Author: WorkCompAcademy

Three additional doctors have been charged in three new cases for their roles in a 15-year-long health care fraud scheme that involved more than $40 million in illegal kickbacks paid to doctors and other medical professionals in exchange for referring thousands of patients who received spinal surgeries. As a result of the kickback scheme, more than $580 million in fraudulent bills were submitted, mostly to California’s worker compensation system.

David Hobart Payne, 60, an orthopedic surgeon who lives in Irvine, is scheduled to be arraigned in United States District Court on charges of conspiracy, honest services fraud, and using an interstate facility to aid in unlawful activity. A five-count superseding indictment returned by a federal grand jury on April 25 alleges that Payne was bribed approximately $450,000 to steer more than $10 million in kickback-tainted surgeries to Pacific Hospital of Long Beach.

Jeffrey David Gross, 52, an orthopedic surgeon who resides in Dana Point and Las Vegas, Nevada, appeared in federal court and pleaded not guilty to charges contained in a 14-count indictment returned earlier this year by a federal grand jury. Gross, who faces charges of conspiracy, honest services mail fraud and honest services wire fraud, was ordered to stand trial on August 7. The indictment alleges that Gross made at least $622,000 in exchange for performing and/or referring more than $19 million in kickback-tainted surgeries to Pacific Hospital.

In the third indictment being announced today, Lokesh Tantuwaya, 51, who maintains residences in Rancho Santa Fe and Rock Springs, Wyoming, was charged in February by a federal grand jury. The 13-count indictment charges Tantuwaya with conspiracy, honest services fraud, and using an interstate facility to aid in unlawful activity. Tantuwaya, who pleaded not guilty in April, has been ordered to stand trial on November 6. The indictment alleges that Tantuwaya received approximately $3.2 million in kickbacks for referring and/or performing $38 million in surgeries to Pacific Hospital.

The kickback scheme centered on Pacific Hospital of Long Beach, which specialized in surgeries, especially spinal and orthopedic procedures.

The owner of Pacific Hospital, Michael D. Drobot, conspired with doctors, chiropractors and marketers to pay kickbacks in return for the referral of thousands of patients to Pacific Hospital for spinal surgeries and other medical services paid for primarily through the California workers’ compensation system. During its final five years, the scheme resulted in the submission of over $500 million in fraudulent medical bills. To date, nine defendants have been convicted for participating in the kickback scheme.

If they were to be convicted of the charges in the indictments announced today, Payne, Gross and Tantuwaya would face potential sentences of decades in federal prison.

Artemio Elguea was a pizza delivery driver for Pizza Hut.. His general manager was Alex Rodriguez.

Elguea alleged that Rodriguez discriminated against him on the basis of his age – reducing his hours, stealing his tips, and allowing other employees (who were related to Rodriguez) to throw food at him. Elguea’s doctor placed him on medical leave for stress, and he never returned to Pizza Hut.

Elguea brought suit against PIzza Hut alleging age discrimination, related causes of action under the Fair Employment and Housing Act (FEHA) and other torts.

While this action was pending, Elguea was also pursuing multiple workers’ compensation claims. The four workers’ compensation cases were resolved by two simultaneous settlements, each for slightly less than $25,000 (to avoid MSA approval requirements). Each Compromise & Release was signed by Elguea, and one of his workers’ compensation attorneys, Diana Sparagna.

Each C&R had an addendum which specifically stated the following: “This Compromise & Release also includes resolution of all claims arising under any state or federal law regulation, including the California Fair Employment and Housing Act, federal and state wage and hour laws, federal and state False Claims Acts, Title VII of the Civil Rights Act, the Americans With Disabilities Act, the Family Medical Leave Act, the California Family Rights Act, the California Labor Code,…….(etc)”

Pizza Hut then moved for judgment on the pleadings in the civil case, based on the releases and, specifically, the broad language in the addenda to the C&R. The court granted judgment on the pleadings without leave to amend. The Court of Appeal affirmed in the unpublished case of Elguea v. Southern Cal. Pizza Co., LLC. Elquea also attempted to set aside the C&R at the WCAB, but his Petition in this regard was denied.

Elguea argued, among other things, that he does not understand English and was never informed in the workers’ compensation action that he was releasing his civil claims. Elguea asserted that he was represented by counsel in the FEHA action at the time of the workers’ compensation settlement, and nobody informed his FEHA counsel that the FEHA complaint was being addressed by the workers’ compensation settlement.

The Court of Appeal ruled that If the parties to the workers’ compensation proceeding include in their release an addendum which reflects an intention to reach beyond workers’ compensation, that addendum may be given effect and may encompass FEHA claims. (Jefferson v. Department of Youth Authority (2002) 28 Cal.4th 299, 301) “Given this controlling authority, we easily resolve the issues raised by Elguea on appeal.”

“Indeed, this case is stronger than Jefferson, in that the addendum to the workers’ compensation releases Elguea signed here expressly encompasses FEHA claims. In short, the trial court correctly concluded that a release which specifically includes FEHA claims does, in fact, release FEHA claims.”

Miami lawyers expected a state court victory in 2017 to pave the way for billions of dollars from liability and workers’ compensation insurance carriers across the nation to flow back to Medicare and its beneficiaries.

The attorneys, John Ruiz and Frank Quesada of the firm MSP Recovery, are going after major liability insurers for allegedly shirking their duty to reimburse Medicare benefit providers for conditional payments. Under the Medicare Secondary Payer law known by the acronym MCP, the government can recover double damages from a primary payer that fails to pay Medicare back for medical expenses covered by a liability policy

The home page of the firm boasts of the slogan aimed to attracted its clients who are Medicare Advantage insurance companies, challenging them to “DISCOVER YOUR LOSSES – RECOVER WHAT’S YOURS.”

No attorney had ever secured class certification under the Medicare Secondary Payer law. A nuanced interplay between federal and state laws made it difficult to establish common issues of law and fact. But MSP Recovery overcame those obstacles in Miami-Dade Circuit Court in 2017, where Judge Samantha Ruiz Cohen certified a class in a lawsuit against the auto insurer Ocean Harbor Casualty Insurance, a primary payer for thousands of Medicare Part C beneficiaries.

The judge also noted MSP Recovery has developed a sophisticated system to identify claims by collecting and matching data including Centers for Medicare & Medicaid Services reports, automobile crash reports, ambulance records, insurance declaration sheets and no-fault personal injury protection payout sheets.

That system has allowed the 30-attorney firm with roughly three dozen partner firms across the country to divide claims into categories and file lawsuits across the country on behalf of more than 100 health plans. Their firms boasts of more than 100 class actions pending in state and federal courts across the nation. Targeted defendants include companies such as Allstate Property & Casualty, Liberty Mutual, State Farm Mutual Automobile, Geico and others.

But the firm has suffered some setbacks. Just recently, MSP Recovery LLC and several of its attorneys have been sanctioned by a Federal District Court.The decision is entitled Recovery v. State Farm Mut. Auto. Ins. Co. 2018 U.S. Dist. LEXIS 95789, U.S. District Court for the Central Dist. Of Ill. (June 7, 2018).

This class action involved the usual allegations by MSP Recovery LLC, essentially that MSP Recovery has assignments from various MAPs that have made Medicare conditional payments wherein State Farm should have been the primary payer and/or reimbursed the MAPs that made those conditional payments.

MSP Recovery failed to allege any facts supporting their claims. More particularly, MSP Recovery LLC failed to identify any MAPs that allegedly paid medical expenses on behalf of Medicare beneficiaries. MSP Recovery then filed its first Amended Complaint, and then attempted a Second Amended Complaint to correct the deficiency. The court found MSP Recovery’s contradictory statements to be “palpably absurd and clearly wrong under the law.”

The court issued Rule 11 sanctions in the amount of $5,000 against three of MSP Recovery LLC’s attorneys, as well as an additional $5,000 against MSP Recovery LLC itself, for a total of $20,000.

The Court explained that “Plaintiffs characterize their inaccurate allegations as “correctable flaw[s].” (Doc. 88 at 4). They argue that “it is in the nature of the course of litigation to discover additional facts that change the accuracy of the pleadings”. Id. The Court would be more amenable to this argument if Plaintiffs discovered these inaccuracies early on in litigation, or at least owned up to the misstatements once the Court questioned the Second Amended Complaint’s accuracy in April. The parties have been litigating the issue of standing for over a year, and this is Plaintiffs’ third attempt at filing an adequate complaint.”

Jessica Aram worked as a genetic counselor for Laboratory Corporation of America Holdings. She provided prenatal genetic counseling to patients at several clinics in Southern California, including followup care and counseling when a genetic test revealed abnormal results.

A dispute arose between Aram and LabCorp about the content of her clinical notes. The dispute was not resolved between them regarding the details provided in her documentation. . Her employment was terminated by LabCorp in October, 2011.

In 2014, Aram filed a civil complaint against her employer asserting causes of action for wrongful termination, retaliatory discharge,violation of whistleblower protections, and intentional infliction of emotional distress. Aram alleged that respondents’ bullying and threats constituted the basis of her claim for intentional infliction of emotional distress.The employer moved for summary judgment or, in the alternative, summary adjudication.

After hearing argument and orally explaining its analysis of the evidence, the court granted the motion and dismissed her case.

In addition to ruling against her substantiative claims, the court also found that the employer’s actions did not “constitute extreme or outrageous conduct” to support the claim for intentional infliction for emotional distress, and the claim was “barred by the exclusivity provisions of the California Workers’ Compensation Act.”

The Court of Appeal affirmed the judgment in the unpublished case of Aram v. Esoterix Genetic Labs LLC .

On appeal, among other employment law related issues, Aram claims the trial court erred in concluding that her claim for intentional infliction of emotional distress was barred by the exclusivity provisions of the California Workers’ Compensation Act. The Court of Appeal disagreed.

The Court noted that when a claim of intentional infliction of emotional distress is based on allegedly wrongful conduct that “occurred at the worksite, in the normal course of the employer-employee relationship” then “workers’ compensation is [a plaintiff’s] exclusive remedy for any injury that may have resulted.”

This is so even when the alleged emotional distress arose from conduct that would support whistleblower claims such as those alleged by Aram.

She would be required to show “extreme or outrageous conduct” to circumvent the exclusive remedy limitation.

At its Silicon Valley headquarters, network gear maker Cisco Systems Inc is going to unusual lengths to take control of the relentless increase in its U.S. healthcare costs.

According to Reuters, the company is among a handful of large American employers who are getting more deeply involved in managing their workers’ health instead of looking to insurers to do it. Cisco last year began offering its employees a plan it negotiated directly with nearby Stanford Health medical system.

Under the plan, physicians are supposed to keep costs down by closely tracking about a dozen health indicators to prevent expensive emergencies, and keep Cisco workers happy with their care. If they meet these goals, Stanford gets a bonus. If they fail, Stanford pays Cisco a penalty.

Cisco said costs for Stanford plan patients are 10 percent lower than conventional coverage still used by most of its employees. Chipmaker Intel Corp told Reuters it is saving 17 percent on its workers enrolled in a similar plan, known as Connected Care. Aircraft manufacturer Boeing Co and Walmart Inc, the world’s largest retailer, have likewise hammered out health plans directly with providers.

The movement is small, just a few very large U.S. corporations that have signed up tens of thousands of workers so far. Their early efforts show the challenges of changing behaviors among patients and doctors.

But they speak volumes about corporate America’s frustration with inexorably rising medical costs and the traditional insurers that sell them coverage.

Corporations help pay for healthcare for more than 170 million Americans, in most cases working with an insurer to handle everything from the price of treatments to medical claims.

These employers will spend an estimated $738 billion on health benefits in 2018, a figure that has been rising about 5 percent annually in recent years, according to federal data.

Other big firms are watching closely. Amazon.com Inc, JPMorgan Chase & Co and Berkshire Hathaway Inc said in January they will form an independent company to improve healthcare for their roughly 750,000 U.S. employees, prompting speculation that they would displace health insurers and other industry “middlemen”.

To boost enrollment, all three companies have dangled sweeteners such as extra money for health savings accounts or lower monthly premiums and co-pays. The approach also requires employers to take a more hands-on role.

Cisco’s experiment began in 2008 when it opened the campus clinic for all of its employees there. Designed like a spa, the facility offered primary care in new-age sounding treatment areas: body, mind, heart and spirit.

The savings were notable: about 30 percent compared to an offsite doctor’s office. Cisco later brought in Stanford to develop a full-blown medical plan, which took effect in 2017. Stanford operates the clinic and provides more specialized services through Stanford University’s medical system.