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Whistleblower Cases Accuse Kaiser of Massive Billing Fraud

Jeffrey Mazik is the former “Senior Practice Leader for Kaiser’s National Compliance Office” and has over 25 years of experience in fraud control, auditing, and compliance. He was “employed by Kaiser” from 2008 to 2017, joining as an “Information Technology Audit Specialist” in May 2008 and transitioning to the role of “Senior Practice Leader in the Fraud Control Program” in March 2012.

His duties included working with regional compliance leadership to implement compliance and fraud control initiatives, using data analytics to improve compliance and fraud-mitigation initiatives, investigating potential fraud, and developing corrective action plans to address fraud risks.

He has filed federal lawsuit in the United States District Court tor the Eastern District of California against Kaiser Foundation Health Plan, Inc. (“KFHP”), Kaiser Foundation Hospitals (“KF Hospitals”), The Permanente Medical Group, Inc., Southern California Permanente Medical Group, and Colorado Permanente Medical Group, P.C. (“the PMG defendants”). The PMG defendants are groups of physicians that “contract with the other Kaiser entities” to provide medical services Each PMG defendant operates within its individual territory and is funded primarily by reimbursements from its respective regional Kaiser Foundation Health Plan entity.

Defendant KF Hospitals is a nonprofit corporation headquartered in California that operates hospitals and provides facilities for the benefit of the PMG defendants. (Id.) It also receives its funding from defendant KFHP. (Id.) Defendant KFHP is a nonprofit corporation headquartered in California that enrolls members in health plans and provides medical services for its members through contracts with defendant KF Hospitals and the PMG defendants.

On April 2, 2021 Mazik filed his operative first amended complaint under seal on behalf of the United States of America and the states of California, Colorado, Georgia, Hawaiʻi, Maryland, Virginia,, and Washington pursuant to the federal False Claims Act,

He alleges defendants have schemed to defraud the federal government by allowing external, i.e., “non-Kaiser,” healthcare providers to submit false diagnosis codes, which defendants in turn submit to CMS in order to inflate their capitation rates. In particular, defendants intentionally fail to properly use fraud-detection tools to monitor claims errors. Defendants contract with data analytics vendors to review their external provider claims for each region. The vendors provide software applications that perform various types of reviews. For instance, some programs”detect claims that are incorrectly billed . . . [while] other programs identify intentionally manipulated claims that technically fall within plan rules . . . .”

However, he alleges defendants intentionally misused these programs and used them at minimum capacity, such as by disabling key features, in order to reduce the chances of detecting claims errors. In this way, defendants were actively working to avoid detecting and correcting fraudulent claims.

In late 2015, Mazik was tasked with comparing the functionalities offered by two claims analytics vendors, McKesson and Verisk, with which defendants routinely contracted. McKesson offers auditing software called ClaimsXten that detects fraudulent billing practices using “a robust set of rules.” However, defendants chose to deactivate 25 of the 54 rules used by ClaimsXten – “the principal software program that they were supposedly relying on [to] detect such billing fraud.” When a group of employees including Mazik used a Verisk program to double-check data from “the Georgia region” produced by ClaimsXten, the group found $5.3 million in overpayments stemming from defendants’ decision to deactivate nearly half the rules in ClaimsXten. Defendants neither reactivated the disabled rules nor rectified the $5.3 million in overpayments.

When Mizak audited regional office claims from August 2010 through July 2016, he discovered that inflated diagnosis codes caused $209 million in Medicare Advantage overpayments, $181 million in Medi-Cal overpayments and $181 million in other Medicaid programs.Additional allegations similar to the above were made in the lawsuit, and Mazik claims that ultimately he was “stripped of his duties and responsibilities” On January 5, 2017, Mazik was fired.

On July 13, 2022, defendants filed their motion to dismiss Mazik’s First Amended Complaint. In their pending motion, defendants argued that Mazik’s federal FCA claim is barred by the first-to-file rule and the first amended complaint filed by the relator, Dr. James Taylor, in United States ex rel. Taylor v. Kaiser Permanente, No. 21-cv-03894-EMC (N.D. Cal.) (“the Taylor Complaint”). The Court compared the allegations in both cases and concluded that Mazik’s FCA claim was barred by the first-to-file rule except to the extent relator alleges that defendants deliberately tampered with compliance software to ensure that it did not identify erroneous diagnosis codes.

And on February 13, 2024 the Court issued its ruling granting in part and denying in part the Motion to Dismiss. Thus parts of the Mazik case will proceed, and there is additionally the Taylor case proceeding in another California Federal District Court based upon similar allegations.  

FDA Grants Priority Review of Psychedelic Drug for PTSD

San Jose based Lykos Therapeutics announced that the U.S. Food and Drug Administration (“FDA”) has accepted its new drug application (“NDA”) for midomafetamine capsules (“MDMA”) used in combination with psychological intervention, which includes psychotherapy (talk therapy) and other supportive services provided by a qualified healthcare provider for individuals with post-traumatic stress disorder (“PTSD”).

MDMA is commonly known as ecstasy (tablet form), and molly or mandy (crystal form). MDMA was first synthesized in 1912 by Merck. It was used to enhance psychotherapy beginning in the 1970s and became popular as a street drug in the 1980s. [

The FDA has granted the application priority review and has assigned a Prescription Drug User Fee Act (“PDUFA”) target action date of August 11, 2024. If approved, this would be the first MDMA-assisted therapy and psychedelic-assisted therapy.

The NDA submission included results from numerous studies including two randomized, double-blind, placebo-controlled Phase 3 studies (MAPP1 and MAPP2) evaluating the efficacy and safety of MDMA used in combination with psychological intervention versus placebo with therapy in participants diagnosed with severe or moderate to severe PTSD, respectively.

Both MAPP1 and MAPP2 studies met their primary and secondary endpoints and were published in Nature Medicine.The primary endpoint for both studies was to assess changes in PTSD symptom severity as measured by the change from baseline in Clinician-Administered PTSD Scale for DSM-5 (“CAPS-5”). The key secondary endpoint of both studies was to assess improvement in functional impairment associated with PTSD as measured by the change from baseline in the Sheehan Disability Scale (“SDS”). No serious adverse events were reported in the MDMA group in either study.

The FDA grants priority review for drugs that, if approved, would represent significant improvements in the safety or effectiveness of the treatment, diagnosis, or prevention of serious conditions when compared to standard applications.

MDMA-assisted therapy has not been approved by any regulatory agency. The safety and efficacy of MDMA-assisted therapy has not been established for the treatment of PTSD. Investigational MDMA-assisted therapy is also being studied in other indications.

PTSD is a serious mental health condition that can develop when a person experiences or witnesses a traumatic event. PTSD affects approximately 13 million Americans each year with women and disadvantaged or marginalized groups more likely to be affected.

Military personnel also have a greater prevalence of PTSD than the general population however, it may not be as widely known that that the largest cause of PTSD is non-combat-related trauma (e.g., sexual violence, unexpected death of a loved one, life-threatening traumatic event or interpersonal violence). In addition to the significant personal impact, PTSD has an enormous economic impact resulting in an annual cost of over $232 billion in the United States.

Trauma-focused talk therapy, which concentrates on memories of the traumatic event or thoughts and feelings associated with the traumatic event is first-line treatment for PTSD , which can be used alone or in combination with medication. There are two SSRIs approved for the treatment of PTSD (sertraline and paroxetine). Studies have shown talk therapy lessens the severity of PTSD symptoms, however improvements in functioning and quality of life have been modest. Trauma-focused talk therapy is associated with a high risk of dropout and lingering symptoms which occur in as many as two-thirds of people who complete treatment.  

Current treatments for PTSD are “reasonably efficacious” however many people don’t respond to treatment or stop treatment early, underscoring the urgent need for new evidence-based therapies and approaches to address this important public health issue. While there have been advancements in the management of PTSD, there have been no new drug treatments approved by the FDA in over twenty years.

In the 1970’s and early 1980’s MDMA was used in conjunction with talk therapy by mental health providers to enhance patients’ access, processing, and communication of difficult emotions and experiences. However, in 1985, the U.S. Drug Enforcement Administration (“DEA”) made MDMA a Schedule I drug under the Controlled Substances Act preventing it from being used for recreational or medical use.

Since then, research has shown the unique properties of MDMA allow it to act as a powerful catalyst to support psychotherapy by helping diminish the brain’s fear response allowing people to access and process painful memories without being overwhelmed. However, additional clinical trials would be needed to secure regulatory review and potential approval.

Lykos pioneered the first randomized, double-blind, placebo controlled clinical trials evaluating the efficacy and safety of MDMA-assisted therapy as an investigational modality using midomafetamine (MDMA) in combination with psychological intervention to treat PTSD.

APCIA Announces Award Winners Among 2024 Class of Emerging Leaders

The American Property Casualty Insurance Association (APCIA) is the primary national trade association for home, auto, and business insurers. APCIA promotes and protects the viability of private competition for the benefit of consumers and insurers, with a legacy dating back 150 years. APCIA members represent all sizes, structures, and regions—protecting families, communities, and businesses in the U.S. and across the globe.

The APCIA just announced special award winners among the 2024 Class of Emerging Leaders during the Emerging Leaders Conference in San Antonio, Texas. This year, 13 individuals were recognized among a class of 201 insurance professionals with an award for their exceptional work and outstanding impact in 2023.

“I am thrilled to congratulate the exceptional industry leaders who were honored with awards at this year’s Emerging Leaders Conference,” said David A. Sampson, president and CEO of APCIA. “It is a privilege for APCIA to recognize the industry’s top talent and provide meaningful opportunities for networking and professional development. I also want to congratulate the entire 2024 Class of Emerging Leaders for being nominated and selected to participate in this prestigious conference.”

The awards announced during the 2024 Emerging Leaders Conference include: Business Excellence Award; Business Impact Award; Business Leadership Award; Exceptional Philanthropic Impact Award; Innovation Leadership Award; Leadership Award; Outstanding Diversity, Equity, and Inclusion Leadership Award; and Talent Leadership Award.

This year’s winners reflect the innovation and collaboration of the industry’s best and brightest future leaders,” said Marguerite Tortorello, managing director of the Insurance Careers Movement. “The diverse categories of awards also demonstrate the significant impact the winners are having across their organization and in their community through their leadership.”

The stellar 2024 Class of Emerging Leaders included rising stars from 80 different companies,” said Jessica Hanson Hanna, APCIA’s senior vice president of public affairs. “The incredible participation in this elite conference demonstrates a true commitment among the industry to recognize and cultivate talent. I want to congratulate the award winners for their special and well-deserved recognition.”

Class of 2024 Emerging Leaders Award Winners

– – Business Excellence Award: Michelle Page, The Hartford
– – Business Impact Award: Mukund Nair, CSAA Insurance Group and Kenji Swepson, Everest
– – Business Leadership Award: Joe Alessi, Universal Shield Insurance Group, Enjonli Hutchison, Amerisure Insurance and Craig Woodworth, Argo Group
– – Exceptional Philanthropic Impact Award: Megan Williams, Auto Club Group
– – Innovation Leadership Award: Wendy Coffing, Great American Insurance Group, Jonathan Macenski, Ally Insurance, and Glen Norton, Illinois Casualty Company
– – Outstanding Diversity, Equity, and Inclusion Leadership Award: Shameem Awan, Amica Mutual Group and Sandra Polanco, Zurich North America
– – Talent Leadership Award: Jon O’Camb, ERIE Insurance Group.

The Emerging Leaders Conference provides candid insights by industry executives, networking, and tools and resources for emerging leaders to succeed in this fast-changing world. After the Emerging Leaders Conference, the rising stars will join their fellow alumni in serving as ambassadors for the industry and in helping expand career opportunities in insurance.

North Hills Family Arraigned in $192K Auto Insurance Fraud Scheme

Shannon Ninio, 60, of North Hills, was arraigned on charges related to insurance fraud after a California Department of Insurance (CDI) investigation found she and her husband, Moshe Ninio, allegedly stole their rental car company’s customers’ personal information and used that information to file more than 40 fraudulent auto insurance claims and collect nearly $200,000 in undeserved payouts.

Moshe Ninio was arraigned in Los Angeles County Superior Court on 18 felony counts of insurance fraud. The Ninios’ son-in-law, Ivan Lebedynets, 33, of Winnetka, was also arraigned for his alleged involvement in the scheme.

CDI began its investigation after an insurance company alleged that Moshe Ninio, owner of AT Car Rental, stole the identities of his customers to obtain auto insurance policies in their name to insure his fleet of rental cars.

Shannon Ninio was also owner of the company and Lebedynets was their employee.

The investigation found that when their customers would get into legitimate accidents, Moshe Ninio would file insurance claims impersonating his identity theft victims who were listed as the policyholder.

While posing as that policyholder, he would claim he gave permission to a “friend,” who was actually the current vehicle renter, to drive the vehicle, all to disguise their rental car business.

Shannon Ninio and Lebedynets also allegedly posed as policyholders for many of the claims. Between September 2018 and July of 2020, 47 auto insurance claims were filed under the fraudulent policies.

The total paid loss for the claims was $192,282.

During the course of this investigation, 15 individuals who were listed as policyholders were interviewed and the majority of the identity theft victims stated they had previously rented vehicles from Moshe Ninio.

They also stated that they never opened any of the fraudulent insurance policies and that their personal information was used without their permission.

Moshe and Shannon Ninio were arrested December 21, 2023. Lebedynets self-surrendered and was arraigned on January 29, 2024. All three are scheduled to return to court on April 10, 2024. This case is being prosecuted by the Los Angeles County District Attorney’s Office.

One Call Accused of Using Interpreters With Fake Names & Badges

The Association of Independent Judicial Interpreters of California (AIJIC) is a nonprofit trade association that represents the voice of independent court interpreters in California in matters that have, or could have, a significant impact on the independent interpreting profession in the private sector.Its principal office located in Studio City, Los Angeles County, California.

One Call Corporation dba One Call, One Call Care management, and/or One Call Care Transport & Translate is a corporation registered with the Florida Secretary of State, with its principal office located in Jacksonville, California. ONE CALL provides care coordination services to the workers’ compensation industry, which services include providing interpreters. Interpretation services which are provided nationwide.

On January 31, 2024, AIJIC sued One Call in the Los Angeles Superior Court. The lawsuit stems from allegations of multiple cases of identity theft of court interpreters’ names and credentials in Workers Compensation depositions.

The AIJIC lawsuit was brought pursuant to California’s Unfair Competition Law, Business & Professions Code sections17200 et seq., to enjoin defendants from unlawful, fraudulent, and unfair business practices and false advertising.

The plaintiffs allege One Call employs individuals and businesses that are impersonating certified court interpreters in California worker’s compensation cases, resulting in harm to workers alleging industrial injuries who cannot proficiently speak or understand English, However AIJIC alleges that One Call “has publicly disseminated untrue or misleading statements and advertising as regards the company’s ability to provide certified interpreters for worker’s compensation cases.”

AIJIC also alleges on “numerous occasions, individuals employed by defendants appeared in California worker’s compensation cases, and these individuals have falsely impersonated certified California interpreters. Some of these individuals have falsely impersonated certified California interpreters in more than one instance.” And that “defendants not only impersonated others, but these individuals also were not certified to interpret in California for worker’s compensation proceedings.”

The lawsuit goes on to allege that “On or about December 1, 2022, Plaintiff sent a letter to ONE CALL to inform it that California certified interpreters were being impersonated by unknown individuals employed through ONE CALL at Zoom depositions based in California. This letter, which was supported by sworn declarations from court reporters and impersonated interpreters, identified nine specific instances where impersonations had occurred in 2021 and 2022.”

ONE CALL responded by stating it would no longer do business with the individuals or contractors who had provided interpreters for the Zoom depositions addressed in the December 1, 2022 letter. ONE CALL, however, refused to identify any of the individuals or contractors by name.”

However AIJIC continues to allege that “ONE CALL again employed one of the individuals previously involved in impersonating certified California interpreters. On this occasion, the individual appeared for a pre- deposition meeting with a worker and his attorney. On or about July 14, 2023, Plaintiff notified ONE CALL of this impersonation and asked that the impersonator’s true name be provided. ONE CALL did not respond to Plaintiff’s request.”

“Since July 14, 2023, individuals employed through ONE CALL and/or DOE defendants have continued to appear in California worker’s compensation cases, and these individuals have falsely impersonated others in their official capacity as certified California interpreters. In some instances, these individuals also have provided fake Judicial Council of California badges bearing the names of the certified court interpreters they were impersonating “

Plaintiff seeks “an accounting of all defendants for any and all profits derived by defendants from their business acts and practices in violation of the UCL” among other relief.;

One Call will have 30 days from the date they are served with this lawsuit to respond, and the parties will then conduct discovery followed by law and motion activities.

This lawsuit has now had nationwide attention in the media including Bloomberg Law and the Daily Journal in California.

Insurance Commissioner Publishes “First Wave” of Insurance Market Reforms

Advancing hisSustainable Insurance Strategy announced last September, Insurance Commissioner announced the first of several regulatory rule change packages aimed at streamlining the Department’s rate approval process. The California Office of Administrative Law published that rulemaking today and the Department invites public comment in advance of a public hearing on March 26.

These proposed changes are intended to modernize the submission requirements for auto, home, business, and other property and casualty insurance rate applications, ensuring that insurance companies adhere to clear guidelines and provide comprehensive information from the outset for the Department’s review.

The proposed amendments aim to address critical issues surrounding insurance companies’ rate application submissions under Proposition 103. The existing regulations, created in an age of pagers and payphones, lack clarity and fail to specify the exact materials and information required in a complete rate filing application given the change in times and increased complexity of filings. This ambiguity can lead to confusion among insurance companies and delays in the review process, ultimately impacting consumers’ access to fair and appropriate insurance rates and insurers’ level of certainty on their filings and the review process.

Key highlights of the proposed regulations include:

– – Clarity in Submission Requirements: Insurance companies will now have clearer instructions about what must be submitted with a complete rate application, with necessary materials and information clearly specified by regulations. This clarity will provide insurance companies with certainty regarding the documentation required for initial rate submissions.
– – Front-Loading the Delivery of Key Information: The proposed regulation will eliminate lengthy exchanges between the Department and insurers about incomplete applications before the rate review process may actually begin. These amendments will also provide consumer representatives more opportunity to timely review insurer rate applications in order to decide whether to intervene in the rate review process.
– – Inclusion of Criteria and Guidelines: The proposed amendments mandate what insurers must provide so the Insurance Commissioner may assess whether requested rates are appropriate and not excessive, inadequate, or unfairly discriminatory. This includes any and all criteria, guidelines, systems, manuals, models, and algorithms used to assess risks or modify coverage options, as set forth in California Insurance Code section 1861.05.

The Commissioner emphasized that these regulations are crucial for the effective evaluation of rate applications, enabling the Department’s experts to assess proposed rate changes accurately and promptly without compromising on quality. Moreover, these proposed amendments promote transparency by making all rate application materials public, allowing consumer representatives and regulatory authorities to review submissions in a timely manner, as set forth in California Insurance Code section 1861.07.

The Commissioner is now receiving public comment on the regulations. The public may submit written comments to the Department until March 26, 2024, at which time the Commissioner will hold a public hearing.

Jury Awards $1.675 Million in an EEOC ADA Discrimination Case

A seven-person jury in Syracuse, New York returned a verdict to resolve a disability discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC). The jury awarded $1.675 million to Shelley Valentino, a deaf individual, who unsuccessfully applied for two positions in McLane’s warehouse located in Lysander, N.Y., for which she was fully qualified. The facility employs approximately 650 people and distributes products to retail businesses throughout the Northeast.

On March 12, 2018, Valentino applied online for two open positions with Defendant: Warehouse Selector II and Warehouse Selector IV. Her application indicated two prior work experiences: working as a hostess and busser at Plainville Restaurant between August 2007 and July 2008, and as a filing and data entry clerk between January and October 2003. Her resume indicated that she received her GED in 2005, a certification in medical billing and coding in 2011, and an associate degree in health information technology in 2016. Valentino’s application nowhere indicates that she has any disability or requires any accommodation.

McLane contacted her the same day she applied for the two jobs, and left a message. She then returned McLane’s call using a Telecommunications Relay Service, which uses an operator to facilitate calls for people with hearing and speech disabilities. After being contacted via the Relay Service, McLane did not return her call and rejected her application the next day. McLane filled the positions with individuals who are not hearing impaired. The reason given in the applicant tracking system was that Valentino did not meet the company’s preferred qualifications.

McLane received a total of 208 applications for the Warehouse Selector II position and hired 15 individuals. Similarly, they received 209 applications for the Warehouse Selector IV position and hired eight individuals.

The EEOC filed suit in the U.S. District Court for the Northern District of New York (EEOC v. McLane/Eastern, Inc. d/b/a McLane Northeast, Civil Action No. 5:20-cv-01628-BKS-ML) after first attempting to reach a pre-litigation settlement through its conciliation process. The EEOC sought back pay, front pay, compensatory damages, and punitive damages for the applicant, as well as injunctive relief designed to remedy and prevent future disability discrimination in the hiring process.

In January 2023, the court heard a motion for summary judgment filed by McLane, who pointed out that courts regularly dismiss ADA disability discrimination claims where the plaintiff cannot establish that the employer had knowledge of the plaintiff’s disability, on the ground that such a plaintiff cannot establish the causation element of a prima facie case. An employer “cannot be liable under the ADA for firing an employee when it indisputably had no knowledge of the disability,” because an employer cannot take an adverse action with respect to an employee or applicant “because of a disability unless it knows of the disability.”

“[A] plaintiff alleging discrimination on account of his protected status must offer evidence that a decision-maker was personally aware of his protected status to establish a prima facie case of discrimination.” Murray v. Cerebral Palsy Ass’ns of N.Y., Inc., No. 16-cv-662, 2018 WL 264112, at *7, 2017 U.S. Dist. LEXIS 213553, at *19-20 (S.D.N.Y. Jan. 2, 2018) ( other citations omitted).

McLane argued that the evidence “plainly demonstrates” that it had no knowledge of Valentino’s deafness when her applications were rejected, because (1) Defendant’s Human Resources Manager, Anne Orr – the decisionmaker -testified that she did not know Valentino is deaf until Valentino filed a charge of discrimination with the EEOC in August 2018; (2) the other three members of the Human Resources Department testified that they were not aware of Valentino’s disability at the relevant time, did not speak to Valentino on the phone or recall a TRS call, and played no role in the hiring process; and (3) Valentino herself never expressly informed Defendant of her disability and does not know for sure whether the TRS operator did so.

The Court denied the motion for summary judgment, concluding that there is evidence from which a reasonable factfinder could conclude that Defendant had knowledge of Valentino’s disability at the time it decided not to interview or hire her in March 2018, based on the transcript of the March 12 Telecommunications Relay Service, that someone in McLane’s HR department received.

After a 3 ½-day trial, the jury found, following just two hours of deliberation, that McLane Northeast violated the Americans with Disabilities Act (ADA) by first refusing to interview Valentino, once the company learned that the candidate was disabled. Then the company further violated the ADA by refusing to hire the candidate for the two entry-level warehouse jobs that she applied for, the EEOC.

The jury awarded Valentino $25,000 in back pay, $150,000 in emotional distress damages, and $1.5 million in punitive damages.

Caitlin Brown, one of the EEOC trial attorneys who litigated the case, said, “The jury clearly understood that what McLane did here was wrong ” Deaf applicants, and all applicants with disabilities, deserve a fair chance to get jobs to enable them to support themselves and their families.”

$1 Million Settlement for Warehouse Workers in Inland Empire

The Labor Commissioner’s Office (LCO) has reached a $1 million settlement against La Mina De Oro Inc. and related businesses for wage theft violations.

The settlement will compensate 107 warehouse and retail workers who were not paid for all hours worked, which resulted in making less than minimum wage. Workers were also not paid for daily overtime and did not receive required rest and meal breaks.

LCO is distributing checks to workers who worked at La Mina de Oro, Inc. or related entities KD Distributors, Inc. and Desire Fragrances Inc. between August 1, 2014 and September 30, 2016. These workers should contact the LCO at 833-LCO-INFO (833-526-4636), as they may be entitled to owed wages and damages under this settlement agreement.

LCO’s Bureau of Field Enforcement (BOFE) began an investigation of La Mina de Oro around June 2016 after receiving a referral from the Warehouse Workers Resource Center (WWRC), a non-profit community-based-organization that advocates for workplace compliance in the warehouse industry.

Workers reported they were not paid for all the hours that they worked and their wage statements did not reflect the required information such as all required overtime pay or late meal-periods. They were not paid overtime after eight hours in a day, but only after 40 hours in a week. Workers also reported that they were not allowed to leave and had to be ready to serve customers during their rest breaks and meal breaks.

Citations were issued to La Mina de Oro and related entities on February 24, 2021 and a second citation was issued on May 18, 2021.

“My office is committed to stopping wage theft and collecting owed wages for workers,” said Labor Commissioner Lilia García-Brower. “Employees who were affected by this case should contact my office, as they may be entitled to owed wages and damages under the settlement agreement.”

February 5, 2024 – News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: WCAB Panel Reviews Criteria to Set Aside C&R for Incompetence. Opinion Defines When Ending Forced Arbitration Act “Dispute” Arise. Insureds May Video Record Participants During Examination Under Oath. SoCal Man Sentenced for $6M Used and Counterfeit Medical Device Fraud. Ethics Ratings of Nearly All Professions Down in U.S. NCCI Releases Q4 2023 “Upbeat” Quarterly Economics Briefing. CWCI Reports Workers’ Comp Inpatient Care Declined by 51.1%. DWC Annual Report of Inventory for Claims Due by April 1. Researchers Discover Potential Non-Opioid Treatment for Chronic Pain. Pomona Valley Hospital Overbilled $1.4M For Prescription Meds.

Lien Claimant’s Market Rate Analysis Inadequate to Justify Additional Fees

Lien claimant San Diego Imaging, Inc., dba California Imaging Solutions filed a lien for services rendered to Applicant Jose Abrego who claimed injuries while he was employed by Tri-State Employment who was insured by Lumbermen’s Underwriting.

It was undisputed that all dates of service of the lien were initially paid, in part, by Lumbermen’s Underwriting. When Lumbermen’s went into liquidation and CIGA took over the case, California Imaging re-submitted its bill of its alleged balance to CIGA.

A lien trial was set on August 14, 2023, and September 20, 2023 regarding the sole issue of the alleged balance of California Imaging’s lien.

California Imaging attempted to prove its claim for the balance of it’s lien with an unauthenticated, partial market survey. The Market Survey Analysis was identified as Lien Claimant Exhibit 10 at trial and objected to by Defendant for lack of foundation and as non-substantial evidence. It was however admitted into evidence over the Defendant’s objection.

California Imaging argued that it should be paid its lien balance, based solely on an in-house created Market Rate Analysis. In this case, Lumbermen’s paid the lien claimant’s bills in excess of the current fee schedule, which fee schedule was operative shortly thereafter on July 1, 2015. Lien claimant acknowledges receiving the EOB/EOR(s) statements for its invoices, within its objections to Lumbermen’s thereto.

California Imaging attached an Affidavit of Yvette Padilla to its Market Rate Analysis. Ms. Padilla is identified in California Imaging’s Petition for Reconsideration as its Collection Supervisor. The Affidavit of Ms. Padilla states that, “On January 30, 2020, I compiled the following report by retrieving data from California Imaging Solutions internal database. For convenience only the first 5 pages of the report are included, and the rest of the report is available upon request.” Thus, the Market Rate Analysis was an unauthenticated, incomplete document.

Also, California Imaging submitted its invoices, which did not include dates of service and detail multiple charges, fees and costs which were unexplained and incomprehensible. “Further, without a witness to authenticate its documentary evidence, Defendant is denied its due process right of cross-examination.”

On November 2, 2023 the WCJ found that lien claimant failed to meet its burden of proving that (1) it is entitled to an additional monetary payment from CIGA; and (2) its lien was reasonable and necessary. and ordered that lien claimant take nothing.

Reconsideration was denied, for the reasons stated in the WCJ Report, in the panel decision of Jose Abrego v Tri-State Employment -ADJ8995855-ADJ10748640-ADJ10749649 (January, 2024).

The court in Ashely Colamonico v. Secure Transportation (2019 Cal.Wrk.Comp.LEXIS 111; 84 Cal.Comp.Cases 1059)(en banc)) states that, “a lien claimant is required to establish that: 1) a contested claim existed at the time the expenses were incurred; 2) the expenses were incurred for the purpose of proving or disproving the contested claim; and 3) the expenses were reasonable and necessary at the time they were incurred.”

Pursuant to Labor Code §4620(a); §4621(a), the lien claimant must prove the medical-legal expense was reasonably, actually, and necessarily incurred [See §§3205.5, 5705; Colamonico, supra; Torres v. AJC Sandblasting (2012) 77 Cal.Comp.Cases 1113, 1115 [2012 Cal.Wrk.Comp. LEXIS 160] (Appeals Board en banc).

Any award, order or decision of the Appeals Board must be supported by substantial evidence in light of the entire record (Labor Code §5952(d); Lamb v. Workers’ Comp. Appeals Bd. (1974) 11 Cal.3d 274,280 [39 Cal.Comp.Cases 310]. It is more than a mere scintilla, and means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion – It must be reasonable in nature, credible, and of solid value (Braewood Convalescent Hospital v. Workers’ Comp. Appeals Bd. (Bolton) (1983) 34 Cal.3d 159,164 [48 Cal.Comp.Cases 566].

California Imaging’s Market Analysis was not substantial evidence, in light of the entire record. This is the only document that lien claimant relied upon to substantiate its alleged balance of $3,840.29. The lien claimant did not prove that its balance was reasonable or necessary.