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Lawmakers Maintain Focus on Fraud in 2017

  • State: California
  • Topic: Top
  • - Popular with: Legal
  • -  12 shares

After passing a pair of bills in 2016 that regulators have credited with eliminating millions of dollars in potentially fraudulent liens, California lawmakers are pushing additional fraud-fighting bills this year.

Measures presented ahead of the Feb. 17 introduction deadline would increase penalties for deceptive advertisements placed by work comp service providers.

Another bill would limit reimbursement for medical services in some cumulative trauma cases to combat referral schemes.

A third bill is viewed as a possible vehicle for recommendations in a Rand Corp. report currently in the peer-review process.

Last year, the Center for Investigative Reporting quoted Kareem Ahmed, the president of Landmark Medical Management accused of paying doctors to prescribe his compound creams to injured workers, as saying “nobody gives a fuck” about work comp fraud in California. Before the year ended, lawmakers passed two bills to kick convicted providers out of the system and prevent them from pursuing payment for any liens they had filed.

The new statutes put in place by AB 1244 and SB 1160 require the Division of Workers’ Compensation to suspend any provider who has been convicted of fraud or patient harm, or was kicked out of Medicare or Medicaid. The measures also require the division to stay any liens filed by a provider who is accused of fraud, and to hold an expedited hearing when the criminal case is completed, to determine whether the liens are for services related to the criminal activity and should be dismissed.

The DWC in January announced that it stayed 200,000 liens with a combined claimed value of more than $1 billion that were filed by 75 providers who are defendants in fraud cases. On Feb. 16, the division announced that it suspended seven providers who have been convicted of criminal charges or kicked out of Medicare.

Assemblyman Adam Gray, who authored AB 1244, said last year’s efforts were a good start, but there is more work to be done.

“Workers' compensation fraud is out of control, and the problem is growing,” Gray said in a statement. “Last year we made significant strides to put crooked doctors and lawyers on notice, and we are starting to see the fruits of that labor. But the fraud is not gone and the fight is not over. I have introduced legislation this year to further protect employers and employees from becoming victims of these con artists.”

Gray, a Democrat from Merced, introduced AB 221, which provides that an employer is not liable for medical costs or liens in occupational disease or cumulative trauma claims unless the claim is found to be compensable or the case settles for $25,000 or more, excluding medical costs.

“There is a fraudulent business model that some workers’ compensation doctors and attorneys use where they call immigrants to inform them of their health care rights, with the goal of signing them up to file a cumulative trauma back injury claim,” Gray’s office said in a “fact sheet” for AB 221. “The doctors file liens on the health care coverage and get paid for the medical treatment they provide while the attorneys continually settle the non-medical awards for nuisance value well under $25,000.”

Another bill would increase penalties for deceptive ads by 50%.

Laypeople are prohibited from identifying themselves as doctors, attorneys, legal centers or “specialists in workers’ compensation law.” AB 1260, by Assemblyman Jose Medina, D-Riverside, would increase penalties for violating that prohibition to $15,000 from $10,000.

Robert Boykin, a legislative aide for Medina, said on Wednesday that the measure was introduced with the understanding that it would be amended later in the session. In other words, it’s what’s commonly referred to as a “spot bill,” a measure introduced before legislative language is fully fleshed out.

Boykin said he doesn’t know what will ultimately be proposed in the bill.

A third measure, by Assemblyman Tom Daly, D-Anaheim, would require the Fraud Assessment Commission to consult with the Department of Industrial Relations when setting the annual assessments charged to employers to fund fraud prosecutions.

But AB 1422 could ultimately serve as a vehicle to introduce fraud-fighting recommendations from Rand Corp.

The DIR in January said it contracted with Rand for an independent review of fraud detection in other federal and state health care programs. The report is currently in peer review, and Rand’s recommendations are scheduled to be released later this spring.

Mark Rakich, chief consultant for the Assembly Insurance Committee, said lawmakers are waiting for the forthcoming report for possible policy direction.

“We’re hoping when the Rand report comes out it will provide some directions and has guidance on the best next steps for attacking fraud,” he said.

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Do not post libelous remarks. You are solely responsible for the postings you input. By posting here you agree to hold harmless and indemnify WorkCompCentral for any damages and actions your post may cause.
John Don Feb 23, 2017 a 4:02 pm PST

Just signed up a client who said he found his prior [out of county] attorney when a capper came by his building and started knocking on everyone's door asking if they know anyone who was injured at work.

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