Category: Daily News

Federal authorities arrested eight defendants last week in a sweeping enforcement action targeting health care fraud across Southern California and beyond. The cases, coordinated with the Vice President’s Task Force to Eliminate Fraud, involved more than $50 million in fraudulent billing — with sham hospice companies at the center of most charges.

The Hospice Schemes

Five separate cases targeted operators of fraudulent hospice care facilities. The common playbook: enroll Medicare beneficiaries who weren’t terminally ill, bill Medicare for services that were unnecessary or never provided, and pay kickbacks to recruiters and patients to keep the pipeline flowing.

The largest hospice case involves Nita Palma, a thrice-convicted health care fraudster who allegedly opened three new hospice companies while out on bond awaiting trial for a previous hospice fraud case. She and her husband, Adolfo Catbagan, are charged with billing Medicare at least $4.8 million through those companies, with Catbagan serving as the nominal owner to evade Palma’s exclusion from Medicare.

Other hospice defendants include Lolita Minerd, a vocational nurse whose company had an 85% non-death discharge rate — nearly five times the national average — and billed Medicare over $9.1 million; psychologist Gladwin Gill and his wife Amelou, who allegedly laundered over $4 million in fraudulent proceeds through personal expenses; Evelyn Tindimobuna, charged with billing $3.8 million for sham hospice services; and Ivan Lauritzen, whose company’s live discharge rate exceeded 75% and who allegedly forged a physician’s signature on enrollment forms.

Union Health Plan Fraud

Three additional cases targeted a longshore workers’ union health plan. In the largest, four defendants are charged with submitting $19 million in false claims for chiropractic and physical therapy services through a network of wellness centers. Separately, Idaho chiropractor Gregory Cartmell allegedly billed $9.1 million under a co-conspirator’s credentials after being terminated from the plan. And Sonia Griffen is charged with submitting $4.9 million in fraudulent claims through her wellness center after it, too, was barred from the plan.

Immigration Medical Fraud

In a standalone case, Young Joo Ko was charged with running a scheme exploiting the green card medical exam process — preparing required immigration health forms without actual physician examinations.

The defendants face penalties ranging from 10 to 20 years in federal prison depending on the charges. All are presumed innocent until proven guilty.

The California Attorney General filed an amicus brief in Art Center Holdings, Inc., et al. v. WCE CA Art, et al., a case before the California Second District Court of Appeal, B338625. The case involves a dispute between a physician who owned a medical practice and a private equity-backed management services organization (MSO).

The dispute arises from a “friendly PC” (professional corporation) model arrangement common in healthcare, where a physician-owned professional corporation (PC) contracts with a management services organization (MSO) for administrative and non-clinical support.

The case involves WCE, a management services organization (MSO). Under a management services agreement, WCE provided management and administrative services to the Southern California Reproductive Center (SCRC), a California professional corporation providing women’s health, reproductive, and fertility services.

In 2019, the physicians and their affiliated companies sold a 51 percent stake in their fertility practice to WCE in exchange for immediate cash and deferred/contingent consideration. WCE and its affiliates were to provide non-clinical services in exchange for fixed percentage fees.

After BC Partners acquired WCE in 2020, disputes arose. The plaintiffs alleged that WCE mismanaged the practice — under-collecting accounts receivable, causing staff departures, and underinvesting in equipment. They further alleged the MSO asked the PC to terminate some physicians, and when it refused, WCE terminated the Consulting Agreement as a pretext to change ownership of the PC.

The plaintiffs moved for the appointment of a receiver. The trial court found that WCE had engaged in the unlicensed corporate practice of medicine by exercising undue control over SCRC. The court reasoned that because WCE had the contractual ability to remove Dr. Surrey from his position whenever they disagreed with his clinical decisions, WCE effectively had undue control over the physician-owner — it could replace any doctor-owner at will with one more compliant with its wishes.

The heart of the case concerns whether specific contractual mechanisms in the “friendly PC/MSO” structure violated California’s longstanding corporate practice of medicine (CPOM) doctrine. This doctrine (rooted in the Medical Practice Act, Business and Professions Code §§ 2000 et seq., Corporations Code §§ 13400 et seq., and related provisions) prohibits unlicensed corporations and non-physicians from directly or indirectly practicing medicine, owning medical practices, or exercising undue control over licensed physicians’ clinical judgment, including decisions on hiring, firing, disciplining, or retaining physicians based on clinical matters. MSOs may provide administrative support but cannot control clinical operations or create “captive” PCs where nominal physician ownership masks corporate dominance.

The AG frames this structure as a “captive PC” — one where the physician is the nominal owner on paper, but the MSO holds effective control through contractual leverage. The AG describes this as part of a broader pattern in which private equity-backed MSOs use continuity agreements, assignable options, and stock transfer agreements to maintain de facto ownership and control of medical practices while technically complying with the requirement that only licensed physicians own PCs.

The AG concludes that the trial court correctly held that these captive PC arrangements violate California’s CPOM laws, and urges the Court of Appeal to affirm that legal standard rather than adopting the more permissive frameworks proposed by either party.

According to a May 2024 California Health Care Foundation report, private equity investment into health care totaled about $83 billion nationally and $20 billion in California in 2021. While the majority of overall private equity dollars has been directed at biotechnology and pharmaceuticals in recent years, private equity acquisitions of health care service providers (such as clinics, hospitals, and nursing homes) make up a significant portion of all private equity health care deals.

In California, acquisitions of providers totaled $4.31 billion dollars between 2019 and 2023, and represented roughly a third of all deals. Available data, while limited, show that private equity has gained a small but meaningful ownership foothold among certain kinds of providers.

Private equity firms now own approximately 8% of all private hospitals in the U.S. and approximately 6% of private hospitals in California. Higher charges, which are often passed along to patients, have been documented in clinics, hospitals, and nursing homes. Twenty-seven studies reviewed found 12 with a harmful impact on quality of care, nine found a mixed impact, and three found a neutral impact.

One rigorous study found that private equity acquisitions led to an 11% higher mortality rate during short-term nursing home stays.

This appellate case will scrutinize the “friendly PC” model commonly used by private equity firms to invest in physician practices. The case was part of a broader wave of scrutiny in California that ultimately led to the passage of SB 351 in October 2025, which codified prohibitions on the corporate practice of medicine and restricted private equity groups from interfering with physicians’ clinical decision-making.

All workers employed on public works projects in California must be paid the prevailing wage determined by the Director of the Department of Industrial Relations (DIR), CA according to the type of work and location of the project. In essence, prevailing wage is the pay rate that reflects the going compensation for similar work in a given area — these rates are often based on pay rates from local union agreements for similar jobs and are usually higher than the minimum wage.

The requirement applies to all employees working on projects when the total cost of the public works project exceeds $1,000. LMCC This is a much lower threshold than the federal requirement of $2,000, meaning more projects in California are subject to prevailing wage laws. There are limited exemptions: if an awarding body has a labor compliance program, prevailing wages are not required for construction projects of $25,000 or less, or for alteration, demolition, repair, or maintenance work of $15,000 or less.

Both prime contractors (hired directly by a public agency) and subcontractors must comply with prevailing wage laws.

Under California prevailing wage law, workers receive different wage rates for working on legally recognized holidays. All crafts recognize New Year’s Day, Memorial Day, July 4th, Thanksgiving Day, and Christmas. Beyond those five universal holidays, not all crafts recognize Veterans Day, Martin Luther King Day, or the day after Thanksgiving — which holidays apply depends on the specific trade classification and its applicable wage determination.

As of January 1, 2026, Diwali, known as “Diwali.” (the 15th day of the month of Kartik in the Hindu lunar calendar) was added to Government Code Section 6700 as a holiday.  AB 2156 redesignated March 31 from “Cesar Chavez Day” to “Farmworkers Day,” and was filed with the Secretary of State on March 26, 2026, taking effect immediately as an urgency statute. Thus the list of holidays specified by Government Code Section 6700 has been changed accordingly.

Diwali, often called the “Festival of Lights,” is one of the most widely celebrated festivals in Hinduism, Jainism, Sikhism, and some Buddhist traditions. It symbolizes the triumph of light over darkness, good over evil, and knowledge over ignorance. Celebrations typically span five days and include lighting oil lamps (diyas) and candles, fireworks, prayer and worship (particularly of Lakshmi, the goddess of prosperity), feasting, and exchanging gifts with family and friends. It’s observed by over a billion people worldwide, making it one of the largest religious celebrations in the world.

For crafts whose prevailing wage determination is based on a CBA, these changes may have no immediate impact — those crafts follow whatever holidays are recognized in their specific CBA. The CBA holiday list doesn’t automatically update just because Section 6700 changed.

For crafts whose prevailing wage determination is not CBA-based, the Section 6700 list is the governing holiday schedule. For those classifications, Diwali and Farmworkers Day (March 31) are now recognized prevailing wage holidays. That means if workers in those non-CBA classifications perform work on those days, they’d be entitled to the applicable holiday pay rate (typically double time, depending on the determination).

Glucagon-like peptide-1 receptor agonists (GLP-1 RAs) — including semaglutide (Ozempic, Wegovy), tirzepatide (Mounjaro), liraglutide, and dulaglutide — have become one of the most widely prescribed drug classes in the United States. Originally developed for type 2 diabetes, they now carry FDA approval for obesity and weight-related comorbidities. With over 40% of U.S. adults classified as obese per CDC data, and with obesity being a well-documented risk factor for complications in joint replacement and spine surgery, GLP-1 RAs are increasingly relevant to the injured worker population. More than half of patients undergoing total knee and hip arthroplasty meet criteria for obesity or morbid obesity, making preoperative weight management a frontline concern for orthopedic surgeons treating industrial injuries.

Perioperative Risks: Aspiration and Gastric Motility

GLP-1 medications slow gastric emptying — a therapeutic feature for appetite control that becomes a serious anesthetic hazard. The American Society of Anesthesiologists (ASA) has issued guidance recommending that patients on **daily-dose** GLP-1 therapy withhold the medication on the day of elective surgery, and patients on **weekly-dose** formulations withhold it for a full week prior. If a patient on GLP-1 therapy presents with gastrointestinal symptoms on the day of surgery, the ASA recommends either postponing surgery or proceeding with “[full stomach precautions](https://journals.lww.com/jbjsjournal/fulltext/2025/08200/glp_1_receptor_agonists_in_orthopaedic_surgery_.17.aspx).” Research presented at the American Academy of Orthopaedic Surgeons (AAOS) 2025 annual meeting in San Diego suggested an even more conservative window — stopping GLP-1s **14 days** before surgery to adequately reduce aspiration risk. Aspiration complications can include bronchial spasms, pneumonia, and death. In the trauma setting, where surgery cannot be delayed, surgeons should use point-of-care gastric ultrasound and full stomach precautions at the surgeon’s discretion.

Bone Healing and Fusion Concerns

This is where the evidence becomes most consequential for workers’ compensation claims involving spine and fracture surgery.

Spine Surgery: A systematic review and meta-analysis published in the *North American Spine Society Journal (December 2025) pooled data from 13 retrospective cohort studies and found that GLP-1 RA use was associated with a **reduced risk of pseudarthrosis** (failure of bone fusion), with no consistent increase in infection, wound healing complications, cerebrospinal fluid leak, or thromboembolic events. However, the authors cautioned that heterogeneity across studies was notable and causality cannot be inferred. Contradicting these pooled findings, a [study on posterior cervical spine surgery published in *The Spine Journal (September 2025) found that patients on GLP-1 medications had a 4.79 times higher risk of non-union and a 2.12 times higher risk of dysphagia compared to controls. The discrepancy likely reflects differences in surgical approach, patient nutrition status, and GLP-1 exposure timing.

Lower Extremity Fractures: A large retrospective cohort study with two-year follow-up found that perioperative GLP-1 RA use was associated with a modestly higher risk of nonunion following lower extremity fracture fixation, though without increased wound complications. Importantly, GLP-1 use was linked to reduced cardiac arrest and one-year mortality — suggesting that the systemic cardiovascular benefits may outweigh the localized bone healing concern for many patients.

Joint Replacement:  Results are mixed. For total shoulder arthroplasty, patients on GLP-1 RAs showed no increase in length of stay or complications. For total knee arthroplasty, semaglutide was associated with decreased periprosthetic joint infection, sepsis, and readmissions — but also with increased acute kidney injury, pneumonia, myocardial infarction, and hypoglycemic events. Total hip arthroplasty data showed similar infection and readmission benefits without the same medical complication increase.

Nutritional and Muscle Mass Implications

Rapid weight loss from GLP-1 medications — often 10–15% of body mass over 6 to 12 months — can deplete lean muscle along with fat, particularly in patients over 60 or those not performing resistance training. This sarcopenic effect directly undermines postoperative rehabilitation. Muscle mass and function are essential for ambulation after joint replacement and spine surgery, and insufficient protein intake increases the risk of delayed wound healing and infection. For workers’ compensation cases, this creates a practical question: is the injured worker’s nutritional status adequate to support surgical healing? Providers should document total weight loss, duration of GLP-1 use, and whether the patient is supplementing with protein or creatine.

Practical Takeaways for Workers’ Compensation Stakeholders

– – Treating physicians and QMEs should document GLP-1 medication use, duration, total weight loss, and nutritional supplementation in every surgical evaluation for an injured worker.
– – Utilization review organizations should flag GLP-1 use when evaluating requests for spine fusion, fracture fixation, or joint replacement — and ensure preoperative nutrition optimization is addressed in the treatment plan.
– – Claims administrators should be aware that GLP-1-related complications (non-union, revision surgery, aspiration events) may extend claim duration and costs, but that the medications also reduce systemic risks like infection and mortality.
– – The standard hold period** before elective surgery remains debated: the ASA recommends 7 days for weekly formulations, while AAOS research suggests 14 days may be safer. Surgeons and anesthesiologists should coordinate on a case-by-case basis.

Following alarming reports that California officials failed to properly safeguard federal funds, House Committee on Oversight and Government Reform Committee Chairman James Comer (R-Ky.) and Oversight Committee Republicans launched an investigation into rampant taxpayer fraud in California’s hospice programs.

In a letter to California Governor Gavin Newsom, the lawmakers emphasized that the Newsom administration has been aware of state audit reports of hospice fraud for at least four years but has failed to prevent or detect it and has enabled hospice providers to defraud the American taxpayer and exploit vulnerable patients. The Oversight Committee is now requesting documents and communications regarding California’s oversight and internal controls to detect and prevent fraud for its federally funded hospice programs.

“Recent reporting has revealed alarming evidence of fraudulent activity in California’s hospice programs, including agencies overbilling Medicare and fraudulently enrolling beneficiaries without their knowledge. In California, your administration’s Departments of Public Health, Social Services and Health Care Services all have a role in overseeing federally funded hospice programs.  The Committee is concerned your administration does not have sufficient internal controls to prevent and detect fraud and is not conducting proper oversight of these hospice programs. As a result, Americans across the country are paying for California’s rampant hospice fraud and vulnerable patients are being exploited. California has a well-documented history of fraud in its hospice programs. Your administration has been aware of credible reports of hospice fraud for at least four years. Despite these red flags, it appears California has enabled hospice providers to defraud the American taxpayer and exploit vulnerable patients,” wrote the Republican lawmakers.

The Committee’s investigation into Minnesota’s federally funded social service programs exposed widespread failures by state agencies to conduct oversight and prevent fraud, with similar schemes now appearing in California’s hospice programs. According to a March 29, 2022, report from the California State Auditor, Los Angeles County has seen a 1,500 percent increase in hospice providers since 2010, with providers overbilling Medicare by at least $105 million in a single year. In addition, a whistleblower reported that California has minimal safeguards to prevent fraudsters from obtaining hospice licenses, including allowing individuals living abroad to secure them, and described schemes in which fraudsters recruit seniors. The Centers for Medicare and Medicaid Services recently estimated that Los Angeles County alonerepresents $3.5 billion in hospice fraud, and that 18 percent of all hospice billing in the United States comes from this single county.

“Last year, California Attorney General Rob Bonta called hospice fraud in California, specifically in Los Angeles County, ‘an epidemic.’ The March 2022 audit report highlighted several red flags and key warning signs of fraud: many providers are listed at the same address; very low patient counts compared with the rest of the State; patients listed as terminally ill were later discharged alive; excessive billing for services that may not have been provided; and staff were shared across multiple hospice providers. The Committee is requesting documents and communications regarding California’s oversight and internal controls to detect and prevent fraud for its federally funded hospice programs,” continued the Republican lawmakers.