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Rehabilitation Therapists Pressured to Drag Out Treatment

Nursing homes in California – and notably in Orange County – are outpacing the nation in embracing the most expensive form of therapy for their patients on Medicare, triggering an outcry from some therapists who say the therapy is frequently unnecessary.

The Orange County Register reports that 72 percent of Medicare rehabilitation patients in Orange County nursing homes in 2014 received treatment at the highest rate allowed. That compares to 66 percent statewide, and 58 percent nationwide, the CHCF Center for Health Reporting found in an analysis of Medicare data for the Orange County Register.

The cost to taxpayers is upward of $500 per patient per day, contributing significantly to the nearly $30 billion per year that Medicare pays nursing homes for all patient care.

The practice, known as ultra high care, can require sometimes frail patients to receive at least 12 hours of physical, occupational or speech therapy every week. Some therapists in nursing homes say they’re being told to give inappropriate treatment to patients, according to the three major therapist professional groups.

“We get calls from therapists who are being pressured to do practices that are unnecessary or illegal,” said Roshunda Drummond-Dye, director of regulatory affairs at the American Physical Therapy Association.

Melissa Lathon said she personally saw Medicare fraud skyrocket in her 16 years as a social services director at six nursing homes, including three in Orange County. “They would pretty much twist the therapists’ arms and say, we need another week at the ultra high level,” she said. And when she handled patient discharges, “If they still had Medicare benefits available, they would not let me discharge them.” She said she left the field after a supervisor ordered her to fill out a document saying a patient needed assistance in walking when he had clearly shown he was walking independently.

A handful of nursing home therapists have turned whistleblower, filing lawsuits under the federal False Claims Act. In November 2013, Mission Viejo-based Ensign Group agreed to pay $48 million to settle a case involving allegedly false rehab claims at Sea Cliff Healthcare Center in Huntington Beach and five nursing homes in other Southern California cities. Two therapists originally filed the suit. Ensign denied wrongdoing at the time and did not respond to questions for this article.

Pending cases against two of the nation’s largest nursing home chains, HCR Manor Care and Life Care Centers of America, allege managers pressured therapists to step up treatments. They also allegedly administered expensive therapy to dying patients. Both HCR and Life Care are fighting the lawsuits. Life Care has nursing homes in Garden Grove, La Habra and Lake Forest.

The recent $125 million settlement with Kindred Healthcare, the nation’s largest nursing home operator, a company with annual revenues topping $2.5 billion, sent its stock to its lowest point in nearly four years. Kindred denied wrongdoing.

Clinic Operators Convicted After Three Week Trial

The Los Angeles Times reports that two Glendale men were convicted of laundering more than $1 million generated through fraudulent billings to Medicare for equipment and tests that were either medically unnecessary or never provided.

After a three-week trial, a federal jury found Karen “Gary” Sarkissian guilty of six counts of money laundering, five counts of health care fraud and one count of conspiring to commit money laundering. Edgar Pogosian, also known as Edgar Hakobyan, was convicted of one count each of conspiring to commit money laundering and money laundering. Both are slated to be sentenced in June, according to the U.S. attorney’s office.

Officials said Sarkissian operated an Echo Park clinic, where a physician assistant, L’Tanya Smith, ordered medically unnecessary tests and services in 2009 and 2010 that led to more than $1.2 million in fraudulent Medicare claims.

Smith also ordered medically unnecessary durable medical equipment and tests that were referred to other Medicare providers, who then submitted more than $10 million in fraudulent claims. Smith pleaded guilty to five counts of healthcare fraud and is due to be sentenced in May.

According to the U.S. attorney’s office, Sarkissian was involved in laundering the fraudulent proceeds through five bogus corporations established by two men also convicted in the scheme. The two co-conspirators deposited millions of dollars of fraudulent proceeds into the bank accounts of the bogus companies, and later wrote checks from the companies to themselves and their relatives, including Pogosian, officials said.

Pogosian’s uncle, Khachatour Hakobyan, who prosecutors believe led the scheme, was sentenced last month to 57 months in prison after pleading guilty to conspiring to launder healthcare fraud proceeds and underreporting his income from the conspiracy. The Glendale resident was also ordered to pay more than $600,000 in restitution.

Another Glendale resident involved in the scheme, Aram Aramyan, was sentenced to 51 months in prison and ordered to pay more than $350,000 in restitution, officials said.

Former CHP Officer Ordered to Pay $183,000 After Comp Fraud Conviction

A former California Highway Patrol officer who was seen engaging in physically strenuous outdoor activities while receiving workers’ compensation has been ordered to pay more than $183,000 in restitution.

The Sacramento Bee reports that Daniel Corey Clapp pleaded no contest to misdemeanor workers’ compensation insurance fraud in August 2014. He was sentenced to 60 days in county jail and three years probation, and ordered to make restitution to the CHP and State Compensation Insurance Fund.

Sacramento Superior Court Judge Steve White on Wednesday ordered Clapp to pay the CHP $151,927.01 for benefits he received and the costs incurred by the CHP to investigate the case. The judge also ordered Clapp to repay the State Compensation Insurance Fund $31,475.68 for disability benefit payments he received and investigative costs, according to a Sacramento County District Attorney’s Office news release.

On Jan. 3, 2012, Clapp filed a workers’ compensation claim for injuries to his shoulder, neck, knee and back arising from a struggle with a man he was attempting to arrest. Over the next two years, Clapp told his doctors he was unable to work because of the injuries, authorities said.

When fellow officers working traffic control saw Clapp drive by towing a camping trailer and ski boat, an investigation was initiated by the CHP’s Internal Affairs Division, Workers’ Compensation Fraud Unit.

Investigators conducted surveillance during several camping and boating trips that Clapp took with his family. He was filmed hooking up a boat trailer and fifth-wheel camping trailer, launching the boat, and being very physically active, authorities said. Throughout this time, he was telling his supervisors that he was too disabled to do even office work.

During a deposition in his workers’ compensation case, Clapp was asked under oath if he had attempted to do any physical activities like camping, hunting, riding dirt bikes or boating. Clapp testified that he had not, but wished he could, and claimed he could only shuffle around the workbench in his garage.

Results of the CHP’s investigation were submitted to the District Attorney’s Office and prosecuted by the Insurance Fraud Unit.

Owners of “Scofflaw” Marijuana Club Indicted for Comp Fraud

The owner and two officials of what officials call a “scofflaw” San Jose marijuana dispensary were indicted by a criminal grand jury this month on felony charges including illegal sales of marijuana, tax fraud, insurance fraud, worker’s compensation fraud, and money laundering.

The company, San Jose Organics, failed to pay over $2 million in taxes to the state and city. This, despite the fact that investigators found a paper trail showing the dispensary made approximately $10 million dollars in profit between April 2013 and July 2015. Also recovered from the San Francisco home of the owner Ben Kit Lew was $800,000 in cash. Another $400,000 was uncovered from other locations associated to the investigation.

Lew, 44, faces up to 46 years in prison on 46 felonies and one misdemeanor, if found guilty. Brian Wong, the 43-year-old manager, faces up to 23 years on 15 felonies and one misdemeanor. Ernest Ma, 28, the Secretary of the Corporation, faces a maximum of about 10 years on six felonies.

The dispensary was raided in July and the defendants were arrested. Evidence showed that the dispensary was bringing in $25,000 a day in sales.

San Jose Organics was featured in a May 2015 NBC Bay Area expose that called the club “one of the busiest medical marijuana collectives” in in the city and reported that it claims to have between 5,500 and 6,000 members. The report said city officials accused San Jose Organics of “breaking the law every day it’s open for business” and had already served it with “multiple citations,” and alleged the dispensary sold weed to buyers under age 21 in violation of city law. The TV report said the owners declined an interview through a consultant.

“People like these defendants are profiteers exploiting the medical marijuana laws,” prosecutor Edward Liang said. “They do this, while at the same time ignoring laws that every other business in California is required to follow. We would not accept this conduct in any other industry. We will continue to hold medical marijuana dispensaries to the same standards.”

Former Senator Yee Sentenced to Five Years in Comp Law Bribery Case

A federal judge sentenced former California state senator Leland Yee on Wednesday to five years in prison after he acknowledged accepting thousands of dollars in bribes. Prosecutors had recommended an eight-year sentence, saying that would reflect the extent of Yee’s crimes. Yee’s attorneys had called for no more than five years and three months behind bars, saying Yee had a history of public service and his wife was ill.

“I take full responsibility for this. I accept my crimes, I am asking for lenience. I hope you look at my entire life and not just the crimes I committed,” Yee said just before sentencing. District Court Judge Charles Breyer rejected his request. “The crimes you committed were an attack on our democratic institutions. Mr Yee, you abused that trust,” he said. “These are very serious abuses. The most significant crime was that your vote was for sale.”

Yee and his codefendants pleaded guilty in federal court in San Francisco last July. For his part, Yee, 66, acknowledged that he participated in two criminal enterprises, the Leland Yee for Mayor Campaign 2011 and the Leland Yee for Secretary of State campaign. In connection with these campaigns, Yee admitted he (1) accepted $10,000 in exchange for using his influence as a state senator to assist in the process of obtaining a grant from the California Department of Public Health, (2) conspired to extort money from individuals by suggesting he would cast favorable votes for specific legislation only if the money were paid, (3) accepted a $11,000 bribe in exchange for arranging a meeting with another state senator to discuss specific legislation, (4) conspired with others to purchase weapons in the Philippines and import them illegally into the United States, and (5) provided more than $6,000 in cash to a campaign aid knowing the aid would launder the money by arranging to convert the cash into checks made payable to Yee’s Secretary of State campaign.

The federal indictments included accusations that Yee took bribes in exchange for voting for bills that favored his contributors. One bill involved regulations for medical marijuana, a second extended the life of the California State Athletic Commission, and a third prevents pro football players on non-California teams from filing workers’ compensation claims for their injuries.

The indictment said an undercover agent told one of his associates, Keith Jackson, a former San Francisco school board president who also worked as a consultant and fundraiser for Yee, that the owner of a National Football League team was prepared to contribute $60,000 to Yee if he would support the workers’ compensation bill. Jackson accepted, after contacting Yee, who voted for the bill, the indictment said. It said the money was never paid.

The judge gave Yee 30 days to surrender to the U.S. Marshal’s Service, which will turn him over to the federal prison system. James Lassart, Yee’s lawyer, asked the judge to recommend the sentence be served at the federal prison in Taft in Kern County. Yee rushed out of the courthouse with his lawyer who said: “He’s remorseful and he’s tired of this humiliation to his family and he’s tired of what I would call this circus.”

Sheriff’s Correctional Deputy Sentenced to 120 Days for Comp Fraud

A former Santa Clara County sheriff’s correctional deputy was sentenced this week for a false workers’ compensation claim filed last year.

Mark Samuel Navarrete, 40, of San Jose, was sentenced to 120 days in county jail, but can serve the time out of custody through electronic monitoring, his defense attorney Patrick Valencia said. Navarrete was also ordered to pay about $22,880 in restitution for the workers’ compensation he had received.

Navarrete originally pleaded not guilty to a felony count of making and presenting a false or fraudulent statement in support of a workers’ compensation claim. However last month, Navarrete changed his plea to no contest.

The former deputy was injured during a softball game on July 14 while off-duty at Twin Creeks Sports Complex in Sunnyvale and later took himself to an emergency room for pain to his left bicep, according to authorities. However Navarrete underwent surgery through the county and claimed he was injured while closing a filing cabinet at work..

Navarrete’s co-worker who knew the injury took place outside the workplace informed a supervisor, which led to an investigation into the claim. Investigators obtained hospital records, text messages and video from the sports complex that recorded the game.

His lawyer reported that Navarrete now understands the mistake he made, but it was “unfortunate” that he lost his job over the matter. Navarrete had worked with the sheriff’s office for 12 years and resigned soon after his arrest. His lawyer also called the sentence “lenient” and believed the judge would have even given a lighter punishment if there were not other issues surrounding violence at the county jail which has placed this case in the spotlight.

The Navarrete case predates the investigation into the deadly Aug. 26 beating of Michael Tyree at the Main Jail, which spurred murder charges against three other correctional deputies and prompted elected officials to promise a host of reforms of the county’s jail facilities, with pointed attention at misconduct by jail staffers.

Can You Think Away Chronic Back Pain?

An eight-week group program focused on mindfulness-based stress reduction may help with short-term function and long-term pain for people with chronic low back problems, according to a new study published in the JAMA Internal Medicine and reported in Reuters Health.

“Most people would think mindfulness meditation would help stress,” said lead author Dr. Natalia Morone of the University of Pittsburgh. “They would not typically think it could actually lead to reduced pain or lead them to have less pain interference during their day to day activities.”

The researchers studied 282 older adults, with an average age of 74, in the Pittsburgh area with functional limitations due to chronic low back pain between 2011 and 2014. The participants were randomly separated into two groups. Both groups entered into an eight-week program followed by monthly sessions for an additional six months.

In the mindfulness group, participants were taught four methods of meditation, using directed breathing and mindful awareness of thoughts and sensations in sitting, walking or lying down positions. They also learned mindful stretching during the initial eight weeks. During the six months of booster sessions, participants met to meditate and discuss themes of the mindfulness program.

Those in the comparison group met for the same amount of time in groups of the same size with the same amount of “homework” and time with a facilitator, but instead focused on education based on the 10 Keys to Healthy Aging, which does not address pain. They learned about managing high blood pressure and did the same chair stretches as the mindfulness group.

The participants had monthly 15-minute phone interviews about the back pain, function, mindfulness, and doctor or hospital visits. Based on disability questionnaires, the people in the mindfulness group had improved more after eight weeks than the control group, though disability scores were again similar by the six-month point.

The mindfulness group also had more improved current and most severe pain scores at the six-month point, as reported in JAMA Internal Medicine.

“In terms of mechanism for pain reduction, the study gives us a clue as patients in the mind-body program reported more self-efficacy toward pain – they were able to better cope with their pain,” Morone told Reuters Health by email.

She and her coauthors did not compare the mindfulness program to other back pain treatments, but it should be seen as an option for some patients that does not involve medication or surgery, she said.

The authors did not report how consistently the treatments were delivered or how faithfully participants practiced outside of their sessions, which would be important information, Dr. M. Carrington Reid of Weill Cornell Medical Center in New York and coauthors wrote in a commentary alongside the paper.

But “chronic pain is one of the most common conditions encountered by health care professionals, particularly among patients 65 years and older,” and barriers often prevent treating it with medication, so studies on non-medication options like mindfulness are important, they wrote.

The Mindfulness-Based Stress Reduction Program is offered in many medical centers, communities and online.

Applicant Attorneys Encouraged to use MOVEit for IMR Documents

The Division of Workers’ Compensation encourages attorneys representing California injured workers to now submit independent medical review (IMR) applications and medical records online with MOVEit file transfer system.

MOVEit is a web-based portal that allows users to submit files securely and is the best and most reliable way to transmit medical records to MAXIMUS Federal Services, Inc., the independent medical review organization. The system also provides much better traceability than paper and fax submissions.

“We believe utilizing MOVEit for IMR applications will improve the efficiency and predictability of the IMR process,” said DWC Acting Administrative Director George Parisotto. “Attorneys will know with certainty that their applications have been received.”

Whether an applicant attorney chooses to submit a request for IMR via MOVEit or otherwise, it is very important do the following:

1) Include a copy of the complete utilization review (UR) determination with the IMR application form that was provided to you by your claims adjustor
2) Sign the IMR application form before submitting a request for IMR
3) Send the signed IMR application and the UR determination within 30 days of receiving the UR determination to the address on the form.
4) Remember to serve all parties

For further information on using MOVEit, contact IMRHelp@maximus.com.

Court of Appeal Issues Writ of Review in Another IMR Challenge

The case of Saul Zuniga v. Interactive Trucking, Inc.; SCIF involves another challenge to the constitutionality of the IMR process, asserting that the anonymity of the IMR reviewers violates due process and the IMR statute violates the guarantee of right to appellate review.

After successfully appealing an IMR determination and obtaining an order remanding the matter back to IMR for review by a different physician reviewer, Zuniga filed a discovery motion seeking the disclosure of the IMR reviewers’ identities. While the discovery motion was pending, the second IMR decision was issued authorizing additional, but not all, of the prescribed medications. Thereafter, over defendant’s objections, a trial was set on the issue of the disclosure of the IMR physicians’ identities. The Workers’ Compensation Judge issued a decision finding that he could not release the names of the IMR physicians pursuant to Labor Code section 4610.6(f).

Zuniga filed a petition for reconsideration, which was denied. He then filed a petition for writ of review in October 2014 arguing that the anonymity of the IMR reviewers violates due process and that the IMR statutes violate the guaranteed right to appellate review. SCIF filed its answer arguing: (1) The petitioner lacks standing since he did not exhaust his administrative remedies by filing an appeal of the second determination and therefore the petition for review was premature; (2) the petition failed to name the DWC, which is an indispensable party; (3) the WCJ was correct in finding that he lacked the authority to order the disclosure of the reviewing doctors; and (4) not revealing the reviewers’ identities did not deprive the petitioner of his due process rights.

The briefing in this case was completed in December 2014 and the case remained idle for over a year.

In February 2016, the petition for writ of review was granted in case Saul Zuniga v. Interactive Trucking, Inc.; SCIF California Court of Appeal, First Appellate District, Div. 2, Case No. A143290. The Court issued the following order.

“Petitioner is directed on or before February 5, 2016 to serve a copy of his petition on the Administrative Director of the Division of Workers’ Compensation, who has the option to file an informal opposition to the petition on or before February 23, 2016. The clerk of this court need not issue a formal writ in this proceeding. It appears to this court that the record provided by the parties is a complete record of the Board’s proceedings on the issues raised in the petition. Accordingly, unless a party or the Administrative Director of the Division of Workers’ Compensation serves and files an objection, in writing, within 20 days of the date of this order, the Board need not prepare a certified record in this matter. Absent further order of the court, no further briefing in this matter is contemplated. The justices will be familiar with the facts and issues, will have conferred among themselves, and will not require oral argument. If oral argument is requested, the request must be served and filed within 20 days of the date of this order. If no such request is received, the court will deem oral argument waived.”

This important case has not received much attention from the Workers’ Compensation community notwithstanding the significance of the outcome. Thus far the stakeholders have not appeared in this case as amicus.

EMPLOYERS® Names New VP of Fraud Investigations

EMPLOYERS® has named Samuel V. King as vice president, fraud investigations for EMPLOYERS. With 24 years of fraud investigations leadership experience and 10 years of law enforcement experience, King brings to EMPLOYERS his valuable expertise in the field of workers compensation fraud. This position will work under the senior vice president of claims, and will bring best-in-class thinking to fraud investigation function.

A recognized expert in the area of workers’ compensation fraud, King served as past chairman of the California Workers Compensation Institute’s (CWCI) Anti-Fraud Committee, founding member of California Department of Insurance Fraud Division Anti-Fraud Advisory Committee and former chairman of the California Department of Insurance committee on SIU training. King holds a Bachelor of Science degree in Business Management from Azusa Pacific University and is a licensed private investigator, which will add a valued contribution to the EMPLOYERS organization.

King will be based in Glendale, CA.

Earlier this month EMPLOYERS® reported operating income for the fourth quarter and full year 2015 of $34.3 million and $81.3 million, or $1.05 and $2.50 per diluted share, respectively, and announced a $50 million share repurchase program and a 50% increase in the first quarter 2016 cash dividend to $0.09 per share. Operating earnings benefited from favorable prior year reserve development of $8.5 million and $7.2 million for the quarter and full year, respectively. Combined ratio before the LPT of 93.0% and 97.1% for the quarter and full year, respectively, down 9.2 and 7.9 percentage points, respectively, year over year.

The Company commented: “We strengthened our performance throughout 2015 and we are pleased to report our best operating results in the fourth quarter and the full year since 2007. We achieved an annualized operating return on equity of 16.1% in the fourth quarter and 9.8% in the full year, representing a 9.4 and 5.1 percentage point increase in the quarter and full year, respectively, year-over-year. Our underwriting profitability, measured by the combined ratio before the LPT, improved 9.2 percentage points in the quarter and 7.9 points in the full year relative to 2014 and our adjusted book value per share increased 8% year-over-year.”