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Nearly Half of Provider Suspensions Not Prompted by Fraud

By Greg Jones (Deputy Editor)

Thursday, March 8, 2018 | 1751 | 2 | 44 min read

Almost half of the medical providers who have been kicked out of California’s workers’ compensation system under a new fraud-fighting law were never charged with fraud.

Steve Cattolica

Steve Cattolica

Of 227 providers suspended under Assembly Bill 1244, 97 were suspended because they no longer have a license to practice medicine. After the DWC on Monday announced the suspension of 10 providers, all of whom surrendered their licenses or had their licenses revoked, Steve Cattolica, director of government relations for the California Society of Industrial Medicine and Surgery, questioned whether it was necessary to publicly shame them.

Though Labor Code Section 139.21 requires the administrative director to suspend providers in certain situations that include loss of a license, Cattolica said that doesn’t mean the DWC needs to take credit for suspending those who are no longer practicing medicine.

“Why publicize the names at all?” he asked. “When you read the descriptions, the DWC’s suspension often means nothing because the provider is already permanently out of medicine.”

Of the 10 providers whose suspensions the DWC announced Monday, two handed over their licenses to the Medical Board of California in 2017 amid disciplinary proceedings because of allegations that they had inappropriate relationships with patients. Four were disciplined in other states for violations ranging from failure to complete treatment for alcohol abuse to unprofessional conduct.

The Legislature in 2016 passed a pair of bills that included provisions to crack down on workers’ compensation fraud. Senate Bill 1160 required the DWC to stay liens filed by, or on behalf of, criminally charged providers. Assembly Bill 1224 ordered the division to suspended providers who are convicted of fraud and required that liens filed by a convicted provider be consolidated for a hearing where there is a presumption that the claims are fraudulent and not collectable.

Two California providers surrendered their licenses last year because of illnesses that affected their ability to practice medicine. And the last doctor surrendered licenses in California and Massachusetts last year for reasons that were not disclosed.

AB 1224 also requires the administrative director to suspend providers who have lost their professional licenses, in addition to those who were suspended from the Medicare or Medicaid programs because of fraud or abuse.

A suspension that is ordered because a provider lost his license or because of Medicare or Medicaid violations does not trigger lien consolidation proceedings, as do suspensions that are ordered because of fraud. Also, the law doesn't create a presumption that the providers' bill is invalid, as it does for suspensions because of fraud.

But all suspended providers are “unable to provide or obtain payment for any treatment, evaluation or other service related to a workers’ compensation claim,” according to a Department of Industrial Relations fraud prevention web page listing all suspended providers.

DWC spokesman Peter Melton did not elaborate when asked if providers suspended for reasons other than fraud are prohibited from pursuing payments for services rendered prior to the suspension. He said only that the language on the website is “quite clear” without elaborating.

While the agency’s website says suspended providers are prohibited from obtaining payment for any service related to a workers’ compensation claim, that’s not actually the case, according to attorney Charles Rondeau of the Rondeau Law Firm in El Segundo.

“That may be what some people want to do, but that’s not how it works,” Rondeau said.

Providers suspended for losing their license are not able to collect on bills for services provided after the suspension took effect. They’re also prohibited from pursuing payment for services provided after they lost the license, according to Rondeau.

But he said there is no law or regulation that acts to prevent doctors suspended for this reason from being paid for services provided while they still had their license.

So what’s the point of suspending providers who are already prohibited from professional practice because they’re not licensed?

Mark Rakich, chief consultant to the California Assembly Insurance Committee, said that just because a provider surrendered his license doesn’t necessarily mean he has stopped working. So the suspension is a way to notify the payer community of those who are no longer allowed to treat injured workers, he said.

Rakich said he has “no strong feeling” about publicizing the suspension of providers who lost their license. He said he doesn’t know enough about the circumstances leading to the suspensions of most of the providers on the DWC’s list, but when it comes to anyone who was already “in the sights” of the workers’ compensation community, he has no problem with putting their name on the list.

“A bit of cautious prevention is not a problem by me,” Rakich said.

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