Category: Daily News

A 49-year-old local woman was found guilty Tuesday for her role in an elaborate $20-million healthcare fraud scheme that officials say involved Manor Medical Imaging Clinic in south Glendale and pharmacies in and around the San Gabriel Valley. This is the first case in the nation alleging an organized scheme to defraud government health care programs through fraudulent claims for anti-psychotic medications, a type of scheme that investigators say is on the increase around the nation. Court documents outline a conspiracy in which Manor operated a bogus clinic authorized to make claims to Medicare, employed a doctor to write prescriptions, and had close relationships with pharmacies and a fraudulent drug wholesale company that was used to funnel prescription drugs back to the pharmacies participating in the scheme.

Nurista Grigoryan, a Glendale resident, allegedly fraudulently used an American doctor’s name and license number when she saw homeless patients at Manor Medical Imaging Clinic in the 200 block of North Central Avenue, according to a statement from the U.S. Attorney’s Office. Grigoryan, who reportedly only holds an Armenian medical license, allegedly filled out phony prescriptions, which were already signed by physician Kenneth Johnson. He was reportedly paid for allowing his name to be used for the bogus prescriptions.

U.S. District Judge S. James Otero described the defendants as having “preyed upon the poor [and] used them as pawns,” according to the statement. Johnson, 47, of Ladera Heights and Artak Ovsepian, 32, of Tujunga were also convicted in the fraud scheme.

The plot involved so-called “prescription harvesting,” in which the clinic and other San Gabriel Valley pharmacies allegedly re-billed government healthcare programs repeatedly for expensive anti-psychotic medications, according to a federal criminal complaint. The clinic’s operators funneled prescription drugs back to participating pharmacies and black-market wholesalers, where the drugs were relabeled, repackaged and dispensed again, according to the criminal complaint.

The anti-psychotic medications that are the subject of the fraudulent prescriptions alleged in this case include Abilify, Seroquel and Zyprexa. Ninety-pill bottles of these drugs can bring a pharmacy reimbursements of up to $2,800, which is why there is a wholesale black market for these products where the drugs can be purchased for as little as several hundred dollars.The primary pharmacy involved in the case, Huntington Pharmacy in San Marino, saw a huge spike in claims to Medi-Cal – going from just under $45,000 in 2009 to nearly $1.5 million in 2010 – and the vast majority of claims were the result of prescriptions written by Manor’s in-house doctor, according to the criminal complaint, which alleges that the owners of Huntington Pharmacy were receiving kickbacks and “structuring” cash deposits totaling hundreds of thousands of dollars into their personal and business accounts.

During the three-week trial, federal prosecutors presented evidence showing how patients’ files were doctored to show that they needed medication and they were treated. Employees at the clinic reportedly used stolen identities to create thousands of prescriptions, according to the criminal complaint. They also recruited veterans, low-income seniors and Medicare and Medi-Cal beneficiaries to bill the government for illegitimate services and prescriptions.

Grigoryan and Ovsepian are scheduled to be sentenced on June 9. Johnson is expected to be sentenced on June 30. They face a mandatory two-year sentence for identity theft, but Grigoryan and Johnson also face the maximum sentence of 30 years in federal prison.

The investigation in this case, which was called Operation “Psyched Out,” was conducted by the San Marino Police Department; the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; the United States Food and Drug Administration, Office of Criminal Investigations; IRS – Criminal Investigation; the United States Department of Health and Human Services, Office of the Inspector General; U.S. Immigration and Customs Enforcement; the Glendale Police Department, Organized Crime Team; and the California Department of Health Care Services, Audits and Investigations Branch.

Sergio Rodriguez was employed by Hagemann Meat Company and claims to have sustained an industrial injury while lifting a 70-pound box. of chicken to his low back, and in the form of left inguinal hernia and femoral entrapment neuropathy. The carrier initially denied the injury. .

The WCJ found an injury causing 6% permanent disability with no apportionment, and found that Dr. Keller was applicant’s primary treating physician and that the Permanente Medical Group/Kaiser Foundation Hospitals (Kaiser) had provided treatment reasonable and necessary to cure or relieve applicant; from the effects of his industrial injury. The WCJ awarded benefits and ordered defendant to pay Kaiser’s lien. Kaiser claimed an outstanding balance of.for $3,050.52. In the Opinion on Decision, he wrote: “As this was a denied case at the time [Kaiser’s] services were provided, Kaiser is not limited to the official fee schedule, only their usual and customary fee.”

Defendant filed a Petition for Reconsideration which did not contest that Kaiser is entitled to payment for medical services it provided to applicant but argues that Kaiser cannot.recover more than the amount set by the OMFS. The WCAB agreed and reversed in the case ofRodriguez v Hagemann Meat Company and Zenith Insurance Co.

Previously, several writ denied decisions have held that a medical provider is not limited to the OMFS when the injured employee’s claim has been denied. (CNA Insurance Companies v. Workers’ Comp. Appeals Bd. (Valdez) (1997) 62 Cal.Comp.Cases 1145, 1146 (writ den.) (Valdez); Southern California Edison Co. v. Workers’ Comp. Appeals Ed (Wells) (1999) 65 Cal.Comp.Cases 100 (writ den.).) This line of cases originated with Federal Mogul Corp. v. Workmen’s Comp. Appeals Bd. (Whitworth) (1973) 38 Cal.Comp.Cases 584 (writ den.) (Whitworth), in which the applicant self-procured treatment after the defendant’s insurer did not accept the claim. The Whitworth decision held that the treating surgeon was entitled to the billed amount of his services rather than the amount set by the Official Minimum Fee Schedule, absent evidence that the billed charges were excessive.

The authors point out “Appeals Board panel decisions, including writ denied decisions, are not binding on other panels.” and further noted that “More importantly, the statutory basis for the Whitworth decision has changed in the ‘intervening years” and .thus chose to re-evaluate this issue.

That minimum fee schedule has since been replaced with an Official Medical Fee Schedule which establishes reasonable maximum fees. (Lab. Code, § 5307.1.) Administrative Rule 9792(c) now sets forth the specific circumstances under which a medical provider may recover more than the amount under the OMFS. “A medical provider or a licensed health c,are facility may be paid a fee in excess of the reasonable maximum fees [under the OMFS] if the fee is reasonable, accompanied by itemization, and justified by an explanation of extraordinary circumstances related to the unusual nature of the services rendered; however, in no event shall a physician charge in excess of his or her usual fee.” (Cal. Code Regs., tit. 8, § 9792(c).)

Consistent with the general principle that lien claimants have the burden of demonstrating the reasonableness of the amounts charged, a lien claimant seeking to establish that it should receive payment at its usual and customary rate, above the level set by the OMFS, must present evidence sufficient to satisfy the requirements of Rule 9792(c). In this case they did not.

Commissioner Frank Brass dissented. He concluded that “These policy considerations still hold true today. Nothing in the changes to Labor Code section 5307.1 suggests that the Legislature intended to alter existing law in order to allow defendants the advantage of the OMFS even when they deny claims for injuries that are later determined to be compensable.”

On January 13, the Division of Workers’ Compensation began operations at a satellite to the Oxnard District Office, located at 411 East Canon Perdido in Santa Barbara. The Santa Barbara satellite was opened in order to continue service to the population formerly served by the Goleta District Office, which was closed last December in an effort to consolidate and conserve State resources.

While the Santa Barbara satellite was welcomed for making DWC service locally accessible, the Division has been made aware that the current space cannot accommodate the volume of users. The size of the lobby, hearing room and available parking is particularly insufficient for all parties on conference days, and the crowding is negatively impacting other tenants in the facility. An increase in tenant complaints over the last few weeks have made it clear that the Division must take immediate measures to reduce its impact on the shared facility space. Therefore, beginning on Monday, March 3 all conferences that would have taken place in Santa Barbara will be scheduled on Mondays in Oxnard. The Oxnard District Office, located approximately 38 miles to the south of Santa Barbara, has ample room for all case participants in a typical conference calendar. Recognizing that some applicants may have difficulty travelling to Oxnard, the Division encourages use of Court Call in lieu of personal appearance for attorneys who represent applicants in the Santa Barbara area. DWC will also explore alternatives for unrepresented injured workers, which may include a telephone appearance option to be facilitated by DWC’s Information and Assistance staff.

The Santa Barbara satellite will continue to be used for a limited number of trials and expedited hearings held on Tuesdays, Wednesdays and Thursdays. There will be no hearings scheduled on Fridays, which are termed a “dark day,” set aside for judges to work on their decisions. The Information and Assistance Office in Santa Barbara will stay open five days a week.

DWC is actively pursuing a more spacious satellite location in the greater Santa Barbara area, as to remain accessible to those who had frequented the Goleta District Office. “The Division remains committed to serving the County of Santa Barbara,” affirmed Christine Baker, Director of Industrial Relations. “In the meantime, we appreciate the community’s patience while we continue to seek a sustainable presence in the area.”

Los .Angeles. officials wanted to make absolutely sure the city’s trash truck drivers would not get caught sleeping in their trucks – a sight sure to enrage taxpayers or possibly attract a TV news camera. So they laid down a set of break time rules prohibiting naps and placing other restrictions on where and how drivers could have lunch. But the Los Angeles Times reports these rules have the city facing a $26-million legal payout, most of it for more than 1,000 trash truck drivers who said they were improperly barred from catching a few winks during their 30-minute meal breaks. The City Council, meeting behind closed doors, moved ahead Wednesday with the payout, designed to end an 8-year-old class-action lawsuit. The drivers would receive an average of $15,000 each in back pay, according to Matthew Taylor, their attorney. He argued that they effectively were required to remain “on duty” – but not paid – during nine years of meal breaks.

Taylor said the no-napping rule created dangers on the road involving heavy city garbage rigs. “It’s a hazard to the public if you have commercial truck drivers who are fatigued and are not allowed to take a nap during their breaks,” he said. In addition to banning naps, the Bureau of Sanitation also prohibited drivers from congregating in large groups or traveling to locations away from their pickup routes during lunch breaks. Those rules were abandoned last summer.

City lawyers warned council members that they might have to pay as much as $40 million if the court battle over the drivers’ work rules continued. A Superior Court judge and a state appeals court panel have already sided with the drivers. “The city does impose duties during meal periods: the duties to stay awake and to avoid congregating,” trial court Judge John Shepard Wiley Jr. ruled in 2011. “The drivers are thus subject to the city’s control during their meal periods.”

Some lawmakers expressed outrage at the rulings, saying the work rules had a legitimate purpose. “I just am appalled that a court can take it upon themselves to assert that we have to retroactively pay [workers] for lunch breaks that were in fact taken by our employees,” said Councilman Paul Krekorian, who added that the city’s unions signed off on the work rules. Krekorian, who heads the council’s Budget and Finance Committee, would not discuss Wednesday’s closed-session deliberations. But three other officials familiar with the lawsuit, who asked to remain anonymous because they were discussing a confidential legal matter, told The Times the council voted to go ahead with the $26-million settlement. Those sources said the only opposing votes were cast by council members Joe Buscaino and Mitchell Englander. Both declined to comment.

City officials said the contested work rules were intended to guard the public image of the trash collection service and enhance safety. By limiting the number of workers who could gather in one spot for a meal, the city kept large numbers of oversized trash trucks from being parked together in a single neighborhood or in restaurant parking lots, said Enrique Zaldivar, who runs the sanitation bureau. The no-sleeping rule, Zaldivar said, was imposed to ensure members of the public would not see trash truck drivers asleep in or near their vehicles.”It’s impossible for the general public to know whether a driver is on duty or not while sleeping, he said. “So we felt it was prudent to not have any sleeping occur when the driver is in public view, or during any time that could be construed as on duty.”

The work rule dispute dates back to 2006, when trash truck driver Jose Gravina filed a lawsuit alleging he was routinely denied meal breaks owed after five hours of work. Gravina had been disciplined for napping during his meal break, his lawyer said. Gravina’s case received class-action status in 2011, the year he retired. After losing at the trial court level, city lawyers appealed, arguing state meal break regulations do not apply to employees of cities like Los Angeles, which operate under voter-approved charters. An appeals court also sided with the drivers, saying issues of vehicle and public safety trumped any local governance concerns. Councilman Mike Bonin called the court rulings in the case “obscenely ridiculous,” saying the image of a city employee in uniform in a city vehicle sleeping would be “an affront” to his constituents. Krekorian said the public would also draw the wrong conclusions upon seeing multiple trash trucks parked outside a restaurant. “It looks as though they’re not tending to their duties,” he said.

People injured in an accident or at work sometimes file for monetary compensation, and according to some studies those who file tend to have worse long-term health than those who do not. A new survey of Australian accident victims found that claims stress often comes from confusion about the process, delays and related medical assessments. Those who were most stressed by filing a claim tended to have higher levels of disability years later.

According to the article in Reuters Health, study author David M. Studdert of Stanford University in California said past studies have compared people who filed for compensation to people who did not, but those groups might have different types of injuries to begin with. Another aspect to consider is that people who file claims have an incentive to exaggerate their symptoms to receive more compensation for longer. “The novelty of this study was to look within a group of claimants to test whether those who reported experiencing the most stress also had the slowest recoveries,” Studdert said. “They did.”

He and his colleagues polled a random selection of more than 1,000 patients hospitalized in Australia for injuries between 2004 and 2006. Six years later, 332 of the patients who had filed for workers’ compensation or another accident claim told the researchers how stressful the process had been. Claims can take four to five years to conclude, Studdert noted. A third of the claimants reported high stress from understanding the claims process and another third were stressed by delays in that process. A slightly smaller proportion said repeated medical evaluations and concern for the amount of money they would receive were sources of stress.\Negative attitudes from doctors, friends, family or colleagues, on the other hand, did not seem to be common sources of stress.

People with the most stress tended to score higher on a disability scale and have higher levels of anxiety and depression and lower quality of life, the researchers reported in JAMA Psychiatry. “While it’s intuitive that the compensation process is going to be stressful for some claimants, what is less clear is whether that stress has a substantial impact on recovery many years after the injury,” Studdert said. “We were surprised by the size of the compensation effects on outcomes like level of disability and quality of life – they were fairly strong,” he told Reuters Health.

“There is much debate at the moment about the role of ‘systems,’ in this case ‘compensation systems’ on health outcomes,” said Michele Sterling, who studies injuries and rehabilitation at the University of Queensland in Herston, Australia. She was not involved with the current study. “If it can be established which parts of the process cause stress and/or poor outcomes or recovery then the system could look at targeting these specific areas and improve them,” Sterling told Reuters Health. “Some insurance regulators are already trying to do this in some areas.” This study deals with severe injuries that require hospitalization, and her own research focuses on more minor injuries, she noted, but the relationship between stress and health is likely the same, she said. She has found that posttraumatic stress symptoms predict poor recovery, and that could be worsened by stresses in the claims system, she said.

“Our study joins many others that show the rate of mental health problems among people who are injured is astonishingly high,” he said, adding that medical systems are excellent at treating physical injuries but not as good at treating mental conditions Studdert said. “I think the point that needs to be made is that those managing these systems, insurers or workers’ compensation boards, or no fault automobile compensation schemes, should realize that they are undermining their own mission of getting workers back on their feet if the process is unnecessarily stressful,” said Katherine Lippel, who studies occupational health and safety law at the University of Ottawa in Ontario, Canada and was not involved in the study. The authors suggest that compensation schemes could be redesigned to get the process over with quicker and make it easier for patients to understand, which could alleviate some sources of stress.

Studies such as this one may be a basis to seek apportionment of permanent disability based upon causation. New Labor Code sections 4663, subdivision (a) and 4664, subdivision (a) eliminate the bar against apportionment based on pathology and asymptomatic causes. Thus, under the post SB 899 workers’ compensation system, apportionment of permanent disability shall be based on causation (§ 4663, subd. (a)), and the employer shall only be liable for the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment. Creative trial work coupled with a comprehensive forensic presentation may accomplish a persuasive argument to apportion away the effects of stress from the disability after a physical industrial injury.