Author: WorkCompAcademy

A Valencia doctor pleaded guilty to federal charges for submitting more than $2.4 million in fraudulent claims to Medicare.

Dr. Gary J. Ordog, 61, pleaded guilty before United States District Judge Fernando M. Olguin to one count of health care fraud. Judge Olguin is scheduled to sentence Ordog on August 18.

According to admissions made as part of his plea agreement, Ordog, a physician specializing in toxicology, specifically admitted he “submitted false and fraudulent claims to Medicare for purported office visits and other services that the defendant, in fact, never provided, including: (a) purported services for Medicare beneficiaries who were deceased well before the purported dates of services; (b) services purportedly provided to beneficiaries on dates and times when the defendant was, in fact, out of the area, including on dates and times when the defendant was outside of the United States; (c) for dates and times in which the defendant claimed to have provided more than 24 hours of services for that date. Defendant, at times, fabricated patient records to support false and fraudulent claims to Medicare”.

He also specifically admitted that he “submitted and caused the submission of approximately $2,435,089.00 in false and fraudulent claims.”

Despite these admissions, Ordog continues to be fully licensed as a physician to practice medicine in California, despite this case, his guilty plea, and prior disciplinary problems with the Board of Medicine.

His license to practice medicine in California was restricted in April 2015 by a condition in the order setting bail. At the time he was required to submit copies of paper billing with written notes and other supporting documents to the Department of Justice for billing submitted to Medicare.

But the following month the Medical Board of California issued an Order Following Completion of Probation indicating that Ordog had completed probation on prior charges against him and his license was “fully restored and renewed/current status and free of probation requirements, effective March 13, 2015.”

Notwithstanding his serial legal and ethical problems the Board of Medicine currently indicates his license is “Renewed & Current” and Ordog is at this moment free to practice medicine in California despite his admission that he committed a $2.4 fraud. He only agreed as part of his written plea agreement that “Defendant understands and acknowledges that as a result of pleading guilty pursuant to this agreement, defendant will be excluded from Medicare, Medicaid, and all Federal health care programs.”  The California Medical Board seems to be slow to respond in any way to his current admitted multi-million dollar fraudulent medical practice.

According to a report by the Center for Investigative Reporting, providers who have been convicted of fraud, or banned from practicing in one health system, have no problem starting a second career in California’s workers’ compensation system. Perhaps Ordog can join the growing list of refugee physicians who just migrate over to industrial patients for a living.

The HHS-OIG and the California Department of Justice investigated the case, which 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. Fraud Section Trial Attorneys Ritesh Srivastava and Niall O’Donnell are prosecuting the case.

There seems to be relentless constitutional challenges to legislative limits to the ever expanding worker’s compensation system. California has seen this play out in the Stevens case which has been resolved in favor of the constitutionality of the SB 863 IMR process. Similar constitutional battles against legislative reform to the rising costs of workers’ compensation coverage are being waged in courtrooms nationwide. These battles seem to define the trend of what might be expected in the industry in the near future.

In a major victory for injured workers and stinging defeat for businesses, the Florida Supreme Court on Thursday struck down a law limiting attorney’s fees in workers’ compensation cases. The story reported in the Miami Herald says that the 5-2 ruling is a setback for business groups who say legal fees drive up the cost of workers’ compensation insurance and threaten Florida’s economy and they must seek help from a reliably pro-business Legislature. The long-awaited decision puts pressure on lawmakers to call a special session in an election year to referee a high-stakes battle between Republican-aligned businesses and Democrat-leaning law firms, two deep-pocketed rivals that are among the biggest contributors to legislators’ political campaigns.

The case before the high court involves a Miami man, Marvin Castellanos, who suffered head, neck and shoulder injuries while working for Next Door Company, a maker of doors and door frames in Miami. The company waged an aggressive defense, but Castellanos won and received benefits of $822.70. His lawyer, who worked on the case for 107 hours, sought a fee of $36,817.50. He received a fee of $164.54, the equivalent of $1.53 per hour under a fee system the Legislature approved in 2009. Under that law, attorneys who successfully represent injured workers are paid 20 percent of the first $5,000 in benefits obtained and 15 percent of the next $5,000 in benefits.

But the question is not only how the fees are calculated, but also who pays the fee. When litigation is filed in Florida for workers’ compensation medical care or wages, the defendants have thirty days to provide the benefit voluntarily. After that point, they become responsible for payment of the fee associated with any benefits provided as a result of the suit. This is commonly called a “prevailing party” fee shifting provision. The Castellanos case involves a fee that was to be paid by the employer, unlike California where it is paid out of the worker’s benefits.

Writing for the majority, Justice Barbara Pariente said the law violates workers’ due process rights under the state and U.S. Constitution because it prevents challenges to the “reasonableness” of legal fees in workers-compensation cases. “Without the likelihood of an adequate attorney’s fee award, there is little disincentive for a carrier to deny benefits or to raise multiple defenses, as was done here,” Pariente wrote. “Virtually since its inception, the right of a claimant to obtain a reasonable prevailing party attorney’s fee has been central to the workers’ compensation law.” By replacing the former “reasonable” standard with a sliding scale of legal fees, Pariente said, “the Legislature has thus eliminated any consideration of reasonableness.”

Workers’ compensation rates in Florida are regulated by the Office of Insurance Regulation, run by Kevin McCarty, who has resigned effective May 2 but who has offered to stay on with no permanent successor in place. “Limiting attorney’s fees has been an important factor in reducing workers’ compensation rates,” McCarty said. “A legislative remedy will be required to prevent significant increases in rates, and we look forward to working with all parties affected to bring about a sensible solution.”

The effect on rates businesses pay for workers’ comp insurance will be clearer in about a month when the National Council on Compensation Insurance, a federal clearinghouse, is expected to submit a proposed rate filing with McCarty’s office. The impact on Florida’s workers compensation system costs is expected to be significant, said Chris Bailey, a spokesman for NCCI.

Class action litigation has been pending for nearly a year against Berkshire Hathaway Homestate Insurance Company, its wholly owned subsidiary Cypress Insurance Company, Zenith Insurance Company, the defense lawfirm of Knox Ricksen, LLP, and others.alleging that the defendants illegally “hacked” confidential information about workers’ compensation claimants to use to defend claims pending before the WCAB. This month a second class action has been filed in federal court against essentially the same parties. The new case has received some media attention. However, it does not seem that the second case adds anything new to the factual basis for the first alleged case.

The first federal case was filed by Hector Casillas in June 2015. His second amended complaint was filed in March 2016. He files this as a class action pursuant Federal Rule of Civil Procedure 23. He alleges he was a client of the law firm of Reyes & Barsoum LLP to litigate a worker’s compensation claim.

One of the defendants, Palmdale based HQSU Sign Up Services, Inc. is the centerpiece of the compromised data. HQSU is allegedly paid a pre-negotiated flat fee to provide “administrative services” for clients unable to come to an attorney’s office due to physical, financial, or transportation limitations, and to.assist attorneys signing a retainer agreement and filling out an In-Take Packet with personal information. HQSU then uploads the documents to its allegedly username and password-protected website. Attorneys using this service upload and download other documents to HQSU servers. Casillas alleges that HQSU failed to provide adequate or responsible protections against unlawful access and failed to report the hacking activity so it is sued in the class action along with the carriers.

The alleged “hacking” of the HQSU files was first suspected during an in-chambers hearing in a worker’s compensation case before Presiding Judge Paige Levy. The case was being defended by Knox Ricksen. Knox Ricksen’s attorneys allegedly revealed they had Mr. Casillas’ attorney-privileged In-Take Packet. The attorney first allegedly responded to questions by Judge Levy that it was obtained from the HQSU “website” but later said he did “not know” where it came from. Levy ruled it was attorney client privileged and ordered it to be returned.

Allegedly the downloading of documents from HQ Sign Up compromised approximately 32,500 intake sheets, in addition to the Casillas documents. Plaintiff’s experts have allegedly discovered that the documents were obtained by a “directory traversal attack.” Directory traversal is an HTTP exploit which allows attackers to access restricted directories and execute commands outside of the web server’s root directory. On the other hand, Zenith has argued HQSU intake packet materials were obtained using a Google search of the claimant’s name and thus “were found in the public domain.”

In a motion by Zenith to be dismissed, it’s attorneys claim that the case was before Judge Levy because “Knox petitioned the WCAB for an order allowing certain discovery that Knox asserted may show that a “runner” or “capper” had procured Casillas as a Reyes client and Casillas had fabricated or exaggerated his claimed injuries. Reyes opposed, arguing that the discovery was derived from attorney-client privileged information contained in Reyes’s “In-Take Packet” for Casillas. (One would assume from this motion that Zenith believed HQSU Sign Up Services was suspected of running and capping injury cases for lawyers). In any event Zenith was not involved in the Casillas workers’ compensation case and asks to be dismissed.

Another motion recently filed by defendants seeks to strike the class action allegations claiming Casillas violated Central District local rule 23-3 which requires a motion for class certification to be filed “[w]ithin 90 days after service of a pleading purporting to commence a class action” which expired last October. Casillias replied that the local rule is discretionary, and asks for more time.

An now a second federal complaint has been filed by Adela Gonzalez seeking class action status against the same carriers and others. Gonzalez was also a client of Reyes & Barsoum LLP in connection with a workers’ compensation claim. The facts of the second case are essentially similar to the Casillas second amended complaint. Nothing new is alleged what was not previously claimed. The second case is in its infancy, and no responsive documents have yet been filed by any defendants. Gonzalez does not specifically allege how her case was compromised other than as part of the entire scheme.

At the moment, the controversy seems to essentially be a claim by a client of an applicant lawfirm that approximately 33,000 “In-Take Packets” completed by HQSU Sign Up Services, Inc. were “hacked” by a conspiracy of insurance carriers using a “a directory traversal attack” to download these confidential records that were protected by attorney client privilege from HQSU in violation of law.

On the other hand, the defendants suspect and claim that HQSU was really a runner or capper organization soliciting injury claimants for lawfirms, and that they had approximately 33,000 records of litigants on an insecure website that Google regularly indexed. A Google search of any of the claimants by name in these records would lead to file on the HQSU website that could be downloaded by anyone without hacking anything and thus were in the “public domain.” Since HQSU is a party to this case, no doubt discovery will prove or disprove its status as a runner or capper organization.

It has been one of the pharmaceutical industry’s most closely watched experiments: does ending kickback payments to doctors undermine drug sales?  GlaxoSmithKline, the British drugmaker, believes it has proved that raising the ethical bar on marketing practices doesn’t necessarily reduce competitiveness.

GSK Chief Executive Andrew Witty said better-than-expected 2016 first quarter results coincided with a period where the entire group had operated under a new policy that bans payments to doctors who speak on behalf of GSK. “It convinces us that the moves we’ve made are both good for our business and also good for improving the reputation of the industry,” Witty told reporters.

GSK, which was fined nearly $500 million in 2014 for bribing doctors in China, is the first drug company to implement such a broad clampdown on payments to prescribers and competitors are watching closely to assess the commercial fallout.

The former head of the Chinese division of GlaxoSmithKline was charged with corruption in connection with the bribery scandal in which GSK paid off doctors and government officials. In the prior six years Mark Reilly and some of his associates allegedly spent an approximate sum of $480 million on hospitals and its employees, in order to increase the sales of GSK pharmaceuticals in China. Shortly after the allegations against the pharmaceutical company were made public their sales in the Chinese market fell 61%.

GlaxoSmithKline announced it would stop paying doctors for promoting its drugs and scrap prescription targets for its marketing staff – a first for an industry battling scandals over its sales practices, and a challenge for its peers to follow suit. Britain’s biggest drugmaker also said it would stop payments to healthcare professionals for attending medical conferences as it tries to persuade critics it is addressing conflicts of interest that could put commercial interests ahead of the best outcome for patients.

The Chinese authorities were not only investigating GlaxoSmithKline; big international pharmaceutical companies like Novartis International AG, AstraZeneca PLC, Sanofi S.A., Bayer AG und Eli Lilly and Company have also been subjected to greater scrutiny.

In China, GSK’s business is still struggling, with sales down 28 percent in the first quarter, due to disposals of some products and lower prices, but Witty said he expected GSK to return to growth in China in the second half of 2016.

In the United States, the industry’s biggest market by far, many companies have run into conflicts over improper sales tactics and GSK reached a record $3-billion settlement a few years ago with the U.S. government over charges that it provided misleading information on certain drugs.

AstraZeneca said in 2011 it was scrapping payments for doctors to attend international congresses but others, until now, have not followed suit and GSK’s actions go further.

The shift is pragmatic to a certain extent, since many decisions about which drugs to use are now taken centrally by big insurers and governments, based on cost-effectiveness measurements, rather than by individual doctors.

Marissa Gonzalez-Ornelas injured both her knees in 2004 while working as a counselor for the County of Riverside.

In 2015, her treating physician submitted a request for authorization to provide her with Synvisc injections in both knees. Defendant submitted the request to UR, and a UR decision issued denying authorization. She appealed the UR denial to IMR. An IMR determination issued denying authorization. She timely appealed the IMR determination to the WCAB pursuant to Labor Code section 4610.6(h).

The WCJ denied applicant’s IMR appeal based upon the finding that “[t]here is no clear and convincing evidence that the determination was procured by fraud,” and “[there is no clear and convincing evidence that the determination was the result of a plainly erroneous finding of fact, which erroneous finding is a matter of ordinary knowledge, and not a matter subject to expert opinion.” The WCAB reversed the WCJ in the panel decision of Gonzalez-Ornelas v County of Riverside.

The !MR reviewer wrote that denial of authorization was because, “[t]here is no documentation that the patient failed conservative therapies” and “[t]here is no documentation that the patient is suffering from osteoarthritis or severe osteoarthritis that did not respond to conservative therapies.” These statements by the IMR reviewer are directly contradicted by what is set forth in Dr. Jackson’s December 30, 2014 notes which were in the IMR file.

Page four of the December 30, 2014 progress notes by Dr. Jackson states that applicant complained of pain in both knees at that time and that x-rays of the knees showed “some medial compartment arthritis and minimal patella-femoral arthritis.” On page five of the notes, Dr. Jackson provides a diagnosis that includes “primary osteoarthritis of the right knee … primary osteoarthritis of the left knee” and “unilateral post-traumatic osteoarthritis” of both knees. (Id.) Dr. Jackson further documents in his notes that applicant had left knee surgery “with no real decrease in her symptoms,” but that she did have “definite benefit” with Synvisc injections in both knees over the years, writing on page five that applicant “has undergone treatment on a very conservative basis which has been complicated by her morbid exogenous obesity which also would have precluded any significant intervention other than simple conservative measures as have been done.” (Id.) Dr. Jackson opined that applicant will eventually need bilateral total knee replacements, but that Synvisc injections will help her symptoms until surgery and that Synvisc is recommended because applicant “does not do well with cortisone.” (Id.)

The WCAB panel concluded that “Denying authorization based upon a finding that there is “no documentation” when such documentation is, in fact, in the possession of the IMR reviewer is “a plainly erroneous express or implied finding of fact [as] a matter of ordinary knowledge based on the information submitted for review … and not a matter that is subject to expert opinion” as described in section 4610.6(h)(5). It is also an action taken “without or in excess of the administrative director’s powers” as described in section 4610.6(h)(I). The !MR appeal should have been granted by the WCJ on both those grounds.”

“Contrary to the view expressed by the WCJ in her Report, expert opinion is not needed in order to determine that the IMR decision in this case is defective. It is within the realm of ordinary knowledge to conclude that it was error for the IMR reviewer to state that there is “no documentation” when such documentation is part of the record, as in this case. It is also within the realm of ordinary knowledge to determine from the face of the IMR decision that the use of the injections is recommended by the ODG for people who suffer from osteoarthritis in their knees, like applicant.”

The panel ordered the Administrative Director to “provide a new IMR of the treatment forthwith in accordance with section 4610.6(i) and this decision. As part of the new IMR, the ODO should be applied based upon the documentation in the record, which as discussed above, appears to support the provision of the Synvisc injections.”