In a recent letter to the Commission on Health and Safety and Workers’ Compensation, the Chair of the California Senate Committee on Labor and Industrial Relations identified fraud as a specter haunting the workers’ compensation system and presenting a fundamental challenge to the operation of system for all stakeholders.
Specifically, the letter cited the recent press coverage by the Center of Investigative Reporting which detailed more than $1 billion in fraudulent activity by a variety of medical providers including the Pacific Hospital of Long Beach, Peyman Heidary, Cary Abramowitz, Ronald Grusd and George Reese.
The analysis of the proposed law continues by point out that “despite the charges, medical bills and workers’ compensation liens from doctors convicted of medical fraud are still being pursued. For example, Dr. Philip Sobol, who pled guilty in connection with his involvement with the Pacific Hospital kickback scheme and is facing up to 10 years in prison, is still filing workers’ compensation liens and seeking payment for treatment that is likely fraudulent. In theory, these workers’ compensation liens could go towards paying his $5.2 million in restitution due to his fraudulent activities. Additionally, Dr. Sobol’s medical license remains active – the Medical Board has yet to take adverse action. “
An now AB 1244 has been proposed to help combat workers’ compensation fraud by changing the incentives facing medical providers in the California workers’ compensation system.
Specifically, AB 1244 seeks to create a suspension process for medical providers who commit serious crimes or are involved in fraudulent activity that is modeled after the suspension process for Medi-Cal.
Currently, there is no suspension process for medical providers in the workers’ compensation system beyond removal from the Qualified Medical Examiner (QME) list.
In a nutshell, AB 1244 would follow the lead of Medi-Cal and require the suspension of a medical provider if the medical provider is convicted of a felony, a misdemeanor connected to fraud, a misdemeanor connected to patient or privilege abuse, or the medical provider’s license is suspended or revoked.
AB 1244 then provides a hearing process where the medical provider can contest the applicability of suspension – such mistaken identity or a later plea deal that reduces a felony to a non-eligible misdemeanor. If the medical provider does not request a hearing, the suspension would take effect within 30 days of notice.