Workers Comp Zone


Despite his promises, President Trump may not be draining the swamp.

But in the California workers’ comp world, the medical provider swamp is being drained, little by little.

Yesterday came word that scores of physicians up and down the state had been charged in a kickback scheme involving compound medications, transdermal creams, and urine tests. Allegedly, creams and repackaged drugs were billed at insanely high mark-ups and doctors were offered kickbacks on profits.

The press release from California Insurance Commissioner Dave Jones (and Orange County DA) can be found at the end of this blog post.

These sorts of schemes provide incentives for doctors to dispense meds.

It’s always amazing to me that in-office dispensing and repackaged drug prescribing have remained such a problem even after the advent of MTUS, UR, and IMR.

Among those charged are several Northern California physicians who have treated my clients and clients of my partners, associates and colleagues. Some are charming and well-liked by their patients. Several are QMEs.

They’ll have their right to a day in court, but it does not look good.This just seems to be one more scheme that adds to the picture of an ugly swamp.

The tentacles of greed seem to extend deep into the workers’ comp system.

There may be some who would respond by noting that employer and carrier abuse and treatment denials are a huge problem, as if that somehow excuses problems with provider abuse. The difficulty some injured workers have getting appropriate treatment is real and a substantial problem for those workers.

But it doesn’t excuse provider excess. 

Draining the swamp will benefit legitimately injured workers.

The lien stay and provider suspension provisions enacted in 2016, SB 1160 (Mendoza) and AB 1244 (Gray) were overdue. While being challenged in court, those provisions are likely to survive any constitutional challenge.

Meanwhile, it appears that the legislature will plug a possible hole in the law that might allow some providers to collect on liens. AB 1422 (see link below) would, in the event the criminal proceeding resulted in a conviction, additionally require the lien stay to remain in effect from the date of the conviction until the end of suspension adjudication procedures.

AB  1422 passed out of the Assembly Insurance Committee on April 19 by a 13-0 vote.

Here is the CDI press release on the charges:

Here is the current version of AB 1422 (Daly):

Stay tuned.

Julius Young