Author: WorkCompAcademy

The California Insurance Guarantee Association provides funding when one of its member insurers becomes insolvent and unable to pay its insureds’ claims. California state law prohibited CIGA from reimbursing state and federal government agencies, including Medicare.

CIGA filed this declaratory action in federal court, after Medicare paid for and demanded reimbursement from CIGA for medical expenses of certain individuals whose workers’ compensation benefits CIGA was administering. The federal district court ruled in favor of Medicare, concluding that federal law preempted California law to the extent it prohibited CIGA from reimbursing Medicare.

The 9th Circuit Court of Appeal reversed in the published case of California Insurance Guarantee Association v Alex M. Azar, Secretary of HHS.

Medicare regulations define “primary plan” to mean, “in the context in which Medicare is the secondary payer, a group health plan or large group health plan, a workers’ compensation law or plan, an automobile or liability insurance policy or plan (including a self-insured plan), or no-fault insurance.” 42 C.F.R. § 411.21 (emphasis added); accord 42 U.S.C. § 1395y(b)(2)(A). CIGA does not fall within the plain meaning of this definition because it is not a workers’ compensation law or plan.

CIGA is “an insurer of last resort” and thus “assumes responsibility for claims only when no secondary insurer is available.”

The Court went on to say that “It makes little sense to interpret the statutory phrase ‘primary plan’ to refer to a payer of last resort. The Medicare statute describes Medicare only as ‘secondary.’ Under agency regulations, the term ‘secondary’ refers to benefits that ‘are payable only to the extent that payment has not been made and cannot reasonably be expected to be made under other coverage that is primary to Medicare.'”

Because CIGA is not a primary plan under the Medicare Act’s secondary payer provisions, it has no obligation to reimburse CMS for conditional payments made on behalf of workers’ compensation insureds. Therefore, the district court was reversed and the case remanded for further proceedings consistent with this opinion.

San Diego chiropractor, George Reese, with offices on El Cajon Boulevard, was indicted in 2015 for referring patients to a Los Angeles area medical service provider. Foremost Shockwave Solutions in return for bribes.

The bribes were set by the conspirators at $100 per patient and paid through an intermediary. After taking a cut amounting to $25 per patient, the intermediary would pay the remaining $75 per patient to Reese.

Foremost Shockwave Solutions was allegedly controlled by attorney Lee Mathis and Fernando Valdes its president. Both were also indicted. Although disguised as “office rent” payments, the illegal bribes were allegedly paid in cash during clandestine exchanges in restaurants and parking lots.

The indictment alleged that defendant Foremost Shockwave Solutions and others engaged in a $22 million kickback and bribery scheme through which co-conspirators paid bribes and kickbacks to physicians to refer California Workers’ Compensation patients to Foremost.

For example, $6,000 in cash was delivered to Reese in the parking lot of the Jolly Roger in Oceanside, hidden in a gift bag. Other times, it was passed in envelopes or stashed inside newspapers.

According to the indictment, Reese and his codefendants generated and submitted bills to insurers totaling in the tens of millions of dollars. Most of these treatments involved the providing of “Shockwave therapy,” which uses low energy sound waves to initiate tissue repair. Proceeds from the insurance claims generated through this scheme were paid to Mathis and Valdes.

Reese pleaded guilty in June 2016. and began serving a one year one day sentence. Valdez entered into a plea agreement in July 2017.

Foremost Shockwave Solutions has just entered into an agreement with prosecutors that provided the following. Foremost agrees that “it will not, directly or indirectly, attempt to collect or collect on any bills, claims, or liens filed by FOREMOST SHOCKWAVE SOLUTIONS or on its behalf.”

In exchange, the United States will dismiss, without prejudice, the pending charges against Foremost.

A Southern California-based ophthalmology group, its former CEO and several of its physicians have paid the United States and California $6.65 million to settle False Claims Act allegations that they defrauded public health care programs by billing for unnecessary eye exams, improperly waiving Medicare co-payments, and violating other regulations, the Justice Department announced today.

Retina Institute of California Medical Group (RIC), is a medical partnership of ophthalmologists who specialize in the treatment of retinal diseases. RIC operates in multiple locations in Los Angeles, Orange and Riverside counties. On October 2, the RIC and several other defendants paid the United States $6,353,410 and paid California $296,590 pursuant to a settlement agreement.

The other defendants who participated in the settlement are:

— Dr. Tom S. Chang, of Pasadena;
— Tom S. Chang, M.D., Inc., a Pasadena-based company;
— Dr. Michael A. Samuel, of Arcadia;
— Dr. Michael J. Davis, also of Arcadia;
— Brett Braun, former CEO of Retina Institute of California Medical Group;
— California Eye and Ear Specialists, a Pasadena-based subsidiary of Trilogy Eye Medical Group Inc., a company for whom Chang and Samuel serve as senior executives; and
— San Gabriel Ambulatory Surgery Center LP, a San Gabriel-based company.

Between January 2006 and August 2017, the defendants allegedly violated the False Claims Act by submitting bogus claims to Medicare and Medicaid/Medi-Cal, according to a settlement agreement signed in this case. Medicare reimburses physicians for examining patients, paying more money as the medical exams performed increase in complexity. RIC personnel allegedly improperly billed public health programs by misclassifying simpler exams as being more complex, using billing codes normally used for patients with severe or emergency conditions.

RIC and the other defendants also allegedly waived Medicare co-payments and deductibles without proper documentation of patients’ financial hardship, which was intended to induce referrals. The defendants allegedly also billed Medicare and Medicaid for medical services that weren’t performed, were unnecessary, not documented in the medical record or were not in compliance with applicable rules and regulations.

The allegations were made in a whistleblower lawsuit filed in United States District Court by Bobbette A. Smith and Susan C. Rogers, who formerly worked for RIC as administrators, under the qui tam – or whistleblower – provisions of the False Claims Act. These provisions permit private individuals to sue on behalf of the government for false claims and to share in any recovery. The United States may intervene in the lawsuit, or, as in this case, the whistleblower may pursue the action. Smith and Rogers will receive a share of the settlement, but that amount has not yet been determined.

The case, which was filed in May 2013 and unsealed in July 2016, was monitored by the United States Attorney’s Office, as well as the U.S. Department of Health and Human Services – Office of Inspector General.

The lawsuit is captioned United States, et al., ex rel. Smith and Rogers v. Tom S. Chang, M.D., et al., No. 13-CV-3772-DMG (C.D.Cal.).

Maria Leon sustained an injury arising out of and occurring in the course of her employment resulting in her death on November 20, 2012, while she was employed as a caregiver by the Department of Social Services (DSS), and as a kitchen helper by Meals on Wheels.

Ms. Leon was survived by two sons, Juan Manuel Vasquez and Julian Vasquez. An Application for Adjudication of Claim was filed and both were claiming a death benefit as dependents of Ms. Leon.

They also filed a civil action for negligence in LA County Superior Court against the operators of Golden West Towers, the senior living center where Ms. Leon was murdered by a tenant of the center.

Julian Vasquez filed a petition dismissing his claim with prejudice on February 29, 2016. On the same date, the attorney for Juan Manuel Vasquez filed a petition to withdraw as attorney, citing Juan Manuel Vasquez’s failure to cooperate with his counsel in the prosecution of the claim.

An order was issued on March 24, 2016, dismissing with prejudice the “potential dependent Julian Vasquez.” The WCJ also issued an order relieving counsel representing Juan Manuel Vasquez.

On March 25, 2016, a settlement check in the sum of $559,311.17, was issued to Juan Manuel Vasquez as a result of third party tort litigation.

In light of the dismissal of the claims of Julian Vasquez and Juan Manuel Vasquez, The Death Without Dependents unit of the Department of Industrial Relations (DWD), sought to proceed as an applicant to claim the statutory death benefit under Labor Code section 4706.5.

The WCJ found that the DWD failed to meet its burden of proof to establish Ms. Leon had no surviving dependents, and that the defendants provided sufficient evidence to prove that at least Juan Vasquez and his three children were the dependents of Ms. Leon prior to her death. The WCJ further held that a credit of $599,31 1.17 for Mr. Vasquez’ civil recovery is applicable and would negate a claim for death benefits. The WCJ denied DWD’s application for death benefits. The DWD petition for reconsideration affirmed the take nothing the panel decision of Mary Leon v DSS.

Dependency is determined as of the time of injury, and may be found to be total or partial, depending on the facts established. “Dependency may be defined as reliance upon another person for support. Total dependents are those who at the time of injury are solely supported by the decedent, or who have a legal right to look to him for their entire support . . . . Partial dependents are those who at the time of injury have means of support other than the deceased’s contributions . . . . ” (Mendoza v. Workers’ Comp. Appeals Bd. (1976) 54 Cal.App.3d 820 [41 Cal.Comp.Cases 71]. )

However, if the employee dies and leaves no dependents, the death benefit escheats to the State of California and is to be paid to the Death Without Dependents unit of the Department of lndustrial Relations, pursuant to Labor Code section 4706.5(a). This provision has been held to require the DWD to affirmatively establish the absence of any dependents, either total or partial, of the deceased.

DWD argues that because Juan Manuel Vasquez and Julian Vasquez chose not to pursue their claims for death benefits, they must be found not to be entitled to the benefit and therefore DWD should be found to be entitled to receive the benefit.

This, however, is not what the law requires. The law does not provide that the death benefit escheats to DWD if a dependent, either partial or total, has not received the benefit. Rather, the law requires DWD to establish that no “person entitled to a dependency death benefit” exists. DWD has not established that Juan Manuel Vasquez or Julian Vasquez were not dependent upon their mother and had no claim to a death benefit as partial dependents. Since Juan Manuel Vasquez and Julian Vasquez chose to receive a civil settlement in an amount greater than the amount of the death benefit, and withdrew their claims for workers’ compensation death benefits, the WCJ properly found DWD did not meet its burden to establish that “such employee does not leave surviving any person entitled to a dependency death benefit.”

Opioid dispensing to workers injured on the job has decreased substantially in recent years in all 27 state workers’ compensation systems studied, according to a WCRI report, Interstate Variations in Dispensing of Opioids, 5th Edition. Increases in non-opioid pain medications did not fully offset these decreases. As a result, the percentage of workers’ compensation claims with pain medication decreased in each of the 27 study states.

However, workers continued to receive treatment for their pain for the most part. The WCRI study suggests that providers have switched from multi-pronged pain treatments, which involve pain medications (including opioids) and other restorative therapies, to a treatment protocol that more frequently relies solely on non-pharmacologic services.

This change in treatment patterns conforms to the recommendations of opioid prescribing and pain treatment guidelines and policies implemented in a number of states, which call for broad adoption of alternatives to opioids for treating acute and chronic pain. While this switch occurred, in some states, there were small net increases in the percentage of claims that received neither pain medications nor non-pharmacologic treatment.

What are these non-pharmacologic pain management services and how frequently are they used?

— The most frequent services billed and paid under workers’ compensation were physical medicine evaluation, active and passive physical medicine, and passive manipulations. We found that the frequency of use of each of the non-pharmacologic pain management services varied across the 27 states..
— Physical medicine evaluations were conducted in the majority (more than 50 percent) of claims in 24 of 27 states. As part of an evaluation, the physical therapist may decide whether additional treatments are necessary. The provider may offer additional treatment, they may demonstrate some home exercises for the worker to do on their own, and they may recommend some self-care during that visit.
— Active physical medicine was the most frequent form of treatment in all 27 states. The percentage of claims with active physical medicine ranged from a low of 50 percent in Massachusetts and 51 percent in Louisiana to a high of 67 percent in California and 68 percent in Nevada. Active physical medicine is exercises and movements performed by the worker.
— Passive physical medicine modalities were the second most frequent treatment in 18 states, with the percentage of claims ranging from a low of 30 percent in Texas and 32 percent in Massachusetts to over 50 percent in California, Connecticut, Delaware, Maryland, and Nevada. Passive treatments, including the modalities covered here and passive manipulations covered below, are administered by the manual therapy provider to the affected area. They are used in the early stages of treatment when the patient is too injured or their condition is causing too much pain for them to do active exercises. Passive physical medicine modalities include electrical stimulation therapy and hot and cold therapy.
— Passive manipulations were relatively frequent in the study states, ranging from 24 percent of claims in Arkansas to 58 percent in Nevada. Passive manipulations include manual therapy and massage. Chiropractic manipulations were used in 10 – 14 percent of claims in seven states, while they were rarely used in most other states.
— Interventional pain management was the fourth most frequent pain treatment, ranging from 16 percent of claims in Maryland to 27 percent in Georgia. This category of pain treatment includes epidural procedures, facet and sacroiliac joint interventions, trigger point injections, and other injections and nerve blocks.
— Fifteen percent of claims in California and 4 percent of claims in New York received acupuncture, but this treatment was rarely seen elsewhere. Behavioral evaluation and behavioral treatments were very infrequently used.

The data underlying these measures comprise over 222,000 nonsurgical workers’ compensation claims with more than seven days of lost time from 27 states.