Category: Daily News

Detectives from the California Department of Insurance (CDI) arrested Los Angeles Doctor Glenn Neil Ledesma, 63, owner of California Dermatology Center, Inc. CEO Jonathan Ledesma, 49, Glenn Ledesma’s adopted son, was also arrested. Both are charged with multiple felony counts of health care disability fraud for presenting false claims. The suspects allegedly collected disability benefits totaling more than $1.8 million while continuing to work and practice medicine.

“The Ledesmas knew it was illegal to file for and collect disability benefits while still working,” said Insurance Commissioner Dave Jones. “Their criminal activity is part of the health insurance fraud epidemic that totals billions of dollars annually and results in higher premiums for all consumers.”

Dr. Ledesma first submitted a disability claim in 1997 stating he was unable to treat patients due to his medical condition. His insurer told him he could receive disability benefits while running his corporation, but was not allowed to treat patients or practice medicine. In 2008, Dr. Ledesma continued collecting disability payments while resuming his medical practice and treating patients. From 2008 to 2013, he treated more than 2,900 patients while simultaneously collecting $1,605,464 in disability benefits.

In 2008, Jonathan Ledesma filed a disability claim with UNUM Life Insurance Company of America indicating he was also unable to work due to medical reasons. He denied knowing Dr. Glenn Ledesma even though he listed the doctor as his employer and investigators discovered Jonathan Ledesma was in fact the CEO of one of eight of Dr. Ledesma’s medical corporations, California Dermatology Center, Inc and his adopted son. From 2010 to 2013, Jonathan Ledesma collected more than $200,000 in disability benefits while performing administrative duties as CEO.

Both suspects have been arrested and booked into the Inmate Reception Center in Los Angeles. Bail is set at $50,000 for each and they may face 20 years in state prison if convicted on all counts. This case is being prosecuted by the Los Angeles County District Attorney’s Office.

Early this month, ProPublica/NPR published an article “The Demolition of Workers’ Comp” that asserted that “over the past decade, states have slashed workers’ compensation benefits, denying injured workers help when they need it most and shifting the costs of workplace accidents to taxpayers.” The story has triggered heated response from the workers’ compensation community.

Robert P. Hartwig, Ph.D., CPCU, president of the Insurance Information Institute responded to the criticism of with a letter he sent to ProPublica/NPR that began by saying “it’s necessary that the record be set straight using facts – verifiable, incontrovertible facts – rather than the unsubstantiated assertions, incorrect interpretations and subsequent erroneous conclusions upon which the basic premise of this series is built.”

He goes on to say “The very title … is at best misleading and at worst erroneous. “The Demolition of Workers Comp” is hyperbole of the highest order. The fact of the matter is that workers compensation insurers today provide some $40 billion in benefits annually to hundreds of thousands of injured workers and to the families of those killed on the job – a basic and important fact that is somehow omitted by the authors. Also omitted from the piece is the indisputable fact that the workplace has become safer – much safer – in no small part due to the relentless loss control efforts of insurers and employers in partnership with state and federal government. The incidence rate of fatal occupational injuries plunged by 36 percent over the past two decades and by 90 percent over the past century – precisely coincident with the dawn of modern workers compensation systems.”

He later notes that “Your story asserts that 33 states have “cut” benefits since 2003 through legislation which is characterized as having been passed under the guise of reform. This is far too sweeping of a statement. A system as large as workers compensation, where costs are driven primarily by the same complex factors driving healthcare costs across the United States, is in constant need of monitoring and fine tuning. Many of the changes simply mirror changes in the health care system overall.”

After pointing out other arguments he concludes by saying “Workers compensation, a century after its inception, remains as vital as ever to virtually every worker in the America. Benefits can and do vary from state to state but in no state are workers left without the important safety net that workers compensation provides. Though large, the workers comp system continues to adapt to rapid changes in the workforce, the workplace, the economy and the U.S. health care system. Insurers, employers and workers are united in their agreement that that the safety of workers is paramount and that for those who are injured there is a system that works for their benefit, helping them to achieve maximum medical recovery and return to work as quickly as possible.”

ProPublica/NPR published his letter in its entirety, and then published its rebuttal.

“ProPublica titled its story ‘The Demolition of Workers’ Comp,’ to signify how recent reform laws were dismantling some of the fundamental protections workers’ comp historically provided: The guarantee that workers would receive enough of their wages so they wouldn’t fall into poverty, the promise of the medical care they need to return to as normal a life as possible and the expectation that injured workers would have a voice and be treated with dignity.”

“ProPublica and NPR do not dispute that the workplace has become safer. But the focus of our story was on how changes in workers’ comp laws have affected people who are injured on the job. Workers’ comp is a vital safety net whose costs give employers an incentive to keep their workplaces safe. This is precisely why we felt it was critical to investigate the rollback of benefits by many states.”

“Over the century that workers’ comp has been in effect, workplace injuries have gone both up and down. The decline in fatalities and injuries has multiple causes, including the creation of the Occupational Safety and Health Administration (OSHA), improvements in auto safety and health research, the growth in automation and a changing economy which has reduced jobs in dangerous manufacturing and mining industries and expanded them in the safer service and office sectors.”

The finding that workers’ comp rates have fallen was substantiated by multiple data sources. ProPublica and NPR relied on three separate studies to examine the cost that employers pay for workers’ comp insurance premiums. All three are widely respected and used by the workers’ comp industry, and all three come to the same conclusion: Workers’ comp rates are the lowest they’ve been in decades. The sources, which were included in the graphic, are the Oregon Workers’ Compensation Division, the U.S. Bureau of Labor Statistics and the National Academy of Social Insurance.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Stephanie Yonekura of the Central District of California and Assistant Director in Charge David Bowdich of the FBI’s Los Angeles Field Office announced that a pharmacist who owned and operated a pharmacy in Los Angeles pleaded guilty this week in connection with a Medicare fraud scheme.

Rouzbeh Javaherian, 34, of Beverly Grove, California, pleaded guilty to health care fraud in connection with a scheme to defraud the Medicare Part D program through a pharmacy called Emoonah Inc., doing business as Westaid Pharmacy and Medical Supply. According to admissions in the plea agreement, Javaherian was a licensed pharmacist and owner of Westaid, which was located in Los Angeles. From January 2008 to November 2014, Javaherian devised and executed a scheme to defraud the Medicare Part D program by paying illegal cash kickbacks to Medicare beneficiaries to induce them to submit their prescriptions to Westaid. Javaherian then filled some of those prescriptions, but also submitted false and fraudulent claims to Medicare Part D plan sponsors for prescriptions that he did not actually fill.

From January 2008 to November 2014, Javaherian received approximately $644,060 in overpayments from Medicare as the result of the fraud scheme.

Sentencing is scheduled for June 1, 2015, before U.S. District Judge Stephen V. Wilson of the Central District of California. Unfortunately, the California Board of Pharmacy still reports that Javaherian is licensed as a pharmacist in California with no apparent restrictions on his license. The status is reflected as “clear.”

The case was investigated by the FBI, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. The case is being prosecuted by Trial Attorney Alexander F. Porter of the Criminal Division’s Fraud Section.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion. In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

New research suggests that older people with a new episode of back pain should not be sent right away for x-rays or other imaging studies. According to the report in Reuters health, they will not be any better off, and they’ will just end up with bigger bills, the researchers say. “We found that they didn’t have worse or better outcomes, and yet they were certainly getting more things done to them downstream,” said Dr. Jeffrey Jarvik, the study’s lead author from the University of Washington in Seattle.

Guidelines (including the ACOEM Guideline) suggest that young people with new back pain should wait a while before getting X-rays, magnetic resonance imaging (MRI) or computed tomography (CT), but the same guidelines make exceptions for older people since there could be more serious underlying conditions. Based on the new results, however, people of every age should not routinely get early imaging studies, the researchers write in JAMA. Jarvik told Reuters Health by phone that older people who get early imaging studies might receive treatments for abnormalities on the tests that ultimately have nothing to do with their back pain.

The researchers looked at data from 5,239 patients age 65 and older who visited their primary care doctor complaining of new back pain and returned for a follow-up visit a year later. Within six weeks of the first visit, 1,523 patients had X-rays, MRIs or CT scans of their backs.

After one year, there was no difference in the disability related to back or leg pain between those who did or did not have early imaging studies, the researchers found. Those who had the X-rays, MRIs or CT scans, however, ended up with medical bills averaging $1,300 higher than for those who didn’t have early imaging studies. Those costs include out-of-pocket payments.

Imaging accounts for most of the $35 billion spent on medical care for lower back pain each year in the U.S., said Manuela Ferreira, associate professor at The George Institute for Global Health and the Institute of Bone and Joint Research of Sydney Medical School at The University of Sydney in Australia. “Adults with sudden back pain do not need to rush to get an X-ray or magnetic resonance imaging (MRI), unless the clinician suspects the patient has a more serious condition, such as fracture or cancer,” Ferreira told Reuters Health by email. “Less than 5 percent of patients with low back pain, however, will fall into this category,” she added. Most of the time, back pain develops from stress and strain on muscles or joints.

“Older adults don’t really need to be treated differently than younger adults,” Jarvik said. Most of the time, the cause of back pain is probably never discovered, he said. “That’s not necessarily a bad thing because most people get better,” he added. “It’s probably not necessary to try and discover exactly why somebody’s back starts hurting, the various investigations you can do often won’t reveal the cause.”

A thorough physical exam and medical history should help doctors distinguish between more benign forms of back strain or a more serious cause, Ferreira said. In the meantime, people can take over-the-counter painkillers and may try physical therapy, which may help overcome a sudden episode of pain, Jarvik said.

Recent panel decisions have carved out exceptions to the UR and IMR process to resolve medical disputes. The most significant exception was pronounced in the second en banc case of Dubon v. World Restoration, Inc. (2014) 79 Cal.Comp.Cases 1298. In Dubon II the Appeals Board held that any “determination of medical necessity” is to be made by the WCAB following an untimely UR, and is to be “based on substantial medical evidence consistent with Labor Code section 4604.5.”

However, the WCAB in Dubon confirmed the mechanics of what is required to show “substantial evidence” supporting a request for medical care. Quoting from Sandhagen: the WCAB in Dubon said “The Legislature amended section 3202.5 to underscore that all parties, including injured workers, must meet the evidentiary burden of proof on all issues by a preponderance of the evidence. (Stats. 2004, ch. 34, § 9.) Accordingly, notwithstanding whatever an employer does (or does not do), an injured employee must still prove that the sought treatment is medically reasonable and necessary. That means demonstrating that the treatment request is consistent with the uniform guidelines (§ 4600, subd. (b)) or, alternatively, rebutting the application of the guidelines with a preponderance of scientific medical evidence (§ 4604.5).” (Sandhagen, supra, 44 Cal.4th at p. 242 [bolding added].)

Unfortunately, the requirement for a showing that a request for treatment meets some type of a “uniform guideline” was ignored in the recent panel decision of Jared Carnes v Auto Zone.

In an Expedited Hearing, the parties stipulated that the UR was not timely. The WCJ therefore obtained jurisdiction over whether or not to award the treatment requested by Dr. Eichbaum. A Findings and Order, ruled that applicant had presented substantial evidence of need for medical treatment consisting of a sleep number bed that cost $5,325.86. The WCAB denied reconsideration in the split panel decision.

Dr. Eichbaum made a Request for Authorization setting forth that applicant was scheduled for a major lumbar surgical procedure. He has difficulty with sleeping and his bed is over fifteen years old. He has a very poor mattress. Dr. Eichbaum recommends a new mattress better suited for him and his condition to alleviate his pain and allow him to get rest. In his next letter Dr. Eichbaum said that applicant was scheduled for a lumbar decompression and fusion. In order to optimize his recovery, he’ll need an appropriate bed to sleep on after the surgery. Dr. Eichbaum states that applicant has an inadequate bed and this would definitely be a problem following his surgery.Dr. Eichbaum specifically indicates that a “Sleep Number 18” mattress would be ideal after the surgery and would maximize his ability to recover.

What was missing from the record was any reference to any “uniform guideline” by the treating physician in his reporting, or any other medical professional that that supported an order for this bed. The decision is therefore a step back from the limits specified in Dubon and Sandhagen. The digression from exiting law that requires evidence from a “uniform guideline” did not go unnoticed by Commissioner Zalewski in the dissenting opinion.

The dissent goes on to note that an employer is obligated to provide medical treatment ”that is reasonably required to cure or relieve the injured worker from the effects of his or her injury … ” (Lab. Code, § 4600, emphasis added.) Through its enactment of recent statutes, the Legislature has shown that a dispute over whether a proposed medical treatment is reasonably required is to be determined by the use of evidence-based standards and medical opinion. (See Lab. Code, § 5307.27 [which provides for the development of a medical treatment utilization schedule (MTUS) that “shall incorporate the evidence-based, peer reviewed, nationally recognized standards of care”] and § 4610.5(c)(2) [defining “medically necessary” and “medical necessity” based upon a hierarchy of standards as follows: “A) The guidelines adopted by the administrative director pursuant to Section 5307.27. (B) Peer-reviewed scientific and medical evidence regarding the effectiveness of the disputed service. (C) Nationally recognized professional standards. (D) Expert opinion. (E) Generally accepted standards of medical practice. (F) Treatments that are likely to provide a benefit to a patient for conditions for which other treatments are not clinically efficacious.”]; cf. Lab. Code, §§ 4604.5 [MTUS are presumed to be correct on the issue of extent and scope of medical treatment], 46 I 0 [UR], 4610.5 and 4610.6 [independent medical review].)”

Commissioner Zelewski points out that none the evidence in this case meets this standard, and thus the Finding is not supported by substantial evidence. The majority consisting of Commissioners Frank Brass and Marguerite Sweeny seemed to believe that this standard was met, without explanation except to say that “For the reasons stated by the WCJ in his Report, which is adopted and incorporated by this reference, the December 23, 2014 decision is affirmed and defendant’s petition for reconsideration is denied.”

The mandates of Sandhagen and Dubon have thus been eroded – without explanation by the majority,- and are in the process of death by a thousand small cuts.