Author: WorkCompAcademy

A Fresno County jury has awarded more than $600,000 to a respiratory therapist who said she was wrongfully terminated at a sleep medicine center because she blew the whistle on Medicare fraud.

Tansi A. Casillas, 51, of Fresno, alleged that her employer, Central California Faculty Medical Group, eliminated her position at University North Medical Specialty Center in retaliation for the fraud complaints she made and for refusing to perform medical services outside the scope of her respiratory care license. Central California Faculty Medical Group is a multispecialty practice affiliated with UCSF-Fresno. It operates several medical offices, including University North Medical Specialty Center for pulmonary and sleep medicine.

In her lawsuit, Casillas said doctors left the responsibility to her to have face-to-face evaluations with patients on continuous positive airway pressure (CPAP), a treatment that keeps the airways open for people who have sleep apnea and other breathing problems. The patient and Medicare were later billed for a doctor’s visit, even though the patient was not seen by a doctor, the lawsuit said.

According to the lawsuit, the faculty medical group’s compliance department investigated Casillas’ claims and found the medical group had “erroneously” overbilled Medicare but that no fraud had occurred. The overbilling resulted in the medical group’s reimbursing Medicare for the overcharges, the lawsuit said.

The jury found Casillas had been retaliated against for being a whistleblower and awarded her $131,200 in economic and emotional damages. And later they awarded her $500,000 in punitive damages.

Karen Rushing, human resources director for Central California Faculty Medical Group, said in an email Wednesday that the medical practice strongly denied wrongdoing.

The faculty medical group, represented by San Francisco lawyer Steven R. Blackburn, argued in a motion to dismiss the case, saying that Casillas was terminated for economic reasons that were aggravated by “her bad behavior in interacting with her coworkers.”

According to Casillas’ lawsuit, the medical group falsely accused her of violating the company’s conflict of interest policy as part of its retaliation for being a whistleblower.

Casillas had worked as a respiratory therapist for the faculty medical group since November 2008 and had received good performance evaluations before her whistleblowing, the lawsuit said. But she worked under a “microscope” after she refused to perform medical services outside the scope of her respiratory care license and refused to participate in unlawful billing to Medicare, the lawsuit said.

She first voiced concerns about Medicare fraud to Dr. Lynn Keenan, medical director for sleep medicine at North Medical Specialty, on April 8, 2013, the lawsuit said. Concerned that the issue had not been taken seriously, she called the faculty medical group’s compliance officer and the National Board of Respiratory Care on April 9, 2013.

The following day, retaliation began, the lawsuit said.

The jury found that Casillas’ disclosure about Medicare fraud and her refusal to participate in medical services outside the scope of her respiratory care license were contributing factors in the faculty medical group’s decision to discharge her. And the jury found the medical practice would not have discharged her for legitimate, independent reasons.

It is with great sadness that we announce the passing of applicant’s attorney David Wallace Ashton of Milburn and Ashton. He was born March 3, 1956 and was 60 years of age when he died from cancer on December 1.

His offices has provided legal services to the residents of the Antelope Valley and surrounding communities for more than 30 years. He was very well respected in the workers’ compensation community.

Mr. Ashton graduated from California Polytechnic State University San Luis Obispo with Honors in 1978. He obtained his Master’s Degree in Education from Azusa Pacific University, and his Juris Doctor from University of Laverne in 1992.

He was admitted to the State Bar of California on December 14, 1992, and to the United States Federal District Court on January 11, 1993.

Mr. Ashton has been practicing workers’ compensation law for over 22 years, primarily before the Van Nuys, Bakersfield and San Bernardino Workers’ Compensation Appeals Boards.

He is an active member of the California Applicants Attorney Association (CAAA), the Antelope Valley Bar Association, and the State Bar of California. Mr. Ashton had extensive trial and litigation experience before both the Workers’ Compensation Appeals Board and the Central District California Court of Appeals.

One of his co-workers – Jennifer Loza – said that “Dave was the best boss, and also one of the greatest human beings, in the whole world. My heart is broken. My deepest condolences to Sharon and the kids, who were always the most important things to him. Dave, you fought like a honey badger.”

Services will be held at Joshua Memorial Chapel 808 East Lancaster Blvd. Lancaster, CA 93535 Wednesday December 7th, 2016 at 11:00 am, Graveside Service to follow at 12:00 pm. In lieu of flowers please send donations to City of Hope and PSP Society.

The Division of Workers’ Compensation (DWC) has posted an adjustment to the inpatient hospital section of the Official Medical Fee Schedule (OMFS) to conform to changes in the 2017 Medicare payment system as required by Labor Code section 5307.1. The effective date of the changes is January 1, 2017.

Under the regulatory definitions the term “Hospital” means any facility as defined in Section 1250 of the Health and Safety Code.The term “Inpatient” means a person who has been admitted to a hospital for the purpose of receiving inpatient services. A person is considered an inpatient when he or she is formally admitted as an inpatient with the expectation that he or she will remain at least overnight and occupy a bed, even if it later develops that such person can be discharged or is transferred to another facility and does not actually remain overnight.

The Medicare FY17 update to the inpatient prospective payment system was published on August 22, 2016 in the Federal Register (Vol. 81 FR 56762). Using this publication, the DWC calculates changes to Title 8, California Code of Regulations, sections 9789.20 – 9789.25 consistent with the Labor Code requirements.

L.C. 5307.1(g)(1)(A)(i) provides that the annual inflation adjustment for inpatient hospital facility fees for California workers’ compensation claims shall be determined solely by the estimated increase in the hospital market basket. Thus, in lieu of using the Medicare FY2017 rates to determine the updated OMFS amounts, the estimated increase in the hospital market basket was applied to the 2016 OMFS rates for dates of discharge effective, January 1, 2017.

Based on the Medicare Hospital Inpatient Prospective Payment System, all hospitals are paid the same standard rate for operating costs (based on the rate for hospitals located in large urban areas). The 2016 rate was $6,269.83. The estimated increase in the market basket is 2.7%. The 2017 standard rate under the OMFS will become $6,439.11 ($6,269.83 x 1.027).

Pursuant to Labor Code section 5307.1(g)(2), the Acting Administrative Director of the Division of Workers’ Compensation orders that to the extent references to the Federal Register or Code of Federal Regulations are made in any sections starting from section 9789.20 through 9789.25 of Title 8 of the California Code of Regulations, said section is hereby amended to incorporate by reference the applicable Federal Register final rule (including correction notices and revisions) and Federal Regulations in effect as of the date the Order becomes effective, to be applied to discharges occurring on or after January 1, 2017.

Further information and adjustments to the inpatient hospital section of the Official Medical Fee Schedule can be found on the DWC website’s OMFS page.

A former sales representative for AFLAC has been found guilty of federal fraud charges stemming from a scheme that bilked the insurance company out of $4 million with fake disability claims.

Patricia Diane Smith Sledge, 60, of Redlands, was convicted in the scheme involving fictitious employers and “employees” who falsely claimed to have suffered injuries that prevented them from working.

At the conclusion of a two-week trial, the jury convicted Sledge of six counts of mail fraud. The jury also found that Sledge committed two counts of witness tampering while on bond in this case.

United States District Judge James V. Selna, who presided over the trial, ordered Sledge to return to court for a sentencing hearing on March 20, 2017, at which time the defendant will face a statutory maximum sentence of 160 years in federal prison.

The evidence presented at trial showed that Sledge, who was residing in Irvine while working for the company formally known as American Family Life Assurance Company, sold disability insurance policies to bogus companies and people who supposedly worked for those companies. Sledge then orchestrated the filing of fraudulent disability claims and directed the purported employees to doctors that would sign off on the fake injury claims.

As a result of the false claims, AFLAC suffered losses of approximately $4 million.

Sledge made money both from the commissions related to the sale of the fraudulent insurance policies and from kickbacks she received from the supposedly injured “employees.”

“Using knowledge she gained as a company insider, this defendant was able to game the system, causing her employer to suffer millions of dollars in losses,” said United States Attorney Eileen M. Decker. “While her scheme went unnoticed for a period of time, her employer was able to uncover the conduct and referred the matter to federal authorities. This cooperation from the victim and a thorough investigation by law enforcement has resulted in this successful prosecution.”

Sledge was also found guilty of witness tampering for encouraging potential witnesses to lie to federal investigators and discouraging them from cooperating in the investigation. Both counts related to conduct after Sledge became aware of the federal investigation, and one count stemmed from conduct after she was indicted in this case and freed on bond in 2012.

“Defendant Sledge illegally misused the authority granted to her as a licensed insurance agent in California for her own personal gain, at the expense of her trusted employer,” said Deirdre Fike, the Assistant Director in Charge of the FBI’s Los Angeles Field Office. “In addition, the defendant’s brazen attempt of witness tampering to tilt the justice system in her favor further demonstrates her lack of respect for the rule of law. The lengthy prison sentence the defendant faces should serve as a warning to anyone contemplating insurance fraud.”

Two others have been prosecuted for acting as fake employers and fake employees in this scheme.

Historically, the federal government has fought corporate health care fraud in two ways. First, the U.S. Department of Justice routinely intervenes in civil False Claims Act cases filed by qui tam relators. Second, the federal government typically has relied on individual U.S. Attorney’s Offices to initiate and prosecute criminal health care fraud cases.

Although the DOJ relied on tools such as the Medicare Fraud Strike Force to prosecute health care crimes in geographic areas that exhibited greater systemic abuse of the health care system, the focus of these efforts lay largely in individual prosecutions of Medicare fraud and abuse rather than corporate prosecutions.

According to the report by Law360, this approach changed late last year when DOJ formed a separate Corporate Health Care Fraud Unit (“CHCFU”) within the Criminal Division’s Fraud Section. Staffed by experienced health care fraud prosecutors, the unit brings increased resources and a new, nationwide focus on the investigation and prosecution of health care fraud against corporations.

The unit’s prosecutors review all FCA cases filed across the country and evaluate whether the allegations support the initiation of criminal investigation and prosecution. Indeed, earlier this year, Assistant Attorney General Leslie R. Caldwell indicated in a speech that, as a result of the unit’s efforts, there were over a dozen active corporate investigations. AAG Caldwell also stated that the DOJ was steering additional prosecutorial resources to this area to support fighting health care fraud through parallel civil and criminal investigations in order to “maximize the department’s ability to secure the appropriate outcome in each matter – whether it be financial penalties, restitution, federal program exclusion or criminal prosecution of both corporations and individuals.”

The DOJ’s efforts are already bearing fruit. Last month, the DOJ announced a settlement with Tenet Healthcare Corporation that signaled a shift in policy for health care fraud enforcement. The settlement represents one of the first returns on the DOJ’s investment of prosecutorial resources to combat health care fraud against corporations on a national level.

No longer satisfied to focus on fraud, even large-scale fraud, perpetuated by individual physicians, home health care providers, pharmacy owners, and medical supply company executives that were the traditional targets of the DOJ’s criminal task force efforts, the Tenet settlement makes clear that the DOJ is now bringing nationwide resources and expertise to the kind of corporate investigations and prosecutions historically left to regional U.S. Attorney’s Offices.

The Tenet settlement is an important development for health care companies because it demonstrates the impact of the DOJ’s expanded resources and nationwide focus on combating corporate health care fraud. In particular, the Tenet settlement offers four key takeaways:

1. The DOJ is no longer satisfied to prosecute individuals alone and is now, more than ever before, actively scrutinizing corporations for both civil and criminal health care fraud.
2. Health care companies operating in multiple jurisdictions are especially susceptible to the coordinated focus that comes with the DOJ’s involvement in the prosecution of corporate health care fraud.
3. The DOJ’s involvement opens the door to prosecutions in jurisdictions that do not have health care fraud expertise.
4. Corporations and individual executives alike should beware.

Well before Tenet resolved the corporate allegations, the DOJ secured pleas from two executives – Tracey Cota and Gary Lang – for their involvement in the kickback scheme. Cota and Lang each pled guilty to conspiracy to violate the Anti-Kickback Act by paying and receiving bribes in exchange for Medicaid patient referrals.