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CA DIR Suspends 7 Workers’ Comp Providers for Fraud

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In February, the California Department of Industrial Relations suspended seven medical providers from the California workers’ compensation system. The DIR was able to suspend these providers thanks to Assembly Bill 1244. This bill, which passed the California legislature in 2015, requires the Division of Workers’ Compensation administrative director to suspend any party convicted of fraud from participating in the California workers’ compensation system.

The Suspended Providers

All seven providers were convicted of workers’ compensation fraud or suspended from Medicaid or Medicare programs for medical fraud. In total, these providers filed more than 8,500 liens through the California workers’ compensation system. According to the CA DIR, these liens add up to a total claim value of more than $59 million. Here are the convicted providers:

  • Philip Sobol. This Los Angeles orthopedic surgeon had nearly 6,000 active workers’ compensation liens totaling more than $42 million. The U.S. District Court Central District of California in Santa Ana convicted Sobol for insurance mail fraud and other charges for receiving workers’ compensation kickbacks.
  • Boniface Okwudili Onubah. After a medical license revocation, the state of California barred this former Marina Del Rey neurologist from Medicaid and Medicare programs.
  • Jason Hui-Tek Yang. The Riverside County Superior Court convicted this Pasadena psychiatrist for an insurance fraud conspiracy, including unnecessary referrals for patients to justify billing the workers’ compensation system. Yang held more than 2,000 active workers’ compensation liens totaling more than $13 million.
  • Daniel Dahan. This former Long Beach chiropractor surrendered his license to practice after the CA DIR suspended him from participating in Medicare and Medicaid programs.
  • Alan Ivar. The U.S. District Court Central District of California in Santa Ana convicted this Costa Mesa chiropractor for participating in a referral scam with a Long Beach hospital. Ivar held more than 400 active workers’ compensation liens worth more than $2.5 million.
  • Thomas M. Heric. The U.S. District Court Eastern District of California in Sacramento convicted this Los Angeles physician for health care fraud and summarily suspended him from Medicare and Medicaid programs.
  • Carlos Arguello. The U.S. District Court Southern District of California in San Diego convicted this Chula Vista businessman for his role in a kickback scheme. Arguello was needlessly referring injured workers to a specific chiropractor.

Another three providers received notifications of pending suspensions and are appealing those actions. Once a provider receives a notification, he or she has 30 days from the issue date to file an appeal.

The Problem With Workers’ Compensation Fraud

Workers’ compensation exists to ensure the welfare of injured employees. While workers’ compensation benefits may not cover the total cost of a job-related illness or injury, they can provide much-needed financial relief from medical expenses and lost wages. Workers’ compensation provides funds to injured workers receiving care for their injuries, and the healthcare professionals who treat them.

When providers refer patients or provide unnecessary treatment, they can bill these services for their expenses. Some employers, such as Arguello above, receive kickbacks from the referrals they send to fraudulent healthcare providers. The provider will be able to bill a workers’ compensation service for the needless treatment, then pay the referrer a “finder’s fee.”

Workers’ compensation fraud is a serious issue, and the expense it places on state and federal programs makes it difficult to increase the amount of financial support available for truly injured workers. Assembly Bill 1244 has been generally well-received and has afforded California with another layer of protection against workers’ compensation and health care fraud. AB 1244 requires the DWC administrative director to suspend any practitioners, physicians, or other medical care providers from participation in workers’ compensation systems following a conviction for fraud. These new measures should inspire confidence in California’s workers’ compensation system and deter future fraudulent practices.

If you’re looking for an Orange County workers compensation lawyer, contact DiMarco | Araujo | Montevideo now.