Tag: 2013 News

On March 8, 2011, Clifford Mulford fell from a ladder while working for El Toro RV Inc. as a service writer. He sustained a catastrophic brain injury as a result of his fall and spent several months in the hospital. At the time of his release from the hospital, he was experiencing residual left side weakness, decreased memory, fatigue, and seizures.

Applicant was evaluated by H. Richard Adams, M.D., a neurologist. The parties appeared for a second expedited hearing on January 15, 2013 on the issue of the provision of home health care. At the hearing, applicant presented the WCJ and defendant with a note from Dr. Adams, dated January 14, 2013, that reads, “Home health or or [sic.] case manager RN to eval for ongoing home health assistance.”

The workers’ compensation administrative law judge found that applicant sustained industrial injury to his head and brain. The WCJ found that defendant was not liable for home health care from October 23, 2012 to the present,. In the accompanying Opinion on Decision, the WCJ explained that labor code section 4600(h) applied retroactively to applicant’s injury, and that applicant had not met his burden of showing that his doctor had prescribed home health care.

Applicant timely sought reconsideration, contending that the WCJ erred in finding that defendant was not liable for home health care from October 23, 2012 to the present. Applicant argues that section 4600(h) does not apply to his case. Alternatively, applicant argues that if section 4600(h) does apply to his case, he has met his burden of proof under section 4600(h). Reconsideration was denied in the panel decision of Mulford v El Toro RV inc.

The WCAB agreed with the WCJ that the language in SB 863 “clearly indicates that [section 4600(h)) applies to all pending cases prospectively from the date the statute became effective regardless of the date of injury[.)” (Report, p. 4.) Accordingly, it was applicant’s burden to prove that home health care services were “reasonably required to cure or relieve” applicant’s injury, and “prescribed by a physician and surgeon.” (Lab. Code, § 4600(h).)

Applicant has not done so. Dr. Adams’s December 5, 2012 Report does not include a prescription for home health care services. To the contrary, it makes no mention of home health care. Similarly, Dr. Adams’s January 14, 2013 note does not prescribe home health care services. Instead, it prescribes an evaluation to determine whether home health care services should be provided. Reconsideration was therefore denied.

Commissioner Sweeney in a dissenting opinion concurred with the majority that the recently-enacted Labor Code section 4600(h) applies to this case. However, “I would rescind the WCJ’s finding and return the matter to the WCJ to develop the record and obtain a supplemental report from applicant’s primary treating physician.”

Sutter Health, which operates one of the largest hospital chains in California, agreed to pay $46 million and implement historic changes in its billing and disclosure of anesthesia charges and services to its patients, insurers and other payers.

Sutter has over 20 hospitals in northern California, including California Pacific Medical Center in San Francisco, Sutter General Hospital in Sacramento, and Memorial Medical Center in Modesto. The settlement brings to a close a 2011 whistleblower lawsuit brought against Sutter by billing auditor, Rockville Recovery Associates. The California Insurance Commissioner joined the whistleblower in that lawsuit.

“This settlement represents a ground breaking step in opening up hospital billing to public scrutiny,” said Commissioner Jones. “The settlement requires Sutter to disclose on its Website every component of its anesthesia billing and what those services cost Sutter. ;Patients, insurers and the public will now be able to compare Sutter’s costs to what it charges for anesthesia. They will see any mark-ups. I commend Sutter for agreeing to these reforms and this settlement. This new transparency should lead to lower prices and point the way to similar billing reforms for all types of hospital services.”

The whistleblower lawsuit alleged that Sutter included a false and misleading charge in its surgery bills. Sutter patients or their insurers received three separate charges relating to anesthesia, including a charge by an outside anesthesiologist, a charge for the operating room and a charge under an obscure Code 37x Anesthesia. Sutter often charged thousands of dollars for Code 37x Anesthesia for each operation. Yet the services covered by that code were allegedly already captured in the operating room charge, itself a charge in the thousands of dollars. Sutter charged for anesthesia on a time-based or chronometric basis even when no Sutter employee, only the outside anesthesiologist, was present and overseeing anesthesia. Some hospitals also charged separately for anesthesia gasses using code 25x. Sutter’s contracts with insurers also included a clause alleged to unduly restrict insurers from contesting the bills.

In March of this year, Time Magazine devoted a special issue to the problem of lack of transparency in hospital billing practices. “Bitter Pill: Why Medical Bills Are Killing Us” exposed hospital bills that sometimes include markups as high as 10,000%.

The settlement requires that Sutter 1) pay $46 million, 2) stop billing for anesthesia in the operating room on a chronometric basis and instead charge on a fully disclosed flat-fee basis, 3) describe every component of its anesthesia billing, 4) post on its Website and provide to insurers and the commissioner the cost to each Sutter hospital of its anesthesia services, updated annually, 5) clarify the relationship between its master schedule of charges (known as chargemasters in the health care industry) and the bills that consumers and insurers receive. This change will lead to an increase of transparency and accountability in hospital billing, and 5) more readily permit insurers and other payers to contest Sutter’s bills.

Another defendant, Marin General Hospital, has agreed to implement the same changes to its procedures for billing anesthesia services. Marin General Hospital was a member of Sutter Health during the period of the misconduct alleged by the complaint. In 2010, Marin General Hospital became an independent hospital.

Today’s settlement also includes defendants MultiPlan, Inc. (“Multiplan”) and Private Healthcare Systems, Inc. (“PHCS”), whose provider contracts with Sutter included Sutter’s audit policy that allegedly unduly restricted payers’ ability to challenge Sutter’s charges. In addition to paying $925,000, MultiPlan and PHCS agreed to continue to provide notifications to payers about their audit rights.

As required by the state’s insurance whistleblower law, Sutter’s settlement payment will be divided between the whistleblower, Rockville Recovery Associates, and the State of California. The state will receive $20 million, to be used to enhance the investigation and prevention of insurance fraud.Sutter and MultiPlan/PHCS do not admit to wrongdoing in the settlement agreement.

The WCIRB has now submitted the 2013 SB 863 Cost Monitoring Report, which was prepared in conformance with the monitoring plan submitted to the California Department of Insurance earlier this year The WCIRB’s plan to retrospectively monitor the cost impact of SB 863 based on emerging post-reform costs was published on March 27, 2013. Pursuant to this plan, this report summarizes the WCIRB’s initial retrospective evaluation of the cost impact of a number of SB 863 provisions based on data emerging through the third quarter of 2013..

Indemnity claim frequency for the first six months of 2013 is 6.2% above the comparable 2012 frequency, which is significantly above the projected levels. It is not yet clear the extent to which the higher than expected claim frequency in 2013 is attributable to a greater than projected impact of SB 863 permanent disability benefit increases. Nevertheless, the sharp increase in claim frequency is concerning .

Early indications on lien filings based on Division of Workers’ Compensation (DWC) data through September 30, 2013 suggest that there may be a greater reduction than the 40% reduction projected by the WCIRB in 2012. Also, as projected, WCIRB lien survey data suggests that the greatest level of reduction is in liens for relatively small amounts.

In 2012, based on a California Workers’ Compensation Institute analysis, the WCIRB estimated an approximate $20,000 per claim reduction on claims involving spinal implant hardware due to the SB 863 provisions related to duplicate reimbursement for spinal implant hardware. Preliminary WCIRB data suggests savings of more than $15,000 per claim on affected spinal surgery claims in 2013.

SB 863’s reduction in maximum ambulatory surgical center faci lity fees was estimated to reduce those costs by 25%, which is consistent with the reductions observed based on preliminary WCIRB MDC estimates comparing 2013 reimbursements to pre-SB 863 levels.

A relatively small number of IMRs were filed during the first half of 2013. However, once IMR became effective for all injuries regardless of the accident date starting on July 1, 2013, IMR requests have increased significantly. If the higher volume of August (15,731) and September (14,990) IMR requests are indicative of filing rates for subsequent months, the number of IMRs requested per year would be over three times greater than that projected in the WCIRB’s prospective cost estimate, potentially eliminating any savings in administrative costs due to IMR and also potentially negatively impacting medical treatment costs. Based on DWC information on early IMR decisions, approximately 75% of decisions have upheld the initial utilization review determination.

Although relatively few independent bill review (IBR) requests have been filed when compared to IMR filings, early estimates of IBR decisions show 60% of decisions favoring the provider for amounts significantly less than the IBR filing fee.

Preliminary estimates of medical provider network usage in 2013 show that network utilization in the first six months of 2013 is fairly consistent with that for prior years.

An FBI affidavit, filed under seal in U.S. District Court in Sacramento,and obtained and now publicized by news media lays out part of the government’s case against California state Sen. Ronald Calderon in order to justify a raid of his office. According to the FBI affidavit, State Sen. Ronald Calderon allegedly accepted $60,000 in bribes from an undercover FBI agent during an elaborate sting operation. The document says there was also probable cause to believe that Calderon “participated in a separate bribery scheme with Michael D. Drobot,” the chief executive officer of Pacific Hospital of Long Beach. The lawmaker allegedly accepted $28,000 from Drobot in exchange for “supporting legislation that would delay or limit changes in California’s workers compensation laws.” The affidavit alleges both Tom and Ron Calderon were involved in the bribery scheme with Michael Drobot, owner of Pacific Hospital of Long Beach, which specializes in spinal surgery for injured workers. The FBI said it believed Drobot was involved “in large-scale health care fraud,” including paying kickbacks to surgeons who performed spinal fusion surgeries.

The alleged arrangement was that Ron Calderon would limit or kill workers’ compensation legislation that would restrict profitable spinal surgeries at the hospital, and Drobot would pay him $28,000 in bribes, “disguised” as payments for a job to Ron Calderon’s son, Zachary. The affidavit also notes that Drobot paid Tom Calderon $10,000 a month as a consultant.

The affidavit lists three bills the FBI alleges were influenced by Ron Calderon on behalf of Drobot. It said de León amended one bill at Calderon’s request so it would have less impact on Drobot’s business.

According to the Los Angeles Times, Jeffrey Rutherford, an attorney for Drobot, denied the allegations involving his client. “Any allegation that Mr. Drobot engaged in wrongdoing with respect to Ron Calderon is baseless,” Rutherford said.

The FBI affidavit also alleges that Ron and Tom Calderon had a meeting with Sen. Ted Lieu, D-Torrance, and persuaded him to drop a second bill that “would have disrupted Drobot’s health care fraud scheme.” The Calderons’ brother, then an assemblyman, made the August 2012 motion to have the bill sent to the inactive file, according to the affidavit.

A third bill, carried in 2012 by de León, allowed separate reimbursements for spinal devices to continue through 2013. The bill passed overwhelmingly, and Ron Calderon was one of the few lawmakers to oppose it. But he allegedly told the FBI undercover agent that he and Tom Calderon had been influential in getting language inserted that was more advantageous to Drobot.

Ultimately, Ron Calderon allegedly asked the undercover agent to make a political contribution to de Leon at a fundraiser, scheduled in conjunction with a prize fight in Las Vegas. According to the agent, Calderon made the suggestion because de León had complained that he had not been rewarded for dropping the implant legislation. “I don’t mind helping, but I haven’t seen any help,” Calderon quoted de León as saying, according to the affidavit.

“That’s false and the investigation will bear that out,” de León’s chief of staff Dan Reeves told The Sacramento Bee. He said the U.S. attorney has “made clear” that de León is not a target of the investigation.

No charges have been brought against anyone and no arrests have been made at this time.

This month Swiss customs agents seized one million fake tablets of anti-anxiety drug Xanax at the Zurich airport. The story was one incident, of a growing international problem surrounding fake prescription medications reaching the hands of innocent consumers. So, this incident would raise questions about what else might be fake in health care delivery? Is there a problem with fake doctors?

On July 1, 2000, the California Medical Board was given the authority for four investigator positions that established the Operation Safe Medicine (OSM) unit whose sole purpose was to investigate complaints of unlicensed medical activity. This unit also worked with other regulatory and law enforcement agencies to find unlicensed facilities. The Board summarized the performance of OSM in the 2012 Sunset Review Report to the California Legislature. The Report said that the volume and seriousness of the cases thus far investigated by OSM underscores the importance of this unit. Cases that staff investigated include the unlicensed practice of midwifery (result: conviction); a subject stealing the identity of a physician assistant and forging documents (felony charges filed); the unlicensed practice of medicine resulting in burns to a patient from a cosmetic procedure (felony charges filed); and a myriad of other violations of law. OSM has developed such an excellent reputation as a group of highly skilled, specialized and effective investigators of unlicensed practice . It is now receiving referrals from other law enforcement agencies, including the Orange County and Los Angeles County District Attorney’s offices.  The Report highlighted some examples of fake doctors.

The San Jose office investigated an unlicensed individual who was performing hemorrhoid surgery and almost killed a man when his colon was perforated with a prong.

In the San Francisco area, an unlicensed individual, Carlos Guzmangarza, 49, performed liposuction in an unsanitary office while smoking a cigar and not wearing gloves. The victim held her own IV bag because there was no assistant. Board investigators executed a search and arrest warrant . The subject was charged with over 35 felonies. Guzmangarza assumed the identity of a physician assistant who shared a similar name and ran Derma Clinic, a dermatology office on Mission Street in San Francisco. After an initial round of press coverage spurred additional victims to come forward, prosecutors filed amended charges against him. They included practicing medicine without a license, false impersonation, identity theft, rape and grand theft.

In the San Jose area, a disbarred attorney was practicing medicine at Shiny Toes clinics in San Francisco and San Ramon using a laser to cure toenail fungus. One child’s toenails fell off because of the treatment. Search and arrest warrants were served. The subject was convicted of 19 felonies. Cary Silberman was sentenced to four years and eight months on charges of practicing medicine without a license

In the Pleasant Hill office, an unlicensed individual was convicted after injecting an unknown substance into the faces of female victims, causing permanent disfigurement.

In the San Jose area, an unlicensed individual was convicted and is serving seven years in prison for performing face lifts with Exacto knives.

Other cases investigated by the unit have focused on vendors selling “big eye” contact lenses in Los Angeles. The lenses are popular in Asia and make the iris of the eye appear larger, but they can also cause eye damage.

Other states have had a similar problem. William Hamman  shared millions in grants, had university and hospital posts, and bragged of work for prestigious medical groups. An Associated Press story featured him leading a teamwork training session at an American College of Cardiology convention. He duped hospitals, universities and even the AMA. But it turns out Hamman isn’t a cardiologist or even a doctor. The AP found he had no medical residency, fellowship, doctoral degree or the 15 years of clinical experience he claimed. He attended medical school for a few years but withdrew and didn’t graduate. Ernest Addo stole a physician’s identity and pretended to be a doctor for a year in South Carolina.  He was hired as a general practitioner and provided the kind of exams patients would receive during a visit to the family doctor. Authorities said he also wrote prescriptions, including some for himself.  also worked as a contract doctor for the South Carolina Department of Mental Health, filling in for a doctor on medical leave.  After he made a small mistake on a death certificate. South Carolina health officials trying to fix the error contacted the doctor Addo was impersonating. He told them he hadn’t practiced medicine for a year in the state. This month an Annapolis woman was accused of faking medical license and treating pediatric patients.  The Huffington Post has a page of fake doctor stories.

It would seem prudent claims practice in this climate to check and double check the identity and licensure of unknown treating physicians.  The Medical Board of California website allows public access to license information and is a good starting point.  Other professions such as chiropractors, and psychologists can similarly have license status verified online.