Defense Lawyer Says Fictitious Name Permits Needed

Thursday, September 17, 2009 | 0

By Jeff C. Andersen

I'm a California State Compensation Insurance Fund (SCIF) defense attorney and I'm writing to respond to WorkCompCentral's Sept. 14 article titled "SCIF Must Pay Sanctions for Fictitious Name Permit Argument". My views are my own, I do not speak for my employer.

Medical doctors and medical facilities are licensed for the protection of the public. It follows that unlicensed doctors and medical facilities should not be allowed to use a court to collect for any unlicensed medical work, and that is in fact the law in California. See, for example, Zenith Insurance Co. v. WCAB (Beach Cities Surgery Center) (2006) 71 CCC 374, in which the Fourth Appellate District held that a workers' compensation judge's award of facility fees to two lien claimants was not supported by substantial evidence where the lien claimants failed to disprove the insurance carrier's allegation that their outpatient medical treatment centers were not properly licensed or accredited, in violation of Health and Safety Code sections 1248(c), 1248.1, 1248.8; the court also held that the lien claimants had the burden of proof on the licensure issue, in accordance with, Labor Code sections 5705, 3202.5. 

Looking at p. 3 of workers' compensation judge (WCJ) Petty's 7/31/09 Report and Recommendation on Petition for Reconsideration in the Tim Stokes v. CHP case mentioned in your article, we see this line: "... Issues raised in the Pretrial Conference Statement included "Licensing of POSC - failure to have an FNP..."

So SCIF properly raised the licensure issue in the POSC case mentioned in your article, and it was error for Judge Petty to sanction SCIF for doing so, since the lien claimant has the burden of proof on the licensure or accreditation issue according to the Zenith case cited above.

Also, in addition to being properly licensed and/or accredited, an outpatient surgery center may be required to also hold a fictitious name permit (FNP) from the California Medical Board if the outpatient surgery center is owned by a doctor, because although an "outpatient surgery setting" may be exempt from getting an FNP if it can show it's accredited under B&P Code section 2285 (c), a doctor is never exempt. See Business & Professions (B&P) Code sections 2285 (a) and 2415 (a), and 16 CCR 1344, which requires professional corporations to have FNPs issued under B&P 2415. Why is 16 CCR 1344 important? Because many of these outpatient surgery centers are owned by doctor-controlled professional corporations, thus raising the potential issue of illegal self-referrals banned by LC 139.3.

In the Premier Outpatient Surgery Center (POSC) case mentioned in your article, I don't believe the ownership of POSC was ever revealed to Judge Petty, since, as she wrote on p. 7 of her 7/31/09 reconsideration report: