Beverly Hills Dentist And His Office Manager Charged With Insurance Fraud by Los Angeles D.A.'s Office - Nurse Charged In Related Case

A Beverly Hills dentist and his office manager have been charged with insurance fraud and other felony counts in a state criminal case pending in Los Angeles County Superior Court. 

On May 3, 2012, the Los Angeles County District Attorney's Office (Healthcare Fraud Division) charged Beverly Hills dentist Tom Kalili on a 101 felony count complaint (Case No. BA394506) alleging insurance fraud, grand theft and tax evasion. The allegations relate primarily to Dr. Kalili's acts as the owner and operator of Beverly Hills Medical Suite (BHMS). The office manager Claudia Ventura was also charged with ten felony counts.

A felony complaint is only an accusation and is not evidence of guilt. Dr. Kalili and Ms. Ventura are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.  

What is alleged in the criminal complaint? It is a wide-ranging complaint. First, according to detectives from the California Department of Insurance (CDI), Dr. Kalili, acting as the owner and operator of BHMS, directed his office manager Ms. Ventura to knowingly submit fraudulent billing statements to four separate insurers in the amount of $339,799.99. 

It is alleged that BHMS submitted billing for services not rendered and in most cases the billing involved emergency dental procedures that were never performed. It is also alleged that BHMS submitted false medical reports in support of the fraudulent billing, which generally included fictitious mechanisms of injury.

Second, the investigators looked at Dr. Kalili's own insurance claims for automobile accidents and filed counts relating to them. The case alleges that Dr. Kalili submitted two fraudulent insurance claims on behalf of himself and his son to two automobile insurers. These claims included medical reports alleging he received treatment in auto accidents in 2005, 2008 and 2009 and his son for treatment received for injuries sustained in a 2009 auto accident. The detectives contend that these medical reports were fraudulently prepared and that the dentist listed as providing treatment for the injuries claimed by Kalili denied performing the services listed.

Third, the complaint alleges counts relating to tax counts: filing false tax returns/failure to file tax returns and tax evasion.  

In a related case, Marti Quinn, a nurse who allegedly received over $11,000 from a fraudulent claim submitted by BHMS was charged in a separate criminal case with insurance fraud. 

Commentary:  It appears that this case was under investigation since June 2010 after a report was sent to the California Dept. of Insurance, fraud division, that BHMS was submitting fraudulent medical bills for emergency dental work that was not provided to patients. Thus, these type of cases generally take a long time to investigate and charge.

This investigation involved a number of different agencies and companies: the California Dental Board, California Department of Insurance, California Franchise Tax Board, Anthem, United Health Care, Blue Shield, CIGNA, AAA, and Mercury Insurance. With computerized records, coordinated investigations are easier to conduct and becoming more common.

I am seeing a trend in investigating whether the medical provider has submitted fraudulent claims relating to his or personal life. This allows the government to bring in evidence that the person has engaged in other bad conduct and allows them an alternative theory at trial if there are viable defenses in billing related to their business.

As a condition of bail, the Superior Court issued an order while this case was pending precluding Dr. Kalili from submitting any insurance claims or engaging in any "insurance billing activity" while this case was pending. Otherwise, the dentist can continue to practice while this case is pending.  

Posted by Tracy Green, Esq. Please email Ms. Green at tgreen@greenassoc.com or call her at 213-233-2260 to schedule a complimentary 30-minute consultation. 

Any questions or comments  should be directed to Tracy Green, a very experienced insurance fraud attorney and dentist attorney at tgreen@greenassoc.com. The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers in criminal matters in California and throughout the country. Their website is: http://www.greenassoc.com

New Rules Require Revocation Of Physician Assistant License If Registration As Sex Offender Required - Critical To Have Chaperones And Be Careful Of Plea Agreements Involving Sexual Issues

Over the years I have represented physicians, physician assistants, nurses and other health care professionals who have been accused of unlawful "touching" by a patient. In a number of these cases, the allegations were false. For example, one high profile gynecologist was accused of sexual touching when he conducted a breast exam of a 55 year old woman with fibroid breasts both with her laying down and sitting up. Since she had never had a breast exam where she was sitting up, she made a complaint. The complaint was dismissed but it was an unpleasant interview for the physician to go through simply because he was being thorough.

A few years ago, a physician assistant was accused of sexual touching because he placed the stethoscope just under the area near the breast while he listened to the heart -- very standard routine exam. The complaint was dismissed but only after an interview and investigation.

Recently, I was asked to consult on a case where a physician was charged criminally with a violation of Business & Profession Code 726 which prohibits sexual contact with patients since the physician had consensual oral sex with a patient.

Currently, I am representing a health care professional who is accused of touching a woman's breasts over the clothes during an exam. The case has been filed criminally since the same complaint was made by two different women and the present plea offer is a misdemeanor but with a requirement that he register as a sex offender. The sex offender registration is part of the regular plea offer. In his case, it would not be a bar to practice but if he were a physician assistant it would be a bar.

The Physician Assistant Committee in California has decided to increase the level of discipline for any physician assistant who has had sexual contact with a patient or who has been convicted of  a sex offense as defined in Section 44010 of the Education Code. Under the revised California Code of Regulation 1399.523 there is a finding that any proposed decision "shall contain an order revoking the license" and that "[t]he proposed decision shall not contain an order staying the revocation of the license."

What does this mean? First, if a physician assistant has sexual contact with a patient in violation of Section 726 or is convicted of any sex offense defined in Education Code Section 44010 which includes any registration as a sex offender -- the physician assistant's license will be revoked and is not eligible for probation.

For those unfortunate enough to be charged with any offenses related to sexual touching or gratification, any defense or plea of such charges needs to consider this important change.

For those that are practicing, it is critical that the use of chaperones -- especially for male PAs -- be considered as a routine policy. It should be essential during physical exams especially during breast and pelvic exams. However, all the patient needs to allege are things like touching a breast over clothes, rubbing a penis against a leg during a physical exam -- and there can be a critical issue. I have seen such allegations and they seem to be increasing for a variety of reasons and most of the cases I have handled have been false or exaggerated claims.


Posted by Tracy Green, Esq. Please email Ms. Green at tgreen@greenassoc.com or call her at 213-233-2260 to schedule a complimentary 30-minute consultation.
Any questions or comments  should be directed to Tracy Green, a very experienced California physician assistant attorney, health care attorney, and California Board attorney at tgreen@greenassoc.com.

The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers in California and throughout the country. Their website is: http://www.greenassoc.com/

Giftcards To Patients: Walgreens Pays $7.9 Million To Settle Lawsuits That Its Giftcards Were Kickbacks To Illegally Induce Transfer Of Prescriptions To Its Pharmacies

Have you ever seen a chain pharmacy's offer that if you transfer a prescription, you will receive a $25 gift card for use at their store? I have and I always wondered how their legal counsel could have signed off on that proposal given that if one of my non-chain pharmacies had ever given a gift card for $25 to patients, they would have been charged criminally. 

The difference between large chains and small providers is that large chains usually have legal opinions that help prevent criminal prosecutions and the ability to pay large fines. This is what happened to Walgreens.

On April 20, 2012, Walgreens, the largest drugstore chain in the nation, paid the United States and participating state governments $7.9 million to settle allegations that it paid kickbacks to illegally induce the transfer of prescriptions to its pharmacies. The settlement was announced on April 20 when the federal and state governments learned that federal judges had unsealed allegations contained in two “whistleblower” or qui tam lawsuits filed against Walgreens by two Walgreens employees. The federal lawsuits were filed in Los Angeles and Detroit.

The settlement resolves allegations that Walgreens illegally offered gift cards and other incentives as kickbacks to customers covered by government-funded health insurance programs to induce the transfer of prescriptions from other stores to its pharmacies. As part of the settlement, Walgreens did not admit wrongdoing.

The federal and state governments contended that these gift cards and incentives were "kickbacks" which resulted in the governments paying for unneeded prescriptions, small-business pharmacies unfairly losing customers to Walgreens, and patients making decisions based upon monetary incentives rather than legitimate health care needs. 

Commentary: One way that some pharmacies have attempted to ensure that such promotions do not violate state and federal law is to limit it to cash or private pay insurance and not allow any Medicare or Medi-Cal/Medicaid patients to receive any gift cards or incentives for transferring prescriptions. However, mistakes can be made and it is not clear what policies and procedures Walgreens had in place. Other chain pharmacies like CVS have had such programs as well but for smaller pharmacies or health care providers, it is critical that any such incentive programs be reviewed by health care counsel before being offered to any potential patients. 

Posted by Tracy Green, Esq. Please email Ms. Green at tgreen@greenassoc.com or call her at 213-233-2260 to schedule a complimentary 30-minute consultation.  

 Any questions or comments  should be directed to Tracy Green, a very experienced health care fraud attorney and civil qui tam defense attorney at tgreen@greenassoc.com. The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers in white collar criminal and civil qui tam matters in California and throughout the country. Their website is: http://www.greenassoc.com/

Medical Spas Under Investigation In California - Is Your Practice Legal?

The California Medical and Nursing Boards are targeting "medical spas" or aesthetic practice locations where they suspect that are owned by laypersons, nurses or other non-physicians.  They are also targeting clinics or spas where there is a suspicion of unlicensed personnel performing procedures or nurses performing services but not being supervised properly.

Undercover agents are being sent in on a regular basis. Additional investigators have been hired to help conduct these investigations. In some cases, misdemeanor charges for the unlicensed practice of medicine or aiding and abetting the unlicensed practice are being filed.  I have a number of cases where Board investigations are ongoing, cases where we have successfully closed the investigations, and a recent case where a physician, nurse and unlicensed persons were charged criminally (more about that later). In addition, disciplinary charges are being brought against some professionals for their involvement in medical spas that were not structured properly or were not being operated within all the proper legal parameters.

How Does The Board Decide Who To Investigate?

Typically, the investigations are generated by complaints by competitors. Many times the complaints are anonymous and sometimes they are someone affiliated with a competitor. It takes only a simple complaint such as "Practice X is being run and operated by a nurse" to generate a full investigation.

There are also complaints by patients which trigger these investigations -- a quality of care complaint will ultimately raise the questions of who owns the business being investigated and who are the physicians, physician assistants, nurse practitioners or nurses involved in supervision, treatment or ownership.

How Can I Prepare For These Investigations?

It is best to prepare in advance -- long before any investigator comes to your office. Hiring legal counsel knowledgeable about this field can help you save money and legal problems in the long run. If you know that your business is not structured properly -- NOW is the time to restructure and become compliant with all laws, rules and regulations. Restructuring and compliance not only includes ownership issues but also practice and supervision issues, websites, advertising, payment arrangements and related business issues. It is much cheaper to pay for preventative legal counsel than to pay for the defense of an investigation, administrative action or criminal case.

Do NOT be afraid that if you make changes now it will "look suspicious" or imply that you were doing it wrong before. The Boards look for current compliance. If you made mistakes in the past, fix them and move on so you are compliant.

The California Medical Board has publications on its website that are informative as to what is legal and what is not legal and serves as notice to physicians on this issue. For example, "The Bottom Line: The Business of Medicine - Medical Spas" warns physicians about being "medical directors" and lending their license for clinics or spas for which they have no legal ownership or responsibility. In addition, the Medical Board has a publication entitled "Use of Mid-Level Practitioners for Laser, Dermabrators, Botox and Other Treatments" that is a helpful outline and should be read by anyone in this business.

In addition, it is important to understand that California is a state that does not allow the "corporate practice of medicine" or ownership of a medical practice by unlicensed professionals. However, there are ways to structure professional medical corporations that are owned 51% by a physician and 49% by other licensed health care professionals such as nurses, physician assistants or nurse practitioners.


What Should I Do If An Investigator Sends Me A Letter Or Comes To My Office?

Do NOT agree to be interviewed without legal counsel. Be friendly and arrange for any interview to be held while you have your counsel present. If you believe you are legally compliant, get together all the business records, delegation of service agreements, protocols and other information you will need. If you are not legally compliant, it is time to do so ASAP. Do not get paralyzed and take action.


What Type Of Cases Go Criminal?

Based on my experience, the cases that go criminal are where unlicensed personnel like medical assistants are performing procedures such as laser hair removal, Botox, etc. or where the corporate structure of the business is illegal on its face (the nurse or nursing corporation owns the business and the physician is a "medical director" for little or no pay).  In one recent case, not only was there an illegal structure but the physician and nurse submitted to interviews and admitted to damaging facts.

An important rule is do NOT agree to be interviewed without legal counsel. Be friendly but insistent that any interview be held later. Then have your attorney arrange for any interview to be held at a later date.

In sum, most cases do not result in criminal charges. However, if your business is not legally structured, now is the time to fix this issue before anything else happens. I have had numerous clients who were not structured legally -- but I helped them become legally compliant long before any investigator showed up at their office or right after the investigator from the Department of Consumer Affairs sent a letter.

Posted by Tracy Green, Esq. Please email Ms. Green at tgreen@greenassoc.com or call her at 213-233-2260 to schedule a complimentary 30-minute consultation.  

Any questions or comments  should be directed to Tracy Green, a very experienced medical spa attorney, health care law attorney, and Medical Board and Nursing Board attorney at tgreen@greenassoc.com. See the difference that having an experienced lawyer makes.

The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers and in administrative board and discipline matters in California and throughout the country. They are currently accepting new clients. Their website is: http://www.greenassoc.com/