Category: Daily News

The operator of rehabilitation clinic in Walnut was sentenced to 63 months in prison for his role in a $3.4 million Medicare fraud scheme that involved billing for occupational therapy services that were not medically necessary and not provided.

Simon Hong, 55, of Brea, was sentenced by U.S. District Judge George H. Wu, who also ordered to pay $2,407,857 in restitution. Hong pleaded guilty on December 15 to one count of conspiracy to commit health care fraud.

“This defendant has now been convicted and sentenced to federal prison in two separate schemes that cost taxpayers millions of dollars,” said United States Attorney Decker. “This type of fraudulent conduct is a burden on the entire health care system, drives up costs for patients and compromises the delivery of services to people who legitimately need care.”

In addition to today’s sentence, Hong was sentenced in January to over 10 years in prison in a separate case. The 63-month sentence imposed by Judge Wu will run concurrently to the sentence imposed by Judge Carter.

As part of the guilty plea that led to the current sentencing, Hong admitted that he owned JH Physical Therapy Inc., an occupational therapy clinic in Walnut, but hid his ownership in the name of a straw or nominee owner in an effort to execute and conceal the fraudulent scheme. Hong admitted that as part of the scheme, he billed Medicare for occupational therapy services when no such services were provided to the Medicare beneficiaries. Instead, the Medicare beneficiaries received acupuncture and massage services, which were not reimbursable by Medicare. Hong further admitted that he directed co-conspirator therapists to falsify medical records to make it appear as if the services billed had been actually provided and funneled 87 percent of the proceeds from Medicare to himself.

Through this scheme, Hong admitted that he and his co-conspirators billed Medicare approximately $3,454,485 from October 2009 until December 2012 in false claims and received approximately $2,407,857.

Hong was charged by indictment on June 16, 2016, along with Grace Hong, 51, of Brea, and Keith Canlapan, 38, of West Covina. Canlapan pleaded guilty to one count of conspiring to commit health care fraud, and Grace Hong is scheduled for trial March 21.

HHS-OIG investigated the case. The Criminal Division’s Fraud Section Trial Attorney Niall M. O’Donnell and Former Fraud Section Trial Attorney Blanca Quintero prosecuted the case.

What started as a workplace dispute at an Irvine industrial plant, culminating with an alleged attack on a co-worker, led to insurance fraud charges for a 65-year-old Lake Forest man.

The Orange County Register reports that Randal Brown McKay was arrested on charges stemming from the fracas with a co-worker in June 2014. McKay quickly posted $25,000 bail.

Senior Deputy District Attorney Pamela Leitao said McKay had “a habit of being a difficult and angry person” with his former co-workers . “He’s been known to throw things at other employees.”

Leitao said the dispute began when he arrived at work on June 6, 2014, and berated a longtime forklift driver for not opening up large, transparent plastic strips at a door of the plant to allow more air in.

At some point, McKay “jumped in front of the forklift” the victim was driving and “dared him to hit him,” the prosecutor alleged.

The co-worker managed to stop just short of McKay, who claimed he was struck by a pallet on the forklift, Leitao said.

As a manager attempted to sort through the dispute, the forklift driver, “who is a quiet and humble guy and was shaking over all this controversy,” laughed nervously, she said.

Witnesses told investigators that “McKay, cursing again, literally runs toward him and runs and leaps and clocks him in the head and tries to knee him,” according to Leitao.

McKay left work, contacted Irvine police to report that he was assaulted and later filed a workers’ compensation claim.

On June 11, 2014, McKay filed a claim with CompWest Insurance Co. alleging work related injuries for being struck by a forklift, and on July 14, 2015, he repeated the lie while under oath during a Worker’s Compensation Appeals Board trial, the OCDA says.

The WCALJ determined McKay was not struck by a forklift and did not sustain any injuries, states the OCDA, which notes its own fraud investigation began after prosecutors were contacted by CompWest Insurance Company.

The victim had to receive eight stitches as a result of the attack and as recently as late last year still suffered from blurred vision, Leitao said.

The forklift driver was initially reluctant to seek a criminal complaint against McKay out of fear, but is now more willing to testify since the defendant is facing insurance fraud charges, as well, Leitao said.

McKay is charged with assault with force likely to produce great bodily injury, three counts of insurance fraud and perjury, along with a sentence-enhancing allegation of causing great bodily injury.

McKay could face up to 11 years in prison if convicted.

In 1990, Leticia Flethez became an employee of San Bernardino County. He worked as an equipment operator from 1991 until 2000. In 1998, he was injured while performing his job duties. His last day of work was on January 28, 2000.

On June 12, 2008, Flethez filed an application with SBCERA for a service-related disability retirement and allowance. It was rejected for omission of a signed medical records authorization.

A little more than one year later, Flethez filed a complete application, including a signed medical records authorization and a supporting physician’s report. In August 2010, SBCERA granted Flethez’s application for service-related disability retirement benefits, effective as of the date of his initial application in 2008.

Flethez then filed a request for review and reconsideration limited to the question of the starting date for his benefits. When SBCERA maintained its original decision setting June 12, 2008 as the commencement date for his benefits, Flethez requested a formal administrative hearing on the issue. An administrative hearing rejected his request to make payment retroactive to July 15, 2000.

Flethez filed a petition for writ of mandate in the superior court seeking a writ ordering SBCERA to set aside its decision and grant him service-related disability retirement benefits effective as of July 15, 2000. He also sought interest at the legal rate on all retroactive amounts.

The superior court issued a peremptory writ commanding SBCERA to grant Flethez a service-connected disability retirement allowance retroactive to July 15, 2000. The superior court also ruled Flethez was entitled to prejudgment interest under section 3287(a) at the legal rate from the date that each payment of retroactive disability retirements benefits would have been due, starting from July 15, 2000. The interest payments on all retroactive amounts totaled $132,865.37. SBCERA timely filed a notice of appeal “limited to the issue of interest.”

The Court of Appeal reversed the judgment insofar as it awarded prejudgment interest retroactive to July 15, 2000. It concluded that “in the context of disability retirement benefits, a retiring member is entitled to recover section 3287(a) prejudgment interest on a court award of disability retirement benefits from the day on which his or her right to recover those benefit payments became vested,” which was “not until the retiring member establishes his or her entitlement” to those benefits.

The Supreme Court reviewed the Court of Appeal in the published case of Flethez v San Bernardino County Employee’s Retirement Association and concluded that prejudgment interest begins to run only when a county retirement board wrongfully denies a member’s application for retroactive disability retirement benefits.

Flethez’s disability retirement benefits under the CERL were not due before SBCERA received his application and made a determination of his eligibility. Flethez experienced a wrongful withholding of his benefits when the Board erroneously denied his application for a retroactive disability retirement allowance under the inability to ascertain permanency clause. His entitlement to prejudgment interest under section 3287(a) commenced on the date of wrongful denial

Pfizer’s Senior Principal Scientist has quietly left the company, following allegations of data manipulation in several of her published papers.

Cancer researcher Min-Jean Yin was with Pfizer in LaJolla California for 13 years and published multiple scientific articles during that time. Now, the pharmaceutical giant is retracting five of them and correcting a sixth, after PubPeer raised suspicions of image duplication.

A private corporate inquiry found the images in Yin’s papers were in fact duplicates. Pfizer has recommended, along with the researcher herself, that the journals retract five of these articles on the efficiency of Pfizer’s own pharmacological enzyme inhibitors, and publish a correction to a sixth.

An article in Pharmaceutical Investing News says that this issue “image duplication” is rather prevalent in biomedical publications. In fact, recent research indicates that as much as 3.8 percent of them may contain inaccurate date. It’s an honest mistake most of the time – or at least in 50 percent of cases. Researchers accidentally replicate western blot images, for example – but they also deliberately splice and duplicate select, clinically promising, parts of a gel band.

The reported irregularities in Yin’s papers, according to watchdog blog For Better Science, included duplicated western blots and duplicated bands within western blots. The problem articles span a four year period, from 2010 to 2014.

Pfizer is keeping mum on the exact nature of the duplication and the circumstances around Yin’s departure. But while the company has only said that she is “no longer employed” at Pfizer, some suspect the researcher was let go – perhaps as a result of the image duplication incidents.

In September 2016, she joined Diagnologix, a small San Diego-based biotech startup. Once Pfizer’s Senior Principal Scientist, her business card now reads “general manager.”

C. Glenn Begley, former head of oncology and hematology research at Amgen, believes this latest example of flawed research is just the tip of the iceberg – not for industry specifically, but for all published science.

“These retractions appear to be intentional image duplication, but there’s an entire spectrum of flawed research published in journals at every tier,” Begley said in an interview last week.

While Big Pharma fraud attracts more attention, Begley said the incentives are far greater for academic scientists to exaggerate, “cherry-pick,” or deliberately bias their results. A 2013 study of 140 cancer research trainees found over 30 percent had felt pressure to confirm a mentor’s hypothesis, even when the science wasn’t there.

The Division of Workers’ Compensation has concluded its investigation into San Bernardino County’s handling of cases involving victims of the Dec. 2, 2015, terror attack at the Inland Regional Center, finding that denials for treatment have been rare and that delays were mainly attributed to doctors failing to submit the appropriate information.

State officials, in an eight-page report, concluded that a significant number of cases involved “a provider’s failure to provide an adequate clinical rationale or appropriate documentation to justify requests for extended or new prescriptions, extended or alternative therapies, or special equipment that veered away from standard medical treatment guidelines and limits.”

In a letter accompanying the report, addressed to Department of Industrial Relations Director Christine Baker from George Parisotto, acting administrative director for the Division of Workers’ Compensation, Parisotto noted that as claims matured, the county increased its scrutiny of treatment requests, leading to modifications and denials.

Until mid-April 2016, the county was routinely approving nearly all requests, according to the report.

“While the (independent medical review) decisions generally upheld the county’s actions, often because doctors failed to document or fully explain their requests, employees who were still suffering and expected their doctors’ recommendations to be followed were frustrated by the denials,” Parisotto wrote in his letter to Baker.

The report also stated that better documentation at the time requests were submitted might have reduced the number of denials and independent medical review requests.

State officials credited the county with hiring nurse case managers to facilitate treatment requests, according to a county news release.

In December, the Board of Supervisors allocated $100,000 to hire an outside firm to help expedite workers’ compensation claims by establishing the Workers’ Comp Claim Expediter Reserve fund.

Of the 2,146 requests for medical and psychological treatment and prescription medications for the 58 survivors, 2,000, or 90 percent, were approved, while two cases were neither approved nor denied, with one being classified as a “disputed liability” and another providing no information about the decision. Three percent of the requests received modified approval.

Among the 144 treatments that were denied, only nine were overturned on appeal – less than one percent of the total number of requests. In all, there were 68 appeals filed by 11 employees, according to the county’s news release.

The county denied claims of 25 employees alleging psychological injury from the terror attack, according to the report.

“According to the county, a common thread among these denials was that the employees were not present at the training center when the incident occurred,” the report states.

The report also noted that a large percentage of denied claims was concentrated among a relatively small number of providers, suggesting a “particular problem with certain providers and not typical or characteristic of interactions as a whole.”