industry Mourns Death of WorkcompCentral CEO David DePaolo
Tue, 19 Jul 2016 08:23:51 - Pacific Time
56-year-old David John DePaolo, the CEO of WorkCompCentral.com died on Sunday afternoon on Yerba Buena Road in the Santa Monica Mountains. while riding on his Honda 250 motorcycle that he nicknamed "the Sewing Machine."

Authorities report that he was riding east on Yerba Buena Road in an unincorporated area of Ventura County near Vedder Motorway when "for reasons that are still under investigation" the motorcycle veered right into the road's shoulder to the south, hitting a dirt embankment shortly after 4 p.m. The cause of the incident is still under investigation by the California Highway Patrol.

David graduated from Pepperdine University school of law in 1984. While in law school he noticed the building prominently located along the 101 freeway that sported the name of its law firm occupants "Miller and Folse - Attorneys at Law." He stopped by one day to greet one of the partners, Rene Folse, as he announced he wanted to go to work for the firm when he graduated. At the time he did not know that the firm specialized in workers' compensation defense.

As promised, David arrived again after graduation announcing that he was ready to go to work. He was hired, and eagerly learned the workers' compensation defense industry. He remained with the Miller & Folse firm for the next fifteen years. He moved on to become the founder of WorkCompCentral.com an industry leading online publication.

David was the consummate competitive athlete. He was an avid bicyclist, surfer, an instrument rated and passionate airplane pilot, and his competitive skills were an excellent compliment to his professions as a litigator, and as the entrepreneur who formed WorkCompCentral.com. He was tireless and unrelenting when he set his mind toward any goal.

You will not find anyone who did not hold him in high regard. Positive comments were immediately posted to the WorkCompCentral article announcing this tragedy.

Christine Baker, DIR Director stated in her post "My most profound sympathies to David’s family at this time. The workers’ compensation world has lost a visionary and it is indeed a sad day."

Alex Swedlow, President of the California Workers' Compensation Institute said "A very dark, sad day. David was an intelligent, empathic and totally original voice and presence. I will miss him as a friend and colleague. Wishing all his family and friends peace and healing memories.

And the industry top litigators such as Saul Allweiss said "What a horrible and tragic loss. David was a visionary in his creation of WorkCompCentral, a leader in the Workers Compensation Community and a dear dear friend."

And even his competitors have kind words. Robert Wilson owner of competing website Workerscompensation.com said "David DePaolo was an oversized personality packed into a thin and agile frame. He was passionate and robust, yet reflective and compassionate. He was both funny and deadly serious. He was one of a kind. David’s death is a tragic loss for his family, his company, and the industry he served." and Robert went on to say "But the loss is much greater than the personal feelings for a competitor I grew to like and respect over the years. David DePaolo lived life to the fullest, and his robust character, brash honesty and unquestioned integrity have forever and indelibly influenced our industry for the better. His loss is a tremendous one for workers’ compensation."

David is survived by his wife, Anne; daughter, Nichole; and son, Anthony, and the rest of us who will never forget him. Read More...

Applicant Attorney Admits He Was "Greedy and Stupid"
Tue, 19 Jul 2016 08:23:42 - Pacific Time
Sean E. O’Keefe was a well-known applicant attorney in San Diego, Public records list him as the lawyer on about 9,000 injured workers’ cases. And he admitted to a grand jury that he paid cash for the bulk of the clients who walked through his door.

In recently released court records summarized in an article by the Center for Investigative Reporting, O’Keefe testified that he paid a firm to send him two-thirds of his clients. He also promised the recruiter, Carlos Arguello, that he would make sure those workers ran up bills at certain medical providers who offered MRIs, sleep studies, psychology, medications and toxicology screenings.

"I was greedy and stupid," O’Keefe told a San Diego grand jury Dec. 1. "Clients or patients were essentially treated as commodities and billing opportunities."

O’Keefe’s revelations came in testimony recently unsealed in one of more than a dozen criminal cases against more than 100 people who made their living off the medical care rendered to California’s injured workers.

His testimony highlights Arguello’s recruitment firm, Centro Legal, as a big player. It was so efficient, O’Keefe said, that the kickback cash flow was "almost universal" in the treatment of Latino injured workers in Southern California.

The testimony sheds light on the way injured workers are used for profit, regardless of their medical needs. It also reveals the ongoing efforts of prosecutors to clean up a system that California lawmakers and officials are charged with governing.

O’Keefe, now barred from practicing law, testified that he earned about $1.1 million a year representing injured workers, mostly by collecting a 15 to 18 percent fee from the settlement of their injury cases. He pleaded guilty in August 2014 to federal charges of health care fraud and agreed to cooperate with prosecutors in hopes for a more lenient sentence.

In the recently unsealed San Diego County Superior Court testimony, he broke down how the kickback scheme worked. O’Keefe said he paid Arguello for each client. Arguello has pleaded not guilty to federal charges related to his alleged patient recruiting and referral scheme.

An FBI agent who testified in the case said Arguello’s firm engaged in "guerrilla marketing," passing out cards at the border crossing to Tijuana, Mexico; putting them on parked cars; and displaying them in restaurants. The cards advised workers that they could earn up to $4,000 per month if they were injured at work.

O’Keefe said Arguello told him which chiropractor or doctor to which the patient would be referred. The doctor, in turn, would cut his or her own deals over the patient’s referrals for MRIs, sleep studies, nerve tests and medicated pain creams. "And so whether I was paying for a referral or receiving a bribe, I could also be exchanging those clients for other clients, so to speak, more clients," O’Keefe testified.

O’Keefe noted that he didn’t send all of his clients into Arguello’s network of preferred doctors and chiropractors. He said he would engage in some "smoke and mirrors" and "spread the clients around a little bit" so workers’ compensation insurers wouldn’t cry foul over his practices. "Otherwise," he testified, "you couldn’t do what I’ve been doing for decades." Read More...

Past Week News Archive


WCAB Rules of Practice and Procedure Do Not Apply to UR Process: Mon, 18 Jul 2016 12:46:32 - Pacific Time: Read More...


Study Claims Fewer Painkillers Prescribed in 17 Medical Marijuana States: Mon, 18 Jul 2016 12:46:25 - Pacific Time: Read More...


DWC Reports on SB 863 Progress: Fri, 15 Jul 2016 10:44:00 - Pacific Time: Read More...


WCIRB Summarizes Past and Future Initiatives: Fri, 15 Jul 2016 10:43:53 - Pacific Time: Read More...


Buena Park Doctors' License Revoked - Three Years After Fraud Conviction!: Thu, 14 Jul 2016 10:21:31 - Pacific Time: Read More...


Appeals Court Delivers Another ObamaCare Law Blow: Thu, 14 Jul 2016 10:21:24 - Pacific Time: Read More...


WC Insurance Industry Returns to "Unsustainable" Profitability: Wed, 13 Jul 2016 08:52:40 - Pacific Time: Read More...


Insurance Agent Faces Embezzlement Charges: Wed, 13 Jul 2016 08:52:33 - Pacific Time: Read More...


Filmmaker Sentenced for Manslaughter - Then Awarded Psyche Benefits?: Tue, 12 Jul 2016 10:25:29 - Pacific Time: Read More...


Declining Major Disease Rates May Complicate Reserving Estimates: Tue, 12 Jul 2016 10:25:21 - Pacific Time: Read More...