In separate incidents, Miguel Velazquez and Servando Velazquez suffered injuries, and each required Spanish language interpreting services in connection with their medical care. Meadowbrook was the carrier for the claimants’ employers and accepted both claims and administered benefits.

DFS Interpreting, provided interpreter services to each claimant, and timely submitted invoices to Meadowbrook. Meadowbrook issued explanations of review pursuant to Labor Code section 4603.3, explaining that it refused to pay the invoices DFS submitted.

DFS objected to those explanations of review, but did not request a second review pursuant to section 4603.2, subdivision (e) or California Code of Regulations, title 8, section 9792.5.5.

After each underlying case resolved, the cases were consolidated to determine whether DFS properly contested Meadowbrook’s explanations of review, and, if not, whether to award further payment to DFS. The parties stipulated that the interpreters were necessary at all medical treatment appointments, DFS timely submitted the invoices, Meadowbrook timely issued the explanations of review, and DFS objected to the explanations of review but did not request a second review.

The WCJ issued her findings and award and order in favor of DFS, and found that the liens were not barred by its failure to request a second review, because the administrative director had not adopted a fee schedule pursuant to section 4600, subdivision (g).

The WCAB denied the reconsideration petition. It reasoned that the AD had not specifically adopted a fee schedule for interpreters after the Legislature enacted Senate Bill No. 863. Thus, there was not an applicable fee schedule and DFS was not required to submit a request for second review.

The Court of Appeal reversed in the published case of Meadowbrook v WCAB.

The AD adopted Title 8, section 9795.3, entitled “Fees for Interpreter Services” in 1994. The section also describes interpreter fees that “shall be presumed to be reasonable.”

There is no requirement that the AD adopt a fee schedule after Senate Bill No. 863 was enacted. Title 8, section 9795.3 is an applicable fee schedule as required by the labor code and regulations.The parties offer no authority establishing that the schedule of fees set out in Title 8, section 9795.3 is not a “fee schedule” such that it qualifies as such under the relevant regulation.

“Because the fee schedule set out in Title 8, section 9795.3 is an “applicable fee schedule” as required by Title 8, section 9792.5.4, we hold that DFS’s liens are barred by its failure to request a second review. Because the WCAB’s interpretation of the law is clearly mistaken, the WCAB’s opinion and decision on reconsideration must be annulled.”

Several hospitals owned and operated by Sutter Health, a California-based healthcare services provider, and Sacramento Cardiovascular Surgeons Medical Group, Inc., a practice group of three cardiovascular surgeons, have agreed to pay the United States a total of $46,123,516.36 to resolve allegations related to reimbursement claims they submitted to the Medicare program.

The Physician Self Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has a financial relationship, unless that relationship satisfies one of the law’s statutory or regulatory exceptions. The law is intended to ensure that medical decisions are not influenced by improper financial incentives.

As part of the settlements, one of Sutter’s hospitals, Sutter Memorial Center Sacramento, has agreed to pay $30.5 million to resolve allegations that, from 2012 to 2014, it violated the Stark Law by billing Medicare for services referred by Sac Cardio physicians, to whom it paid amounts under a series of compensation arrangements that exceeded the fair market value of the services provided.

Relatedly, Sac Cardio has agreed to pay $506,000 to resolve allegations that it improperly submitted duplicative bills to Medicare for services performed by physician assistants that it was leasing to SMCS under one of those compensation arrangements.

Separately, Sutter has agreed to pay $15,117,516.36 to resolve other conduct that the company itself disclosed to the United States, principally concerning additional violations of the Stark Law.

Specifically, Sutter hospitals submitted Medicare claims that resulted from referrals by physicians to whom those hospitals (1) paid compensation under personal services arrangements that exceeded the fair market value of the services provided; (2) leased office space at below-market rates; and (3) paid reimbursements of physician-recruitment expenses that exceeded the actual recruitment expenses at issue.

Additionally, several Sutter ambulatory surgical centers double-billed the Medicare program by submitting claims that included radiological services for which Medicare separately paid another entity that had performed those services.

The allegations relating to SMCS and Sac Cardio were originally brought by Laurie Hanvey in a lawsuit filed under the whistleblower provisions of the False Claims Act, which allow private parties to bring suit on behalf of the federal government and to share in any recovery. The whistleblower will receive $5,891,140 as her share of the federal government’s recovery in this case.

These matters were handled on behalf of the government by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the Northern District of California, and the U.S. Attorney’s Office for the Eastern District of California. Investigative support was provided by the Department of Health and Human Services’ Office of the Inspector General.

The California State Auditor conducted an audit of the Department of Industrial Relations’ Division of Workers’ Compensation and its oversight and regulation of QMEs, as directed by the Joint Legislative Audit Committee. The full 52 page report has been made available online.

The review found that from fiscal years 2013-14 through 2017-18, the total number of QMEs decreased by 12 percent while requests for QMEs increased by 37 percent. Consequently, the availability of QMEs has decreased during those years, indicating that the current number of QMEs is not meeting the demand for their services.

During this time period, the number of panels that were requested to be replaced because QMEs were unavailable more than quadrupled – from about 4,600 replacement panels in fiscal year 2013-14 to nearly 19,000 in fiscal year 2017-18.

Nevertheless, DWC has not taken sufficient action to address the QME shortage, such as establishing a process to recruit new QMEs and updating the 13-year-old rates on the fee schedule that QMEs use to charge for their services, which could help DWC attract and retain QMEs.

Furthermore, DWC inappropriately used its reappointment process to discipline certain QMEs alleged to have committed overbilling violations. This practice raises concerns about due process. Specifically, instead of having used its regulatory process to discipline QMEs at the time it identified alleged violations, DWC denied their reappointments because of the alleged violations.

Finally, DWC has not continuously reviewed medical-legal reports, prepared by QMEs and containing the findings of the examinations, for quality and has not tracked when workers’ compensation judges have rejected medical-legal reports because those reports failed to meet minimum standards. Because it did not perform these reviews or track when workers’ compensation judges rejected reports, DWC lacks the data to identify whether report quality is a systemic problem or whether individual QMEs are producing low-quality reports.

The auditor suggested that the Legislature should amend state law to specify that DWC review and, if necessary, update the fee schedule for compensating QMEs at least every two years based on inflation. And the Legislature should revise state law to increase the number of QMEs on the panels DWC provides.

The DWC should develop and implement a plan to increase the number of QMEs, prioritizing specialties with the greatest shortage relative to demand. It should also develop and implement separate written policies and procedures that define and specify its internal processes for disciplining and reappointing QMEs. As well as create and implement a plan to continuously review QME reports for quality and report its findings to its administrative director annually.

In response, the Division acknowledged and accepted the draft report’s recommendations, which it will work to implement by April 2020. It did however disagree with some of the conclusions

The DWC pointed out that the supply of primary care physicians in California is not sufficient to meet the population’s needs. Therefore, while attempts to increase the number of QMEs in our system can be made through outreach at medical and workers’ compensation conferences and in continued discussions with medical groups, the DWC faces headwinds in ending the persistent and ongoing decline.

56-year-old Earl “EJ” Thompson was sentenced to 10 years state prison for Workers’ Compensation Insurance Fraud, Conspiracy, Wage Theft, Perjury, and Grand Theft.

After Thompson’s California Contractor’s License was revoked for fraud, he convinced his wife and friend to put their names on a new business, Russell/Thompson, which he would secretly run using the fraudulent contractor’s license they obtained. Thompson used that business to obtain a contract with UC Davis to build some of the Tercero South student housing.

During the construction, Thompson stole $633,199 in wages from his employees, defrauded his workers’ compensation insurance carrier, California State Compensation Insurance Fund, for $359,011, committed multiple acts of perjury to conceal his fraud, and caused a total loss of over $2 million.

Deputy District Attorney Jennifer McHugh prosecuted the case which included over 35,000 pages of discovery, over 60 defrauded employees, and involved 26 felony counts.

Over the course of the six years it took to prosecute the case, the defense filed multiple motions to dismiss counts or enhancements and the case was further delayed when Thompson claimed to be incompetent to stand trial. Ultimately the Court deemed Thompson competent to stand trial and criminal proceedings were reinstated.

On July 10, 2019, Thompson plead no contest to all charges pending against him and the Court heard evidence on the enhancements.

On November 13, 2019, the Court found Thompson ineligible for probation and sentenced him to 10 years in state prison. The Court considered Thompson’s extensive history of committing similar offenses, his prior felony convictions for insurance fraud and tax evasion, the sophisticated nature of Thompson’s fraud and the position of leadership that Thompson took in committing the crime. After getting out of prison for insurance fraud and tax evasion in 1995, he continued defrauding unsuspecting victims in California.