In 2002, the California Insurance Guarantee Corporation Association initiated a proceeding against Premier Medical Management Systems, Inc. in which it alleged that Premier engaged in billing fraud, fee splitting and the unauthorized practice of medicine. A number of other like actions were filed which were consolidated in 2004. At some point, two of Premier’s executives, David Wayne Fish and Birger Greg Bacino, as well as Premier itself, were criminally charged with filing false and fraudulent claims, filing false tax returns and unlawfully receiving compensation for the referral of clients. Fish and Bacino entered into a plea bargain in 2010 under which they agreed to dismiss with prejudice lien claims filed by the “Premier Providers” that were listed in the October 17, 2006 letter of representation provided to the WCJ by the lawfirm of Riley and Reiner

Champion Medical Group, a California Corporation doing business as Universal Psychiatric Medical Center, Inc, was one of many lien claimants represented by Premier Medical Management Systems, Inc. Universal assigned some of its liens to Premier for purposes of collection. As part of a plea bargain Premier dismissed the lien claims of 109 entities, Universal’s included. The workers’ compensation administrative law judge upheld the dismissal of Universal’s claim over its objections and the WCAB denied Universal’s petition for reconsideration without issuing an opinion of its own.

Universal claims that it was not a Premier Provider; that Universal only hired Premier to perform billing and collection services and had no authority to dismiss its liens, In response the WCJ gave 10 reasons why Premier had the power to dismiss liens of the Premier Providers including the Universal liens with prejudice.

The Court of Appeal in the unpublished opinion of Universal Psychiatric Medical Center, Inc. v WCAB ruled that “as it turns out, none of these reasons apply to Universal.” In rejecting the decision of the WCAB, the Court of Appeal went on to say that the “fundamental flaw in the WCJ’s reasoning is that the WCJ analyzed and addressed issues that were common to most of the lien claimants, whom the parties have chosen to designate collectively as the Premier Providers, and that the WCJ ignored the facts that were unique to Universal’s case. That is, the WCJ validated the resolution of the global case involving over 100 Premier Providers but failed to address Universal’s case. As it turns out, there is evidence that Universal did not authorize Premier to dismiss its liens. Concomitantly, the entire body of evidence on which the WCJ relied to find that Universal did authorize Premier to dismiss its liens is irrelevant to Universal, however relevant it may be to the Premier Providers. In fact, there is evidence that Universal cannot be included in the class of Premier Providers.”

The decision of the Workers’ Compensation Appeals Board denying Universal’s petition for reconsideration was annulled and the case was remanded to the Workers’ Compensation Appeals Board with directions to grant the petition for reconsideration and to enter an order vacating the dismissal of Universal’s liens and to conduct such further proceedings as are consistent with this opinion.