Thousands of Liens Filed in Name of Uwaydah Cos.

Tuesday, September 22, 2015 | 12

Nearly 2,500 liens have been filed by the companies named in a grand jury indictment charging Dr. Munir Uwaydah and 14 others with bilking California workers' compensation carriers.

A WorkCompCentral review of data available through the public search function of the Division of Workers' Compensation Electronic Adjudication Management System found 2,457 liens with a claimed value of $62.1 million filed in the name of companies the Los Angeles County grand jury alleges were swindling insurance carriers. 

Dr. Munir Uwaydah

According to the indictment, there could be hundreds or even thousands of additional liens filed by companies affiliated with Uwaydah. It says in addition to defrauding carriers out of $150 million by billing for unnecessary procedures and allowing an untrained assistant to operate on 21 patients, Uwaydah's companies also racked up liens for $150 million.

The indictment was unclear about whether Uwaydah was paid $150 million and then filed liens claiming he was owed an additional $150 million, or whether he filed the liens after carriers refused to pay what the grand jury alleges were fraudulent bills. Prosecutors have declined to comment on the case beyond an initial statement.

According to the Los Angeles County District Attorney's Office, Uwaydah was arrested Sept. 9 in Germany and is awaiting extradition to the U.S. He was indicted on 32 counts of insurance fraud, 21 counts of aggravated mayhem, three counts of capping or unlawful client referrals and one count of conspiracy.

Uwaydah was majority owner of Frontline Medical Associates in San Fernando. The clinic was known for treating injured workers on a lien basis.

Thirty-eight liens were filed under Uwaydah's name between September 2003 and May 2009. The claimed value for four of the liens is $100, while a fifth is valued at $266. One lien is reportedly for $21,350, but it's possible the claimed value is actually $213.50 due to data-entry errors.

According to EAMS, 2,201 liens with a total claimed value of $57.5 million were filed under the name "Frontline Medical Associates" between Oct. 21, 2005, and March 26, 2015. Some of the liens have no stated value, while four claims are for more than $300,000. On average, the value of the liens is $26,119.64.

An additional 15 liens were filed under the name "Frontline Medical" with a stated value of $687,464. The average value for the liens is $45,830.93.

According to the indictment, Firstline Health Inc. was incorporated in February 2010 to take over Frontline operations. 

Between May 3, 2011, and April 27, 2012, 198 liens were filed under the name "Firstline Health Inc." with a claimed value of $3.7 million. The average amount claimed per lien is $18,919.96.

Three more liens were filed under the name "Firstline Health" with a total claimed value of $1.3 million. 

WorkCompCentral was not able to find any other liens filed under the name of companies identified in the indictment. But even if there are thousands of additional liens in the system for other companies affiliated with Uwaydah, that is little more than a drop in the bucket of the total liens in the system.

According to the Workers' Compensation Insurance Rating Bureau, 1.2 million liens were filed in 2012 alone. The 513,000 liens filed in the last three months of the year exceeded the 460,000 filed in all of 2011.

The rating bureau does not use 2012 for comparison purposes because of the significant ramp up in filing in the third and fourth quarters as many lien claimants sought to beat the $150 filing fee that went into effect Jan. 1, 2013, under Senate Bill 863.

Since the filing fee went into effect, the number of new liens entering the system dropped 60% to 186,000 in 2013 and 190,000 in 2014, according to the WCIRB's 2015 State of the System report.

The rating bureau initially projected a 40% decrease in lien filing as a result of SB 863 and annual savings of $480 million. In November 2014, the WCIRB increased projected savings for the lien provisions to $690 million a year.

With more than 2 million liens filed since 2011, the nearly 2,500 claims WorkCompCentral found for Uwaydah's companies would account for only 0.1%. 

But getting a count on the number of liens in the system is difficult at best.

DWC spokesman Peter Melton said in an email on Friday the division doesn't know how many viable liens are in the system, because many have been negotiated out or sold to third parties.

And unless a lien claimant notifies the Workers' Compensation Appeals Board that a lien has been resolved, it will show up in the system even though the provider is no longer pursuing the claim.

It's similarly difficult to know the value of all the liens in the system.

However, the 2011 Lien Report by the Commission on Health and Safety and Workers' Compensation provides some information on the average amount claimed per lien. According to the report, the average amount claimed per medical lien was $7,774 based on a 2010 survey of claims adjusters. 

The WCIRB in its November 2014 SB 863 Cost Monitoring Report said the average amount demanded for all liens in 2012 was $6,009. For 2013 and 2014, the average was $6,662. The WCIRB report did not break down average cost by lien claimant type.

Either way, the average claimed value for liens filed by Uwaydah's companies of $25,271.84 is more than three times the average amount claimed for all liens.

According to the Los Angeles County grand jury, Uwaydah and Frontline obtained some patients by paying attorneys and marketers up to $10,000 a month for referrals, an arrangement known as "capping." The indictment says Uwaydah's associates paid applicants' attorney Daniel Hitzke referral fees as well as bonuses for surgical candidates and people who had surgery.

Hitzke's attorney, Johnny L. Griffin, said last week it's noteworthy that his client is not named as a defendant or charged with any crimes. He also said once all the facts are made public, it will be clear that Hitzke is one of the "good guys."

The indictment alleges that Uwaydah and his accomplices manipulated or falsified MRI reports to indicate that patients needed surgical procedures when, in fact, they did not.

And the District Attorney's Office said in a statement the most serious charges involve Uwaydah "deceiving" 21 patients into thinking that he would be performing surgeries on them. 

The indictment alleges Uwaydah wasn't even in the room when his physician's assistant, Peter Nelson, performed the procedures. Nelson never attended medical school and all 21 patients "sustained lasting scars and many required additional surgeries" as a result of the procedures he performed.

Nelson was booked into a Los Angeles county jail Sept. 14 with bail set at $21.5 million, according to online inmate information provided by the county sheriff.

Paul Turley, the co-owner of Frontline Medical, was arrested Sept. 13. His bail was also set at $21.5 million.

Twelve other people were indicted for their role in the alleged scheme. Bail amounts range from $1 million to $21.5 million.

Yolanda Groscost, owner of YDG Marketing, is being held without bail. According to the indictment, she received $10,000 a month from Uwaydah for referring 20 to 30 patients.

Jeff Stevens, owner of California MRI, is also being held without bail, according to online records. California MRI was located in a trailer behind the Frontline Medical clinic and exclusively served Frontline patients, according to the indictment. 

Inmate records were not available for two defendants in the case.