Category: Daily News

A federal grand jury returned a 27-count indictment against Terrill Eugene Brown, 61, of Visalia, charging him with conspiracy to dispense oxycodone, dispensing of oxycodone and hydrocodone, and structuring currency transactions to avoid bank reporting requirements, United States Attorney Benjamin B. Wagner and Fresno County District Attorney Elizabeth Egan announced.

According to the indictment, Brown, a medical doctor, sold prescriptions for large quantities of highly addictive, frequently diverted prescription drugs, including oxycodone and hydrocodone, without medical necessity. Brown sold prescriptions to customers that did not have a legitimate medical purpose and were not in the usual course of his professional practice. Brown deposited the cash earned from this into different personal bank accounts in a manner designed to avoid currency transaction reporting requirements.

Oxycodone, also known as “oxy,” is a narcotic analgesic or painkiller and is classified as a Schedule II controlled substance. Demand for oxycodone-based prescription pain medication has grown to epidemic proportions in the United States, and dealers profit by selling such medication on the street. Oxycodone-based Schedule II drugs have a high potential for abuse, and users will often crush and snort the pills or dissolve and inject them to get an immediate high. This abuse can lead to addiction and overdose, and, sometimes death. Hydrocodone is an addictive prescription painkiller, the abuse of which may lead to severe psychological or physical dependence. Hydrocodone is sold generically or under a variety of brand names, including Vicodin, Vicoprofen, Lortab, Lorcet, and Norco.

“Addiction to prescription painkillers is a very serious problem. Diversion of such drugs to the black market is a danger to public health,” stated U.S. Attorney Wagner. “The indictment alleges that the defendant prescribed thousands of highly addictive pills for his own personal profit and with complete disregard for where they would end up or who would take them.”

If convicted of the controlled substances crimes, Brown faces a maximum statutory penalty of 20 years in prison and a $1 million fine, and if convicted for the structuring, he faces 10 years in prison and a $500,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.

This case is the product of an investigation by the Drug Enforcement Administration, the Internal Revenue Service-Criminal Investigation, and the Medical Board of California, California Bureau of Investigation. The case is being prosecuted by Nathan Lambert, a Fresno County Deputy District Attorney sworn in as a Special Assistant U.S. Attorney for the case, and Assistant U.S. Attorney Kathleen A. Servatius. This case is being brought as part of Operation Footprint, a nationwide law enforcement initiative that targets large drug trafficking organizations by identifying the transfer of drug proceeds through financial institutions, bulk cash smuggling and other forms of money transfers. Operation Footprint is focused on bringing criminal charges based on Bank Secrecy Act violations in addition to violations of the Controlled Substances Act and the Money Laundering Control Act. This case is also the product of the Organized Crime Drug Enforcement Task Force (OCDETF), a focused multi-agency, multijurisdictional task force investigating and prosecuting the most significant drug trafficking organizations throughout the United States by leveraging the combined expertise of federal, state and local law enforcement agencies.

A government review released on May 29 finds Medicare overwhelmed by new-medical provider information and unable to police its existing databases against the fraudulent use of taxpayer money. Government investigators found that the data systems used to catalog the records of Medicare providers were riddled with inaccurate or incomplete information. When compared, 97 percent of files studied were inconsistent.

The report, released by the Department of Health and Human Services’ Inspector General, focused on two Medicare databases that manage important provider information, the National Plan and Provider Enumeration System (NPPES) and the Provider Enrollment, Chain and Ownership System (PECOS). The HHS IG found Medicare’s databases for processing medical providers “inaccurate,” opening the door for potential waste, fraud and abuse.

The systems contain the information and identifiers of healthcare providers enrolled in Medicare and assist the government healthcare system in processing payments to those providers. The IG report found data in both systems was “often inaccurate and occasionally incomplete, and were generally inconsistent between the two databases.”

Nearly half–48 percent–of the files containing identifiers assigned to providers by the Centers for Medicare &Medicaid Services were inaccurate. PECOS, which is used to process provider information, had inaccuracies in 58 percent of its files. When provider information from both databases was compared, 97 percent of the files had conflicting information, including the addresses of providers that were billing Medicare.

The IG report also found that CMS did not verify most of the information in either database, raising the possibility that fraudulent information had been used to scam the system.

But the IG report found that, while CMS had processes in place to verify provider data, “the manner in which CMS implemented these processes impeded efforts to ensure that the databases contained accurate information.”

Faced with surging provider applications to fill the increased role of Medicare, CMS allowed for the suspension of other verification processes that may have caught inaccurate data. “The suspension of provider enrollment verification activities at a time of increased application volume could have compromised the accuracy and completeness of PECOS data, increasing the vulnerability of the Medicare program to fraud and abuse,” the IG report said.

The report also noted that CMS oversight allowed for ineffective safeguards in the verification process and suspended others to expedite the processing of provider information.

The IG report recommended stronger oversight and safeguards after noting that three out of four providers identified inaccurate data in either system.

Roberto Carlos Mendoza-Lazo, 45, of San Bernardino, has been charged with Identity Theft and Attempted Perjury.

In Jan. 2013, the San Bernardino County District Attorney’s Office, Workers’ Compensation Fraud Unit began a criminal investigation into alleged workers’ compensation fraud committed by Mendoza-Lazo. During the course of the investigation, it was revealed that Mendoza-Lazo used the social security numbers of two individuals to obtain employment.

According to Senior Investigator Jose Guzman, who is assigned to the case, the defendant also attempted to obtain workers’ compensation benefits using the same social security numbers.

“After confirming with the Inspector General of the United States Social Security Administration that the numbers were valid and not issued to the defendant, we contacted the victims and they wanted prosecution,” Guzman said.

Investigators located Mendoza-Lazo at his place of employment in San Bernardino County where he was arrested and transported and booked into the San Bernardino County Sheriff’s Department, Central Detention Center jail.

Mendoza-Lazo was arraigned on May 31st, and pleaded not guilty to all counts. Deputy District Attorney Scott Byrd will prosecute this case. If convicted as charged, Mendoza-Lazo faces four years, two months in county prison.

Rena B. David has been named the Chief Operations and Chief Financial Officer of the California Workers’ Compensation Institute (CWCI), the Oakland-based nonprofit organization that serves as the research and educational arm of the California workers’ compensation industry.

Ms. David joins CWCI after having served as a consultant and manager with more than 25 years of experience in finance, data systems development, product development, workers’ compensation and group health pricing, health services research and hospital operations. The majority of her experience has been at Kaiser Permanente where she managed high-level consultants and programmers supporting a variety of data coordination/development, budgeting, pricing model development and medical risk assessment projects. In the mid-1990s, she was project lead for the implementation of Kaiser’s 24-hour care product combining group health and workers’ compensation medical care in Sacramento and San Diego. She also played a key role in developing and evaluating the performance of the Kaiser Permanente/State Fund Alliance Initiative. From 2006 to 2008, she managed the California Healthcare Foundation’s “In Search of Affordability Initiative,” which included consulting on the development of a 24-hour coverage carve-out model.

A graduate of Stanford University, where she earned a bachelor’s degree in human biology, Ms. David also holds master’s degrees in business administration and public health from U.C. Berkeley. In her new position, she will be responsible for CWCI’s accounting and budgeting functions, oversee the Institute’s general administration, human resources, facilities and systems, and provide support and expertise to the Research Department on designated research projects. Commenting on Ms. David’s appointment, CWCI president Alex Swedlow said “We’re very pleased to have Rena join the Institute staff. She is a great addition to our professional team, and her technical qualifications and familiarity with key industry issues will provide CWCI with thoughtful leadership and expertise.”

The Division of Workers’ Compensation (DWC) has modified the proposed Qualified Medical Evaluator (QME) regulations. DWC has electronically distributed the 15-day notice of modification to interested parties and has posted the modified regulation text and forms on the DWC website. Members of the public may comment on the modifications until 5 p.m., June 18. The proposed modifications include:

• Section 13 is revised to require all QME applicant requests to add or remove a specialty to be in writing and include documentation that establishes the physician is board certified in the specialty
• Section 26 is revised to clarify that QMEs may continue to request additional office locations up to the 10 office location limit
• Section 30 is revised to state that an issued panel may be revoked by the medical unit if the panel was issued by mistake, misrepresentation of facts, or the parties have agreed to resolve their dispute by using an AME
• Section 35 is revised to allow the claims administrator or injured worker to provide a letter to the QME or AME outlining the medical determination of the primary treating physician or the compensability issue that the evaluator is requested to address
• Section 35.5 is revised to state that if the evaluator declares the injured worker permanent and stationary for the body part evaluated and the evaluator finds injury has caused permanent partial disability, the evaluator shall completer the Physician’s Report of Permanent and Stationary Status and Work Capacity and serve it on the claims administrator and the employee, together with the medical report
• The application for appointment as QME (QME form 100) requires the applicant to indicate whether he or she is certified by a specialty board recognized by the Medical Board of California or the Osteopathic Medical Board of California or have qualifications deemed to be equivalent to board certification in a specialty by the Medical Board or Osteopathic Medical Board, and requires a copy of the board certificate and certificates completion of residency and fellowship training programs
• The panel request form instructions are stricken. Instructions that explain how to fill out the form field by field will be posted with the final form.

The notice, text of the regulations, and forms can be found on the DWC website.