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Surgeon Facing $29M Fraud Released After Positive COVID Test

Randy Rosen M.D., an Orange County surgeon and jail inmate accused in a $29 million insurance fraud scheme who is facing decades behind bars, was temporarily set free ahead of the weekend after testing positive for coronavirus to the criticism of local officials.

Rosen, who was involved in a civil federal lawsuit involving a health care fraud scheme at a Long Beach hospital that was settled in 2017, was was indicted in this new case along with co-defendant Liza Vismanos

Vismanos owns the Wellness Wave surgical center in Beverly Hills and the Lotus Labs medical laboratory in Los Alamitos. Rosen/Vismanos entered into a fraud scheme specifically targeting patients from addiction recovery rehabs to bill their private medical insurance carriers primarily for two types of procedures; a non-FDA approved Naltrexone implant and Cortisone injections.

Rosen and Visamanos were first arrested back on June 30 on a combined 144 counts including money laundering, submitting fraudulent insurance claims and withholding material facts on insurance claims.

CBS Los Angeles reports that District Attorney Todd Spitzer called the release of 57-year-old Rosen – who is being monitored by an electronic bracelet – unfair.

Rosen’s attorney argued before a judge that Rosen “is at substantial risk of poor outcome (of the coronavirus) because of his multiple co-morbidities for his current COVID-19 infection which requires medical follow-up.”

Rosen faces a maximum sentence of 84 years in state prison if convicted as charged, while Visamanos faces 36 years.

After Rosen’s positive COVID-19 test, he has been released, and now Spitzer is calling him a flight risk and questioned whether he would leave the country.

“If I knew I had an out for 30 days and money available and the means to get the heck of out this country, quite frankly I think I’d probably take the opportunity,” Spitzer said. “Whether we see him back again is the big question.”

Feds Approve “Surprise Medical Bill” Ban

Congress is poised to include a ban on “surprise” medical bills as part of its massive year-end spending package that lawmakers are expected to vote on Monday.

In a joint statement Sunday night, House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer confirmed that “bipartisan, bicameral legislation that will end surprise billing for emergency and scheduled care” will be part of $1.4 trillion spending bill, which also includes an additional $900 billion in coronavirus relief money.

The long sought-after legislation will protect insured patients from receiving expensive medical bills when they inadvertently receive out-of-network care. Americans of all stripes support the effort: A survey published Friday by the Kaiser Family Foundation found that 80% of adults support abolishing the practice.

Although lawmakers in both parties had been pushing for a plan to fix the issue for years — with the support President Trump, who had made it a key campaign priority — the effort drew fierce opposition from powerful lobbying groups representing the health care industry, who questioned how much the insurer would have to pay the doctor once the patient was removed from the equation.

A previously announced deal called for health insurers and providers to negotiate most billing disputes or bring their complaints to a mediator. The final legislation moves even further in favor of doctors and hospitals by preventing the arbiter from using the lower payment rates paid by Medicaid and Medicare programs, according to Politico, which obtained a copy of the bill summary.

Lawmakers also diluted a measure that would have required health insurers to disclose information to employers about their drug costs and rebates through their contracts with middlemen known as pharmacy benefit managers. The legislation now calls for insurers to submit more general information on medical costs and prescription drug spending, according to Politico.

Rep. Richard Neal, chairman of the House Ways and Means Committee, called the proposal a “win for patients and their families that will improve America’s health care system.”

An earlier clash between Neal, who had previously blocked proposals to stop surprise medical billing, and three other committees – House Energy and Commerce, House Education and Labor and Senate Health, Education, Labor and Pensions – threatened to derail the reform efforts. After securing changes that were friendlier to doctors and hospitals, however, Neal agreed to support the proposal.

WCAB En Bank Limits Walk-Through Orders

Governor, Gavin Newsom, declared a state of emergency in response to the spread of the novel coronavirus, and issued Executive Order N-33-20 which required all Californians to stay home with certain limited exceptions.

The DWC temporarily closed the district offices for filing to protect the health and safety of staff and the community. The district offices reopened for filing effective April 13, 2020, but limited filings to e-filing via the Electronic Adjudication Management System (EAMS), JET filing or by mail. The DWC has continued to conduct hearings via teleconference or video, but does not currently permit filing of walk-through documents.

The California Department of Public Health issued a Regional Stay At Home Order applicable based on a region’s intensive care unit (ICU) capacity on December 3.

And as a result, the WCAB in it’s December 15, en bank decision, ordered suspension of WCAB Rule 10789(c) regarding the required timeframes for assignment of walk-through cases.This suspension is applicable to all district offices in the State.

This rule states that certain documents “may be submitted on a walk-through basis” including the following: (1) Compromise and Releases; (2) Stipulations with Request for Award; (3) Petitions for attorney’s fees for representation of the applicant at a deposition; (4) Petitions to compel attendance at a medical examination or deposition; and (5) Petitions for Costs pursuant to rule 10545.

The rule also provides that “Each district office shall have a designee of the presiding workers’ compensation judge available to assign walk-through cases from 8:00 a.m. to 11:00 a.m. and 1:00 p.m. to 4:00 p.m. on court days.”

The order of suspension of WCAB Rule 10789(c) will provide the district offices with the ability to schedule timeframes for walk-through of documents as appropriate for their capacity under these circumstances.

WCAB Rule 10789(a) is permissive and the documents that may be submitted on a walk-through basis may therefore be further restricted by the district offices at the discretion of the presiding workers’ compensation judges.

The presiding workers’ compensation judge has full responsibility for assignment of cases to the workers’ compensation judges in each district office. This includes the authority to decline to assign a document submitted on a walk-through basis.

The presiding workers’ compensation judges are empowered to prioritize which documents may be assigned on a walk-through basis to expedite resolution of claims and to account for limited capacity in their respective offices in determining whether to permit a document to be assigned as a walk-through.

This order will remain in effect until further notice.

Mitchell International Releases 4th Quarter Comp Trends Report

Mitchell International, Inc., released its fourth quarter Industry Trends Report for 2020. In this report, industry experts from across Mitchell predict and analyze the key trends that will impact 2021, providing insights that can help guide planning for organizations across the industry.

In 2020, the workers’ compensation industry has faced no shortage of challenges – treatment gaps, delays in elective surgeries, the shift to work-from-home, an onslaught of emergency regulations and more. In 2021, the industries will continue to face pandemic-related challenges that will require adaptations and focus to address.

One of the major issues the workers’ compensation industry has faced during the pandemic is access to care. Across the country, hospitals, medical offices and other sites of service limited or delayed elective surgeries and treatments, leaving gaps in care for many workers’ compensation claims. These trends are expected to continue through the pandemic in line with state COVID-19 rules and restrictions.

The shifting workforce will be the biggest trend to watch in 2021. Much of the U.S. workforce has shifted to work from home, with many workers expected to stay remote even after the pandemic ends. For the workers’ compensation industry, this will pose a challenge when it comes to worker safety, as the risks are different in a home environment compared to an office.

They also anticipate that next year, claims organizations will lean into automating the end-to-end claims process more than ever, that telemedicine will undergo both innovation and additional regulatory and security scrutiny and that we will see increases in certain types of workers’ compensation claims like ergonomic injuries and growing COVID-19 illness claims.

For adjusters and other claim handlers, the biggest game changer will be having a clear understanding that telemedicine, telehealth, telerehab and others are acceptable forms of treatment.

Mitchell experts also caution that in 2021 we may see continuing concerns in the pharmacy system, including escalating drug costs and a growing opioid crisis that has led to an estimated 18% increase in overdoses in 2020, though mostly from synthetic drugs.

Fraud, which costs $30 billion each year, should also remain top of mind right now for carriers, since the changes caused by the pandemic have altered previous patterns, making fraud harder to detect.

The also expect in 2021 that Congress is going to do something to reconcile the difference between where the states are at and where the federal government is at when it comes to marijuana. The federal government might allow states to regulate marijuana similar to alcohol, allowing each state to decide the right policy.

U.S. Supreme Court Allows States to Regulate PBM Drug Prices

The U.S. Supreme Court published its decision in Rutledge v. Pharmaceutical Care Management Association. The question presented was whether ERISA preempts Arkansas Act 900, an Arkansas law that regulates the price at which pharmacy benefit managers (PBMs) reimburse pharmacies for the cost of drugs covered by prescription drug plans.

PCMA, the Pharmaceutical Care Management Association, which represents some of the largest PBMs in the country, challenged Arkansas Act 900 by arguing that the Act is preempted by ERISA. The Supreme Court reversed the judgment of the U.S. Court of Appeals for the Eight Circuit, ruling that Act 900 was not preempted by ERISA.

The Opinion reasoned that Arkansas Act 900’s requirements were too far away from ERISA and ERISA plans to have an “impermissible connection” with ERISA plans, even though the law has an indirect effect on what ERISA plans pay for prescription drugs. “State regulations that merely increase the costs or alter incentives for ERISA plans without forcing plans to adopt any particular scheme of substantive coverage are not preempted by ERISA,” Justice Sotomayor wrote, citing earlier Supreme Court opinions.

The Court’s Opinion is a strict preemption analysis and does not cite to, or reference, the many amicus briefs filed in the case or the political debate surrounding Arkansas Act 900, other than to reiterate the express legislative intent in enacting Arkansas Act 900.

PBMs typically use a “maximum allowable cost” list to determine how much pharmacies should be reimbursed. Trade groups for rural and independent pharmacies have argued that PBM’s strategies in reimbursement rates of maximum allowable costs are unfair and can be lower than the pharmacies’ cost to purchase the drug.

Conversely, other trade groups in support of PCMA, state that PBMs have expertise in ensuring efficiency and cost reduction, and that drug prices are largely established by drug manufacturers.

According to America’s Health Insurance Plans, Inc. (AHIP), PBMs provide incentives to pharmacies to offer low-cost generic drugs and to be more efficient with their drug purchasing. AHIP also claims that PBMs have the expertise in pharmaceutical manufacturing and distribution systems, and that the compliance costs of managing different state regulations make work in this area prohibitively expensive.

The Court’s Opinion may lead to further state regulation of PBMs.

A statement from PCMA expressed disappointment and urged states to proceed cautiously: “We are disappointed in the Court’s decision that will result in the unraveling of federal protections under . . . ERISA,” and “As states across the country consider this outcome, we would encourage they proceed with caution and avoid any regulations around prescription drug benefits that will result in higher health care cost for consumers and employers.”

Riverside Woman Learns $500K EDD Fraud Scheme on YouTube

A Riverside County woman pleaded guilty to a federal criminal charge for fraudulently obtaining more than $500,000 in COVID-related unemployment benefits for herself.

Cara Marie Kirk-Connell, 32, of Menifee, pleaded guilty to a single-count information charging her with use of an unauthorized access device.

Kirk-Connell knowingly used approximately 50 unauthorized access devices. Specifically, she used stolen personal identifiable information, such as dates of birth and Social Security numbers, to apply for unemployment insurance benefits in the names of other people.

Based upon Kirk-Connell’s false and fraudulent applications, she obtained from the California Employment Development Department (EDD) multiple debit cards that contained more than $500,000 in COVID-related unemployment benefits to which she was not entitled, the plea agreement states.

Kirk-Connell admitted she knew people who access the “dark web” to purchase stolen identities that she used to then file fraudulent claims with EDD. She further admitted to watching YouTube videos that instructed viewers on how to commit EDD fraud.

When Murietta police arrested Kirk-Connell on September 11 during a traffic stop, she possessed eight EDD debit cards in other people’s names and, the day before her arrest, Kirk-Connell used fraudulently obtained EDD debit cards to withdraw more than $1,000 in cash. When federal law enforcement arrested Kirk-Connell on October 9, she possessed in her purse four EDD debit cards in victims’ names, four additional debit cards in victims’ names in her car trunk, and approximately $10,000 in cash, according to the plea agreement.

EDD records showed that the cards and identities that Kirk-Connell possessed had been used to apply for and authorize approximately $534,149 in COVID-related unemployment benefits from California’s EDD program, of which nearly $270,000 had already been spent, according to an affidavit filed with a criminal complaint in this case.

The California EDD distributes unemployment benefits under the Coronavirus Aid, Relief, and Economic Security Act, passed by Congress in March. The CARES Act expanded unemployment benefits to cover those who were previously ineligible, including business owners, self-employed workers, and independent contractors, who were put out of business or significantly reduced their services because of the COVID-19 pandemic.

She is scheduled for an April 9, 2021 sentencing hearing, at which time Kirk-Connell will face a statutory maximum sentence of 10 years in federal prison.

WC Claim, and CalPERS Retirement Defeats FEHA Claim

Jacob Lopez, was an employee of the Los Angeles County Metropolitan Transportation Authority. In February 2014 Lopez went on medical leave and submitted a doctor’s note stating he was “to remain totally disabled from work,” because of pain in his back that could not be resolved by ergonomics at work.

When Lopez was ready to come back to work, the Authority did not allow him to return to his position as a transit security lieutenant because his doctor said Lopez had certain physical restrictions.

Lopez sought disability benefits from the California Public Employees’ Retirement System (CalPERS). In his application to CalPERS Lopez claimed that he had “cumulative trauma” to his back and hands, anxiety, and depressive symptoms; that he had lifting, sitting, and standing restrictions and that he was unable to perform his job.

He also filed a workers’ compensation claim against the Authority, claiming he suffered hand, back, and psychological injuries.

In September 2015 CalPERS approved Lopez’s application for disability retirement benefits, finding Lopez was “substantially incapacitated from the performance of [his] usual duties as a Transit Security Lieutenant . . . based upon [his] orthopedic (low back, bilateral hands) condition.” In December 2016 the Workers’ Compensation Appeals Board approved a settlement between Lopez and the Authority for $65,000.

Lopez then filed a civil action, alleging the Authority violated provisions of the Fair Employment and Housing Act (FEHA) that prohibit disability discrimination and that require employers to engage in good faith in the interactive process to find reasonable accommodations.

The trial court granted the Authority’s motion for summary judgment, ruling Lopez could not prevail on either of his two causes of action, in part because he was judicially estopped from asserting he could have performed the duties of his prior position. The court of appeal affirmed the dismissal in the unpublished case of Lopez v Los Angeles County Metropolitan etc.

The trial court ruled that, because Lopez stated in his disability application with CalPERS and in his Workers’ Compensation Appeals Board proceeding that he could not work as a transit security lieutenant, and because Lopez received benefits from CalPERS and settled his workers’ compensation claim, he was judicially estopped from contending he could perform the essential functions of the position.

Several courts have held that, to prevail on a cause of action for failure to engage in good faith in the interactive process, the plaintiff must identify a reasonable accommodation that was available at the time the interactive process (should have) occurred and that the defendant employer could have offered.

Lopez never argued he needed an accommodation, reasonable or otherwise, to return to his position as a transit security lieutenant.

16 Pharmacies Admit Health Care Fraud Schemes

Residents of Los Angeles, California, and Henderson, Nevada, and 16 pharmacies scattered between California, Texas, Wyoming, Arizona and Nevada, pled guilty to charges of healthcare fraud, conspiracy to commit fraud, and/or conspiracy to violate the federal anti-kickback statutes.

Those pleading guilty included brothers Mehran David Kohanbash, and Joseph Kohan and their nephew, Nima Rodefshalom.

In addition guilty pleas included pharmacies Insure Nutrition, Inc., Affordable Pharmacy, Inc., ASC Pharmaceutical, LLC, DQD Enterprise Corporation, DTST Ventures, LLC, Econo Pharmacy, Inc., Emerson Pharmacy, Inc., Genorex Pharmaceutical, LLC, Nutrition Plus, Inc., Pharmatek Pharmacy, Inc., Premier Med Services, Inc., Rexford Pharmacy, Inc., Specialty Pharmacy Management of America, Inc., Solutech Pharmaceuticals, LLC, Village Drug & Compounding, Inc., and Vitamed LLC.

The three individual defendants together with the defendant pharmacies engaged in a series of interconnected actions that resulted in misleading advertising associated with supplying what were described to the Court as nutritional shakes.

The defendants secured the patients’ insurance information which in turn resulted in the defendants soliciting the patients to appeal to their respective physicians to prescribe what were described for the Court as High Yield (expensive) medications.

These medications were often compounded, meaning that one or more of the pharmacies mixed together preexisting medications or substances to provide a new or different product.

It was a part of the scheme(s) involved in the guilty pleas that the defendants conspired to promote these medications that often yielded extremely high profits, by manipulating the collection of co pays on various medications to make it appear that co pays were being collected when in fact they were not.

Sentencing is scheduled for April 7-8, 2020 for the individual defendants. Sentencing for the defendant pharmacies has not been scheduled.

For each individual defendant, the law provides for a maximum total sentence of 35 years in prison, a fine of $750,000, or both.

The three defendants and the 16 corporations agreed to forfeiture, restitution, fines and civil penalties amounting to more than $60,000,000.

December 7, 2020 – News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: “Equitable Tolling” Doctrine Applies to Appeal of Cal/OSHA Citation. Another COVID-19 Employee Tort Case Pending Against Cal. Employer. Sheriff’s Failure of Fitness-for-Duty Test Not a Psychological “Injury”. Oxnard Roofer Faces 5 Felonies for $4M Premium Fraud. Ventura Farm Labor Contractor Faces Comp Fraud Charges. 14 Charged in So. Cal. $22M SJDB Fraud Scheme. So. Cal. Edison Electrician Charged with 63K Comp Fraud. Cal/OSHA Emergency COVID-19 Regulations Now in Effect. CDI Decreases 2021 Advisory Pure Premium Rate by 19.4%. Lack of Surgical Implant Price Transparency Doubles Costs.

Pain Medicine QME Pays $153K to Resolve Opioid Charges

Escondido pain clinic doctor, and board-certified physiatrist, Bradley Chesler, M.D., has paid the United States $153,000 to resolve allegations that he overprescribed opioids.

Dr. Chesler is listed as a Qualified Medical Evaluator by the DWC in the specialties of Pain Medicine and Physical Medicine and Rehabilitation. His QME office address is 1955 Citracado Pkwy, in Escondido.

This settlement stems from the investigation into whether Dr. Chesler illegally prescribed opioids to his patients in violation of the Controlled Substances Act.

Pursuant to the Controlled Substances Act, doctors may write prescriptions for opioids only for a legitimate medical purpose while acting in the usual course of their professional practice.

Federal investigators alleged that from January 1, 2014 to August 31, 2019, Dr. Chesler wrote opioid prescriptions that violated the Controlled Substances Act, which included prescriptions for fentanyl, hydromorphone, methadone, and oxycodone.

Dr. Chesler allegedly prescribed opioids while he concurrently prescribed benzodiazepines, and he prescribed to some patients a combination of at least one opioid, one benzodiazepine, and one muscle relaxant.

Drug abusers colloquially refer to the opioid, benzodiazepine, and muscle relaxant combination as the “Trinity” because of its rapid euphoric effects. These drug combinations are known to increase the risk of abuse, addiction, and overdose.

Chesler prescribed large quantities of opioids to his patients that reached high daily Morphine Milligram Equivalent (MME) levels (sometimes even exceeding 180 MME). The United States further alleged that Dr. Chesler failed to properly address aberrant urine drug test results when prescribing opioids.

Public health experts have long warned health care providers that overdose risk is elevated in patients receiving medically prescribed opioids, particularly those receiving high dosages. Among other things, tracking MMEs advances better practices for pain management by reinforcing the need for providers to consider alternatives to using high-dosage opioids to treat pain, and to appropriately justify decisions to use opioids at dosages that place patients at high risk of addiction, abuse, and overdose.

DEA Special Agent in Charge John Callery said, “Although 99 percent of medical professionals abide by DEA guidance and federal law, we will investigate those who put illicit profits before their oaths and bring them to justice.”