Author: WorkCompAcademy

A licensed occupational therapist pleaded guilty in Los Angeles for his role in a $2.6 million Medicare fraud scheme that involved billing for occupational therapy services that were not provided.

Keith Canlapan, 38, of West Covina, California, pleaded guilty to one count of conspiracy to commit health care fraud before U.S. District Judge George H. Wu of the Central District of California.

Sentencing is scheduled for Feb. 16, 2017, before Judge Wu.

As part of his guilty plea, Canlapan admitted that he was a licensed occupational therapist employed with JH Physical Therapy, an occupational therapy clinic located in Walnut, California. Canlapan further admitted that through JH Physical Therapy, he billed Medicare for occupational therapy services when no such services were provided to the Medicare beneficiaries. Instead, the Medicare beneficiaries received massage and acupuncture services, which are not reimbursable under Medicare rules, he admitted. In fact, on dates that Canlapan purportedly provided occupational services to Medicare beneficiaries at JH Physical Therapy, Canlapan was admittedly not present at JH Physical and instead was either out of the country or at his other places of employment on some of those dates.

Between approximately October 2009 and approximately December 2012, Canlapan, through JH Physical Therapy, billed Medicare $2,669,618 in false and fraudulent claims, of which Medicare paid $1,860,786, he admitted.

Canlapan was charged in an indictment returned on June 16, 2016, along with co-defendants Simon Hong, 54, and Grace Hong, 50, husband and wife, both of Brea, California. Simon Hong is the owner and Grace Hong is the co-operator of JH Physical Therapy, and they are charged with one count of conspiracy to commit health care fraud and three counts of health care fraud. Both are pending trial, which is scheduled for Jan. 17, 2017. An indictment is merely an allegation and all defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Co-conspirator Roderick Belmonte Concepcion, a licensed occupational therapist, was also previously indicted in a separate related case and pleaded guilty in April 2016. His sentencing is scheduled for Jan. 23, 2017.

The case was investigated by the Los Angeles Region of HHS-OIG, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The case is being prosecuted by Trial Attorney Blanca Quintero of the Fraud Section.

Helmerich & Payne International Drilling operates oil drilling rigs located in south Kern County on an Occidental Petroleum leasehold.

One of the drilling rigs operated by H&P was called Oil Rig 261. The night shift crew for Oil Rig 261 included defendant Luis Mooney, a floorhand, and Mark Stewart, a motorman. Ruben Ibarra was the crew’s driller and, therefore, the supervisor of Mooney, Stewart and other members of the crew. Ibarra and Stewart did not live in the area and stayed at the Best Western Hotel.

Mooney lived in Bakersfield and provided Ibarra and Stewart with rides to and from the drill site in his personal vehicle, a Ford F250 pickup. Mooney testified that he had given Ibarra a ride at least 50 times. Ibarra testified that he believed he had ridden with Mooney a few dozen times before the accident. Mooney’s route from his home to the jobsite took him by the hotel. As pointed out by plaintiff, Mooney’s route changed when he gave rides because he would have to turn off of Stockdale Highway and into the parking lot of the hotel to pick up or drop off his passengers. This slight change in route is not relevant in this case. Mooney would have traveled by the accident site on his way to and from work regardless of whether he was providing crew members with a ride to or from the hotel.

On December 12, 2011, after the end of their shift, Mooney was returning home and giving Ibarra and Stewart a ride to the hotel. Mooney also had driven Ibarra and Stewart to work the previous afternoon. At approximately 6:30 a.m., about 13 miles from Oil Rig 261, Mooney’s pickup collided with a Chevrolet 2500 pickup driven by plaintiff Brent Pierson. Mooney crossed the double yellow line and into the lane of oncoming traffic.

Pierson and his wife filed a personal injury action against Mooney, and later added H&P as a defendant. Travelers Property Casualty Company of America, the worker’s compensation insurer for Pierson’s employer, intervened in this lawsuit.

H&P filed a motion for summary judgment against Pierson and Travelers. The motion asserted that the incident occurred when Mooney was driving home from work and did not occur while he was in the course or scope of his employment with H&P. Pierson opposed this motion and filed his own motion for summary adjudication on the scope of employment issue. The trial court granted summary judgment for H&P, concluding as a matter of law that the going and coming rule applied and, therefore, Mooney’s operation of his vehicle at the time of the accident was not within the scope of his employment. Subsequently, a judgment was entered and Pierson filed an appeal. The Court of Appeal affirmed the dismissal of H&P in the published case of Pierson v Helmerich & Payne International Drilling.

The doctrine of respondeat superior holds an employer liable for torts of its employees committed within the scope of their employment. Thus, a plaintiff suing an employer under the doctrine must prove that the tort was committed within the scope of employment.

A corollary of the doctrine of respondeat superior is the “going and coming rule,” which states that employees do not act within the scope of employment while going to or coming from the workplace. The rationale for the rule is that the employment relationship is suspended from the time the employee leaves work until he or she returns because an employee ordinarily renders no service to the employer while traveling.

The going and coming rule is used in tort law to determine the scope of employment for purposes of respondeat superior liability and also is used in workers’ compensation law to determine whether an employee injured while traveling to or from work sustained an injury arising out of and in the course of the employment for purposes of Labor Code section 3600.

However the Court of Appeal noted that the coming and going rule applied in tort law to determine the scope of employment is not identical to the rule applied in workers’ compensation law to determine the course of employment. The differences exist because the policy considerations underlying each field of law are different. This view of the going and coming rule is nothing new and has been confirmed by most recent published decisions addressing the going and coming rule.

Secondly, the workers’ compensation cases awarding coverage under an exception to the going and coming rule cannot be categorically excluded as having persuasive force in tort cases involving the same exception and similar facts. The two versions of the rule and its exception are closely related and, as a result of this overlap, courts often cite tort and workers’ compensation cases interchangeably.

Third, workers’ compensation cases awarding coverage do not necessarily provide reliable precedent for tort cases because the version of the rule applied in tort cases is more restrictive.

Former California State Senator Ronald S. Calderon was sentenced to 3½ years in federal prison after pleading guilty to a federal corruption charge and admitting that he accepted tens of thousands of dollars in bribes in exchange for performing official acts as a legislator.

Ron Calderon pleaded guilty in June to one count of mail fraud through the deprivation of honest services. In a plea agreement filed in this case, Ron Calderon admitted accepting bribe payments from the owner of a Long Beach hospital who wanted a law to remain in effect so he could continue to reap tens of millions of dollars in illicit profits from a health care fraud scheme. Ron Calderon also admitted taking bribes from undercover FBI agents who were posing as independent filmmakers who wanted changes to California’s Film Tax Credit program.

Ron Calderon’s brother, Thomas M. Calderon, 62, also of Montebello, a former member of the California State Assembly who became a political consultant, was sentenced last month to 10 months in custody for his conviction on a money laundering charge for allowing bribe money earmarked for his brother to be funneled through his company.

The Calderon family was a political dynasty for decades in California. A third brother, former Assemblyman Charles Calderon, was not implicated in the corruption scandal. Ronald Calderon’s nephew Ian Calderon is a state assemblyman and the last family member in state elected office. He was not alleged to have any part in the scheme.

Ron Calderon admitted participating in a bribery scheme involving two areas of legislation and the hiring of a staffer who was also an undercover FBI agent.

In the first part of the bribery scheme, Ron Calderon took bribes from Michael Drobot, the former owner of Pacific Hospital in Long Beach, which was a major provider of spinal surgeries that were often paid by workers’ compensation programs. The spinal surgeries are at the center of a massive healthcare fraud scheme that Drobot orchestrated and to which he previously pleaded guilty. Ron Calderon was not charged in the healthcare fraud scheme that led to well over $500 million in fraudulent billings. Drobot, who was described in court papers filed by prosecutors as “a greedy fraudster robbing taxpayer-funded federal programs,” was a client of Tom Calderon’s political consulting firm.

California law known as the “spinal pass-through” legislation allowed a hospital to pass on to insurance companies the full cost it had paid for medical hardware it used during spinal surgeries. As Drobot admitted in court, his hospital exploited this law, typically by using hardware that had been purchased at highly-inflated prices from companies that Drobot controlled and passing this cost along to insurance providers.

Drobot bribed Ron Calderon so that he would use his public office to preserve this law that helped Drobot maintain a long-running and lucrative healthcare fraud scheme, which included Ron Calderon asking a fellow senator to introduce legislation favorable to Drobot and attempting to recruit other senators to support Drobot. The payments from Drobot came in the form of summer employment for Ron Calderon’s son, who was hired as a summer file clerk at Pacific Hospital and received a total of $30,000 over the course of three years, despite the son doing little actual work at the hospital.

In a sentencing memorandum filed with the court, prosecutors write that Ron Calderon “sold his vote not just to help pay for the expenses of living beyond his means, but for the more banal and predictable aims of corruption – fancy luxuries, fancy parties, and fancy people.”

The memorandum further argues that a significant term of imprisonment was necessary to send a message to other political officials and the electorate because, without such a sentence, “the trust already eroded by individual detections of corrupt politicians will spread like cancer and threaten the fundamentals of a trusted democracy. It is not hyperbole to insist that nothing less is at stake in defendant’s sentencing.”

His attorney Mark Geragos suggested during the court hearing that his client should serve no time in prison. He alleged that the government had entrapped Calderon and raised the former lawmaker’s poor health. The former state senator’s legacy has been ruined by his guilty plea in the case, he added. “This is going to be the opening paragraph of his obituary, unfortunately,” Geragos told Judge Snyder.

When Snyder rebuffed Geragos’ appeal and said Calderon needed to spend some amount of time behind bars, Geragos switched tactics, asking her to consider a two-year sentence.

Striking a defiant tone throughout, Calderon, 59, refused to admit any wrongdoing or to apologize.”My goal was always to do the right thing for California,” he said. “At no point did I intend to break the law.”

Calderon added that he was unemployed and tens of thousands of dollars in debt. He said he was not only banned from running for public office again but had been stripped of his real estate license and had been unable to get a job. His wife, he said, would likely have to declare bankruptcy and sell their house.

Judge Snyder was unmoved. “I did not really hear Sen. Calderon accept responsibility or apologize,” she said. “It was really about himself.”

An Orange County Sheriff’s Department (OCSD) deputy was arrested on charges for committing insurance fraud by failing to disclose his true physical abilities and activities to his health care providers and lying under oath.

Nicholas Zappas, 36, who lives in Laguna Niguel, is charged with 11 felony counts of insurance fraud and seven felony counts of perjury under oath. If convicted, Zappas faces a maximum sentence of 16 years in state prison. The defendant was arrested by Orange County District Attorney (OCDA) Investigators, and his arraignment date and time is yet to be determined.

At the time of the alleged crimes, Zappas was employed as an Orange County Sheriffs Department deputy for approximately 14 years.

On April 2, 2015, while working Harbor Patrol and engaged in a boat rescue, Zappas claimed he tripped over a fire hose falling on his back. He filed a workers’ compensation insurance claim for injuries to his left shoulder, left side of his neck, and lower back. He was placed on work restrictions of no lifting, pushing or pulling of greater than 10 pounds by a medical doctor due to his complaint of pain. The OCSD accommodated the work restrictions and Zappas was assigned to dispatch.

However, between May 2015 and November 2015,Zappas is accused of engaging in CrossFit, which is a high-impact exercise with varied functional movements. He allegedly lifted substantial weights in excess of 200 pounds, doing box jumps, burpees, squats, and other activities that were contrary to the limitations imposed by the doctor based on his description of his pain, symptoms and limitations. Zappas appeared on video while engaging in CrossFit. Thus he is accused of failing to disclose that he was participating in CrossFit to his medical physicians.

In May 2015, the County discovered that Zappas was engaging in CrossFit, and it was reported to OCDA Bureau of Investigations, who investigated this case.

On Dec. 1, 2015, while under oath during his deposition, Zappas allegedly denied lifting anything over 20 pounds since the date of his injury and claimed that he could not lift anything heavy, could not do squats, and could not run.

Between January 2016 and May 2016, Zappas is accused of continuing to engage in CrossFit and not disclosing his abilities to his medical physicians.

Deputy District Attorney Pamela Leitao of the Insurance Fraud Unit is prosecuting this case.

Newly adopted AB 2883 provides that all business workers’ comp insurance policies will be required to cover certain officers and directors of private corporations and working members of partnerships and limited liability companies that may have been previously excluded from coverage beginning on Jan. 1, 2017.

Unfortunately, AB 2883 did not include any language exempting in-force policies or delaying its effective date so as not to impact in-force policies.

And the Insurance Journal reports that John Norwood, with lobbying firm Norwood & Associates, said not only does AB 2883 present implementation problems for insurers, it presents an errors and omissions issue for insurance agents and brokers, especially with those entities that today do not purchase a workers’ comp policy because only the owners are involved in the business.

“Literally everybody in the industry responsible for legislative issues missed the application issue relative to this bill, yours truly included in that list, and the same with all legislative and committee staff until after the governor signed the bill into law,” Norwood said. “There may be an opportunity to address the application issue early next legislative session but some coverage will be afforded to individuals with in-force policies if and until a fix-it bill can be passed through both houses of the Legislature and signed by the governor.

According to Insurance Commissioner Jones, the Department of Industrial Relations, the American Insurers Association, and the Association of California Insurance Companies, all agree that this change in law applies to in-force policies.

Prior to the passage of the law, officers, directors and working partners were not required to be covered under the business’s workers’ comp policy unless they opted to be covered and were not listed on a limiting and restricting endorsement.

Going forward officers, directors and partners are required to be covered under the employer’s workers’ comp policy unless they meet a narrower definition of excluded employee. Under this narrower definition, officers, directors, and partners can only opt out of coverage by signing a waiver under penalty of perjury and filing the waiver with their employer’s insurer.

Insurance companies are required to identify and provide notice to each employer that may have employees that were previously excluded from coverage and are affected by the new law, and they are required to report the premium and loss experience associated of those who have not chosen to opt of the coverage.

The Insurance Journal reports that Blake Longo, with Pasadena-based AJLongo Insurance Brokers, shot an email to his clients and business associates on Monday warning them of the changes. Longo said he’s already been talking to some of his clients about it. “They’re not happy about the change,” Longo said. “They don’t believe it adds any benefit to them and that it will certainly add extra costs.”

Longo said the changes will also make life tougher on brokers like him, because it will be brokers who businesses will first turn to if the new rules affect them.”You are delivering the bad news and you’re delivering the additional premium,” he said. “That does not bring smiles to people’s faces.”

According to Norwood, the bill was originally worded to be a bill authorizing a study on paperless systems for the approval of treatment requests in the workers’ comp system. However, that language was gutted and amended to address the issue of exemptions for officers and directors of corporations, partnerships and LLCs.

The bill’s new language was added because some insureds were allegedly abusing the exemption process under current law by listing everyone in their organization as an officer or director to avoid purchasing workers’ comp, Norwood explained.

The biggest issue with AB 2883 is that it applies to all workers’ comp insurance policies that will be in effect on or after Jan. 1, 2017, including those policies in force any time after the first of the year. Katie Pettibone, AIA’s vice president for state affairs, said her group is working with CDI and DIR to help address this.

“Publicly the bill was supposed apply to new policies and renewals after the effective date of January 1, 2017, thus there was no opposition,” Pettibone said. “However, there was ambiguity in the drafting and it appears the bill is going to be broader than just policies written after Jan. 1 or renewals ” it will be applicable to in-force policies. Stakeholders have been working with the California Department of Insurance and Department of Industrial Relations to help address this unintended effect.”