Author: WorkCompAcademy

Walter Martinez, 60, of Alta Loma, Calif. pled guilty to 43 felony counts of using cappers – recruiters paid from victims’ insurance settlement – to get clients for his practice. Martinez evidently embellished his scheme with at least three cappers. “The use of cappers is a problem because these individuals usually approach accident victims acting as an attorney with no training and give legal advice to people when they are vulnerable after a collision,” California Insurance Commissioner Dave Jones said in a statement.

The Department of Insurance Auto Insurance Fraud Task Force received information and documentation that indicated Martinez was using cappers. In this case, bank records showed that more than $250,000 in checks were written to the alleged cappers between 2009 and 2012.

Martinez was sentenced to one year in jail, followed by three years felony probation and a $91,000 fine. Two of the cappers sentenced were: Israel Gonzales, 34, of Rancho Cucamonga, who plead guilty to eight counts 750(a) IC; an Michael Melcher, 58, of Covina, who plead guilty to two counts 750(a) IC.

State Bar records reflect that Martinez was suspended for one year, stayed, actually suspended for five months, and was ordered to make restitution, take the MPRE and comply with rule 9.20 of the California Rules of Court. The order took effect Feb. 23, 2012. Martinez stipulated in the State Bar case to 10 acts of misconduct in six matters. The State Bar information claims that for almost four years, he operated a branch law office in Westminster that was run by two non-lawyers who engaged in conduct that constituted the practice of law. Although he was not aware of their misconduct, he was grossly negligent in not knowing that they were engaged in activities that constituted legal practice. He stipulated that by failing to supervise his employees, he allowed them to engage in the unlawful practice of law. Among other things, the non-lawyers signed up clients, negotiated and settled their claims, paid some settlement funds, accepted settlement funds for other clients but never distributed the money, and did not pay medical bills.

The Orange County district attorney conducted an undercover investigation of Martinez’ law offices, creating paperwork to make it look as if they had been in an auto accident. Martinez’ employee conducted intake and signed up the investigators as clients without any attorney oversight. The employee negotiated and settled the investigators’ claims, received settlement checks from an insurance company and gave the two 50 percent of the proceeds. Several months later, the superior court assumed jurisdiction of Martinez’ practice, which was shut down after the State Bar seized his files and froze his bank accounts.

SB 626 which was introduced last year by state Senator Jim Beall would have rolled back some of the key workers’ compensation reforms contained in SB 863.

The California Chamber of Commerce characterized SB 626 as “A California Chamber of Commerce-opposed “job killer” bill that severely undercuts the workers’ compensation reform deal agreed to by labor unions and employers in 2012 and would result in dramatic cost increases to California employers.” The Chamber goes on to state that “SB 626 distorts the entire balance of the deal and would decimate provisions anticipated to deliver hundreds of millions of dollars of costs savings, which were promised to be redirected to injured workers in the form of higher benefits. Already, important cost-saving reforms under SB 863 have been placed in doubt as a result of litigation from system vendors. Additionally, full regulatory implementation has not been completed, creating uncertainty over whether the savings will materialize. Meanwhile, California employers continue to see their workers’ compensation costs increase, due to higher medical treatment costs and an increase in the rate of claims filed.”

Specifically, the bill would eliminate a cornerstone cost-saving provision contained in SB 863 – independent medical review (IMR). Under SB 626, IMR decisions would be fully appealable to the WCAB taking medical necessity decisions away from physicians and putting them back in the hands of judges. It would also result in treatment delays for injured workers. The projected savings associated with IMR are estimated at around $400 million. It would repeal a provision in SB 863 that eliminates impairment ratings for psychiatric add-ons in some, but not all, cases. Numerous data-driven analyses demonstrated applicant attorneys had abused this add-on to artificially inflate permanent disability ratings. It would repeal a provision in SB 863 that prohibits a chiropractor from being a primary treating physician once the maximum number of chiropractic treatments has been received. It also unnecessarily limits utilization review and Independent Medical Review by requiring that the reviewing physician hold the same license as the physician requesting treatment. Current law requires reviewers to be competent to evaluate the specific clinical issues involved in the medical treatment and utilize relevant, evidence-based medical treatment guidelines, which are not state-specific.

A Senate Labor and Industrial Relations Committee hearing on SB 626 was set for January 15, 2014. This hearing would have been the first step in obtaining passage this legislative year. However, Senator Beall removed the bill from the Committee agenda fearing that it would not obtain enough votes to successfully win Committee approval. Thus, at this point, it would seem the SB 626 may have suffered an early death in 2014.

ABC News reports that federal prosecutors filed a record number of health care fraud cases last fiscal year, perhaps reflecting the greater emphasis the government has placed on combating the crime costing taxpayers billions of dollars per year. According to Justice Department statistics obtained through a Freedom of Information Act request by a Syracuse University-based nonprofit group that tracks federal spending, staffing and enforcement activities, prosecutors pursued 377 new federal health care fraud cases in the fiscal year that ended in October. That was 3 percent more than the previous year and 7.7 percent more than five years ago.

Southern Illinois led the nation on a per-capita basis in such cases filed, with the government pursuing 10.1 prosecutions per 1 million people, which was more than eight times the national average.

The latest numbers, while not necessarily showing that the white-collar crime is on the rise, may reflect a greater emphasis by authorities, predominantly the FBI and the Department of Health and Human Services, to root out the wrongdoing, said Susan Long, who is an associated professor of managerial statistics at the school and the co-director of the nonprofit, the Transactional Records Access Clearinghouse. “Clearly the numbers suggest this is an area the (Obama) administration is not ignoring,” Long said Wednesday.

An illustration of the anti-fraud push came last May, when 89 people in eight cities – including 14 doctors and nurses – were charged for their alleged roles in separate Medicare scams that collectively billed the taxpayer-funded program for roughly $223 million in bogus charges. Because such fraud is believed to cost the Medicare program between $60 billion and $90 billion each year, Attorney General Eric Holder and Health and Human Services Secretary Kathleen Sebelius partnered in 2009 to increase enforcement by allocating more money and staff and creating strike forces in fraud hot spots around the country.

Medicare fraud has morphed into complex schemes over the years, moving from medical equipment and HIV infusion fraud to ambulance scams as crooks try to stay a step ahead of authorities. The scammers have also grown more sophisticated using recruiters who are paid kickbacks for finding patients, while doctors, nurses and company owners coordinate to appear to deliver medical services that they are not.

For decades, Medicare has operated under a pay-and-chase system, paying providers first and investigating suspicious claims later. Federal authorities are using new technology designed to flag suspicious claims before they are paid, but the system still is relatively new.

While “frankly surprised” by his office’s distinction as the per-capita leader in health-care fraud prosecutions, southern Illinois U.S. Attorney Stephen Wigginton said every U.S. attorney enjoys discretion in prioritizing which crime issues to combat, taking into account regional demographics and Holder’s desires. But Wigginton said he placed special emphasis on going after health-care defrauders since he began overseeing his district more than three years ago. Since then, Wigginton’s office has increased such investigations each year. Last year, more than 30 people were indicted for allegedly scamming a Medicaid program meant to allow individuals to stay in their homes instead of entering a nursing home. “I think we’re very focused and strategic,” said Wigginton, whose office also has taken a lead nationally in cracking down on fraudulent time-share marketing and the St. Louis region’s increasing struggles with heroin use.

The judge presiding in the proposed $765 million settlement between the N.F.L. and more than 4,500 retired players who sued the league and accused it of hiding the dangers of concussions has raised significant questions about whether there will be enough money to pay for all of the payouts, medical tests and treatment. Judge Anita B. Brody of the United States District Court for the Eastern District of Pennsylvania rejected the proposed settlement because the league and the plaintiffs’ lawyers had not produced enough evidence to persuade her that $765 million would cover the potential costs for 18,000 retirees over the 65-year life of the agreement. “I am primarily concerned that not all retired N.F.L. football players who ultimately receive a qualifying diagnosis or their related claimants will be paid,” Brody wrote.

The lawyers for the players have said that economists and actuaries have said there will be sufficient money available.

“Unfortunately, no such analyses were provided to me in support of the plaintiffs’ motion,” Brody said. “In the absence of additional supporting evidence, I have concerns about the fairness, reasonableness and adequacy of the settlement.”

The judge’s ruling will probably force the plaintiffs’ lawyers and the N.F.L. to provide documents proving that there will be enough money to pay for the retired players’ claims. If the judge remains unconvinced, the league and the lawyers could increase the size of the settlement, change the amount of the payouts or limit who might be eligible. Even if the league and the lawyers for the players convince the judge that there will be enough money to go around, her ruling on Tuesday will undoubtedly delay when players may get paid. The proposed settlement that the judge reviewed, which was released last week, was to form the basis for mailings sent to retired players. The players would then have several months to approve the settlement, or opt out of it.

None of this means the settlement is off, however. There are tweaks that can be made and, as Christopher Seeger, co-lead counsel for the plaintiffs said in a statement, “analysis from economists, acutaries and medical experts” will prove that the settlement will take care of the players in question.

“We are confident that the settlement will be approved after the Court conducts its due diligence on the fairness and adequacy of the proposed agreement,” Christopher Seeger, co-lead counsel for the plaintiffs, said in a statement. “Analysis from economists, actuaries and medical experts will confirm that the programs established by the settlement will be sufficiently funded to meet their obligations for all eligible retired players. We look forward to working with the Court and Special Master to address their concerns, as they rightfully ensure all class members are protected.

“We believe this is an extraordinary settlement for retired NFL players and their families, and have received overwhelming support as they have learned about its benefits. We look forward to finalizing this agreement so they can soon begin taking advantage of its benefits.”

Florida-based lawyer Sia Nejad, who specializes in insurance defense, says this rejection is a matter of wanting the NFL to “show its work.” “At this point, it seems that Judge Brody is doubting that the $765 million is sufficient to cover the players and that some of the parameters to qualify for portions of the settlement monies are too narrow or restrictive. Bottom line, she wants the lawyers to ‘show their work’ because she’s doubting the fairness of the agreement.”

In forecasting serious asbestos-related claims, some of the country’s largest insurers and consultants appear to be ignoring relevant changes in medical knowledge, demographics and even social media. As a third wave of costly asbestos-related claims strikes the nation in the years ahead, many insurers will be swamped with “unexpected” reserve charges, according to “A Third Wave in Asbestos Liabilities Lies Ahead,” a new study by Assured Research, a New Jersey-based firm that analyzes the property/casualty insurance industry.

“In studying asbestos-related claims, we’re seeing evidence of outdated actuarial models,” explains Assured president William Wilt. “Since they’re based on 30-year-old epidemiological and demographic data, they can’t accurately forecast asbestos-related claims. Some insurers also seem to be ignoring advances in medical knowledge and diagnosis – and the changing behaviors of consumers and personal injury lawyers.”

The first wave of claims came from asbestos miners and millers; the second from people who handled asbestos regularly, such as plumbers, shipbuilders and carpenters. The third wave will be dominated by lung cancer claims which are ostensibly lower quality than those of mesothelioma because the cancer was predominantly caused by smoking rather than asbestos. Nevertheless, large numbers of even lower-quality claims could raise pressure on defendants anxious to settle and minimize nuisance suits. Moreover, recent literature illustrates researchers’ rising awareness of the malignant synergies between asbestos and smoking. Further, researchers are finding that short but intense exposures to asbestos can lead to asbestos illnesses.

“Medical evidence is mounting,” says Wilt, “that there is no ‘lower limit’ below which asbestos fibers cannot cause mesothelioma. Meanwhile, the people most likely to make asbestos claims are living longer – long enough, in some cases, to be diagnosed with asbestos-related disease.”

Asbestosis may be easier to diagnose today, thanks to high-resolution CT-scans, but Assured Research believes the third wave will be dominated by lung cancer claims. Personal injury lawyers are finding it easier than ever to prospect for new claimants, while a new recommendation from the U.S. Preventive Services Task Force recommends annual CT scans for all current and formers (heavy) smokers between the ages of 55 and 80 – some 10 million people.

“We believe this third wave will be aided by the growing prevalence of social media sites such as Google and YouTube which have lowered the cost of prospecting for claimants by lawyers,” says co-author and Managing Director Alan Zimmermann. “If you need convincing, type the name of any well-known asbestos law firm into a search engine and see how fast they come back to you with offers of direct conversations.”

“The confluence of outdated actuarial models, shifts in life expectancies, medical knowledge, social media, and now recommended screening,” Wilt says, “can’t be good news for insurers that are funding higher than expected claims on a pay-as-you-go basis.”