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A Southern California doctor facing 77 criminal counts of insurance fraud has attacked a new state law that prevents him and his medical groups from collecting any of their fees for treating workers’ compensation patients.

In another federal lawsuit against California’s two top workers’ compensation officials, Dr. Eduardo Anguizola claims an anti-fraud law that took effect Jan. 1 violates his rights to due process, to make a contract and to hire and pay his criminal defense attorney.

Plaintiffs include Vanguard Medical Management Billing, One Stop Multi-Specialty Medical Group, One Stop Multi-Specialty Medical Group & Therapy and Nor Cal Pain Management Medical Group: medical billing companies and other businesses connected to the doctor’s practice. The sixth plaintiff is David Goodrich, the Chapter 11 bankruptcy trustee of another business, Allied Medical Management.

Anguizola, 66, is a pain-management doctor who has practiced in Santa Ana for decades. “He is highly respected in both the medical community and the Latino community for his work providing needed care to injured workers,” his lawsuit states.

Three years ago, he was one of 15 doctors, pharmacists and business owners indicted on charges of defrauding insurers of more than $100 million for a very strong – even toxic – prescription analgesic cream made from three expensive prescription drugs. The Orange County District Attorney’s Office also charged the cream’s developer, Kareem Ahmed, and two others with involuntary manslaughter in the death of a small child who ingested the cream. Prosecutors said Ahmed paid $35 to $72 for each tube of the cream but billed insurance companies $1,200 to $1,900 for them.

Ahmed allegedly paid about $25 million in kickbacks to medical providers, including $2.3 million to Anguizola, for prescribing the cream to patients, the district attorney said in an August 2014 statement.

While the law ostensibly was designed to deny medical criminals fraudulent fees, Anguizola et al. claim in the lawsuit that it is an attempt to keep doctors who face criminal charges from defending themselves in court.

“Labor Code Section 4615 represents California’s legislative response to complaints by local district attorneys that defendants who were merely charged, but not convicted, of medical fraud offenses, were using income from their professional practices to pay for their legal defense,” Anguizola says in his May 17 complaint.

The law “represents a money grab for assets that are unconnected to any charged activity and intentionally cuts off untainted funds that providers need to retain lawyers,” Anguizola says in a request for a preliminary injunction. “Now that the doctors have provided a service in reliance on their contractual right to payment, the California Legislature has suddenly interfered, leaving doctors uncompensated and virtually incapable of being compensated,” the motion states.

Courthouse News reports that Christopher Jagard, chief counsel for the industrial relations department, said in an emailed statement that he is confident the law will be upheld. “These reforms are not only entirely appropriate and constitutional, but are important to ensuring integrity within the workers’ compensation system and protecting injured workers from fraudulent medical practices,” he said.

The plaintiffs’ attorney, M. Cris Armenta of Manhattan Beach, said to Courthouse News the complaint and motion speak for themselves and declined further comment.

Anguizola’s defense attorney, Katherine Corrigan, did not return a Courthouse News call about the case. Ahmed’s attorney, Benjamin Gluck, said he cannot comment on it.

Anguizola has pleaded not guilty to all charges. Yet “because of the mere fact that charges have been made,” all the lien debt owed him by insurers is frozen. His “financial situation is dire, and he cannot afford a defense attorney.” He estimates his defense costs will be more than $250,000. He says that is the real point of Labor Code Section 4615.

The lawsuit quotes Baker, speaking at an annual workers’ compensation event in March,’ apparently explaining the provision: “When we had our fraud meetings across various groups, the DA’s were the ones who said we are in the courts trying to convict the doctors‘….. ‘Can you do something about it?’ …… Their defense was getting paid for by the liens, ….. And we have stayed all those liens.” (Ellipses in complaint.)

That shows the purpose of the law was to interfere with providers’ Sixth Amendment right to attorneys, according to the motion for a preliminary injunction. “The law encourages prosecutors simply to charge medical providers with fraud – regardless of the evidence – knowing that merely to charge is to remove the ability to defend.”

Anguizola et al. say the law also constitutes an unconstitutional illegal taking.

A hearing on their motion for a preliminary injunction is set for June 19 before U.S. District Judge George Wu in Los Angeles.