Last year Assemblyman Adam Gray, D-Merced, introduced and successfully passed Assembly Bill 1244 to crack down on medical providers who defraud the system. AB 1244 provides that If a vendor is convicted of fraud, then they are automatically suspended from treating in workers’ compensation, and the Administrative Director is to create a list of all names of suspended vendors on their website.

Last week, the Department of Industrial Relations, using new powers from Gray’s bill, announced that seven Southern California medical providers had been suspended from treating workers’ compensation payments for fraudulent billings.

As AB 1244 was moving through the process last year, Gray inserted and then quickly removed other language that seemingly relieved employers and insurers of responsibility for some small claims for “cumulative trauma” – injuries that accumulate over months or years, rather than stem from one incident.

This year he has introduced Assembly Bill 221, a new Gray bill that’s similar in thrust to last year’s abandoned language. The proposed law, if passed, will add the following language to Labor Code section 4600 that defines medical care.

(i) For claims of occupational disease or cumulative injury filed on or after January 1, 2018, the employee shall have no liability for payment for medical treatment and the employer shall have no liability for payment for medical treatment unless one or more of the following has occurred:
(1) The treatment was authorized by the employer.
(2) The injury to the body part or body parts for which the treatment was provided has been accepted by the employer.
(3) The appeals board, after an evidentiary hearing or stipulation of the parties, finds the injury to the body part or body parts for which the treatment was provided was compensable.
(4) The employee has undergone an evaluation by a qualified medical examiner, pursuant to Section 4600, or an agreed medical examiner and the evaluating physician has determined that the claimed occupational disease or cumulative injury was caused, in whole or in part, by the employment.

According to the Sacramento Bee, Gray’s office says it’s just another effort to crack down on fraud, but lobbyists who work the issue believe there are other motives.

Companies that represent medical providers in seeking workers’ compensation payments for patients’ bills have labeled it a maneuver by employers and/or insurers to shed liability.

Another theory is that it’s an indirect slap by workers’ compensation lawyers against labor unions for their 2012 deal with employers. The California Applicants Attorneys Association, however, denies paternity.

Labor killed last year’s language and will probably kill AB 221. Whatever its origin or fate, it indicates that in the next round of “reform,” cumulative trauma may be on the table.

Cumulative trauma claims have been increasing rapidly and employers and insurers see them as fraught with fraud, while unions are leery of any changes that could deny legitimate claims.m

A former Orange County Sheriff’s Department (OCSD) deputy was convicted and sentenced to six months in Orange County jail and three years informal probation on charges for committing insurance fraud by failing to disclose his true physical abilities and activities to his health care providers.

36 year old Nicholas Zappas who lives in Laguna Niguel, pleaded guilty to six misdemeanor counts of insurance fraud.

In addition to his jail time and probation, Zappas was ordered to pay $34,838.97 in restitution to the County and $1,000 to the Worker’s Compensation Fraud Assessment Fund. The defendant is also required to dismiss his 2011 and 2015 worker’s compensation claims with prejudice as a condition of his probation.

At the time of the crimes, Zappas was employed as an OCSD deputy for approximately 14 years.

On April 2, 2015, while working Harbor Patrol and engaged in a boat rescue, Zappas tripped over a fire hose and fell on his back. He filed a workers’ compensation insurance claim for injuries to his left shoulder, left side of his neck, and lower back.

Zappas was placed on work restrictions of no lifting, pushing, or pulling greater than 10 pounds by a medical doctor due to the defendant’s complaint of pain. OCSD accommodated the work restrictions and Zappas was assigned to dispatch.

Between May 2015 and November 2015, Zappas engaged in CrossFit, which is a high-impact exercise with varied functional movements. The defendant appeared on video while engaging in CrossFit, including lifting substantial weights in excess of 200 pounds, performing box jumps, burpees, squats, and other activities that were contrary to the limitations imposed by the doctor based on the defendant’s description of his pain, symptoms, and limitations. Zappas failed to disclose that he was participating in CrossFit to his medical physicians.

On Dec. 1, 2015, while under oath during his deposition, Zappas denied lifting anything over 20 pounds since the date of his injury and claimed that he could not lift anything heavy, could not do squats, and could not run.

Between January 2016 and May 2016, Zappas continued to engage in CrossFit and did not disclose his abilities to his medical physicians.

Deputy District Attorney Pamela Leitao of the Insurance Fraud Unit prosecuted this case.

California lawmakers passed new law last year to limit lien claims by medical providers who are charged with or convicted of fraud related crimes.

SB 1160 provides that in the event a lien filer is charged with workers’ compensation fraud, Medi-Cal fraud, or Medicare fraud, all liens are stayed pending resolution of the charges. And AB 1244 provides that If a vendor is convicted of fraud, then they are automatically suspended from treating in workers’ compensation, and the Administrative Director is to create a list of all names of suspended vendors on their website.

Last Friday, the DWC announced the suspension of seven medical providers from participating in California’s workers’ compensation system. The providers have been convicted of workers’ comp fraud or have been suspended from the Medicare or Medicaid programs for medical fraud. The suspended providers have filed more than 8,500 liens in California’s workers’ compensation system, with a total of claim value of at least $59 million.

But one convicted chiropractor has fought back, challenging the constitutionality of the two new laws.

The Department of Justice announced that Chiropractor Michael E. Barri, 48, of San Clemente, who owned and operated the Santa Ana companies Tri-Star Medical Group and Jojaso Management Company, pleaded guilty on March 11, 2016 to a conspiracy count and admitted that he received illegal kickbacks for referrals to Pacific Hospital of Long Beach. During a nine-month period that ended in 2013, Barri admitted receiving $158,555 in illegal kickbacks after referring a dozen patients to Pacific Hospital, where they had back surgeries. As a result of his referrals, Pacific Hospital billed insurance carriers approximately $3.9 million for spinal surgeries.

Barri has also been indicted by an Orange County Grand Jury in 2014 with charges of kickbacks and related offenses involving compounded medications, along with Kareem Ahmed the owner of Landmark Medical, and 13 other named providers. Much of that case was dismissed by the Court of Appeal in 2016. However some of the charges have been re-filed by the Orange County District Attorney, and it is not clear how much of the original indictment will proceed, and what defendants will be involved.

Nonetheless, Chiropractor Barri filed case A150549 with the California First District Court of Appeal  on February 15, seeking to have SB 1160 and AB 1244 declared to be unconstitutional, so that he and his company Tri-Start Medical Group can continue to collect workers’ compensation liens. Among other theories, Barri alleged “The Lien Stay Provision Violates Petitioners’ Right to Due Process Under the California and United States Constitutions.”

He further claimed that “Prompt action is essential. The new provisions took effect on January 1, 2017. Dr. Barri and Tristar, along with similarly situated lien claimants, will suffer irreparable injury if the Court does not immediately grant the requested relief. California already has applied the Lien Stay Provision to Dr. Barri’s liens, and approximately 200,000 other liens valued at over one billion dollars” and “Absent immediate relief, under the Lien Stay Provision, Dr. Barri will be deprived of his constitutional right to secure counsel of his choice in the criminal proceeding pending against him. Without the income provided by untainted liens, Dr. Barri simply cannot afford capable counsel” and “The liens that will be stayed provide Dr. Barri with his sole source of income, and a stay will make it impossible for Dr. Barri to pay his defense attorneys’ fees and his living expenses.” His attorneys concede that Barri “resides in Dana Point, Orange County, California” no doubt a very expensive place to live.

He did not get very far with his newly filed case.

Court records reflect that on February 17, the Court of Appeal issued the following order. “The petition for peremptory and/or alternative writs of mandate, prohibition, or other appropriate relief is denied as premature, given that a hearing on the suspension under Labor Code section 139.21 is scheduled for February 24, 2017 before a hearing officer of the Division of Workers’ Compensation, and the suspension is stayed pending the outcome of that hearing. The court also questions whether this is the proper appellate district to file this petition, given that none of the petitioners reside or have their principal place of business in this appellate district. The request for a stay is denied. (Ruvolo, P.J., Reardon, A.P.J., and Rivera, J. participated in the decision.)”

A new study published in the International Journal of Addictive Behaviors found that state programs that require physicians to check drug registries before writing prescriptions appeared to slash the odds of doctor-shopping for opioid pain relievers.

According to the report by Reuters Health, the study “shows that prescription-drug monitoring programs are a promising component of a multifaceted strategy to address the opioid epidemic,” Ryan Mutter, one of the study authors, said in a phone interview. He is a health economist at the Substance Abuse and Mental Health Service Administration in Rockville, Maryland.

Mutter and other researchers analyzed annual nationwide surveys of drug use and health from 2004 until 2014, when 36 states implemented prescription-drug monitoring programs, or PDMPs.

PDMPs are state-run electronic databases designed to track prescribing of controlled substances and to identify people at high risk of using opioids for nonmedical purposes. Every state except Missouri now has a drug-monitoring program. Some states have mandatory programs requiring physicians to participate, and other states have voluntary programs.

California is one of many states that maintain a drug registry. CURES 2.0 (Controlled Substance Utilization Review and Evaluation System) is a database of Schedule II, III and IV controlled substance prescriptions dispensed in California serving the public health, regulatory oversight agencies, and law enforcement. CURES 2.0 is committed to the reduction of prescription drug abuse and diversion without affecting legitimate medical practice or patient care.

The study found that in states where physicians were required to check an electronic database before writing an opioid prescription, the odds that two or more doctors would be giving pain relievers for nonmedical purposes to a single patient were reduced by 80 percent. States that implemented voluntary monitoring programs showed a 56 percent reduction in the odds of doctor-shopping.

States with mandatory prescription-drug monitoring programs reduced the use of painkillers for nonmedical purposes by an average of 20 days a year, the study found. States with voluntary prescription-drug monitoring program reduced the use of painkillers for nonmedical purposes by an average of 10 days a year.

“Overall, this, as well as other studies, suggests there’s promise for prescription-drug monitoring programs,” Dr. Stephen W. Patrick said in a phone interview. “But they aren’t a panacea.”

The number of PDMPs has expanded rapidly across states since 2000, but prior studies have shown mixed results about their effectiveness, the study authors write.

One previous study found that drug-monitoring programs help prevent 10 opioid-overdose deaths a day in the U.S., yet improvements could save another two people a day. States with the most robust programs – ones that tracked a greater number of potentially addictive medications and updated their databases at least weekly – saw the biggest drops in overdose deaths, the previous study showed.

Public health advocates worry that an unintended consequence of drug-monitoring programs could be that opioid users would seek drugs illegally and turn to heroin, the authors write. But the current study found that PDMPs did not lead to an increase in people starting to use heroin.

Lead author Mir M. Ali said in a phone interview he found it “reassuring” that drug-monitoring programs were not responsible for opioid users substituting heroin. Ali is a health economist at the Substance Abuse and Mental Health Services Administration.

The Department of Industrial Relations and its Division of Workers’ Compensation has suspended seven medical providers from participating in California’s workers’ compensation system.

The providers have been convicted of workers’ comp fraud or have been suspended from the Medicare or Medicaid programs for medical fraud. The suspended providers have filed more than 8,500 liens in California’s workers’ compensation system, with a total of claim value of at least $59 million.

“We are moving quickly to use new anti-fraud tools at our disposal to suspend those proven to game the workers’ comp system at the expense of injured workers and employers,” said Division of Workers’ Compensation Acting Administrative Director George Parisotto.

“Workers’ compensation fraud undermines the state’s efforts to increase payments and improve services to injured workers, and to reduce costs for employers,” said DIR Director Christine Baker. “Removing fraudulent providers and staying lien claims of those criminally-charged with fraud will further reduce costs in the system.”

The suspended providers include:

1) Philip Sobol, an orthopedic surgeon in Los Angeles convicted in Santa Ana’s federal District Court for insurance mail fraud and other charges connected to receiving workers’ comp kickbacks. Dr. Sobol has nearly 6,000 active workers’ compensation liens with an estimated total claim value of more than $42.7 million.

2) Jason Hui-Tek Yang, a psychiatrist in Pasadena convicted in Riverside County Superior Court for his involvement in an insurance fraud conspiracy, including the referral of patients for unnecessary care to justify workers’ compensation billing. Dr. Yang has over 2,000 active workers’ compensation liens with an estimated total claim value of more than $13.7 million.

3} Alan Ivar, a chiropractor in Costa Mesa convicted in Santa Ana’s federal District Court for referring patients to a Long Beach hospital in a kickback scheme for well over a decade. Dr. Ivar still has over 400 active workers’ compensation liens with an estimated total claim value of more than $2.5 million.

4} Thomas M. Heric, a physician in Los Angeles convicted in Sacramento’s federal District Court for health care fraud related to the Medicare and Medicaid programs who was suspended from those programs.

5) Carlos Arguello, a Chula Vista businessman convicted in San Diego’s federal District Court for his role in a kickback scheme that involved referring injured workers to specific chiropractors for medical care regardless of their injuries.

6} Daniel Dahan, a former chiropractor in Long Beach suspended from the Medicare and Medicaid programs who surrendered his license to practice.

7} Boniface Okwudili Onubah, a former neurologist in Marina Del Rey suspended from the Medicare and Medicaid programs whose medical license was revoked.

Suspension notices were issued to the providers on January 17, 2017, by the Division of Workers’ Compensation’s Acting Administrative Director George Parisotto. The suspension becomes effective 30 days later if the provider does not appeal the action.

An additional three providers who were notified of the pending suspension have filed appeals of the action. Those appeals are in process.

AB 1244 (Gray and Daly) requires the Division of Workers’ Compensation (DWC) Administrative Director to suspend any medical provider, physician or practitioner from participating in the workers’ compensation system when convicted of fraud. DWC has adopted provider suspension regulations on the new law, which requires providers to be suspended from the system for one or more of the following grounds:

— The provider has been convicted of a crime involving fraud or abuse of the Medi-Cal or Medicare programs or the workers’ compensation system, fraud or abuse of a patient, or related types of misconduct;

— The provider has been suspended due to fraud or abuse from the Medicare or Medicaid (including Medi-Cal) programs; or

— The provider’s license or certificate to provide health care has been surrendered or revoked. DIR has posted information on its fraud prevention efforts online, including a report on its anti-fraud efforts in the California workers’ compensation system.