Author: WorkCompAcademy

The Department of Justice announced criminal charges against 21 defendants in nine federal districts across the United States for their alleged participation in various health care related fraud schemes that exploited the COVID-19 pandemic. These cases allegedly resulted in over $149 million in COVID-19-related false billings to federal programs and theft from federally-funded pandemic assistance programs. In connection with the enforcement action, the department seized over $8 million in cash and other fraud proceeds.

The names of those involved and summaries of each case in the enforcement action are available on the department’s website.This announcement builds on the success of the May 2021 COVID-19 Enforcement Action and involves the prosecution of various COVID-19 health care fraud schemes.

Several cases involve defendants who allegedly offered COVID-19 testing to induce patients to provide their personal identifying information and a saliva or blood sample. The defendants are alleged to have then used the information and samples to submit false and fraudulent claims to Medicare for unrelated, medically unnecessary, and far more expensive tests or services. In one such scheme in the Central District of California, two owners of a clinical laboratory were charged with a health care fraud, kickback, and money laundering scheme that involved the fraudulent billing of over $214 million for laboratory tests, over $125 million of which allegedly involved fraudulent claims during the pandemic for COVID-19 and respiratory pathogen tests. In two separate cases in the District of Maryland and the Eastern District of New York, owners of medical clinics allegedly obtained confidential information from patients seeking COVID-19 testing at drive-thru testing sites and then submitted fraudulent claims for lengthy office visits with the patients that did not, in fact, occur.

The proceeds of these fraudulent schemes were allegedly laundered through shell corporations in the United States, transferred to foreign countries, and used to purchase real estate and luxury items.

In another type of COVID-19 health care fraud, defendants allegedly exploited policies that the Centers for Medicare and Medicaid Services (CMS) put in place to enable increased access to care during the COVID-19 pandemic. In the Southern District of Florida, one medical professional was charged with a health care fraud, wire fraud, and kickback scheme that allegedly involved billing for sham telemedicine encounters that did not occur and agreeing to order unnecessary genetic testing in exchange for access to telehealth patients. Late last year, one defendant previously was sentenced to 82 months in prison in connection with this scheme.

Charges were also filed against manufacturers and distributors of fake COVID-19 vaccination record cards who, according to the allegations, intentionally sought to obstruct the HHS and Centers for Disease Control and Prevention in their efforts to administer the nationwide vaccination program and provide Americans with accurate proof of vaccination. For example, in the Northern District of California, three additional defendants were charged in a scheme to sell homeoprophylaxis immunizations for COVID-19 and falsify COVID-19 vaccination record cards to make it appear that customers received government-authorized vaccines. One defendant allegedly misused her position as the Director of Pharmacy at a northern California hospital to obtain real lot numbers for the Moderna vaccine that were then used to falsify COVID-19 vaccination record cards.

Another defendant in the Northern District of California pleaded guilty to the scheme in April 2022. U.S. Attorney Hinds described additional schemes being prosecuted in the Northern District of California in a video posted here.

In addition, in a separate case in the Western District of Washington, one manufacturer was charged in the multistate distribution of fake COVID-19 vaccination record cards after allegedly telling an undercover federal agent that “until I get caught and go to jail, [expletive] it I’m taking the money, ha! I don’t care.”  

Further, the Center for Program Integrity, Centers for Medicare & Medicaid Services (CPI/CMS) separately announced that it has taken an additional 28 administrative actions against providers for their alleged involvement in fraud, waste, and abuse schemes related to the delivery of care for COVID-19, as well as schemes that capitalize upon the public health emergency.

A former Orange County chiropractor was sentenced this week to 70 months in federal prison for stealing from health insurers by fraudulently causing the submission of $2.2 million in billings for chiropractic services never provided, medical diagnoses never given, office visits that never occurred, and medical devices that were falsely prescribed.

57 year old Susan H. Poon, of Dana Point, was sentenced and ordered her to pay $1,379,622 in restitution to her victims. Poon’s chiropractic license was revoked in July 2019, according to the California Department of Consumer Affairs.

At the conclusion of a five-day trial in June 2021, a federal jury found Poon guilty of five counts of health care fraud, three counts of making false statements relating to health care matters, and one count of aggravated identity theft. Jurors deliberated about eight hours over two days before convicting her of all nine felony healthcare fraud charges.

At the time of her arrest, she operated Head 2 Toe Wellness in Rancho Santa Margarita, where prosecutors said she defrauded Anthem and Aetna insurance companies hundreds of times between January 2015 and April 2018.

She was among 34 people charged in 2019 in what authorities described as a multistate investigation into $257 million in fraudulent Medicare and Medicaid billing. Prosecutors pinned $2.2 million of that on Poon by identifying dozens of patients with hundreds of procedures that were simply made up. Not only were the procedures never performed, in many instances, the patients had never seen Poon and didn’t know she was using their identities to get money from insurance companies..

The patients that Poon claimed to have met with and treated were dependents – such as the spouses and children – of Costco Wholesale Corp. and United Parcel Service Inc. employees. Poon obtained the personal identifying information by attending health fairs at various UPS warehouses and Costco locations and soliciting such information from employees.

“[Poon’s] scheme consisted of interdependent moving parts,” prosecutors wrote in a sentencing memorandum. “She lied about visits with, diagnoses of, and treatments given to actual people and their children. She sent fraudulent Durable Medical Equipment (DME) prescriptions – predicated on visits with these patients that never happened – to a DME manufacturer. And she fabricated medical documentation containing the personal identifying information of these ‘ghost’ patients to mislead an auditor.”

In total, Poon billed and caused to be billed approximately $2.2 million through her scheme.

The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) Governing Committee voted to authorize the WCIRB to submit a September 1, 2022 Pure Premium Rate Filing to the California Insurance Commissioner.

The filing will propose advisory pure premium rates that will be on average 7.6 percent above the average approved September 1, 2021 advisory pure premium rates.

The proposed September 1, 2022 advisory pure premium rates, in addition to reflecting the loss experience as of December 31, 2021 excluding COVID-19 claims, also reflect an average 0.5 percent provision for the projected cost of COVID-19 claims to be incurred on policies incepting between September 1, 2022 and August 31, 2023.

In his presentation to the Governing Committee, WCIRB Executive Vice President and Chief Actuary Dave Bellusci noted that the average of the proposed September 1, 2022 advisory pure premium rates are fairly consistent with the average of the advisory pure premium rates proposed by the WCIRB in the September 1, 2021

Pure Premium Rate Filing. Mr. Bellusci noted that, in effect, the increases in loss development and claim frequency over the last year were largely offset by increased estimates of wage inflation.

The WCIRB expects to submit its September 1, 2022 Pure Premium Rate Filing to the California Department of Insurance (CDI) during the week of April 25, 2022. The CDI will schedule a public hearing to consider the filing, and once the Notice of Proposed Action and Notice of Public Hearing is issued, the WCIRB will post a copy in the Filings and Plans section of the WCIRB website.

Tashay Lenzy worked as a barista at a Ralphs grocery store in Los Angeles, California. In September 2016, she fell and injured her knee when she was struck by the door of a service elevator in the store where she worked as a coffee barista.

She filed an application for adjudication of her workers’ compensation claim with the Workers’ Compensation Appeals Board in which she listed “Ralphs” as her employer. She settled her claim for a lump sum payment of $50,000. The compromise and release identified Kroger as her employer. The order approving the compromise and release identified the defendant as “The Kroger Company, dba Ralphs Grocery Co.”

While Lenzy’s workers’ compensation claim was still pending, she commenced a civil action for negligence against Ralphs and Thyssenkrupp Elevator Corporation.

Ralphs moved for summary judgment claiming the case was barred by the workers’ compensation exclusive remedy rule. The trial court denied plaintiff’s evidentiary objections and granted Ralphs’ motion for summary judgment.

The summary judgment was affirmed by the Court of Appeal in the unpublished case of Lenzy v Ralphs Grocery Company, (April 2022) B308069.

On appeal, Lenzy contends Ralphs did not carry its initial burden to establish two facts required for summary judgment based on the workers’ compensation exclusive remedy rule: (1) that Ralphs (not just Kroger) was plaintiff’s employer, and (2) that Ralphs (not just Kroger) carried workers’ compensation insurance or possessed a certificate of self-insurance.

Because the Workers’ Compensation Act intends comprehensive coverage of injuries in employment,it defines employment broadly in terms of service to an employer and includes a general presumption that any person in service to another is a covered employee. (§§ 3351, 5705, subd. (a) . . . .) (S.G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 354.

The Court of Appeal resolved these issues by concluding that “Plaintiff’s suggestion that Kroger’s involvement in the resolution of her workers’ compensation claim raises doubts as to the identity of her employer misses the mark because the exclusive remedy rule applies even if she was an employee of both Ralphs and its parent company.

“As to insurance, Ralphs’ initial summary judgment burden was satisfied by plaintiff’s statement that Ralphs was insured in her application for adjudication of her workers’ compensation claim and the order approving her workers’ compensation settlement that identified the defendant as Kroger doing business as Ralphs”

Allen Levrault claimed to have incurred continuous trauma injuries while employed as a professional baseball player for various teams. His paying history within the CT period was stipulated to be the Milwaukee Brewers June 10, 1996 to February 1, 2002 – – Oakland Athletics February 1, 2002 to October 15, 2002 – – Miami Marlins December 12, 2002 to October 15, 2003  – – and the Seattle Mariners April 14, 2004 to May 18, 2004.  Levrault resolved his claim with the Brewers by way of Compromise and Release for the sum of $3,000.

The WCJ concluded that there was no subject-matter jurisdiction over the Seattle Mariners, and that applicant cannot recover against the Miami Marlins based upon the reciprocity provisions of former Labor Code section 3600.5(b).

Reconsideration was granted in the panel decision of Levrault v Mariners, Marlins et. al. (April 2022) ADJ8763377.

Applicant contends that the WCJ erred in finding reciprocity under section 3600.5(b), because Florida’s reciprocity statute was not in effect at the time of his employment with the Marlins, and also that the WCJ should have admitted medical records submitted after the Mandatory Settlement Conference.

Labor code 3600.5 limits the general principles of WCAB jurisdiction in specific circumstances. Because applicant’s claim was filed prior to September 15, 2013, the relevant subdivision here is former section 3600.5(b).

Because Florida passed its reciprocity statute in 2011, after applicant’s injurious exposure but prior to the filing of his California compensation claim, the parties’ disagreement focuses on whether former section 3600.5(b)’s reciprocity requirements must be satisfied at the time of the injurious exposure, or whether it is sufficient that reciprocity exists at the time a claim is filed.

Here, the plain language of former section 3600.5(b) requires that the conditions for application of the exemption – including the reciprocity provisions of subdivision (b)(1)(A) & (B) – apply “while such employee is temporarily within this state doing work for his or her employer[.]” (former § 3600.5(b)(1), emphasis added.)

Accordingly, the exemption is not applicable to applicant’s claim.This result is in accord with past panel decisions such as in Roberts v. Tampa Bay Lightning (2016) ADJ9065158, 2016 Cal. Wrk. Comp. P.D. LEXIS 404.

Turning to the jurisdiction issue, the WCJ made clear that even if subdivision (b) of section 3600.5 does not apply to applicant’s claim, she would have found the claim barred by Federal Insurance Co. v. Workers’ Comp. Appeals Bd. (Johnson) (2013) 221 Cal.App.4th 1116, because applicant’s employment with the Marlins did not constitute a significant connection or nexus with the State of California.

Here, applicant testified – and defendants do not contest – that he was regularly employed in California during 1998 and 2002 while playing for the Ports and the River Cats, minor league affiliates of the Brewers and the Athletics respectively.

This constitutes a sufficient relationship between applicant’s injuries and the State of California to satisfy the Johnson due process requirement of a significant nexus between applicant’s injuries and this state.

Turning to the issue of the admissibility of post MSC medical reports. the WCJ, the most important reason she decided to find these reports inadmissible was a belief that applicant’s attorney had misled the court about applicant’s ability to appear for the original July 2017 trial date; the WCJ continued the matter as a result of representations from applicant’s attorney that applicant could not travel to California for trial because of his recent surgery, but applicant did in fact travel to California during that very period to obtain the post-surgery QME reports in question.

In resolving this issue the panel stated “Although we sympathize with the WCJ’s frustration at what appears to have been at the very minimum extremely questionable representations from applicant’s counsel, we disagree that the remedy here was to refuse to admit medical evidence that appears undoubtedly relevant to assessing applicant’s level of disability. If the WCJ believed that applicant’s attorney had misled the court in order to obtain a continuance of the trial under false pretenses, the remedy for that was sanctions against applicant’s attorney, pursuant to section 5813.”