All California employers would be allowed to pay temporary disability benefits by debit card, under a recently amended bill.
Sen. Richard Pan, D-Sacramento, on Wednesday amended Senate Bill 880 to expand the proposed debit card pilot program that originally would have included only State Compensation Insurance Fund.
The amended SB 880 would allow any employer in California to offer temporary disability benefits on a prepaid debit card starting Jan. 1 and continuing until Jan. 1, 2023.
Injured workers would have to opt in and request in writing to receive benefits on a card. The bill would also require that workers be able to withdraw the entire balance on the card in a single transaction without incurring fees and have reasonable access to “in-network” automatic teller machines.
The Assembly Insurance Committee is scheduled to hear testimony on the bill at 9 a.m. Wednesday in room 127 of the Capitol.
A Southern California applicant was sentenced to 30 days in county jail after pleading guilty to a workers’ compensation fraud charge for misrepresenting his limitations, according to Probe Information Services.
Julio Cesar Gomez filed a claim for an injury he said he sustained while working for Silver Creek Industries. Gomez said he was bending over removing nails and felt a strain as he straightened his body.
Gomez testified during a deposition that he had not performed yardwork, automotive repair work or lifted anything weighing more than 15 pounds since the date of his injury. During a medical evaluation, Gomez denied engaging in rigorous activities and said he was unable to work because of pain.
Probe Information Services said it obtained surveillance footage of Gomez performing physically demanding activities including digging holes with a shovel, climbing in and out of the holes, jumping over a fence, installing a roof liner inside a vehicle, carrying a full tool bag and carrying automotive parts weighing more than 15 pounds.
A medical evaluator said there were substantial differences between Gomez’s subjective complaints and what the video footage showed. Based on the video, the evaluator said Gomez didn’t require any work restrictions and wasn’t entitled to benefits.
The Riverside County District Attorney’s Office filed three felony workers’ compensation fraud charges against Gomez, who pleaded guilty to one count on May 3. He was sentenced to 30 days in jail and ordered to pay restitution totaling $30,000
An Applicant who used fake identification to file a claim for an injury that he was also faking was sentenced Tuesday to a year in jail for felony workers’ compensation fraud, according to Intercare Holdings Insurance Services.
Juan Zendejas Barron, of Watsonville, pleaded guilty in March to two counts of insurance fraud, one count of perjury and one count of using a false identity to file a claim, all felonies, Intercare said. The Santa Cruz County Superior Court sentenced him Tuesday to one year in jail, a $1,200 fine and ordered him to pay $124,027 in restitution in monthly installments.
Barron filed a claim against Ramco Enterprises in September 2015 for an alleged injury to his groin, legs, back and abdomen using the name and Social Security number of Octavio Guadarrama. Prosecutors learned that he had used a false identify after the real Guardarrama showed up at a court hearing wondering why he had been charged with fraud.
Investigators learned that Barron had also filed a claim under his own name for an injury to the same body part against a different employer, Intercare said.
Division of Workers’ Compensation online records show that he filed a claim against Christopher Ranch for injury to his respiratory system and skin in 2015, and against Silver Mountain Vineyards for an injury to his head, brain, neck and back in 2012.
Barron was ordered to report to authorities by June 1 to begin his jail term.
California’s Supreme Court on Monday laid down three-prong test to determine whether a person is an employee of an independent contractor.
The three-part test the court created in Dynamex Operations West Inc. v. Superior Court of Los Angeles County (Lee) asks whether a worker:
If the answer to any of the three questions is “no,” a person is an employee subject to various labor law protections, including minimum wages, and meal and rest periods.
Though the high court proposed the test for the purposes of wage violations, the new test could also be useful to determine whether a person is an employee who has to be covered by workers’ compensation. Such application could have far reaching implications, especially in the general-special employer scenarios.
To read the full test of the decision click here: Decision
A federal judge dismissed most of the claims in a lawsuit challenging the constitutionality of a California law requiring the Department of Industrial Relations to stay liens filed by, or on behalf of, criminally charged providers, but allowed plaintiffs the opportunity to file an amended complaint later this month.
U.S. District Court Judge George H. Wu, in an order posted to the court’s website on Friday, also rejected a motion asking him to hold the department in contempt for allegedly violating a December order requiring the agency to allow claimants to argue that a stay was inappropriately applied to a particular lien.
Wu said he did not have a problem with Workers’ Compensation Appeals Board judges continuing cases and allowing the department’s Anti-Fraud Unit to submit evidence it used when freezing a lien.
Wu’s order in Vanguard Medical Management Billing et al. v. Christine Baker et al. marks the end for claims that the lien stay constitutes an improper governmental taking of property or violates the supremacy clause of the U.S. Constitution, which he dismissed with prejudice.
To read the entire order, click here: Order
Does this politicians proposed bill comply with current apportionment laws or is it just a political statement?
"The chairman of the Senate Insurance Committee is pushing legislation to overturn a California Court of Appeals decision that condoned apportioning part of a worker’s permanent disability to a genetic predisposition.
Sen. Steve Bradford, D-Gardena, on Wednesday amended Senate Bill 899 to propose language that would abrogate the 3rd DCA decision in City of Jackson v. Workers’ Compensation Appeals Board (Rice).
In City of Jackson, the appellate court overturned the WCAB after it said a qualified medical evaluator was not allowed to apportion 49% of Christopher Rice’s disability to personal factors and “genetic issues. The WCAB said apportionment can’t be based on immutable characteristics.
But the appellate court said in its April 2017 decision that there was “no relevant distinction between allowing apportionment based on a pre-existing congenital or pathological condition and allowing apportionment based on a pre-existing degenerative condition caused by heredity or genetics.”
Bradford’s amended bill says the decision was “abhorrent” and violates legal norms in California.
“The City of Jackson decision effectively legalizes discrimination on the bases of genetics and heritability, including race, gender and religion, creating disparate impacts in the form of reduced permanent disability benefits to injured workers,” the bill reads.
The bill proclaims the intent of the Legislature to abrogate the decision in City of Jackson and to prohibit other courts from apportioning disability to immutable factors. The bill also declares that the intent of lawmakers is not to prohibit apportionment to “specific identifiable factors.”
The bill is in the Senate Rules Committee pending assignment to a policy committee." Work Comp central
Has Sen. Bradford bothered to read Labor Code section 4663?
4663. (a) Apportionment of permanent disability shall be based on causation.
(b) Any physician who prepares a report addressing the issue of permanent disability due to a claimed industrial injury shall in that report address the issue of causation of the permanent disability.
(c) In order for a physician s report to be considered complete on the issue of permanent disability, the report must include an apportionment determination. A physician shall make an apportionment determination by finding what approximate percentage of the permanent disability was caused by the direct result of injury arising out of and occurring in the course of employment and what approximate percentage of the permanent disability was caused by other factors both before and subsequent to the industrial injury, including prior industrial injuries. If the physician is unable to include an apportionment determination in his or her report, the physician shall state the specific reasons why the physician could not make a determination of the effect of that prior condition on the permanent disability arising from the injury. The physician shall then consult with other physicians or refer the employee to another physician from whom the employee is authorized to seek treatment or evaluation in accordance with this division in order to make the final determination.
(d) An employee who claims an industrial injury shall, upon request, disclose all previous permanent disabilities or physical impairments.
COUNTY OF SAN DIEGO,
WORKERS' COMPENSATION APPEALS
BOARD and KYLE PIKE,
The question presented in this writ proceeding is straightforward. Is petitioner,
County of San Diego (the County), correct that Labor Code section 4656, subdivision
(c)(2)1 precludes respondent, Workers' Compensation Appeals Board (the Board),
from awarding respondent, Kyle Pike, temporary disability payments for periods of
disability occurring more than five years after the date of the underlying injury that
Pike suffered while working for the County? We conclude that the plain language of
the statute indicates that the answer to this question is, "Yes." Section 4656,
subdivision (c)(2) provides, "Aggregate disability payments for a single injury
occurring on or after January 1, 2008, causing temporary disability shall not extend
for more than 104 compensable weeks within a period of five years from the date of
injury." (Italics added.) Accordingly, we annul a Board order affirming a workers'
compensation administrative law judge's order that awarded temporary disability
benefits for periods of disability occurring more than five years after Pike's injury.
To read the entire decision please click here: www.courts.ca.gov/opinions/documents/D072648.PDF
Former Hospital Owner Sentenced to over 5 Years in Prison for Orchestrating Scheme that Paid over $40 Million in Illegal Kickbacks to Doctors, Other Medical Professionals for Spinal Surgery Referrals
SANTA ANA, California – A federal judge today sentenced the former owner of Pacific Hospital in Long Beach to 63 months in prison for overseeing a 15-year-long health care fraud scheme that involved more than $40 million in illegal kickbacks paid to doctors and other medical professionals in exchange for referring thousands of patients who received spinal surgeries.
The scheme operated by Michael D. Drobot led to more than $500 million in fraudulent bills being submitted during last five years of the scheme – much of which was paid by the California worker’s compensation system.
Drobot, 73, of Corona Del Mar, was sentencing this morning by United States District Judge Josephine L. Staton, who noted that Drobot “introduced greed into the doctor-patient relationship.”
Drobot pleaded guilty in 2014 to charges of conspiracy and paying illegal kickbacks, admitting that he orchestrated a wide-ranging fraud scheme in which “[t]housands of patients received surgeries at Pacific Hospital not knowing that [Drobot] bribed their physician to perform their surgery at Pacific Hospital,” prosecutors wrote in a sentencing memorandum filed with the court. Drobot “was motivated by greed and ultimately profited millions of dollars through the scheme.”
From at least 1997 thorugh 2013, Drobot, who owned and/or operated Pacific Hospital during this time, ran a scheme in which he billed workers’ compensation insurers hundreds of millions of dollars for spinal surgeries performed on patients who had been referred by dozens of doctors, chiropractors and others who were paid illegal kickbacks.
“The patients believed that they were receiving conflict-free medical advice when, in fact, [Drobot] illegally incentivized their physician to perform the surgery at Pacific Hospital,” prosecutors said in court documents.
The kickbacks were financed largely by money generated from Drobot’s sale of medical devices implanted into state workers’ comp patients during spinal surgeries. Drobot set up a scheme that exploited a now-repealed California law known as the spinal “pass-through” legislation, which permitted hospitals to pass on to workers’ comp insurers the full cost of medical devices implanted in spinal surgery patients.
Drobot generated the kickback money through his own medical hardware company – the Newport Beach-based International Implants (I2) – to sell hardware used in spinal surgeries performed at Pacific Hospital. I2 submitted bills to Drobot’s Hospital and tacked on an additional $250 per device knowing that the “pass-through” law required to state to pay the full amount of the invoices.
“Through the operation of I2, [Drobot] generated substantial profits that he used to pay at least $40 million dollars in kickbacks,” prosecutors wrote in court papers. “According to the former CFO of Pacific Hospital, his income, bonuses, and other compensation at the hospital was in excess of $20,000,000.”
As part of the health care fraud scheme, Drobot paid bribes to California State Senator Ronald Calderon in exchange for Calderon performing official acts to keep the spinal pass-through law on the books. Calderon is currently serving a 3½-year sentence in federal prison after admitting that he took bribes from Drobot and undercover FBI agents.
Drobot typically paid a kickback of $15,000 per lumbar fusion surgery and $10,000 per cervical fusion surgery. Some of the patients lived as much as hundreds of miles away from Pacific Hospital, and closer to other qualified medical facilities.
Drobot and his co-conspirators concealed the kickback payments by entering into bogus contracts with the doctors, chiropractors, and others who received kickbacks. In reality, the contracts merely provided a cover story for the kickback payments.
In addition to the prison term, which Drobot will begin serving on June 4, Judge Staton imposed a $500,000 criminal fine and issued an order directing Drobot to forfeit $10 million to the government. As part of the forfeiture judgment, which Judge Staton signed on Wednesday, Drobot was ordered to liquidate assets that include real estate and a 1965 Aston Martin, a 1958 Porsche, and a 1971 Mercedes Benz.
Judge Staton has scheduled a restitution hearing for May 11.
In addition to Drobot, prosecutors have charged seven other defendants in relation to the kickback scheme. The seven additional defendants – which include Drobot’s son, Michael R. Drobot – have pleaded guilty and are scheduled to be sentenced by Judge Staton over the next two months.
The ongoing investigation into the spinal surgery kickback scheme is being conducted by the Federal Bureau of Investigation; IRS Criminal Investigation; the California Department of Insurance; and the United States Postal Service, Office of Inspector General.
The case against Drobot was being handled by Assistant United States Attorneys Joseph T. McNally and Scott D. Tenley of the Santa Ana Branch Office, and Ashwin Janakiram of the Major Frauds Section.
In Sobol v. State of California Department of Corrections and Rehabilitation, 2017 Cal. Wrk. Comp. P.D. LEXIS 454, the WCAB determined that an AME's opinion on apportionment to genetic factors was not substantial evidence because it was conclusory and not substantiated with sufficient medical rationale. The applicant sustained an industrial injury to his lumbar spine. The AME reported that the cause of degenerative disease in the spine was convincingly shown to be principally genetic, and apportioned 25 percent of the disability to cumulative aggravation from the job. The WCAB stated that although City of Jackson v. WCAB (Rice) (2017) 82 CCC 437 allowed apportionment to genetic or heredity factors, a decision must be supported by substantial evidence. The WCAB found that the AME made a conclusory statement that degenerative disk disease was convincingly shown to be genetic, but did not provide any medical detail, data, studies or research articles to support his findings. The applicant was awarded permanent disability based on the AME's opinion without apportionment.