Author: WorkCompAcademy

FBI and IRS agents arrived at Pacific Hospital of Long Beach last week to serve a warrant as part of an investigation involving possible fraud against the institution. According to the Press-Telegram, the warrant was served at 8AM on Friday and agents were reportedly looking through computer files

The Long Beach Post says that FBI spokesperson Laura Emiller confirmed that a search warrant was served for possible allegations of fraud at Pacific Hospital of Long Beach, but she was unable to provide further details, noting that the search was sealed by the court. Though the nature of the possible allegations are still unclear, agencies that are also involved in the investigation include the IRS, California Department of Labor, California Department of Insurance, USPS Inspector General’s Office and the DCIS.

Given the number of agencies involved, it appears that the incident being investigated is larger in scope than the self-reported employee fraud discovered by the hospital in 2009, which was investigated by local law enforcement and the California Department of Public Health

In 2010, the hospital was fined $225,000 for a self-reported fraud incident in which an employee had obtained patients’ personal information–including names and social security numbers–and used it to open fraudulent telephone service accounts. Even though the employee was terminated from the hospital in 2009 and the hospital worked closely with law enforcement on the case, Pacific Hospital was fined by the California Department of Public Health, which alleged that the facility “failed to prevent unauthorized access.”

“Our hospital takes patient safety very seriously and has done nothing wrong,” a statement from Pacific Hospital public relations director Laura Salas said at the time. “At Pacific Hospital of Long Beach, we work diligently to serve our community by continually monitoring and improving patient safety programs and are proud of our ability to keep patient information safe from access by unauthorized persons.”

It is not known if that case is related to the current search warrant. Pacific Hospital has yet to return calls for comment.

The Department of Industrial Relations is pleased to announce the recent release of “Workers’ Compensation in California: A Guidebook for Injured Workers.”

“This fourth edition of the injured workers’ guidebook helps workers and others understand the sometimes complicated process of workers’ compensation,” said DIR Director Christine Baker. “The guidebook has been updated to reflect the latest changes to California’s workers’ compensation system.”

The guidebook gives an overview of the California workers’ compensation system. It is meant to help workers with job injuries understand their basic legal rights, the steps to take to request workers’ compensation benefits, and where to seek further information and help if necessary. Also included are references to important laws and regulations and a glossary.

The fourth edition includes important changes since 2006 in the following areas:

• Pre-designation of one’s treating physician or a medical group
• Treatment under the medical treatment utilization schedule (MTUS) adopted by the Division of Workers’ Compensation (DWC)
• Independent medical review (IMR) to resolve disputes over denial of treatment
• Extension of time limits on receiving temporary disability (TD) benefits
• Return-to-work procedures
• Permanent disability (PD) benefits
• Supplemental job displacement benefits (SJDB)

The guidebook is available online in English, with a Spanish translation available soon. Because the workers’ compensation system is undergoing many changes with the implementation of Senate Bill 863, workers using the guidebook are urged to check updates posted at the DIR’s Division of Workers’ Compensation website. Injured workers may also obtain a printed copy at a local DWC district office.

The California Department of Industrial Relations enforces the state’s labor laws to improve the workplaces of over 18 million wage earners and their employers. Its mission is to improve working conditions for California’s wage earners, and to advance opportunities for profitable employment in California. DIR administers and enforces laws governing wages, hours and breaks, overtime, retaliation, workplace safety and health, medical care and other benefits for injured workers, and apprenticeship training programs.

State Fund’s Annual Report for 2012 was just released. The report shows a significant increase in net income for California’s largest workers’ comp insurer. For 2012, State Fund’s income before dividends totaled $458 million, which was $279 million more than the prior year.

The report also indicates that State Fund reduced annual fixed expenses by $150 million dollars compared to 2009, and expects to achieve annual savings of more than $300 million by the end of 2014. These savings will help State Fund maintain fair pricing and bring value to a larger swath of the available market. State Fund announced a rate reduction of 7% effective March 1, 2013.

State Fund maintained a balanced investment portfolio that was focused on both credit quality and investment yield (99.3% of the $18.2 billion bond portfolio was rated NAIC 1, the NAIC’s highest quality credit class). The weighted average credit quality of the overall bond portfolio was Aa1/AA by Moody’s and Standard and Poor’s, respectively. Book yield at December 31, 2012 was 4.10%, down from 4.43% at December 31, 2011.

“I am proud to report that at the end of 2012, we began to realize our vision of a more effective State Fund, and that we are on a sustainable path to become the competitive, agile workers’ compensation carrier envisioned by our core mission,” remarked Tom Rowe, State Fund President and CEO in the report.

Rowe added that, “State Fund is emerging from its restructuring stronger, more efficient, and better able to deliver value to our policyholders, and injured workers – the greatest thing we can do for Californians.”

The report comes as State Fund approaches the three-year mark of implementing a comprehensive restructuring plan aimed at consolidating operations, shrinking its real estate footprint, and reducing operating expenses.

A Carson woman has been sentenced to 156 months in federal prison in an $8 million Medicare fraud case in which she illegally paid kickbacks for referrals to patients whose beneficiary information was used to make bogus claims to the government health care program.

Uben Ogbu Rush, 54, received the 13-year sentence from United States District Judge George H. King. During the sentencing hearing, Judge King said Rush was motivated by greed and the lengthy sentence was necessary, in part, to send a message of deterrence to others who might commit crimes against Medicare.

Rush owned or controlled six companies that ostensibly sold durable medical equipment, such as motorized wheelchairs and powered pressure-reducing mattresses. The companies were located in Carson, Gardena, Torrance, and Paramount.

At a trial in November 2011, federal prosecutors showed a jury how Rush paid marketers to recruit Medicare beneficiaries who would allow their identities and Medicare numbers to be used for the submission of false claims. The evidence also showed how Rush paid kickbacks to marketers, who in turn paid kickbacks to doctors who fraudulently wrote prescriptions, even though the physicians had not examined the patients or an examination revealed that the medical equipment was not medically necessary.

During the course of a scheme that ran from 1999 until 2008, Rush submitted more than $15 million in fraudulent claims to Medicare seeking payment for motorized wheelchairs, hospital beds, air pressure mattresses, and other items for patients who did not need the equipment. Medicare paid more than $8.1 on the bogus claims.

A co-defendant in the case, Carlos Alberto Rezabala, 60, of Downey, was sentenced by Judge King in June 2012 to 41 months in federal prison. Rezabala was a recruiter who brought Medicare beneficiaries into the scheme so their information could be used to submit fraudulent bills.

Another co-defendant, Phitsamay Syvoravong, 58, of Orange County, another recruiter who brought Medicare beneficiaries into the scheme, is scheduled to be sentenced by Judge King on May 20.

A related defendant, Dr. Alfred Glover, 57, of Playa Vista, testified at trial that he was paid for writing fraudulent prescriptions for Medicare beneficiaries, many of whom he never saw. Glover is schedule to be sentenced on May 28.

The investigation into Rush and her Medicare fraud scheme was conducted by the Federal Bureau of Investigation.

CMS published a new 88-page reference guide for Workers’ Compensation Medicare Set-Asides (WCMSAs). The publication’s purpose is to serve as a reference guide for claimants, attorneys, WCMSA consultants and others by consolidating information from previous CMS WCMSA Regional Office (RO) Memorandums and other information on the CMS website. For more comprehensive information, readers are requested to continue to refer to the WCMSA RO Memorandums.

The format of the guide (with version numbers, version history and paragraph numbers) is structured to make it expandable for future updates. This guide is in response to users requests for CMS to provide clearer guidance on the WCMSA program.

This guide was written to help litigants understand CMS’ Workers’ Compensation Medicare Set – Aside Arrangement (WCMSA) amount approval process and to serve as a reference for those electing to submit such proposals to CMS for approval. Submitters of arrangements may include injured workers themselves, their attorneys, Workers’ Compensation Medicare Set-Aside Arrangement agents or consultants, or claimants’ other appointed representatives. This guide reflects information compiled from all WCMSA Regional Office (RO) Memorandums issued by CMS, and from information provided on the CMS website.

A WCMSA allocates a portion of the WC settlement for all future work injury related medical expenses that are covered and otherwise reimbursable by Medicare. When a proposed WCMSA amount is submitted to CMS for review and the individual or beneficiary obtains CMS’approval, the CMS – approved WCMSA amount must be appropriately exhausted before Medicare will begin to pay for care related to the beneficiary’s settlement, judgment, award, or other payment.

The goal of establishing a WCMSA is to estimate, as accurately as possible, the total cost that will be incurred for all medical expenses otherwise reimbursable by Medicare for work-related conditions during the course of the claimant’s life, and to set aside sufficient funds from the settlement, judgment, or award to cover that cost. WCMSAs may be funded by a lump sum or may be structured, such that a fixed amount of funds are provided each year for a fixed number of years.

Any claimant who receives a WC settlement, judgment, or award that includes an amount for future medical expenses must take Medicare’s interest with respect to future medicals into account.  If Medicare’s interests are not considered, CMS has a priority right of recovery against any entity that received a portion of a third party payment either directly or indirectly. Medicare may also refuse to pay for future medical expenses related to the WC injury until the entire settlement is exhausted. These arrangements are typically not created until the individual’s condition has stabilized so that it can be determined, based on past experience, what the future medical expenses may be.

Once the CMS-approved set-aside amount is exhausted and accurately accounted for to CMS, Medicare will pay primary for future Medicare-covered expenses related to the WC injury that exceed the approved set-aside amount.

To view the new WCMSA reference guide, click here.