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DWC Announces Hearing on Hospital and Surgical Center Fee Schedule

The Division of Workers’ Compensation (DWC) has issued a notice of public hearing to revise the hospital outpatient departments and ambulatory surgical centers fee schedule (HOPD/ASC fee schedule).

The public hearing has been scheduled for 10 a.m., Tuesday, March 11, in the auditorium of the Elihu Harris Building, 1515 Clay Street, Oakland, CA 94612. Members of the public may also submit written comment on the regulations until 5 p.m. that day.

For services rendered before January 1, 2014, the pre-2014 Official Medical Fee Schedule (OMFS) physician fee schedule applied to all covered medical services provided, referred, or prescribed by physicians regardless of the type of facility in which the services were provided.

The OMFS HOPD/ASC fee schedule applies only to facility fees for emergency room visits performed in a hospital outpatient department and surgical procedures performed in a hospital outpatient department or ambulatory surgical center.

Facility allowances for non-surgical procedures and non-emergency room visits rendered to outpatients are determined under the pre-2014 OMFS physician fee schedule. These services include clinic services and diagnostic tests (other than tests that are payable under the OMFS for diagnostic laboratory services).

Given the outdated nature of the pre-2014 OMFS physician fee schedule and the newly adopted OMFS RBRVS-based physician fee schedule, DWC proposes to coordinate the HOPD/ASC fee schedule with the OMFS RBRVS-based physician fee schedule.
The HOPD/ASC fee schedule provides a default payment methodology and an alternative payment methodology for determining the maximum allowable amount for facility fees. Facilities may make an annual election to apply the alternative payment methodology to all of their claims.

Due to changes in licensing requirements of ASCs and the fact that the alternative payment methodology is rarely elected, the proposed amendment would eliminate the alternative payment methodology for services rendered on or after the effective date of the proposed amendments.

The notice, text of the regulations, and a RAND working paper analyzing the impacts of the proposed amendment can be found on the proposed regulations webpage.

Whittier Psychologist “Apologizes” for Fraudulent Comp Claims

A psychologist apologized in a Los Angeles federal court for defrauding the federal government with inflated and fraudulent workers compensation claims.

The indictment handed down June 8, 2011 charged clinical psychologist Arnold P. Nerenberg, co-founder of the Whittier-based World Legion of Power bodybuilding organization, with seven counts of mail fraud. The indictment alleged that from June 2000 through April 2008, he submitted fraudulent paperwork to obtain compensation for psychological conditions that were never diagnosed and were reimbursed for medical expenses that were never incurred. According to court documents, Nerenberg billed the U.S. Postal Service for nearly $1 million in bogus medical fees and received about half of that. Also charged in the case are two ex-postal workers, Lois L. Washington, 47, of Inglewood, and Cetric T. Fletcher, 51, of Long Beach. Fletcher allegedly pocketed more than $200,000 as a result of the scheme, while Washington allegedly made more than $145,000.

In some instances, Nerenberg allegedly billed the government for treatment sessions with Washington and Fletcher when records indicate the psychologist was out of the area or out of the country. According to court documents, one of his “patients” was actually an HSI undercover agent posing as a postal worker for whom Nerenberg secured disability pay from the Department of Labor based upon his claimed acute fear of dogs.

Nerenberg said he was grateful federal agents caught him. In an emotional speech, the 72-year-old told the judge he overbilled patients whose costs were covered by the government so he could treat those who could not pay. After his arrest, Nerenberg said a friend told him: “It’s too bad you got caught.” He said he disagreed. “I think it’s too bad I committed the crime. I’m grateful I got caught,” Nerenberg said. “I wanted to stop what I was doing, but I was caught in an inner struggle. … I was grateful for the vigorous federal intervention.”

In an agreement with prosecutors, Nerenberg pleaded guilty to one count of fraud. Six other counts were dismissed. He was sentenced to five years’ probation with the first 12 months on home confinement and electronic monitoring. He also must pay restitution of $172,754. The two ex-postal workers indicted with Nerenberg in the 2011 case reached plea agreements and were sentenced earlier to probation and restitution.

U.S. District Judge Christina A. Snyder said she considered letters from Nerenberg’s family and friends in deciding his sentence. The prosecutor, Assistant U.S. Attorney Rozella Oliver, said she was persuaded that there were mitigating factors weighing in Nerenberg’s favor. She agreed home confinement was an appropriate sentence. “Dr. Nerenberg has done far more good than harm,” said his attorney, who noted that former patients were in the courtroom to support him. She said he had suffered public humiliation and would probably lose his medical license. “My remorse is profound,” said Nerenberg, who spoke of his pain when agents went to interview his former patients. “They came to me for healing, and the harm that came to them – I just couldn’t face it,” he said, his voice breaking. Nerenberg said he is turning his life around, concluding, “I have not always lived with honor, but I will die with honor.”

The judge said she was impressed with Nerenberg’s remarks and felt he was sincerely sorry. “But this is a very serious crime, defrauding the government of $172,000, whether with good or bad intentions,” Snyder said. She then imposed his sentence.

The California Board of Psychology records do not reflect any disciplinary action against Nerenberg. His license is currently active.

Monterey County Sting Grabs Illegal Contractors

The promise of a large landscape project attracted six alleged unlicensed contractors to a Salinas undercover sting operation conducted on January 30, 2014, by the Contractors State License Board (CSLB) with assistance from Monterey County District Attorney’s Office investigators.

After giving bids that exceeded the legal $500 limit for unlicensed contracting, suspects were cited for illegal contracting and other charges and ordered to appear in Monterey County Superior Court.

CSLB’s Statewide Investigative Fraud Team (SWIFT) held the operation at a single-family home with a large, empty backyard where investigators requested bids for various landscaping projects. The highest bid received during the sting was $15,000 for new sod and related projects. Suspected unlicensed landscaping operators were found advertising on online bulletin boards, including

“Professional landscapers are not like gardeners who usually don’t need a contractor license for maintenance or small, low-cost projects,” CSLB Registrar Steve Sands said. “You always should check CSLB’s website to see if the landscaper bidding on your job has an active contractor license that is in good standing.”

All suspects were cited on misdemeanor charges for contracting without a license (Business and Professions Code section 7028). In California, all home improvement jobs valued at $500 or more (combined labor and material costs) must be conducted by a company or person with a CSLB-issued license. First-conviction penalties for contracting without a license include up to six months in jail and/or up to $5,000 in fines. Penalties escalate with successive violations.

The six also were cited on a misdemeanor charge of illegal advertising (Business and Professions Code section 7027.1). State law requires contractors to place their license number in all print, broadcast, and online advertisements. Those without a license can advertise for jobs valued at less than $500, but the ad must state that they are not a licensed contractor.

Three phony contractors also were cited for requesting an excessive down payment (Business and Professions Code section 7159.5). The legal limit for down payments is 10 percent or $1,000, whichever is less. Often unlicensed contractors fail to obtain workers’ compensation insurance for their workers.

Suspects are scheduled for arraignment at 8:15 a.m. on March 13, 2014, in Monterey County Superior Court, 230 Church Street, Salinas

Reduction of Attorney Fee in Longshore Case Must State Specific Reasons

In this Longshore and Harbor Workers’ Compensation Act (LHWCA) case, Rick Carter injured his back and neck at work in 1991, and he has been permanently totally disabled since October 1, 1993. In 1996, the parties entered stipulations, and the ALJ awarded Carter disability and medical benefits based on those stipulations. In this protracted case, litigation has continued over disputes involving post award issues.

In the current dispute, Rick Carter appeals to the 9th Circuit Court of Appeals in California from the district court’s order awarding him $14,268.50 in attorneys’ fees and costs on his fee petition in the amount of $22,585.The district court’s selection of a blended hourly rate of $400, combined with its reduction in the number of compensable hours by almost half, from 60.9 to 35 hours, resulted in Carter receiving a 27 percent reduction in fees: from $22,585 to $14,268.50. Carter contends on appeal that the district court erred as a matter of law by reducing the fee award without sufficiently explaining its rationale for the reduction.

The panel in the published opinion of Carter v Caleb Brett LLC held that the district court erred as a matter of law by reducing the fee award without sufficiently explaining its rationale for the reduction. The panel vacated the district court’s order awarding attorneys’ fees and costs, and remanded for the district court to articulate the basis for its fee determination with greater specificity.

When determining a reasonable fee award under a federal fee-shifting statute such as the Longshore Act, a district court must first calculate the lodestar by multiplying the “number of hours reasonably expended . . . by [the] reasonable hourly rate.” This Circuit requires that courts reach attorneys’ fee decisions by considering some or all of twelve relevant criteria set forth in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67 (9th Cir. 1975). The Kerr factors are (1) the time and labor required; (2) the novelty and difficulty of the questions involved; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the “undesirability” of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.

A mere statement that a court has considered the Kerr guidelines does not make a decision within the court’s discretion. Rather, the court must “articulate with sufficient clarity the manner in which it makes its determination.” While detailed calculations are not mandated, “something more than a bald, unsupported amount is necessary” to affirm an award of attorneys’ fees. As a general rule, a fee-awarding court that makes a substantial reduction in either documented time or authenticated rates should offer reasonably explicit findings.” The district court must also “explain how it arrived at its determination with sufficient specificity to permit an appellate court to determine whether the district court abused its discretion in the way the analysis was undertaken.”

The district court’s selection of a blended hourly rate of $400, combined with its reduction in the number of compensable hours by almost half, from 60.9 to 35 hours, resulted in Carter receiving a 27 percent reduction in fees: from $22,585 to $14,268.50. In its fee order, the district court identified the twelve Kerr factors and mentioned two that it considered most relevant: (1) “the disproportionate relationship between the amount of fees incurred($22.585.00) and the amount at stake in the litigation ($3,220.20)”; and (2) that “Carter [did] not bear primary responsibility for the fact that this matter became considerably more protracted than the ‘quick and inexpensive mechanism’ envisioned by the statute.” Beyond that very brief discussion, however, the district court offered no other analysis before concluding that “[u]nder the circumstances here, for purposes of fee-shifting, 35 hours of attorney time at a blended hourly rate of $400 is reasonable.”

The Court concluded that the district court did not explain its decision to reduce Carter’s fee request with sufficient specificity to allow it to review the reasonableness of the fee award.

Expiration of Federal Terrorism Insurance Increases Comp Rates

Employers with large concentrations of employees will find an increasingly difficult workers’ compensation market in 2014 as insurers have begun underwriting policies that contemplate coverage without the financial protections afforded by the federal Terrorism Risk Insurance Program Reauthorization Act (TRIPRA), Marsh said in a new report.

Barring Congressional action, TRIPRA will expire on Dec. 31, 2014, and the uncertainty over its reauthorization has resulted in higher rates and less capacity for employers.

Not only are insurers less willing to underwrite risks with large employee concentrations, some are setting policy expiration dates on 2014 programs to coincide with the anticipated expiration of TRIPRA, effectively pushing the challenges created by the uncertainty on to insurance buyers, Marsh said in its latest Marsh Risk Management Research briefing: Pending TRIPRA Expiration Impacts Workers’ Compensation Industry.

“Several factors have motivated insurers to seek higher workers’ compensation rates and premiums over the last 24 months, including higher claims costs, historical unprofitability and a continued weak interest rate environment,” said Christopher Flatt, Workers’ Compensation Center of Excellence leader, Marsh. “These issues are now being compounded by the uncertainty around TRIPRA’s reauthorization, which is contributing to an already challenging market.”

“The state-regulatory nature of workers’ compensation prevents insurers from excluding terrorism-related losses, so the only way they can reduce their terrorism exposure and protect their assets is to limit the amount of capacity deployed and raise rates. Starting the renewal process early and providing insurers with a differentiated view of the insured’s terrorism risk profile can help better manage a potentially challenging renewal,” Flatt added.

In the report, Marsh notes that providing underwriters with the highest quality of employee-accumulation data to run in their catastrophe models, including for example, the total number of employees working during peak shifts and the percentage of the workforce in the field or telecommuting, will help to ensure carriers have an accurate view of the risk they are considering.

In addition, employers with large concentrations of workers should be prepared to provide insurers with additional detailed information including: employee marital/dependency status; physical security of the building; how access to the building is controlled; management policies around workplace violence, weapons, and employee screenings; and emergency response and crisis management plans and procedures, Marsh noted in the report.

New NFL Law Triggers More Than 1000 Claims

Last fall, the National Football League scored a huge victory in California, helping push through a new law barring most professional athletes from filing workers’ compensation claims in the state. The NFL, successfully lobbied the state legislature to pass AB 1309, which prohibits athletes who spent most of their careers playing for teams outside California from filing claims in the state. The leagues believed the law could save them from exposure to countless claims from injured athletes. But that win has come at a cost.

The Los Angeles Times reports that publicity from a high-profile battle over the legislation prompted players from around the country to file more than 1,000 injury claims just prior to a September deadline – a huge influx that could cost the nation’s top professional sports leagues hundreds of millions of dollars to resolve. In the first two weeks of September, current and retired players filed 569 claims against NFL franchises, 283 claims against Major League Baseball clubs, 113 against National Hockey League teams and 79 against NBA squads. Nearly 70% of the filings include allegations of head or brain injuries caused by repetitive trauma. Most of these athletes appeared to have never played for a California team; they filed claims based on repetitive injuries they say were sustained in part during road games played in the state. It is those claims that are now barred under the new California law.

Among the athletes rushing to beat the deadline were sports legends such as Miami Dolphins quarterback Dan Marino, Baltimore Orioles pitcher Jim Palmer and Houston Rockets center Hakeem Olajuwon, as well as many lesser-known retirees, some suffering serious physical impairment. A number of active players, including San Francisco 49ers standouts Michael Crabtree and Frank Gore, also filed claims.

The six sports leagues affected by the new law – a group that includes Major League Soccer and the Women’s NBA – had predicted a jump in filings before the deadline. Still, the size of the increase was surprising. The volume of claims in September was about 10 times higher than average monthly levels since 2011. The workers’ compensation data highlights the huge scale of the injury legacy that confronts American professional sports franchises. More than a third of the final batch of claims lodged before the new statute became effective Sept. 15 wouldn’t have been affected by the new law, the Times analysis found. Advocates for injured athletes say that the months-long fight over the bill, which drew national attention, helped alert athletes who otherwise wouldn’t have known they could seek benefits.

More than three-quarters of the claims filed against NFL teams in the first two weeks of September alleged head or brain injury. Half of baseball players and just over 90% of hockey players made similar claims. An NFL study of past filings found that the average California claim cost teams $215,000 to resolve, a number that could be far higher for players with debilitating brain disease. Unlike other states, California long permitted claims from players who did not play for in-state teams so long as they participated in at least one game or practice here. California also recognizes cumulative injuries incurred over time. And although California has a one-year statute of limitations for claims, that restriction is waived when workers aren’t properly notified of their right to file, which was the case with many players for decades. As a result, many athletes with slow-to-develop disease such as dementia turned to California when legal doors in other states had long been shut.

In anticipation of that deadline, workers’ compensation attorneys scrambled to find players and file on their behalf. San Diego lawyer Ron Mix squeezed in almost 300 athlete cases in the final month, according to state data. To get through the mountain of paperwork, he said he paid his staff triple overtime and hired numerous temp workers. “We were working 12 to 16 hours a day, seven days a week,” said Mix, a former Hall of Fame lineman for the San Diego Chargers.

The Times analysis showed that 363 of the 1,064 claims made in the first two weeks of September listed a California-based team as the employer, indicating they likely didn’t need to beat the Sept. 15 deadline. In addition, a number of still-active players filed injury claims, something that rarely occurred in the past because players feared being cut by their teams.

“Everyone wanted to beat the deadline,” said Mel Owens, a Laguna Hills attorney and former Los Angeles Ram linebacker. He filed more than 250 claims for athletes in the final push, according to the analysis.

Overall, between February, when the bill was introduced, and Sept. 15, a total of 1,980 athlete claims were filed in California – compared to 1,170 in all of 2012. More claims were filed in that nine-month period than any other year, by far, the analysis found. Although it’s impossible to determine how many athletes will be barred from filing under AB 1309, attorney Mix estimates it could top 4,000. In recent months, he said he’s gotten calls from about 150 athletes that he had to turn away because they missed the deadline.

CHP Officer and Wife Arrested for Comp Fraud

The Sacramento District Attorney announced the arrest of 11-year veteran California Highway Patrol (CHP) Officer Daniel Cory Clapp, stationed in Lassen County, and his wife, CHP dispatcher Jolea Marie Clapp, on five felony counts of workers’ compensation insurance fraud.

Daniel Clapp filed his workers’ compensation claim based upon injuries he allegedly received during a scuffle while making an arrest on December 27, 2011. Daniel and Jolea Clapp stated to the workers’ compensation doctor that Daniel was unable to drive, lift heavy items, and that pain prevented him from performing his duties as a CHP officer.

The CHP’s Internal Affairs Section, Workers’ Compensation Fraud Investigation Unit, conducted surveillance on numerous occasions and observed Daniel Clapp camp, boat, swim and dive. In addition, he was observed driving for long periods of time and cutting and carrying firewood rounds 18″ thick and 24″ in diameter. Jolea Clapp often accompanied Daniel Clapp on these pleasure outings and would drive for him while in the local CHP jurisdiction and then change driver positions outside of the jurisdiction.

During medical visits in which Daniel Clapp complained of pain, Jolea Clapp forcefully corroborated her husband’s accounts of disabling pain and his inability to perform physical activities that she was observed seeing him perform. The details of the investigation are documented in the 157 page affidavit and felony complaint prepared in the case.

Both defendants are accused of conspiracy to make false statements in support of a workers’ compensation insurance claim and making false statements about the true extent of Daniel Clapp’s physical activities and abilities in order to obtain benefits. Daniel Clapp is additionally accused of perjury for false statements in a deposition.

The amount of the fraud is in excess of $50,000 and the charges carry a potential state prison sentence of up to 5 years and a $150,000 fine upon conviction. The defendants will appear in Sacramento Superior Court in early February 2014. This case is being prosecuted by the District Attorney’s Insurance Fraud Unit. View Arrest

No Reimbursement for Differential Pay to Sheriff After Return to Light Duty

While working as a deputy sheriff for the Nevada County Sheriff’s Department in mid-August 2011, David Lade injured his right shoulder. At the time of his injury, Lade was working a night shift schedule that entitled him to 5 percent shift differential pay. He had been earning the shift differential since 2004, and the differential was paid regardless of whether he worked, took vacation, used sick leave, or received holiday pay.

He was returned to regular work, but in late January 2012 Lade was placed on modified duty at the direction of his physician. From then until he had surgery in early March, Lade worked light duty on the day shift. From the date of his surgery Lade was again off work. In late April, he returned to work full time but remained on modified duty. Sheriff’s deputies on light duty are typically assigned to the day shift, and Lade was no exception.

While Lade was off work, he apparently received his regular full pay, including the 5 percent shift differential. While he was working on the day shift, however, Lade was not paid the differential. In November 2012, the parties went to trial on whether section 4850 entitled Lade to the shift differential while he was working modified duty on the day shift. As relevant here, section 4850 provides that whenever a sheriff’s deputy “who is employed on a regular, full-time basis, and is disabled, whether temporarily or permanently, by injury or illness arising out of and in the course of his or her duties, he or she shall become entitled, regardless of his or her period of service . . . to a leave of absence while so disabled without loss of salary in lieu of temporary disability payments . . . , if any, that would be payable under this chapter, for the period of the disability, but not exceeding one year, or until that earlier date as he or she is retired on permanent disability pension, and is actually receiving disability pension payments, or advanced disability pension payments pursuant to Section 4850.3.” (§ 4850, subds. (a), (b)(4).)

The WCJ decided that Lade was entitled to the shift differential. Relying on Johnson v. Contra Costa County Fire Protection Dist. (1972) 23 Cal.App.3d 868, the WCJ reasoned that the county “could not change Officer Lade’s status [from night shift to day shift] for purposes of [section] 4850 so as to avoid indemnification for the shift pay.” The county petitioned the board for reconsideration, arguing (among other things) that the WCJ erred “in granting Labor Code [section] 4850 ‘leave of absence’ benefits while [Lade] was not on a leave of absence and in fact [was] working modified duty.” Adopting the report and recommendation of the WCJ, the board denied reconsideration.

The Court of Appeal reversed the WCAB in the published opinion of County of Nevada v WCAB and David Lade.

The Court of Appeal rejected Lade’s argument stating “We do not believe section 4850 is reasonably susceptible to the interpretation Lade advances” citing Collins v. County of Los Angeles (1976) 55 Cal.App.3d 594. “Here, the Legislature provided that a public safety worker like Lade, when disabled, is entitled to a leave of absence at full salary instead of temporary disability payments. There is nothing in section 4850 that guarantees a worker anything when he is no longer on a leave of absence and is instead back at work. Moreover, there is nothing in section 4850 that can be reasonably understood to mean that a leave of absence is anything less than being absent from one’s employment.”

The WCAB order denying reconsideration was annulled, and the matter was remanded.

Conviction of Doctor and Attorney Closes $154M Orange County Fraud Prosecution

A doctor and an attorney, the final two defendants in a 19 co-defendant case, have been convicted for their role in the largest medical fraud prosecution in the nation for recruiting thousands of healthy patients to undergo unnecessary and dangerous surgeries to fraudulently bill medical insurance companies. Attorney Roy Chester Dickson, 65, Yorba Linda, pleaded guilty to one felony count of money laundering and one felony count of grand theft with white collar crime sentencing enhancements. In the same case, Dickson was found guilty by a jury Nov. 26, 2012, of two felony counts of filing a false personal tax return and was sentenced Dec. 20, 2012, to two years and eight months in state prison and $41,629 restitution on the tax conviction. He is scheduled to be sentenced for the current convictions Aug. 8, 2014, in Department C-45, Central Justice Center, Santa Ana, and faces a maximum sentence of 14 years in state prison.

Doctor Mario Rosenberg, 66, pleaded nolo contendere Jan. 24, 2014, to two felony counts of insurance fraud and white collar crime sentencing enhancements. He faces a maximum sentence of 10 years in state prison at his sentencing March 28, 2014, in Department C-45.

The defendants in the Unity case participated in a $154 million medical insurance fraud scheme that recruited 2,841 healthy people from all over the country to receive unnecessary surgeries in exchange for money or low cost cosmetic surgery. Insurance companies paid out more than $20 million over a 9-month period. The Orange County Grand Jury examined 1,054 exhibits and heard testimony from 56 witnesses over 28 days, resulting in a 70-page indictment. The indicted defendants include an attorney, accountant, three doctors, and patient recruiters known as “cappers.” The recruitment of patients, or “capping,” is illegal in California.

Andrew Robert Harnen, 59, Rosemead, Unity’s accountant, pleaded guilty to the court Aug. 16, 2013, to two felony counts of conspiracy, eight felony counts of capping or paying for patient referrals, 30 felony counts of grand theft, 30 felony counts of insurance fraud, 30 felony counts of making false and fraudulent claims, one felony count of filing a false tax return, and white collar crime sentencing enhancements for taking over $2.5 million. Harnen was sentenced to five years and four months in prison. The People advocated for a sentence of 41 years and eight months in state prison. The sentence will be served concurrent to the sentence he received Dec. 20, 2012. The defendant was previously sentenced to prison and ordered $904,780 restitution for his Nov. 26, 2012, conviction by a jury of three felony counts of filing a false tax return and six counts of failing to file tax returns.

Doctor William Wilson Hampton, Jr., 58, Seal Beach, pleaded guilty May 8, 2009, to 47 felony counts including conspiracy, insurance fraud, and capping and was sentenced to 16 years in state prison. Doctor Michael Cheeluen Chan, 68, Cerritos, pleaded guilty Aug. 4, 2011, to the court to 40 felony counts including conspiracy to commit insurance fraud, insurance fraud, aiding and abetting capping with white collar crime sentencing enhancements. He faces a sentence ranging from probation up to 28 years in state prison at his sentencing March 28, 2014, at 9:00 a.m. in Department C-45.

The Unity cappers targeted employees from businesses in 39 states who were covered by PPO insurance plans, affecting more than 1,000 employers whose employees became involved in this scheme. They arranged transportation for the patients, scheduled the surgeries, and coached the healthy “patients” on what to say. In exchange for undergoing surgery, the patients received a cash payment, usually between $300 and $1,000 per surgery, or credit toward a free or discounted cosmetic surgery.

The three doctors charged in this case participated in medical insurance fraud for performing unnecessary medical procedures on healthy people with the knowledge that the patients were being recruited. Doctors Chan, Hampton, and Rosenberg performed a total of 1,037 procedures, resulting in insurance billings exceeding $30 million for the facilities fees alone. Unity received over $5.1 million in payment as a result of the surgeries performed by these doctors. The doctors performed many of the surgeries on Saturdays and Sundays and often performed the same procedures on co-workers or members of the same household on the same day. The doctors ignored basic medical protocols such as: 1) Patients receiving surgeries on consecutive days instead of under one anesthesia; 2) Doctors not meeting the patients prior to operating; 3) Doctors not following up with patients after the procedure was completed; and 4) Doctors not obtaining necessary medical information.

Attorney Dickson went to Unity after having previously managed and represented another surgery center involved in similar illegal activities. He was sanctioned by the federal bankruptcy court for filing a fraudulent bankruptcy claim for a doctor at that surgery center. Dickson was hired by Unity to collect payments from insurance companies and patients. He helped the surgery scheme by creating fraudulent documents to disguise illegal capping activities.

Thirteen Indicted for Comp Premium Fraud

The San Diego County District Attorney announced charges against four businesses, their owners and several employees who were indicted on various types of insurance fraud including workers compensation fraud, unemployment fraud and tax evasion

Owners of A1 Patio and Remodeling Experts in Encinitas, Christina Engineering in Escondido, Quality Way Building Maintenance in National City and Rufino’s Landscaping of Escondido were all indicted by the grand jury in December for their roles in bilking insurance companies and the state tax board out of $1.5 million. Fourteen defendants were indicted in December. Of those, four were arraigned on January 6, and the remainder is scheduled to be arraigned this week in San Diego Superior Court . They include Joshua Swarthout, James Hooper, Andrew Curtis, Billy Ray Alsbrook, George Norton, Jacob Kuhn, Pat Gee, Tim Mountney, and Tom Jarvis . If the defendants fail to appear for arraignment, warrants will be issued for their arrest.

When an employee of Russ E. Kubart of A1 Patio and Remodeling Experts.injured himself after falling from a deck at a jobsite, Kubart told the employee to tell medical staff he injured himself at home because Kubart did not have workers ’ compensation insurance. Loss to known victims is $160,000. Ten employees of Christina Engineering were indicted for their roles in receiving unemployment benefits at the same time they were being paid cash to work, which they were encouraged to do by their employer. Loss to known victims is $350,000 .  Marcos Castaneda , of Quality Way Building Maintenance was indicted on four counts of felony insurance fraud for his role in intentionally lying about his payroll in order to receive reduced workers compensation premiums. Loss to know victims is $133,921. Rufino Aguiluz and his wife, Maria Foulk of Rufino’s Landscaping , were indicted on several counts of insurance fraud, payroll tax evasion and income tax evasion for their roles in failing to report payroll to various workers’ compensation insurance carriers and tax collectors. Loss to known victims is $952,202.

“These are excellent examples of the variations found within the underground economy that continues to negatively impact the California Workers’ Compensation system” said Donald Marshal, Chair of the California Workers’ Compensation Fraud Assessment Commission . “We can see that the victims of these alleged crimes include injured workers and the citizens of the State who must absorb the costs paid for this criminal activity. Congratulations to the San Diego District Attorney’s Office and the California Department of Insurance for their hard work in disrupting the activities of these suspected criminal enterprises.”