Author: WorkCompAcademy

A Huntington Beach doctor with a history of legal and disciplinary problems is one of the 25 people accused of participating in a Medicare fraud scheme that netted about $150 million through fraudulent insurance claims, according to federal prosecutors.

74 year old Nagesh Shetty, was just indicted in connection with the scheme, which involved “medically unnecessary” cardiac treatments and testing through an Inglewood healthcare provider, Global Cardio Care.

Shetty was first licensed by the California Medical Board in 1979 and has operated practices in Costa Mesa, West Covina and the West Hills neighborhood of Los Angeles, according to documents and online records.

In 1994, Shetty was indicted in federal court on 28 counts of mail fraud on allegations of defrauding a Minnesota-based insurance company through nonexistent, medically unnecessary or excessive medical treatment.”That case was later transferred to a California district court and charges were eventually dropped, court records show.

In 1996, Shetty was sentenced to 21 months in federal prison and fined $40,000 for filing false income tax returns and failing to report more than $400,000 in income over a three-year period in the 1980s, court documents show. At the time of the crimes, Shetty was owner and attending physician of Harbor Newport Medical Clinic in Costa Mesa.

While in prison, Shetty was indicted in 1998 on federal charges alleging that he defrauded military and private health insurance programs.

In 2000, a jury convicted Shetty of 26 felony counts of mail fraud and he was sentenced to two years in prison and three years’ supervised release, court records show. He also was ordered to pay restitution, including more than $28,000 to the U.S. Treasury and more than $19,000 to Blue Cross Blue Shield, court records show.

The California Medical Board revoked Shetty’s license in 2000, according to board records. His license to practice medicine also was revoked in New York in 1999 and Washington state in 2001, records show.

In 2005, Shetty petitioned the California board to reinstate his medical certificate. At the time, Shetty was bagging groceries and stocking shelves at a store and said his inability to practice his profession had caused emotional and financial strain for his wife and four children.

He was granted a probationary license, according to a decision by an administrative law judge, with the conditions that he complete an ethics course and a clinical training program, undergo monitoring and be barred from practicing solo, supervising physician assistants and handling any billing matters.

In 2009, Shetty completed his probation and the board reinstated his license.

In a disciplinary order effective April 26 2019, the board issued Shetty a public reprimand stemming from a case in which he was accused of repeated negligence and failure to maintain adequate and accurate records involving a patient in 2016, according to California Department of Consumer Affairs records.

And now he faces charges for his 2019 arrest!

The court of appeal ruled on a case between CIGA and the Travelers that upheld the endorsement on the Travelers policy limiting its coverage for special employees in a general special employment situation.

In the unpublished case of Travelers v WCAB, and CIGA, two employers agreed that the general employer, StaffChex, vwould obtain workers’ compensation insurance for employees it leased to the special employer Jessie Lord Bakery. Relying on this agreement, the special employer obtained workers’ compensation insurance from Travelers for its own employees with a “limiting endorsement” excluding coverage for special employees.

These agreements were in place for several years when a special employee, Jose Luis Mastache, was injured on the job while assigned to the special employer. The general employer’s insurer, Ullico Casualty Company, thereafter became insolvent and California Insurance Guarantee Association (CIGA) took over the administration of the claim.

Although there was a written endorsement attached to the Traveler’s policy excluding coverage for special employees, and the special employee’s carrier was informed the general employee had obtained the required workers’ compensation insurance, the Workers’ Compensation Appeals Board invalidated the Travelers limiting endorsement because the limiting endorsement had not been signed by the special employer. The written affirmation was required under WCAB Rules, section 2259(e) in effect at the time the Travelers policy was written.

Thus, Travelers, the insurer for the special employer was ordered to bear all liability for compensation to the injured worker when the general employer’s insurer became insolvent. This obligated Travelers to pay the entire claim since CIGA had shown there was “other” insurance in effect. Travelers appealed and the court of appeal reversed the WCAB in the unpublished case.

The question of whether Travelers is “other insurance,” relieving CIGA of liability, turns on whether the endorsement in the Travelers policy is valid.

The court of appeals made the observation that it was addressing a commercial relationship between two relatively sophisticated parties and a third sophisticated insurance company who embarked on a course of dealing that had been in place for a number of years before Mastache was injured.This entire structure was set aside by the appeals board, ostensibly over the absence of a signature by Jessie Lord on the endorsement to the contract with Travelers, even though this contractual structure had been functioning for three years when Mastache was injured.

The parties complied with the applicable regulatory requirements and it is undisputed that they complied with their contractual commitments to one another. They performed these contractual commitments for several years. The court of appeals concluded that the appeal board’s decision was thus unreasonable and inequitable.

“Nullifying a three-sided, sophisticated contractual structure, under which all three parties performed their obligations in good faith over the absence of a signature on an endorsement to a contract disregards reality and is inequitable.”

A local health care fraud enforcement action has resulted in federal charges against of 25 Southern California defendants for their alleged involvement in healthcare fraud schemes that fraudulently sought over $150 million from the Medicare and Medicaid programs, as well as private insurers and union health benefit plans. Fourteen of those charged in federal court in Los Angeles and Santa Ana are doctors or medical professionals.

A total of 10 cases have been announced. Those charged are:

Dr. Ronald Weaver, 70, of Pacific Palisades; Sara Soulati, 49, of Santa Monica; Dr. John Weaver, 75, of Alhambra; Dr. Ronald Carlish, 78, of Pacific Palisades; Dr. Howard Elkin, 68, of Whittier; Dr. Wolfgang Scheele, 79, of Los Angeles; and Dr. Nagesh Shetty, 74 of Huntington Beach, who were charged for their alleged participation in an approximately $135 million scheme to defraud Medicare through medically unnecessary cardiac treatments and testing through Global Cardio Care of Inglewood.

Navid Vahedi, 40, of Los Angeles; Vahedi’s pharmacy, Fusion Rx Compounding Pharmacy; and Joseph S. Kieffer, 39, a marketer, of Los Angeles, who were charged in a fraud and kickback scheme. Vahedi and Kieffer, allegedly paid commissions to marketers and some patients to obtain medically unnecessary compounded drugs to allow Fusion Rx to bill health care providers for those compounded drugs, many of which were reimbursed at rates much higher than average medications.

Hilda Haroutunian, 59, of Sun Valley; Dr. Keyvan Amirikhorheh, 60, of Seal Beach; Lorraine Watson, 56, a physician’s assistant, of Valley Village; Noem Sarkisyan, 63, of North Hollywood; and Edmond Sarkisyan, 40, a medical assistant, of North Hollywood, who were charged for their alleged participation in an approximately $10 million scheme to defraud the Family Planning, Access, Care and Treatment (Family PACT) program administered by Medi-Cal, the California Medicaid program, through fraudulent claims for family planning services, testing and prescriptions for non-existent patients submitted through Los Angeles Community Clinic and associated diagnostic testing laboratories and pharmacies.

Amir Friedman, 54, an anesthesiologist, of Calabasas, who is charged for his alleged participation in a conspiracy to commit honest services mail and wire fraud and Travel Act violations involving approximately $800,000 in kickbacks for compounded pharmaceutical drugs involving New Age Pharmaceuticals, Inc., in Beverly Hills.

Susan H. Poon, 54, a chiropractor who resides in Dana Point, who was arrested after a federal grand jury charged her in an approximately $2 million scheme to defraud Anthem, Aetna, and other Blue Cross Blue Shield Association affiliates, including the Teamsters Western Region and Local 177 health care plans.

Antonio Olivera, 78, of Downey; Emelita Cephass, 57, of Downey; and Martin Canter, 70, of Rancho Palos Verdes, who were charged for their alleged participation in a hospice kickback scheme.

Mahyar David Yadidi, 37, a chiropractor who resides in Los Angeles, who was charged with conspiracy to commit health care fraud for operating a scheme to defraud the International Longshore and Warehouse Union – Pacific Maritime Association health care benefit plan.

Darren Hines, 49, a chiropractor who lives in the Harbor City neighborhood of Los Angeles, who was charged with health care fraud for operating a scheme to defraud the International Longshore and Warehouse Union – Pacific Maritime Association health care benefit plan.

Gov. Newsom signed AB 5 – what he called a landmark bill for workers.

AB 5 will codify a state Supreme Court Dynamax ruling last year that simplified the test for when a worker should be classified as an employee and therefore be entitled to a minimum wage, health benefits and other protections. The contentious legislation is expected to affect ride-hailing giants Uber and Lyft, plus a host of other companies that use independent contractors.

“The hollowing out of our middle class has been 40 years in the making, and the need to create lasting economic security for our workforce demands action,” said Newsom, who had previously voiced support for the bill, in his signing letter. “Assembly Bill 5 is an important step.”

A defiant Uber said last week that it is “no stranger to legal battles” and believes it can pass the test imposed by the courts and AB 5: that a worker is an independent contractor when he or she is free from control by a company; when the worker’s duties are outside the usual course of the company’s business; and when the worker is “customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed.”

Uber said it does not plan to classify its drivers as employees when the bill becomes law in January. The San Francisco ride-hailing company, which has offered concessions short of classifying drivers as employees and has been negotiating with labor leaders and the governor, said through a spokesman Wednesday that “California is missing a real opportunity to lead the nation by improving the quality, security and dignity of independent work.”

But the bill’s author, Assemblywoman Lorena Gonzalez, D-San Diego, said in an interview, “If Uber thinks they’re so strong and powerful that they’re just going to ignore the law, that’s the reason we put the local enforcement clause in the bill.” AB 5 includes a provision empowering cities with populations over 750,000 to prosecute companies that continue to misclassify their workers.

Uber, Lyft and food delivery startup DoorDash have put $90 million into a fund for a campaign that would bring the issue to voters.

Representatives for Lyft and DoorDash said Wednesday they were encouraged Newsom indicated he would keep talking with business and labor in an effort to “preserve flexibility and innovation.”

But both companies also mentioned the possibility of putting the issue on the ballot. In addition, Lyft has warned that it wouldn’t need as many drivers and pointed to a recent study that says hundreds of thousands of drivers in the state could lose their ability to drive for the company if it is forced to classify them as employees.

The Orange County Register points out that one professor thinks ride-hailing drivers might see a smaller paycheck.

“This is yet to be seen but it is a possible argument because the incentives and reward system will be restructured to account for employee status,” said Orly Lobel, director of the Program on Employment and Labor Law at the University of San Diego.

Other workers, such as doctors, hairdressers and real estate agents, have secured exemptions from the bill. Newspaper publishers who use contract delivery workers got a one-year delay for compliance. But those in the trucking and music industries, among others, have also complained about the bill.