For years, there have been companies who approach physicians and offer ways they can add to their revenue stream. This has been more common with physicians who treat workers’ compensation patients.
Some of the common revenue enhancements are:
(1) dispensing oral prescription medications in-office to patients;
(2) dispensing a 3-day supply of compound medications in-office to patients; and
(3) performing point of care urine toxicology testing on patients in-office.
Under California workers’ compensation law, there are ways for these medically necessary services and goods to be legally provided and billed. However, if the laws and regulations are not followed, the claims can be denied or the basis for insurance fraud charges.
A recent criminal prosecution in Orange County Superior Court shows what happens when workers' compensation insurance fraud and illegal referral fees are alleged in providing these types of goods and services (prescription medications, compounded medications and toxicology laboratory testing) to patients.
The Orange County District Attorney’s (OCDA) Office filed 26 felony criminal complaints in April 2017 against 25 physicians, a physician assistant, two pharmacists and the two owners of the billing and medical management companies King Medical King Medical Management, Inc., Monarch Medical Group, Inc. and/or One Source Laboratories, Inc. for services and goods provided and/or billed from 2011 to 2015.
Links to the Orange County DA criminal complaints are on the Department of Insurance press release issued on this investigation. All physician defendants are presumed innocent and a felony complaint is not evidence.
It appears the OCDA decided to file a criminal case against each provider separately in order to not have a single multi-defendant case that would progress slowly and for other tactical reasons. However, there is a conspiracy count in each criminal complaint filed against the physicians or pharmacists in which the owner(s) of the medical management and billing companies are named as uncharged co-conspirators. The OCDA views the management billing companies as the hub in these cases.