A recent case shows what can happen if the government contends that self-referral rules under the California Labor Code are violated for workers' compensation patients. There may be very good defenses here where the surgery center was part of the same practice and there was an in-office laboratory that is CLIA certified.
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Corona physician (anesthesiologist who specializes in pain management), Dr. Sanjoy Banerjee, is charged with felony workers’ compensation insurance
fraud (two counts Ins. Code Section 550(a)(1)) and perjury (five counts Penal Code 118(a)) by the Riverside County District Attorney’s Office after investigators claimed he referred patients to a clinical
laboratory and surgical center he allegedly owned or had some ownership interest. Dr. Banerjee is presumed innocent.
Dr. Banerjee works as a pain management doctor who saw workers’ compensation patients (probably among other types of patients) at a medical clinic he owned called Pacific Pain Care. The prosecution contends that Dr. Banerjee signed under penalty of perjury five workers' compensation doctor’s reports stating that he had not referred workers’ compensation patients to companies he owned. I doubt that is what the doctor's reports stated but it was probably just a form statement that there was no violation of Labor Code Section 139.3.
Investigators alleged that Dr. Banerjee had referred some of his patients to a "different business" he owned, Rochester Imperial Surgical Center, also located in the Pacific Pain Care office suite. The prosecution alleges that Dr. Banerjee billed for more than $180,000 worth of urine toxicology testing and epidural injections through the laboratory and surgical center. One of the key issues will be whether this was a "different" business if it was owned by the same physician in the same office suite and met the exceptions of the in-office ancillary exception. If it met the exception, there is NO criminal case.
At the arraignment, the Medical Board attempted to obtain a practice restriction on Dr. Banerjee's license as a condition of bail while the case is pending but the judge refused to go along with it. This is something that is always a concern and the judges have a great deal of discretion in imposing bail. The next court appearance is August 16, 2018.
Attorney Commentary On This Use of Labor Code Section 139.3 As Basis for Fraud and Perjury Charges:
California Labor Code Section 139.3 provides that it is unlawful for a physician to refer workers' compensation patients to a surgery center, laboratory and other services (physical therapy, diagnostic services, DME, etc.) IF the physician or his family has a financial interest in the outside entity. Section 139.3 also provides that insurers do not need to pay liens or charges if there is a violation.
There is a significant exception for group practice and this is a broad exception. One issue in this case is whether the toxicology billing or epidural injection was reasonably believed to fall within the group practice exception. There still will be a disclosure requirement to the patient but it may not have the other criminal issues.
Interestingly, a violation of this 139.3(a) provision is a misdemeanor but the prosecution decided not to charge this offense as a misdemeanor and decided to make it an insurance fraud and perjury felony case based on the billing and the alleged false statement in the doctors' report. Perjury is a wobbler and can be charged as a misdemeanor or felony but in this case it was charged as a felony.
The doctor report forms created by the California Department of Workers Compensation (DWC) have a place for the physician signature which has a general statement under penalty of perjury that "the report is true and correct to the best of my knowledge" and that "I have not violated Labor Code Section 139.3" and does not prompt any further disclosures.
If the epidural injection and toxicology was billed by the medical practice it would have been acceptable but if it was billed by a separate entity (even if owned by the same physician) it can raise the issue of whether it is an improper referral. This could be a case of ignorance about the disclosure and self-referral rules. The fact that there appears to be no other misrepresentations may help the defense in this matter.
The collateral consequences in this case can be troublesome in that a conviction would result in the physician in not being able to collect on any of his workers' compensation billings and from being excluded as an IME or QME. This is why these cases are usually aggressively defended.
Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Dr. Banerjee works as a pain management doctor who saw workers’ compensation patients (probably among other types of patients) at a medical clinic he owned called Pacific Pain Care. The prosecution contends that Dr. Banerjee signed under penalty of perjury five workers' compensation doctor’s reports stating that he had not referred workers’ compensation patients to companies he owned. I doubt that is what the doctor's reports stated but it was probably just a form statement that there was no violation of Labor Code Section 139.3.
Investigators alleged that Dr. Banerjee had referred some of his patients to a "different business" he owned, Rochester Imperial Surgical Center, also located in the Pacific Pain Care office suite. The prosecution alleges that Dr. Banerjee billed for more than $180,000 worth of urine toxicology testing and epidural injections through the laboratory and surgical center. One of the key issues will be whether this was a "different" business if it was owned by the same physician in the same office suite and met the exceptions of the in-office ancillary exception. If it met the exception, there is NO criminal case.
At the arraignment, the Medical Board attempted to obtain a practice restriction on Dr. Banerjee's license as a condition of bail while the case is pending but the judge refused to go along with it. This is something that is always a concern and the judges have a great deal of discretion in imposing bail. The next court appearance is August 16, 2018.
Attorney Commentary On This Use of Labor Code Section 139.3 As Basis for Fraud and Perjury Charges:
California Labor Code Section 139.3 provides that it is unlawful for a physician to refer workers' compensation patients to a surgery center, laboratory and other services (physical therapy, diagnostic services, DME, etc.) IF the physician or his family has a financial interest in the outside entity. Section 139.3 also provides that insurers do not need to pay liens or charges if there is a violation.
There is a significant exception for group practice and this is a broad exception. One issue in this case is whether the toxicology billing or epidural injection was reasonably believed to fall within the group practice exception. There still will be a disclosure requirement to the patient but it may not have the other criminal issues.
Interestingly, a violation of this 139.3(a) provision is a misdemeanor but the prosecution decided not to charge this offense as a misdemeanor and decided to make it an insurance fraud and perjury felony case based on the billing and the alleged false statement in the doctors' report. Perjury is a wobbler and can be charged as a misdemeanor or felony but in this case it was charged as a felony.
The doctor report forms created by the California Department of Workers Compensation (DWC) have a place for the physician signature which has a general statement under penalty of perjury that "the report is true and correct to the best of my knowledge" and that "I have not violated Labor Code Section 139.3" and does not prompt any further disclosures.
If the epidural injection and toxicology was billed by the medical practice it would have been acceptable but if it was billed by a separate entity (even if owned by the same physician) it can raise the issue of whether it is an improper referral. This could be a case of ignorance about the disclosure and self-referral rules. The fact that there appears to be no other misrepresentations may help the defense in this matter.
The collateral consequences in this case can be troublesome in that a conviction would result in the physician in not being able to collect on any of his workers' compensation billings and from being excluded as an IME or QME. This is why these cases are usually aggressively defended.
Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
