Tag: 2022 News

A South Bay chiropractor was sentenced to 14 months in federal prison for taking kickbacks from Pacific Hospital – a corrupt medical center in Long Beach whose owner, Michael D. Drobot, was later imprisoned – and for soliciting kickbacks from another Southern California hospital.

68 year old Brian Carrico, who lives in Redondo Beach, was sentenced by United States District Judge Josephine L. Staton, who also ordered him to pay a fine of $25,000.

Carrico pleaded guilty on February 24 to one count of soliciting kickbacks – the same day his two Redondo Beach-based companies, Performance Medical & Rehab Center Inc., and One Accord Management Inc., each pleaded guilty to one count of conspiracy to solicit kickbacks.

Judge Staton also sentenced Carrico’s companies to one year of probation and fined them each $250,000.

Carrico is a licensed chiropractor and owned Performance Medical & Rehab Center, which treated injured workers. Surgeons saw patients at Performance Medical’s offices. Carrico also owned One Accord Management, which provided billing, collection and other support services for Performance Medical.

His criminal partner, 68 year old William Parker, who also lives in Redondo Beach, owned Union Choice Therapy Network, which had a contract with Pacific Hospital and paid One Accord money from that contract. Last month, Parker was sentenced to one year and one day in federal prison and was fined $5,500. He pleaded guilty on February 24 to one count of soliciting kickbacks.

From June 2004 to December 2013, Carrico and Parker participated in a kickback scheme in which Pacific Hospital overpaid for the value of services performed under its Union Choice contract to induce Carrico and Parker to refer patients to Pacific Hospital for surgeries and other treatment.

Pacific Hospital specialized in surgeries, especially spinal and orthopedic procedures. The owner of Pacific Hospital, Michael D. Drobot, conspired with doctors, chiropractors and marketers to pay kickbacks in return for the referral of thousands of patients to Pacific Hospital for spinal surgeries and other medical services paid for primarily through the California workers’ compensation system.

During its final five years, the scheme resulted in the submission of more than $500 million in medical bills for spine surgeries involving kickbacks. To date, 22 defendants have been convicted for participating in the kickback scheme.

In April 2013, law enforcement searched Pacific Hospital. Later that year, Carrico learned Pacific Hospital was going to be sold and the kickback scheme would end. Rather than cease their criminal conduct after the Pacific Hospital search, Carrico and Parker then approached an executive at a different hospital and solicited kickbacks from him.

Specifically, Carrico and Parker offered a quid pro quo in which the referral of patients to the hospital was contingent on that hospital entering into a management services agreement with Union Choice. Under the proposed agreement, the hospital would have paid Union Choice a total of $110,000 over the span of four months – more than the market value of the services performed.

While not written into the contract, Carrico and Parker would cause the referrals of Performance Medical patients to go to this hospital. The hospital’s executive ultimately rejected the deal.

Maria Rodriguez claimed injury to her left foot, bilateral ankles, left knee, left hip, low back, psyche and sleep disorder while employed as a housekeeper by defendant Southland Lutheran Care Center on November 13, 2008.

On March 7, 2012, a Findings, Award and Order issued, sustaining injury to all claimed body parts save sleep disorder, and awarding temporary and permanent disability.

Rodriguez filed a Petition to Reopen for New and Further Disability on June 13, 2013. Following the Petition to Reopen, Daniel Capen, M.D. continued to serve as applicant’s primary treating physician, and authored multiple interim reports in 2013. On January 22, 2015, AME Dr. Craemer reevaluated applicant’s orthopedic complaints. Internal medicine QME Minal Borsada, M.D. authored a medical-legal evaluation of applicant on February 8, 2016,

The parties proceeded to trial on January 2, 2019, and framed issues of the petition for new and further disability and the substantiality of the AME reporting. The WCJ issued the F&O on June 10, 2019, finding AME Dr. Craemer’s reporting to constitute substantial medical evidence and dismissing the June 13, 2013 petition for new and further disability. The WCAB denied her Petition for Reconsideration and affirmed the F&O in the panel decision of Rodriguez v Southland Lutheran Care Center ADJ6692602 (July 2022)

On reconsideration Rodriguez argued that the reporting of AME Dr. Craemer was not substantial medical evidence for want of diagnostic testing and a correct forensic analysis. and further contends the WCJ should have relied on the reporting of panel Qualified Medical Examiner Dr. Borsada to find that applicant’s diabetes was aggravated as a result of her industrial injuries.

The WCAB panel said that to “recover additional benefits, the injured worker must not only file a timely petition to reopen but must also have suffered a “new and further disability” within that five-year period, unless there is otherwise “good cause” to reopen the prior award. (Sarabi v. Workers’ Comp. Appeals Bd. (2007) 151 Cal.App.4th 920, 925 [72 Cal.Comp.Cases 778]. at p. 926.) An injured worker cannot confer jurisdiction on the WCAB by filing a petition to reopen before the five-year period has expired for anticipated new and further disability that may occur after the five-year limitation period has run.”

Here, applicant’s date of injury is November 13, 2008, and applicant must establish a “demonstrable change in condition” prior to the expiration of the five-year statutory period on November 13, 2013.

The WCJ noted that the reporting of primary treating physician Dr. Capen in 2013 continued to find applicant Permanent & Stationary. With respect to the right knee surgery, Dr. Capen made no mention of the need for surgery prior to November 13, 2013, and his report of February 27, 2014 described the right knee as “not a part of applicant’s claim and not connected to her injury.”

With regard to the diabetes, the WCAB noted that “With respect to applicant’s assertion of aggravation of her diabetic condition, we observe that neither the reporting of Dr. Zlotolow nor that of Dr. Borsada provided an assessment of whether the alleged change in applicant’s condition transpired within five years from the original date of injury.”

“Applicant has not met the burden of establishing a new and further disability, arising within five years of the date of injury.”

Alex Romero sustained fatal injuries as a result of a motor vehicle accident in which he was involved on October 26, 2016. It is alleged that, at the time, Romero’s attorneys claimed he was driving on an errand intended to benefit the alleged employer, Paul Story dba Kar Tunez.

Paul Story worked out of his home garage in Modesto. He engaged in auto stereo installation as a “side business” since he was 13 years old. Story also rented space at a warehouse on Bitritto Way in Modesto and stored tools there. He testified that Romero stored tools there as well. Prior to October, 2016, he had no employees, but that he “partnered” on projects with Romero.

When business improved, he had people helping out — which included Romero, Story’s wife, Patty, and several other individuals.Story testified that . . . when he did a job with Alex Romero, they would split the proceeds. When they worked together, it was because they wanted to “do something good for ourselves.” Alex Romero was “like family” and lived with Paul Story and his family off-and-on for “a few years.”

Text messages occurred between Romero and Story referring to Romer’s potential assistance to Story occurred two days before the accident On October 24 Story texted that he had “some pepole w anting to see some stufff” and offered to pay Romero “20 or better per person” for his help. Romero replied he was free for “about 2 hours.” Romero did not receive a reply so later he texted “Hey you want me to go or no.”
The final reply from Story on the topic was “ill take care of it thanks anyway.”

On the afternoon before the accident, Story noticed his jigsaw was missing. He assumed Romero had borrowed it. She sent Romero a text “Were the [ ] is m y jigsaw!!!!” but Romero did not reply. The jigsaw was discovered in Romero’s trunk after the accident, and Story later retrieved it at the police station.

Thereafter, none of the text messages between applicant and Story reflect any request or expectation that applicant would assist Story in any way. Story had no idea where Romero was going at the time of the accident and could not recall if they spoke before the accident.

Alex Romero’s mother, Margaret King testified that on the day he died, Romero was en route to the Kar Tunez shop, and that Romero was never self-employed. In fact, he refused to start up his own business even though she encouraged it. Romero’s older brother, Steven testified that his brother was working for Paul Story at the time he died and was not doing any work outside the work he had with Paul Story and Kar Tunez.

Anthony Miranda’s — an individual with no familial relationship with the Romero family, and at whose direction the speaker project was commenced — contradicted the testimony of Margaret King and Steven Romero that there was an employment relationship between Alex Romero and Paul Story.

The WCJ found that there is no evidence establishing that applicant’s accident occurred in the course of employment. The WCJ ordered that applicant take nothing on his claim. Reconsideration was denied in the panel decision of Romero v Story & UEBTF – ADJ10821128 (July 2022)

In his Opinion on Decision the WCJ said “No one credibly testified that Story summoned Nieves Romero to the shop. No one credibly testified that Romero was performing a special errand for Story at the time of his death on October 26, 2016. . . . Applicant, represented by Margaret King, had to make a showing of employment. No such showing was made here.”

On the credibility issue of the The WCAB panel said the WCJ determined that “Margaret King’s and Steven Romero’s testimony on that subject was not credible. We accord these determinations great weight because the WCJ had the opportunity to observe the witnesses’ testimony at trial and the record is otherwise without evidence of considerable substantiality that would warrant rejecting them.”

In terms of proof of an employment relationship the panel said “the applicant bears the burden of proving that he rendered service for the defendant, whereupon the burden shifts to the defendant to rebut the employment presumption.” In this case applicant contended the evidence raised this presumption. However the panel went on to say “we concur with the reasoning of the WCJ that the evidence fails to show that applicant was rendering service to Story when he sustained fatal injury.”

Following the California Northridge earthquake, California passed hospital seismic safety legislation.Senate Bill 1953. It was introduced on February 25, 1994 and signed into law on September 21, 1994. The law establishes a seismic safety building standards program for California hospitals built after March 7, 1973.

By January 1, 2030, owners of all acute care inpatient hospitals are required to demolish, replace, or change to nonhospital use, all hospital buildings that are not in substantial compliance, or seismically retrofit them so that they are in compliance with the standards. With roughly seven years left to comply, it is estimated that nearly two-thirds of California hospitals have yet to meet 2030 requirements, according to the Hospital Association.

According to a 2007 RAND study, the law was very controversial. Because of the age and engineering of the California hospital infrastructure, it is projected that the seismic safety goals will require reconstruction of about 50 percent of the current hospital floor space.The 2007 report said that the “pace of SB1953 compliance has been slow. Based on historical rates of construction and permit filings with the California Office of Statewide Health Planning and Development (OSHPD), about half of the SPC-1 hospital infrastructure will not comply with the 2008/2013 deadlines for SB1953, and many may not be able to comply with the final 2030 deadline.“

This backstory leads to a story just published by the Los Angeles Times about a “Backroom deal broken to change earthquake standards in California hospitals collapses.”

According to the Times, a secretive deal between a group of hospitals seeking to weaken seismic upgrades at medical centers and an influential union looking to increase the pay of employees collapsed on Tuesday, just days after it was made public.

“The last-minute alliance between Service Employees International Union-United Healthcare Workers West and the California Hospital Assn. infuriated other unions, which accused the unlikely pair of making a backroom deal that skirted the legislative process and put patients, healthcare workers and communities at risk.”

In a hospital association memo obtained by The Times, the group said the deal with SEIU-UHW came together quickly and followed years of stymied attempts to delay a state law that requires hospital buildings to have earthquake upgrades by 2030. Hospitals estimate that those upgrades will cost $100 billion, a tab they say is likely to result in closures across the state.

Before the deal emerged, the hospital association and SEIU-UHW had been locked in a fierce battle over raising the minimum wage in Los Angeles County for hospital workers. The agreement between the two would have required lawmakers to sign off on the deal before the end of the legislative session Aug. 31.

The California Hospital Assn. sought a seven-year delay to the 2030 requirement and to limit the standards to hospital buildings that provide emergency services, according to a draft of the proposal obtained by The Times.

In exchange, unions would see the minimum wage for healthcare workers raised to between $19 and $24 an hour beginning Jan. 1, with the higher pay going to workers in counties designated as urban or semi-urban. Pay would have increased by $1 an hour in 2024, bringing the hourly minimum wage for some workers to $25.

SEIU-UHW on Tuesday accused the hospital association of walking away from “a conceptual agreement” over labor-related provisions. In response, the union announced that it would instead pursue the statewide minimum wage for healthcare workers that it sought in the deal through the state Legislature or a ballot measure.

In 1935, Presient Franklin Delano Roosevelt created the first federal unemployment insurance program via the Social Security Act. The program created a national lending pool for states with insolvent unemployment relief accounts. It began by ‘incentivizing’ states to join the program and of course is now a required federal tax on all employers.

Called the FUTA tax, it’s levied on business owners directly for each employee they have. The IRS makes clear on its website, “Only the employer pays FUTA tax; it is not deducted from the employee’s wages.”

Recent news reports illustrated problems with the California Employment Development system such as phony pandemic jobless claims, and frantic callers jamming phone lines with questions that the state’s employment agency struggled to answer.

California’s unemployment system was on dicey footing even before the pandemic, rated as the least financially stable system of all 50 states in February of 2020 by the U.S. Department of Labor in its Unemployment Insurance 2020 Trust Fund Solvency Report.

But there’s yet another problem with the Golden State’s unemployment system that’s been brewing quietly during the pandemic: California now bears the unhappy distinction of having about as much unemployment debt as all other states combined.

The state’s unemployment insurance trust fund, a pool of cash funded by a tax on employers supposedly pays for the benefits claimed by workers. Employers put money into the trust fund on a regular basis via FUTA taxes. Workers receive money from it when they get unemployment benefits.

The federal government loaned money to many states early in the pandemic to shore up their unemployment funds. But two years later, several states have paid off their federal loans, while California’s debt balance remains the highest of any state. Millions have used unemployment benefits during the pandemic, draining existing reserves, and now the state is in debt to the tune of nearly $20 billion. Most states have no debt.

According to a report published by CalMatters, none of the few states with negative trust fund balances come close to California’s negative $19 billion balance. To put it into perspective, the second most indebted state is New York at negative $9 billion. And third is Illinois with nearly $4 billion in debt. And some states have surplus balances, such as Arizona at $1.2 billion and Iowa at $1.3 billion.  

Under the current system, it’s going to take years of higher taxes on employers, who fund the benefits, to pay it back. Gov. Gavin Newsom proposed using $3 billion of the state’s projected $21 billion surplus to take a bite out of that debt, in addition to hundreds of millions to cover the loan’s interest payment, when he unveiled his budget proposal in January.

While that proposal is intended primarily to help businesses, there’s no guarantee businesses will reap a benefit directly, especially in the short term. If these debts are not repaid “states may face interest charges and the states’ employers may face increased net FUTA rates until the loans are repaid.”

This isn’t the first time California’s unemployment trust fund has had to turn to the federal government for loans.

In the wake of the Great Recession, the fund went into about $10 billion of debt, and it took California employers roughly a decade to dig the fund out. Taxpayers wound up footing a roughly $1.4 billion dollar bill for interest payments on that loan. In fact, in 2016, when California employers were still paying down the Great Recession debt, analysts at the nonpartisan Legislative Analyst’s Office warned that the fund could go into debt again during the next recession.