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WCAB Clarifies UR Time Limits and That UR Not Required For Denied Body Parts

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Shalisa Chamberlain was employed as a veterinary technician by Humphrey and Giacopuzzi Veterinary Hospital when she sustained injury to her low back, soft tissue, neck, buttocks, right hip, and feet due to weight gain.  She further alleged to have sustained injury to her psyche, vision, balance, urology, weight gain, brain, and internal organs.

Applicant’s PTP, Dr. Moelleken, issued a report on March 5, 2013 (signed March 16, 2013) and requested authorization for the following: (I) One year extension of gym membership; (2) Follow-ups with a psychiatrist; (3) Pain management follow-ups with Dr. Kenly; (4) Urology consultation to evaluate urinary retention and incontinence; (5) Neurology consultation to address headaches; (6) Follow-up in four weeks (not addressed in the WCJ’s Findings and Award); (7) 16 hours of home health assistance every week; and 8. Eight visits of additional chiropractic treatment for neck and back.

After receiving Dr. Moelleken’s report, State Fund submitted the following issues to UR: (I) the prospective request for a one-year gym membership extension; (2) the prospective request for “unknown home health assistant for 16 hours per week for unknown number of weeks”; and (3) the prospective request for eight sessions of chiropractic manipulation. State Fund did not request a UR with respect to the other treatment recommendations by Dr. Moelleken. The April 2, 2013 UR determination did not certify the request for gym membership, 16 hours of home health assistance per week, and eight sessions of chiropractic treatment.

The WCJ found that applicant sustained industrial injury “to her low back, soft tissue, neck, buttocks, right hip, and feet due to weight gain; and claims lo have sustained injury to her psyche, vision, balance, urology, weight gain, brain, and internal organs.” Thus there was no finding of injury to the disputed body parts. The WCJ also found that defendant’s utilization review (UR) determination was untimely and concluded that applicant was entitled to the following medical treatment: (a) a one-year gym membership extension; (b) a follow-up with a psychologist; (c) a follow-up with a psychiatrist; (d) pain management follow-ups with Dr. Kenly; (e) a urology consultation; (f) a neurology consultation; (g) 16 hours of home health assistance every week; and (h) eight visits of additional chiropractic treatment for the neck and back.

In its petition for reconsideration, State Fund contends: (I) its UR determination was timely and, therefore, the WCJ’s Order of medical treatment that was denied through UR was improper; and (2) the WCJ’s Order of medical treatment for body parts that have not been determined as industrial was also improper. The WCAB reversed in part in the panel decision of Chamberlain v Humphrey and Giacopuzzi.

Labor Code section 4610 provides that prospective or concurrent UR decisions “shall be made in a timely fashion that is appropriate for the nature of the employee’s condition, not to exceed five working days from receipt of the information reasonably necessary to make the determination, but in no event more than 14 days from the date of the medical treatment recommendation by the physician.” Although section 4610(g)(l) states that these time limits run “from the date of the medical treatment recommendation,” Administrative Director Rule 9792.9(b)(2) clarifies the 14 days run “from the claims administrator’s receipt” of the treatment recommendation. (Cal. Code Regs., tit. 8, § 9792.9(b)(2).) Dr. Moelleken’s report is dated March 5, 2013, but signed March 16, 2013. State Fund received it on March 22, 2013. The UR denial itself memorializes the efforts State Fund made to obtain additional information about the treatment request from Dr. Moelleken. The UR company faxed Dr. Moelleken on March 27, 2013 and March 29, 2013, requesting additional information regarding the chiropractic treatment request; however, this additional information was never received.

Where a treating physician fails to respond to requests for additional information, the WCAB concluded that a defendant’s UR denial is timely if it is issued within five days of the last request for additional information (provided, of course, the 14-day absolute limit is met). State Fund’s April 2, 2013 UR denial issued 12 days after it received Dr. Moelleken’s report, within the 14 day time limit for receipt of additional information to make a determination of the treatment recommendation. Therefore, the UR denial issued “in no event more than 14 days” from receipt of the report, and the denial was therefore timely as to the industrially-related treatment addressed by State Fund’s UR denial.

The additional information requested by State Fund related only to the 4 chiropractic treatment. However the WCAB concluded that State Fund was not required to issue separate partial denials with respect to the gym membership and the home health assistance within five days of its 6 March 22, 2013 receipt of Dr. Moelleken’s report. Neither section 4610 nor AD Rule 9792.9 (as it read in early 2013) requires separate partial denials. To “read any such requirement into section 4610 or Rule 9792.9 because to do so would create a procedural morass, not only for defendants issuing UR determinations, but also for injured employees who now face a statutory deadline for requesting Independent Medical Review (!MR) with respect to any UR determination.”

UR determinations for non-industrial body parts are not relevant, since non-industrial treatment recommendations are not subject to UR. (Simmons v. State of California, Dept. of Mental Health (2005) 70 Cal.Comp.Cases 866 (Appeals Board en banc).) The dispute over authorization of these treatment requests are, therefore, returned to the trial level for further development of the record and determination whether the disputed body parts are industrially-related.

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Excellence in Workers’ Compensation Risk Management Awards Announced

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Each year, National Underwriter’s Excellence in Workers’ Compensation Risk Management Award recognizes three organizations with exemplary loss control, safety and return-to-work programs. They are the leaders in this arena, all featuring success stories showing proven results. This year’s winners are AmQuip, Danos and Iron Mountain. All three companies are being profiled in its special cover feature in NU’s August issue, and also will be honored on Aug. 18 during the 69th annual Workers’ Compensation Educational Conference (WCEC), set for Aug. 17-20 at the Orlando World Center Marriott in Florida.

AmQuip knows the secret to a successful workers’ compensation program: zero injuries. A tall order, to be sure – especially when your company rents out and operates nearly 700 cranes in 47 states to refineries, power plants, and industrial and building construction sites. Eliminating injuries, however, was far from impossible, according to Jeffrey C. Hammons, vice president of risk management for the Philadelphia-based crane rental provider. The right training and participation among employees, the company and its carriers greatly payed off – and a shared passion for the company and its values doesn’t hurt, either.”We’re one of the three largest employers of union [crane] operators in the country,” Hammons says, and while he’s quick to point out that AmQuip’s partnerships with a lengthy list of local unions attract many eager candidates to work for the company, he acknowledges that when you source 300 to 500 seasonal employees, they come with varied levels of training and professional development. And therein lies Hammons’ No. 1 challenge to his workers’ compensation program. AmQuip has averaged $46,000 a year in workers’ compensation costs since 2009. Its workers’ compensation budgets are reduced by 15% each year that the company comes in below its previous budget.

Danos’ culture of safety yields a record number of incident reduction in often treacherous conditions. Headquartered in Larose, La., Danos provides contract labor services, construction and fabrication, sandblasting and painting services and consultants to the oil and gas industry worldwide. Founded in 1947 and currently boasting a workforce of more than 1,600 employees, Danos operates in the U.S. Gulf of Mexico and gulf coast region, Texas, Wyoming, Pennsylvania, Ohio and in several foreign countries, supplying personnel for various on-site oil and gas industry projects and work sites, including pipelines. “We provide people,” says Mayet. “They are our product.” The work, as one would surmise, is inherently dangerous – particularly on work sites set over water, such as oil rigs. Even traveling to the work sites can be treacherous: Boats and helicopters are used for transportation of personnel and supplies. Swing ropes and cranes are used to transfer personnel and supplies from vessels to platform. Platforms include machinery, high-pressure wells, boat landings, steel decks, stairways and handrails, all of which need continuous maintenance and upkeep to control the effects of a salt water environment on steel surfaces and electrical machinery. Yet through its dedication in recent years to achieving operational excellence, Danos has reached all-time lows in its total recordable incident rates at a time when the company’s personnel, man-hours and exposures have increased tremendously. As its time on-site and total number of personnel have grown in recent years, incidents are on an inverse track.

When Geoffrey Smith joined the risk management team at Iron Mountain in 2008, it was clear that the company required a sea change when it came to its workers’ compensation program. As the largest records-management company in the U.S. with operations in 35 countries, Iron Mountain’s employees face a number of on-the-job exposures. “We pick up and store boxes of customer paper records, computer tapes and media, and then return these records to our customers upon request,” explains Smith – boxes that can easily weigh up to 80 pounds. As a result, back and shoulder injuries are common. He set and achieved the goal of reducing their costs by half within five years.

On Aug. 18 during the conference, NU Executive Managing Editor Shawn Moynihan will lead a special roundtable at 1 p.m. during which attendees can learn some of the secrets behind these award-winning programs. The award is sponsored by Helmsman Management Services, a third-party administrator that offers claims management, managed care and risk-control solutions for businesses with 1,000 employees or more. Presented by the Workers’ Compensation Institute, WCEC is the largest gathering of its kind in the nation and offers discipline-specific programs and breakout sessions from hundreds of national speakers.

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WCIRB Publishes Aggregate Medical Payment Trends Report

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The WCIRB released the California Workers’ Compensation Aggregate Medical Payment Trends report comparing medical payment transaction data from the fourth quarter of 2013 to the fourth quarter of 2012. WCIRB researchers used reported medical payment data representing more than 90% of the California insurance market and accounting for approximately $1.3 billion in payments annually.

Among the findings of the report:

1) On a type of provider basis, specialist physicians, surgeons and services for hospital and ambulatory surgical centers services dropped from 53.6% of total medical paid in Q4 2012 to 49.5% in Q4 2013. During that same period, payments to general practitioners and occupational health providers increased from 13.1% to 16.2% of total paid medical.

2) On a place of service basis, payments to hospitals and ambulatory surgical centers dropped from 31.3% of total medical paid in Q4 2012 to 28.0% in Q4 2013. During that same period, office-based services increased from 47.5% of paid in Q4 2012 to 51.4% of paid in Q4 2013.

3) On a procedure basis, pharmacy spending increased from 12.8% of paid medical in Q4 2012 to 13.7% of paid medical in Q4 2013. Payments for opiates slightly declined from 3.8% of total paid medical in Q4 2012 to 3.7% in Q4 2013.

4) Pharmaceutical payments for 2013 and 2012 averaged approximately 13% of total paid medical as reflected in the WCIRB’s medical transaction data, while payments to pharmacists and pharmacies averaged about 9.7% for both years. These findings suggest that 3% to 4% of paid medical may be generated from physician dispensing in offices.

5) The fastest growing procedure between Q4 2012 and Q4 2013 was Level 4 office visits for existing patients, which is defined by the Official Medical Fee Schedule (OMFS) as involving a detailed history and examination for moderately complex medical decision-making. This code also grew the fastest between Q3 2013 and Q4 2013.

The report is available in the Research and Analysis section of the WCIRB website

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UnitedHealth and Insurance Commissioner Battle Over $10 Billion Fines

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Setting up a major legal fight, UnitedHealth Group Inc. has sued California’s insurance commissioner to block his attempt to fine the insurer $173.6 million for violations during a botched 2005 acquisition. The Los Angeles Times reports that the lawsuit, filed in Orange County Superior Court, is the latest twist in a long-running political drama. Four years ago, California sought a jaw-dropping fine of nearly $10 billion against UnitedHealth, the nation’s largest insurer. The penalty related to problems handling medical claims and policyholder applications after the insurer bought Cypress-based PacifiCare.

But that record penalty didn’t stand. Last year, an administrative law judge rejected much of the state’s case and said UnitedHealth should be fined no more than $11.5 million. California Insurance Commissioner Dave Jones rejected that ruling in a 220-page decision and imposed the $173.6-million penalty. He ordered UnitedHealth to pay it by July 22. That drew the lawsuit and a fiery response from UnitedHealth executives. The insurer, based in Minnetonka, Minn., said Jones was abusing his power and setting a dangerous precedent by seeking such stiff punishment for relatively minor violations. “This ruling threatens to paralyze the healthcare system in the state, resulting in more costs and bureaucracy for Californians,” said Stephen Scheneman, president of UnitedHealth’s PacifiCare unit. “We are taking this action to protect the interests of our customers, who depend on the availability of affordable health insurance.”

Byron Tucker, a spokesman for the insurance department, said the agency hadn’t had time to fully review UnitedHealth’s lawsuit. But he said, “Commissioner Jones carefully applied the law, and the department is confident the penalty will withstand the lawsuit.”

In its June 9 decision, the insurance department said its proposed fine “appropriately reflects the gravity of PacifiCare’s offenses and provides the necessary deterrent effect going forward.” The handling of the case by Jones, a Democrat running for reelection, could become a point of contention in this fall’s campaign over health insurance rate regulation. An initiative on the November ballot would give the insurance commissioner the authority to reject health insurance rate increases that he deems unreasonable. Health insurers, business groups and other opponents say the ballot measure gives the insurance commissioner too much power and subjects the rate-setting process to politics. Jones has said rate regulation is crucial to protect consumers and small businesses from excessive rate hikes. He also says the rate regulation authority is essential to fulfill the goals of the Affordable Care Act.

UnitedHealth has long acknowledged that the takeover of PacifiCare didn’t go as planned. The company admits numerous mistakes in processing medical claims and customer applications. California initially took action against UnitedHealth in 2008 under then-Insurance Commissioner Steve Poizner, a Republican. At first, he said a fine of $1.3 billion was warranted. Two years later – while Poizner was seeking the Republican nomination for governor – he upped the ante and sought as much as $10 billion in penalties. To justify the enormous fine, insurance regulators said UnitedHealth committed more than 900,000 violations after taking over PacifiCare. Poizner stood by his aggressive pursuit of the case while he was in office. He declined to comment directly on the latest developments. “When companies come to California and acquire healthcare organizations, and do not keep promises made to the California Department of Insurance and the people of California, there should be stiff fines,” Poizner said. “In my opinion, that’s what happened when UnitedHealth Group bought California-based PacifiCare.” Poizner is now chief executive of EmpoweredU, an education technology company in Campbell, Calif.

UnitedHealth had challenged Poizner’s proposed fines with an administrative law judge. The case dragged on from December 2009 to June 2013, and the state judge heard testimony and arguments for more than 230 days.In her August 2013 decision, Administrative Law Judge Ruth S. Astle found that “there were numerous problems related to the integration” of UnitedHealth and PacifiCare. She noted significant problems receiving, tracking and retrieving paper documents submitted to PacifiCare. PacifiCare identified 1,799 claims that it had denied in 2006 because of its failure to verify existence of previous coverage, court records show. “This is a serious violation in that it left some claimants with no coverage,” the judge wrote. “It is difficult to assess the full impact since some claimants may have given up and just waited out the six-month exclusion.” The administrative law judge, in setting her $11.5-million fine, noted that the insurer failed to pay claims correctly or on time.

The judge’s ruling was more in line with other penalties assessed against health insurers. The state’s other insurance regulator, the Department of Managed Health Care, cited many of the same problems and reached a settlement with UnitedHealth for a $2-million fine.

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“Disabled” Berkeley Psychologist Convicted of $1 Million Income Tax Fraud

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Hugh Leslie Baras, was sentenced to thirty months in prison today, and ordered to pay restitution of $593,513 to the Internal Revenue Service and the Social Security Administration for tax evasion and theft of government property, United States Attorney Melinda Haag, and Internal Revenue Service, Criminal Investigation Special Agent in Charge José M. Martinez announced.

On Feb. 3, 2014, Baras, 70, a Berkeley psychologist, was convicted by a jury of five counts of tax evasion, in violation of Title 26, U.S.C. § 7201, and one count of theft of government property, in violation of Title 18, U.S.C. § 641. The evidence presented during the seven-day trial, showed that Baras, who formerly worked as a psychologist at Kaiser Permanente, and as an Adjunct Clinical Assistant Professor in the Department of Psychiatry and Behavioral Sciences at Stanford University School of Medicine, started a solo, private practice in Palo Alto, Calif., in late 2002. At his private practice, Baras provided clinical psychotherapy services to clients. During the years 2005 through 2009, Baras’s private practice generated over $1,000,000 of income. Although he filed timely federal income tax returns for each of these years, Baras omitted all of the income produced by his private practice from those returns.

In addition, although he was self-employed and earning substantial income, Baras continued to collect Disability Insurance Benefits from the Social Security Administration. Between 2006 and 2009, Baras received Disability Insurance Benefits payments to which he was not entitled totaling $80,615. Also during this period, Baras sold nearly $600,000 worth of gold and silver coins to a coin-broker in Oakland. These sales created capital gains which Baras also failed to report on his tax returns.

The sentence was handed down by the Honorable Yvonne Gonzalez Rogers, United States District Court Judge, in Oakland. Judge Gonzalez Rogers also sentenced Baras to a three-year period of supervised release, ordered him to forfeit $80,615, and to pay a fine of $7,500. Baras was ordered to self-surrender for service of his sentence on Sept. 29, 2014.

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WCJ Jane Madsen Moves to Eureka Office

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The Division of Workers’ Compensation announced that Judge Jane Madsen will permanently transfer to the Eureka office effective August 1. Judge Madsen has been presiding over the calendar since former Presiding Judge Robert W. Kutz retired in 2013.

Judge Madsen will transfer from her former post as a judge in the Redding district office, where she has been since 2007. She joined DWC in 2005 as a workers’ compensation judge in the Long Beach office.

With only a single workers’ compensation judge, the Eureka office will become a satellite under the supervision of Santa Rosa Presiding Judge James Johnson. The transition will have no effect on access to the office by practitioners and injured workers in the Eureka area. Information and Assistance and Disability Evaluation services will be provided through coordination with the Santa Rosa and Redding offices, as they have been for some time.

The Eureka office will remain at its current location at 100 H Street, Room 202, although a move is possible in the future.

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Activity Level May Predict Orthopaedic Outcomes

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According to a literature review in the July issue of the Journal of the American Academy of Orthopaedic Surgeons (JAAOS), patients’ activity level is a strong predictor for how well they will do with certain treatments and how well they recover from injuries after treatment. Patients are encouraged to ask their orthopaedic surgeon if activity level is an important factor in their treatment decision. For example, more active patients are at a higher risk of re-injury after an anterior cruciate ligament (ACL) reconstruction, and activity level should be considered when deciding which graft to use in the ACL repair.

Easily administered, standardized scales for the shoulder, hip, knee and ankle are commonly used in orthopaedics to quantify a patient’s activity level. But, the measures of how often, rather than how well, a task is performed do not account for symptoms, functional disabilities, age, weight, overall health and other factors which also may impact prognostic and outcome variables.

“In orthopaedics, we want to restore function to take away pain and to help patients return to activity,” said orthopaedic surgeon and lead study author Robert H. Brophy, MD. “We’re still learning about how to best use, quantify and measure activity levels to optimize prognostics and outcomes.”

Shoulder: The strongest predictors for failure in rotator cuff tears were patient expectations on the efficacy of physical therapy and baseline activity level. After a rotator cuff tear, patients who were active were less likely to respond to nonsurgical treatment.

Hip: Preoperative activity levels, age, male gender and lower body mass index (BMI) were predictors of higher activity level at one and five years following total hip replacement surgery.Physical activity — including occupational lifting and standing — may accelerate the development and increased risk of osteoarthritis (OA).

Knee: Higher baseline activity, lower baseline BMI and higher level of athletic competition were associated with higher activity levels two years after ACL reconstruction.Female gender, smoking in the 6-month period before surgery, and revision ACL reconstruction were associated with lower activity level. Following ACL reconstruction, patients were significantly less satisfied if they had a lower post-surgical activity level. Increased incidents of knee injury and trauma in the athletic population, rather than participation in physical activity, may cause an increased risk of knee OA.

“There’s not just one activity level variable” in these measurements, said Dr. Brophy. “It depends on the population, the injury you’re studying, etc. We’re making progress, and the progress varies depending on what you’re looking at.”

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Professional and Collegiate Athletic Concussion Cases Report Settlements

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Early this month, a federal judge granted preliminary approval to a landmark deal that would compensate thousands of former NFL players for concussion-related claims. The ruling by U.S. District Judge Anita Brody in Philadelphia came about two weeks after the NFL agreed to remove a $675 million cap on damages. Brody had previously questioned whether that would be enough money to pay all claims. More than 4,500 former players have filed suit, some accusing the league of fraud for its handling of concussions.

The settlement is designed to last at least 65 years and cover retirees who develop Lou Gehrig’s disease and other neurological problems. The original settlement included $675 million for compensatory claims for players with neurological symptoms, $75 million for baseline testing and $10 million for medical research and education. The NFL would also pay an additional $112 million to the players’ lawyers, for a total payout of more than $870 million. The revised settlement eliminates the cap on overall damage claims but retains a payout formula for individual retirees that considers their age and illness. A young retiree with amyotrophic lateral sclerosis, or Lou Gehrig’s disease, would receive $5 million, a 50-year-old with Alzheimer’s disease would get $1.6 million and an 80-year-old with early dementia would get $25,000.

It is not immediately clear how pending or future workers’ compensation claims will or will not integrate the proceeds of these settlements, or be allowed offsets to claimed compensation benefits.

Meanwhile Reuters reports that the NCAA has agreed to settle a head injury lawsuit by providing $70 million for concussion testing and diagnosis of student athletes in a move to change the way colleges address sports safety, according to court documents filed on Tuesday. The class-action agreement, if approved by a federal judge and class members, would apply to student athletes in all sports who played at schools regulated by the National Collegiate Athletic Association (NCAA) at any time in the past and up to 50 years into the future.

While the money in the NFL settlement was intended to resolve all of the personal injury claims for the plaintiffs’ out of pocket damages, Tuesday’s proposed NCAA settlement was designed to pay only for research and a medical monitoring program.

Attorneys involved in the case said that “If the settlement is approved, overnight it’s going to change the way sports are played.” The NCAA settlement addresses a number of guidelines, including that a student with a concussion will not be allowed to return to play or practice on the same day and must be cleared by a doctor. Also, medical personnel must be present for all games and available for practices. The settlement also establishes a process for schools to report concussions.

The NCAA lawsuit was first filed in 2011 on behalf of former Eastern Illinois football player Adrian Arrington, who said he suffers from headaches and seizures as a result of five documented concussions. The proposed settlement covers other cases. Not all plaintiffs’ attorneys were happy with the proposed settlement. Attorney Jay Edelson told U.S. District Judge John Lee at Tuesday’s hearing in Chicago that it benefited the NCAA, rather than injured players. Edelson said players already received medical testing and the settlement would not help them financially to recover from injuries. U.S. District Judge John Lee set the next hearing on the case for Sept. 19, at which time he may decide on whether to grant a preliminary approval for the settlement. More than 450,000 NCAA student athletes compete in 23 sports. The NCAA makes about $740 million revenue each year, according to court documents.

As the NFL approaches its exit strategy on the concussion cases, it is becoming deeply involved in the new claims filed in San Francisco this year by former players seeking damages for what they allege to be the illegal distribution of painkillers. Former NFL wide receiver J.D. Hill, former Chicago Bears quarterback Jim McMahon and six other former NFL players claim the league illegally gave them narcotics and other painkillers that led to addiction and long-term medical complications in a class-action lawsuit filed this May in San Francisco federal court.

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House Passes Wasserman Schultz Longshore Clarification Act

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The Longshore Harbor Workers’ Compensation Clarification Act, introduced by Rep. Debbie Wasserman Schultz and passed by the U.S. House of Representatives this week, attempts to reinstate congressional intent to ensure that workers in the recreational marine repair industry have adequate workers’ compensation coverage. This legislation provides a more clear definition of a recreational vessel which allows small businesses in the marine repair industry to forgo duplicative insurance policies while ensuring these small businesses, 95% of which have fewer than 10 employees, can adequately protect their employees without incurring exorbitant costs.

In 2009, Congress passed Section 803 of the American Recovery and Reinvestment Act, which expanded an existing exception that allowed more recreational marine repair workers to receive workers’ compensation coverage under state law rather than under the Longshore Harbor Workers Compensation Act. This was necessary because repair workers were simply not buying the more expensive longshore policies and were thus left uncovered. Unfortunately, new regulations were issued in 2011 that adopted a definition of a recreational vessel that was far more complicated and onerous than the existing law. In doing so, this new regulatory definition ran counter to what Congress intended.

The Longshore Harbor Workers’ Compensation Clarification Act establishes a workable definition for a recreational vessel. It restores the intent of Congress in the original 2009 enactment to get coverage for these workers under less expensive state workers compensation insurance policies.

“Put simply, this bill is about protecting jobs while keeping workers covered. With 300 plus miles of inland waterways and 50,000 registered yachts, Ft. Lauderdale is the yachting capital of the world,” said Rep. Wasserman Schultz. “In Broward County alone, there are over 90,000 jobs in the recreational marine industry. These jobs allow workers to buy homes, provide for their families and contribute significantly to local economies. In 1984 and in 2009 Congress intended to make sure these workers and families were covered. This bill keeps that promise.”

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Riverside Attorney and Chiropractor Face $50 Million Comp Fraud Charges

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A year long investigation by authorities into the activities of the California Injury Lawyers Inc. has lead to the arrest of an attorney, chiropractor and other operatives in Riverside County.

Peyman Heidary is one of the named defendants in the 8 page criminal complaint containing a total of 25 counts. Heidary at one time held California chiropractors license 25035 which is now reported to be inactive. The license was first issued in 1997. The Board records also reflect a forfeited license for Heidary Chiropractic Inc. Web searches reflect a chiropractic office at one time located at 1450 W 6th Street in Corona, and another at 15030 Imperial # A, in La Mirada. Corporate information also suggests that Peyman Heidary’s additional active roles include:president of California Healthcare Management Franchise, Inc. and president of The Best of California Promotions and Management, Inc. as well as past president of Doctor’s Reports, Inc. and past managing member of Bellflower Health Clinic, LLC. Riverside Health Clinic, LLC., Corona Health Clinic, LLC. and Santa Ana Health Clinic, LLC. The criminal complaint also alleges that Heidary was also known as Brian Heidary and “The Godfather.” It is believed that Heidary was involved in a total of nine medical clinics in the Southern California area.

The criminal case also involves attorney Cary David Abramowitz. State Bar records reflect that he was issued State Bar number 159906 in October 1992. This license is still active. The Bar reports that he is affiliated with California Injury Lawyer Inc. in Corona. A web search shows the office to be located at 495 E Rincon St #207, Corona,

A declaration in the case signed under penalty of perjury by William G. Hanley, Senior Investigator, Bureau of Investigation, Riverside Count District Attorney’s Office alleges that “Heidary was arrested on July 23, 2014 at 1700 hrs. for a bailable felony offense, to wit: a violation of Insurance Code section 11880 (four counts) with Penal Code section 12022.6 (A)(4) and Penal Code section 186.l l(a)(2) allegations, Defrauding State Compensation Insurance Fund with an excessive taking of more than 1.3 million dollars and the White Collar crime enhancement with a taking of more than $500,000.00. Additional Charges are Insurance Code section 11760 Defrauding an Insurance Company, Penal Code section l 82(a)(2) Conspiracy and Business and Professions Code section 2052(a).” The declaration goes on to state that Heidary was “acting as the head of a criminal organization consisting of illegally established medical clinics and a law firm whose main purpose is to milk money out of Workers’ Compensation Insurance Companies. Between 2008 and today this organization has processed thousands of workers’ compensation claims consisting of non-existent injuries. These cases were prepared and filed at defendant’s direction. The loss to the insurance companies could well exceed 50 million dollars, with a known loss to SCIF of 5 million at the time of the arrest. Aside from having access to large amounts of money in 26 identified Wells Fargo Bank Accounts we also believe that defendant has access to money in overseas bank accounts. Defendant is an Iranian nation (sic) I believe that should he be released on the scheduled bail amount there is a strong likelihood he will flee the State’s jurisdiction.” As a result of this declaration, a Superior Court Judge set bail at $5 million.

A list of the entities allegedly defrauded by this enterprise is extensive. The Complaint lists Amtrust North America, Western States, Zenith Insurance, American Alternative Insurance, California Contractors Network, California Restaurant Mutual, Everest National Insurance Company, Lincoln General Insurance Company, Manufacturers Alliance Insurance Company, Pennsylvania’s Manufacturers Associated Insurance Company, Pennsylvania Manufacturers Indemnity Company, Tower Insurance Company, Zurich American Insurance Group, Crum and Foster Insurance Company, ACE USA Insurance (TPA ISIS), AIG and CNA Insurance, No doubt there are others yet to be identified.

Jail records reflect that Heidary was arrested last Wednesday and remains in custody at Robert Presley Detention Center with his court appearance set for July 29.

Entities currently under investigation include Heidary Chiropractic Inc, The Best of California Business Promotions and Mgmt, Bellflower Health Clinic, LLC, Santa Ana Health Clinic, LLC, Corona Health Clinic, LLC, Ontario Health Clinic, LLC, Riverside Health Clinic, LLC, Anaheim Health Clinic LLC, and Montebello Health Clinic, LLC. Special Investigation Units with relevant information about this entities may contact M. J. Mayman, Deputy District Attorney, Riverside County District Attorney’s Office, Special Prosecutions Section-White Collar Crime, 3960 Orange Street, Suite 1015 in Riverside, California 92501, Telephone No.: 951-955-5400. Cell: No.: 951-427-7277

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