Fifteen California Chiropractors Charged in State Case Filed by L.A. District Attorney's Office Alleging Unlawful Referral Fees and Insurance Fraud

One issue that arises is when are referral fees illegal and when are they legal marketing, promotion or management fees? A recent case shows how important it is for medical professionals to obtain legal opinions before they enter into such agreements. 

Chiropractors in Southern California were stunned when fifteen chiropractors were charged by the Los Angeles County District Attorney's Office for alleged illegal referral fees from January 31, 2015 to June 30, 2018. A copy of the Felony Complaint can be downloaded here. 

The defendant chiropractors are presumed innocent and a felony complaint is not evidence. The charges include: 

🔺 insurance fraud in violation of Penal Code Section 550(a)(1) involving four carriers (Alliance United, Nations Insurance, Farmers Insurance and Geico Insurance); 

🔺 conspiracy to commit insurance fraud in violation of Penal Code Section 550(b)(3);

🔺  participating in patient referral rebates as licensed chiropractors.

In addition, the chiropractor who is alleged to have been the organizer of the referral business was charged with additional counts of money laundering (Penal Code Section 186.10) and failure to file tax returns for certain years. 

Given the provisions of the California Insurance Code, Business and Profession Code and Penal Code when it comes to accepting compensation for the referral of a patient, it is key to ensure that any referral arrangements are compliant with the law. 

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Psychiatrist Who Saw Patients by "Skype" Pleads Guilty to Health Care Fraud for Treatment and Billing for Workers' Compensation Patients

When health care providers tell me that "telemedicine" is now "legal," I respond that the same standard of care applies and that they need to be very careful regarding how the patients are seen, referred, examined and ensure that the medical record keeping and reports also meet the standard of care. 

Health care providers who do telemedicine as a subcontractor also need to make sure they know who they are working for and how the visit is going to be billed. In addition, they need to see whether they are paying a third party for management fees or billing that could be classified as payment for referrals.

The number of health care fraud cases that arise where the patients have been treated or prescribed after "telemedicine" consultations or exams is on the rise.  A recent case shows how Skype was used to allow a psychiatrist to see patients but it appears the reports and billing may not have met the standard of care and even delved to the abyss of false billing.

Dr. John Thomas Terrence of Marina del Rey pleaded guilty on July 16, 2018  to health care fraud involving the alleged defrauding of California workers’ compensation insurers. This was an Indictment that had been filed in July 2015 and related to conduct from 2005 to 2012. Criminal cases often deal in ancient history or acts occurring years prior. 

Minnesota Chiropractors Who Paid Referral Fees to Marketers Charged in Federal Criminal Case for Personal Injury Auto Insurance Accident Cases

For years, health care providers in personal injury or workers' compensation cases were rarely prosecuted federally unless they billed Medicare or Medi-Cal (Medicaid). That is changing rapidly as recent federal criminal cases in Minnesota show which target personal injury fraud. It is clear that federal prosecution will increasingly include all types of health care fraud even where Medicare is not involved.

Across the country, including in California, we are expecting a large increase in prosecuting health care cases where there are allegedly illegal referral fees and alleged unnecessary medical services in private insurance, workers compensation and personal injury cases.  

On December 21, 2016, federal charges were brought against 21 defendants, including 6 chiropractors alleging that between 2010 and 2015 chiropractors engaged in activities with others to defraud automobile insurance companies by submitting fraudulent no-fault insurance claims. Chiropractors Angela A. Schulz, Preston E. Forthun, Huy Ngoc Nguyen and Adam J. Burke were indicted and arrested. Chiropractors Marlyn Comes and Darryl Hummeny were charged in an Information which likely means that a plea deal has been or will be made. All defendants are presumed innocent and Indictments are not evidence.

It is alleged that the chiropractors cumulatively charged billed “no-fault” insurance policies for more than $20 million dollars. The defendants were charged with conspiracy to commit health care fraud and conspiracy to commit mail fraud.  These 21 defendants were charged in 6 separate cases: 4 indictments and 2 felony informations. In cases like this, the government usually relies on cooperating witnesses to record or obtain evidence recorded on video or in texts or emails to show the knowledge of fraud and lack of medical necessity. More charges are expected according to the government. 

Did Your Office Receive OIG Or Grand Jury Subpoena For Records? Case Example Of Why You Should Not Destroy Records Unless You Want Obstruction Of Justice Charge.

I receive many calls from businesses and individuals where the government - federal, state, or administrative boards - or insurance companies are requesting records.  Some records are requested for an audit.  Other records are requested by a subpoena or grand jury subpoena. 

One of the keys in responding is not to panic. Obtain sage advice and proceed intelligently so you do not make matters worse. Even if there are some issues with the records, it may be a damage control case and you may not be objective or thinking clearly when receiving this request for records. 

One of the first things I tell clients is NOT to destroy records. Why? Destroying records does a number of things. First, it helps show intent to defraud. Second, it also provides a basis for an obstruction of justice charge. So even if the government decides not to charge health care fraud, it can charge obstruction of justice. Third, it also means you will not be able to use those records in your defense at any time and you do not know where the investigation is going at an early stage.  

A recent case shows what can happen when records are destroyed. On June 11, 2014, a New Jersey chiropractor, Mary Jean Negri, DC, RN, admitted destroying patient appointment records sought by federal agents investigating potential billing fraud at her medical office. Dr. Degri DC pleaded guilty in federal court to an information charging her with one count of obstructing an investigation of a health care offense. Dr. Negri DC had been practicing for 24 years and now this will cause her to lose her license and have a federal criminal conviction. 

According to documents filed in this case and her own statements made in court, Dr. Degri DC discovered in May 2012 that the FBI and the U.S. Attorney’s Office were investigating her chiropractic corporation for potentially fraudulent billing practices. Dr. Negri DC  suspected that investigators were interested in obtaining the clinic's patient appointment books as evidence of potential fraud. In an effort to obstruct the government’s investigation, she discarded those patient appointment books.

Dr. Negri DC's sentencing is scheduled for September 29, 2014. The maximum sentence on this charge is 5 years, a $250,000 fine, or twice the gain or loss caused by the offense. It is doubtful that she will receive the maximum but the sentence will depend on the judge and the facts and circumstances.  There will be significant collateral consequences to Dr. Negri DC as well such as being excluded as a Medicare provider by OIG and discipline to her license including revocation.  

Do not let your office respond to subpoenas or request for records in a manner that exposes you to greater problems. Seek advice and handle these requests in a professional manner. Even if you need to assert the 5th Amendment or are concerned about billing exposure, remember that not every case investigated is charged but it makes the government's job easier to prove fraudulent intent if there are records destroyed or "lost" in a flood or disaster.

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Phone: 213-233-2260

Email: tgreen@greensasoc.com

76 Year Old Los Angeles Chiropractor Accused of Sexually Assaulting A Patient - What Can You Learn From This?

On June 3, 2014, the Los Angeles Times reported that a 76 year old chiropractor -- practicing for 40 years -- was arrested of sexually assaulting a patient.  Manuel Domingo Chacon was arrested and was held on $100,000 bail but it should be remembered that these are accusations and he is presumed innocent.

While we do not know the facts of this case, it is a reminder that a "sexual assault" or "sexual touching" allegation is very difficult to defend.  My recommendation is for there to be a chaperon in the room where patient are seen. The doors should remain open unless there is a chaperon there.

I often have clients claim they cannot afford it but I recommend having a low skilled medical assistant who can assist with charts and who can enter in each chart their presence during the examination.  I have had clients careers harmed by allegations much less serious than a rape or sexual assault.  I have seen medical providers of brushing up against the outside of someone's clothing for a second. I have seen a physician accused of brushing up his clothed groin area against a patient while performing a laser procedure.

It is not only criminal allegations that are the concern.  If a patient makes that complaint to a Medical, Chiropractic, Pharmacy, Behavioral Science or other Board, those Boards will almost always let them go to hearing and let a judge decide the validity of the allegation.

As part of your best practices, consider making this change in your practice. In today's world, it is easy for someone to make a false claim in the hopes of getting a settlement or if they have psychiatric or other psychological problems that could add to the issue.  Make sure any inappropriate comments by patients are charted and if there are patients who have boundary issues, consider discharging those patients from your practice (while following all the rules and precautions in discharging them).  Be safe out there and be healthily paranoid.

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Phone: 213-233-2260
Email: tgreen@greenassoc.com

Health Care Attorney Tracy Green Quoted in USA Today Article On Chiropractors Being One Largest Medicare Billers. Article Is Result of CMS Releases for First Time Data On Medicare Payments For 2012 By Provider.

Ever since Medicare decided last month to release its 2012 data showing all the payors (physicians and other suppliers), journalists have been reviewing the data and trying to determine how certain providers are getting paid such large amounts. The CMS website has all the data in an Excel spreadsheet that can be downloaded and each physician and supplier can be searched. It's actually an incredible disclosure of private information in that physicians' and suppliers' addresses are there as well as their collections.

I must admit that I searched for my own clients to let them know what the data revealed and gave my clients a heads' up that they may get calls from reporters (which happened in a couple of cases). But providers should review this data so they know what is there. Technically, this is private information but be aware that your patients, employees, friends, ex-spouses, et al., can review this to see your gross collections (of course it does not address

For many of the physicians and suppliers, the numbers are misleading since the billing may reflect an entire group that is being billed under the name of one owner. For others it may be an accurate reflection. However, this is the first time the collections have ever been revealed. The New York Times has posted a link that allows one to search by provider name.

One of the questions that arose is how are chiropractors such a large Medicare group and why are their billings so high? USA Today looked at chiropractors and in the article entitled "Some Chiropractors Making Big Medicare Paid Adjustments," I was quoted on why chiropractors are being looked at in particular. This reporter's editor was particularly interested in chiropractors.

My quote was:

"Los Angeles health care lawyer Tracy Green has represented many chiropractors and says the specialty has "a fair amount of regulatory problems and fraud." Part of the problem is that "they are the ones doing the care" frequently in auto insurance fraud cases and some run pain management clinics, a field that's closely watched given all the pain medication abuse and fraud."

Although it doesn't reflect fully my comments, it is important for providers to see where they are in this list and how they rank compared to similar providers since it will be used as a source of audits and scrutiny. There is no question that physical therapy and chiropractor providers will be at risk for more audits since the charting requirements are incredibly strict and CMS often challenges on medical necessity.

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Los Angeles, California 90017
Phone: 213-233-2260
Email: tgreen@greenassoc.com

Los Angeles Chiropractor Charged With Medicare Fraud, Aggravated Identity Theft And Forfeiture Allegations

Medicare fraud cases involving chiropractors are not very common. The reason for this is that Medicare severely limits coverage for chiropractic services to manual manipulation of the spine to correct a condition known as “subluxation.” The diagnosis of subluxation must be diagnosed and documented either by X-ray or a physical examination that is detailed and documented before Medicare will reimburse. Medicare does not pay for maintenance therapy or for chiropractic treatments that are for maintenance or to promote health.

In Los Angeles, a chiropractor, Danny Paveh (also known as Houshang Pavehzadeh) of the Sylmar Physician Medical Group, was charged in May 2013 with federal health care fraud (18 USC 1347), aggravated identity theft (18 USC 1028(A)(1), and forfeiture allegations. Dr. Paveh is presumed innocent and the fact that an Indictment has been filed is not evidence. This case is pending in the U.S. District Court for the Central District before Judge Manuel L. Real. Mr. Paveh was released on $100,000 bond and a trial date is not yet set.

The allegations in this case are that from 2005 to 2012 – a very long billing period – Chiropractor Paveh billed Medicare more than $1.7 million for chiropractic treatments for subluxation that were never properly performed.  The government alleges that the patients only received massages and other non-reimbursable treatments from Dr. Paveh and massage therapists who worked at his group. Essentially, the government alleges that these were “false claims” submitted to Medicare. It is also alleged that Dr. Paveh committed “aggravated identity theft” by taking the patients information and billing Medicare.

Attorney Commentary Regarding This Chiropractor Medicare Fraud Case

First, it appears that Dr. Paveh may have come to the government’s attention via an audit to be performed by OIG. According to the government, Dr. Paveh was the second-largest Medicare biller in California for chiropractic services – even though he was the only chiropractor in his group. The government also alleged that he was not in the United States when some of the  services were performed.

Second, although clients can panic when faced with an audit, the government alleges that when OIG investigators tried to conduct an audit of Pavehzadeh’s claims, he falsely reported to the Los Angeles Police Department that he had been carjacked and that patient files requested by the auditors had been stolen from his car. This could be used as a sentencing enhancement and to show false statements to government officials in conducting an audit.

Third, I often see clients who assume because they have billed certain procedures for years that it means that Medicare must not have an issue with the billing or documentation. Unfortunately, Medicare is known as “good faith” billing and it reserves the right to go back and audit and seek an overpayment in an administrative context or to seek criminal charges as was done here. Thus, years of billing does not guarantee that the government will not take action. Health care has changed over the years and Medicare has become much more aggressive in health care fraud cases.

Fourth, this case was being investigated for some years. This means that there was significant time to meet with the federal prosecutors and see if the case could be settled pre-indictment. In some cases, we are able to have the prosecutors offer a “reverse proffer” so the client and Medicare fraud attorney can see what evidence the government has so the case can be realistically assessed. 

Finally, forfeiture allegations were filed in this case which can often tie up a defendant's assets and make it more difficult to defend oneself or to support oneself pending a trial. In evaluating anyone's potential exposure, it should be assumed that forfeiture allegations will be filed in any federal health care fraud case. 

In cases like this, obtaining representation long before Indictment – and ideally at the audit stage – make the most sense so the case does not grow and if there are adverse facts, they can be handled at the earliest stage. If there is exculpatory evidence and facts that show innocence and good faith billing, then those facts can be presented as well.

Posted by Tracy Green, Esq.

Ms. Green is a very experienced health care fraud attorney who has handled hundreds of audits and investigations for Medicare, Medi-Cal and private insurance. In addition, she has defended health care professionals and companies in Medicare fraud, Medi-Cal fraud, mail fraud arising from false billing claims, aggravated identity theft and health care forfeiture claims. Feel free to contact her at 213-233-2260 or via email at tgreen@greenassoc.com to discuss your unique situation.

Alert To California Professionals And Licencees: Potential License Denial Or Suspension For Failure To Pay California Taxes Starting In July 2012

Effective July 1, 2012, ALL of the licensing boards in California (Medical Board, Board of Psychology, State Bar, Dental Board, Contractors Board, Veterinary Board,  Accountancy Board, Optometry Board, Pharmacy Board, Board for Professional Engineers, etc.) are required to deny an application for licensure and to suspend the license/certificate/registration of any applicant or licensee who has outstanding tax obligations due to the Franchise Tax Board (FTB) or the State Board of Equalization (BOE) and appears on either the FTB or BOE's certified lists of top 500 tax delinquencies over $100,000. This is pursuant to legislation AB 1424, Perea, Chapter 455, Statutes of 2011.

Once it has been determined that an applicant or a licensee is on a certified list, the applicant or licensee has 90 days from the issuance of a preliminary notice of suspension to either satisfy all outstanding tax obligations or enter into a payment installment program with the FTB or BOE. Any such person who fails to come into compliance will have his/her license denied or suspended until the Medical Board of California receives a release from the FTB or BOE. The form for requesting a release will be included with the preliminary notice of suspension.

The law prohibits the Boards from refunding any money paid for the issuance or renewal of a license where the license is denied or suspended as required by AB 1424.

The FTB and BOE are currently expanding the certified lists from 250 to 500, but you can check if you are currently on the FTB's certified list at: www.ftb.ca.gov/individuals/txdlnqnt.shtml or the BOE's certified list at: www.boe.ca.gov/cgi-bin/deliq.cgi. If you believe you are on either list in error, please call the FTB at (866) 418-3702 or the BOE at (916) 445-5167.   

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 board attorney, administrative attorney, and California licensing 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/

Physicians, Chiropractors & Pharmacists in Workers' Compensation Should Be Aware Of Proposed Restrictions On Compounded Drugs In California

Physicians, chiropractors and pharmacies who provide treatment and prescriptions to workers' compensation applicants in California, should be aware of  new proposed legislation by state Sen. Mark DeSaulnier and Assemblyman Jose Solorio which would limit prices of medically necessary compounded drugs by adding them to the government's fee schedule.

The Los Angeles Times article noted that "Critics of the use of compounded drugs point to a sharp rise in the bills submitted to the State Compensation Insurance Fund, the state's biggest workers' comp insurer. Billings for compounded drugs reached $28 million, or 24% of the fund's total prescription billings last year — from a number so low the previous year that State Fund didn't bother to track it." Rand Corporation is compiling a study on this issue.

An effort last year to discourage the use of compounded drugs — especially those concocted by pharmacists, given by doctors to their patients and billed to insurers — failed to get through the state Legislature. Doctors were among those lobbying against it.

One of the focal points of this bill will be the third party pharmacies that are involved in providing the compounds to the physicians and chiropractors and billing the workers' compensation carriers. According to the L.A. Times article there are concerns about medical necessity and "[s]uspicions of abuse have been fueled by advertisements for compounded drugs on Craigslist two years ago that offered 'doctors who see work comp patients … $20K a month dispensing meds.'" The ad supposedly said:   "There are no legal issues, no billing — we do the billing, no costs or risks to the doctor," the ads said. "We have over 400 doctors in California." The ads further stated that "we have a great product an Anti-Inflammatory Cream that's compounded and has spectacular results" and that doctors could make a $141.60 profit on every prescription.

The L.A. Times article discussed one leading compounding pharmacist Robert Nickell, president of HNP Pharmaceuticals in Torrance. According to the article, Nickell and HNP have been part of a network of dozens of related pharmacies and third-party medical billing companies, many registered at the same Torrance address as HNP.

Posted by Tracy Green, Esq.
Green and Associates, Attorneys at Law
Phone: 213-233-2260
Email: tgreen@greenassoc.com

L.A. Times Article On Illinois Physician Program For Sexual Misconduct Treatment Comes Under Attack. What Do We Do In California For Licensees With Substance Abuse And Sexual Boundary Issues?

In California, if there is a complaint made about a physician that alleges any type of "sexual misconduct," the California Medical Board handles those cases with a presumption that the physician is guilty until proven innocent. The incendiary nature of such an allegation makes it difficult for the Board to refuse to file unproven allegations and often physicians are forced into disciplinary hearings since the Board is reluctant to dismiss weak charges on its own.

The Los Angeles Times ran an article on December 29, 2010 entitled "Doctor misconduct cases monitored in secrecy" regarding a program in Illinois. The article writes about criticisms of the Illinois Professionals Health Program which operates a diversion program for physicians involving alcohol and drug abuse and now sexual misconduct allegations. The article quotes certain opinions that such programs shield physicians and that patients should know about these allegations.

California Does Not Have A Diversion Program
In California, physicians have not been eligible for diversion in lieu of discipline where there are substance abuse allegations since 2008. California does not have any program for the diversion or monitoring of physicians with sexual misconduct allegations where there is also no discipline filed against the physician.

Physicians Can Enroll In Treatment Programs Confidentially Before Disciplinary Charges Are Filed
In California, if a physician has a substance abuse or sexual boundary issue, he or she is free to participate in any treatment program on their own which will remain completely confidential. There is no duty to report the enrollment to the Medical Board. However, if the Board received a complaint that the physician has a substance abuse or sexual boundary problem, the Board investigates the matter to determine if sufficient evidence is found to proceed to disciplinary action.

Most Disciplinary Charges Arising From Substance Abuse Arise From Arrests And Convictions
In our practice, we see most discipline filings relating to substance abuse arising from misdemeanor convictions (such as driving under the influence or wet reckless) and felony arrests and convictions. Physicians (and other health care providers) are required upon renewal to disclose their misdemeanor and felony convictions.

As for arrests, physicians are not required to report a misdemeanor arrest but as for a felony arrest, they must report a felony indictment or a felony information (meaning that in a state criminal case the case has gone through preliminary hearing and the physician has been held to answer).  This means that if a doctor in California is arrested on felony charges, he or she does not need to report until held to answer after a preliminary hearing and an "Information" is filed. We have had cases where a physician was arrested on felony charges and we were able to have the charges dismissed before or at preliminary hearing which did not trigger any self-reporting requirements. Failure to report can be an additional ground for discipline.

Even though self-reporting is not required in felony cases until the Information is filed after a preliminary hearing, there is the risk that the city attorney or deputy district attorneys' office could notify the Board.  Prosecutors in criminal cases are required to notify the Medical Board (and Chiropractic, Osteopathic, Podiatric and "other allied health board") of any felony filings against a licensee upon obtaining information that the defendant is a licensee of that board.   California Business and Profession Code Sections 803.1. Thus, licensee must always be prepared for Board scrutiny where there has been an arrest. 

Reporting also occurs since court clerks are required to report misdemeanor and felony convictions of any persons licensed by the Medical Board and other Boards (Chiropractic, Dental, Osteopathic, Acupuncture, Nursing, Vocational Nursing, Optometry, Veterinary, Pharmacy, Speech-Audiology, Hearing Aid Dispensers, Respiratory Care, Behavioral Science).  California Business and Profession Code Sections 803.1 and 803.5.

Conclusion
Physicians and other licensees can expect that in California, disciplinary charges will be filed in lieu of any type of diversion program. Even where diversion programs exist (such as in nursing), the trend is to file disciplinary charges, place the licensee on probation and then require diversion. The Boards are very attuned to the political climate that they not be perceived as protecting physicians or other licensees and that the process be open to the public.

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 health care attorney, administrative attorney, and California Medical Board attorney.

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/

California Board And Bureau Investigations: Frequently Asked Questions by Licensed Professionals During Board Investigations And Requests For Records

In our practice, we represent a variety of professions before the California administrative boards and bureaus. Here are nine frequently asked questions and answers:

1.  I have received a request for a patient or client file from my licensing board. What should I do?

This is the time to be the most proactive. The earlier you can prevent an investigation from going forward, the better. Once an Accusation or disciplinary charge is filed, it is difficult to unwind it. We find that often charges were filed because the professional did not adequately address the investigation at an early stage.

Each case is different and varies upon the facts. No one strategy works for each case. However, an experienced objective attorney can help you prevent complaint from turning into disciplinary charges or mitigating the problem.

One important piece of advice that applies to most cases (but not all): do not simply produce the file and nothing else. Here are some of the things, among many, that can be done at this early stage:

(1) Take the opportunity to ensure the board has full access to all relevant information.

(2) If there were problems with this particular client or patient, a letter or memorandum summarizing the history, facts and issues will help the investigator evaluate the case.

(3) Have an experienced attorney or other objective party review any submissions since you will have to live with them for several years if the case is investigated further and/or is the subject of disciplinary proceedings. Remember that everything you do is evidence.

(4) If there is significant handwriting in the file, dictate the notes so the handwriting is easy to read. Have your attorney or other objective party ensure that the records are easy to understand.

(5) If this case had a bad or poor outcome (even if that is part of the risk that was disclosed to the client or patient), it may be useful to have your attorney hire an expert and evaluate the file in order to help prepare a thorough response explaining the case or matter.

(6) The board can be contacted to determine what stage the investigation is at so that the appropriate response. This is often easier for your attorney to do since the investigator may be open with him or her. In addition, anything you say is evidence and even impromptu comments like "I didn't do anything wrong" or "I don't remember this person" can be used against you later in ways that are difficult to anticipate when they are said.

(7) Do not alter, backdate or create any records unless such records are properly created and dated.

(8) Once you hire an attorney, have him or her send a letter of representation so the board contacts the attorney and does not show up at your office for a surprise interview.

2.  My licensing board is accusing me of misconduct. What should I do?

A governing board will often state that it is investigating suspected fraud, abuse or other misconduct, but not tell you specifically why. You need to find out the facts supporting the board's accusation. An experienced attorney can help you immeasurably with this process. Once the board is notified that you have hired an attorney, it is not permitted to contact you directly. The attorney can speak with the agency's investigators to learn the factual basis of the allegations. The attorney can then direct you to take specific steps to protect your license.

3.  Why can't I (or shouldn't I) talk to the licensing board myself?

You do not need an attorney to communicate with your licensing board, but it is an excellent idea. An attorney can speak on your behalf and obtain information without making any admissions that might hurt you. Anything you say to a board, even though it may seem innocent, might be used against you later. In addition, it is difficult for you to be objective and create an intelligent and forward thinking strategy.

4.  I already spoke to the licensing board. Is it too late to hire an attorney?

No. Licensing boards do not always act quickly. An attorney can help you find out what the board is intending to do. The attorney may be able to help you submit additional information or documents for the board to consider. The attorney may also be able to negotiate a settlement that would allow you to keep your license.

5.  The licensing board has presented me with a proposed disciplinary order. Do I have to sign it?

No. You can reject it and try to negotiate other terms. If you and the licensing board cannot agree on terms, the board will likely bring formal disciplinary proceedings.

Having an attorney advise you is important. Attorneys who specialize in administrative law understand both the board's concerns and the nature of your profession. This insight often enables them to negotiate settlements that satisfy the board's need for oversight as well as your need to maintain profitability.

A settlement enables you to avoid formal disciplinary proceedings. When a settlement is not possible, you want representation by an attorney who is familiar with procedural rules as well as the laws and regulations governing your profession.

6.  I have an administrative hearing scheduled before a licensing board or regulatory agency. Do I need an attorney?

You are not required to have legal counsel, but it is an excellent idea. The agency will be represented by an attorney and, in fact, you will be at a disadvantage without one.

Many procedural and evidentiary rules must be followed in presenting a defense. Even if you feel you have a good defense, you might not be permitted to present it if you don't follow the rules. An attorney who specializes in administrative proceedings will be able to present your defense in the proper manner.

7.  I have been charged with or convicted of a crime. Will this affect my license?

It likely will. Many regulatory agencies require that you report a criminal charge or conviction, even if it seems unrelated to your practice. Certain charges or convictions may result in the suspension or revocation of your license. This is one reason why it is critical to coordinate any criminal defense with an attorney specializing in administrative law and board defense at the earliest possible stage.

An attorney specializing in administrative law will help you determine the reporting requirements relevant to your profession. If reporting is required, the attorney will help you present the facts in the best light possible. If you fail to report, this can be considered unprofessional conduct and can be used against you later. Honesty is the hallmark of professionalism and a subsequent dishonesty (or even lack of forthrightness) while you are defending your criminal charge can harm your professional license. If you have negative facts in your criminal case, you can win your criminal case and still face discipline from your board in many circumstances. We advise a global strategy that looks forward to the next several years and includes all criminal, civil, and administrative consequences.

8.  Can I apply for a license if I have a criminal record?

It is difficult, although not impossible, for an applicant with a criminal record to obtain a professional license. An attorney skilled in licensing law can help you submit evidence of your character and rehabilitation, so as to present your application in the best light possible. In short, you will need to have a thorough application, numerous support letters, and significant documentation to explain the charges and why you have changed and what you have done to warrant you being granted a professional license. It helps to have an objective attorney who can help you build the best administrative record possible.

9.  I want to avoid problems with my licensing board. How can I make sure I operate my business in compliance with the law?


Many professionals retain a law firm to review their business structure and office policies to ensure they are in compliance with the laws and regulations governing their business. An attorney skilled in administrative law will have knowledge of the common pitfalls for your particular business and can show you where your practice might be vulnerable to administrative scrutiny. The attorney can assist in educating your staff about the law relevant to your practice through in-office presentations or the preparation of formal office policy and procedure handbooks. It is also common for professionals to retain a law firm on an ongoing basis for a monthly fee to have access to an attorney to questions as they arise.

Posted by Tracy Green, Esq.  Any additional questions or comments should be directed to tgreen@greenassoc.com.  Tracy Green is a principal at Green and Associates. The firm focuses its practice on the representation of professionals, particularly health care professionals including individual physicians, corporate providers and group practices.

Tracy Green is one of the best Los Angeles Board attorneys, one of the best Los Angeles professional license defense attorneys and is committed to excellence.  You can email her at tgreen@greenassoc.com or call her at 213-233-2261.   Their website is: http://www.greenassoc.com/

Chiropractors And Attorneys Charged In Staged Accident And Auto Insurance Fraud Case In Los Angeles County

On October 27, 2009, four chiropractors were among those arrested and charged with grand theft and insurance fraud by the Los Angeles County District Attorney's Office (Automobile Insurance Fraud Division) in LASC Case No. BA363494. A few days earlier, four attorneys were similarly charged in the same case. A total of 28 defendants were charged in this case.

Chiropractors Mark A. Stolyar, Babak Naghi, Dmitriy Sklyut, and Christopher Manuel Cleveland were charged. Attorneys Leon Rubin Laufer, John Akopian, Edward Leonid Katsnelson and Stephen Marshall Weiss are charged with numerous counts of insurance fraud, grand theft of personal property and false and fraudulent claim. Mr. Akopian was also charged with money laundering, receiving stolen property and possession of an assault weapon.

A criminal complaint is only an accusation is not evidence of guilt. All the defendants are presumed innocent and are entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.

The attorneys and chiropractors charged are accused of defrauding 15 insurance companies by allegedly filing false claims for staged accidents. Prosecutors allege that the defendants are part of a larger conspiracy involving more than 300 suspects.

There was allegedly a network of of attorneys, chiropractors, doctors, marketers or cappers, and body shop owners who are believed to have worked to defraud auto insurance companies. In addition, the drivers or insureds were involved as well in the fraud. In many of these cases, it is alleged that the accidents only happened on paper. In some of these cases it is alleged that conspiring body shops inflicted physical damages to vehicles reportedly involved in staged accidents.

These charges relate to hundreds of staged auto accident cases and is related to another Los Angeles County case , LASC No. BA340194, in which Alexander Igor Gutman and Laszlo Aldar Bango were charged last year. These defendants plead guilty in February 2009, are cooperating and are awaiting sentencing. Mr. Gutman allegedly was involved in staging some 2,600 “paper accidents” and Mr. Bango was purportedly his co-conspirator. The investigation leading up to Mr. Gutman's case was known as "Operation Big Fish."

Attorney Commentary: There are numerous related issues in these types of cases in order to prove whether or not the attorneys and chiropractors knew that the accidents were staged. It is my experience that the professionals are not told that the cases are staged.

Often circumstantial evidence will be used to show knowledge of intent to defraud. For example, in many of these cases there may have been "marketing" fees or kickbacks for the referral of patients or clients. These referral or marketing fees may be used to show that the attorneys or chiropractors knew or should have known that the accidents were staged. One reason I tell clients that marketing is dangerous in personal injury cases is that once marketers run out of real cases they will create cases to keep their income flow.

Another way the prosecutors may prove fraud is to show that the chiropractors did not have the patients receive all the treatment that was billed to the insurance company. For example, did the patients sign in for treatment that was not received and did the chiropractor bill for it? This allows the prosecutors to prove a false billing claim which is easier to prove than knowledge of a staged accident. However, it could also be used as circumstantial evidence that the chiropractors knew that there was no real injury. The billing statement is provided to the attorneys who then submit it to the insurance carriers in support of their settlement demand.

The sheer number of claims can also be used to show that the attorney or chiropractor must have known that the accidents were staged or exaggerated. Looking at these cases in hindsight with the cooperating testimony of Mr. Gutman and the patients/clients can be difficult to face at trial.

One of the other issues will be whether the attorneys or chiropractors had office managers who had significant authority in their office including, but not limited to, client or patient marketing. The role of other office personnel and whether they are cooperating or not will have significant impact on this case.

In some of these cases, I have seen attorneys use as a defense the fact that when they are told by the insurane carriers that the case is fraudulent that they drop it. However, this is not always a great defense since the prosecutors use it to show that the cases are only dropped once the fraud is discovered. Moreover, often there is no investigation to find out how this fraud case came into the office and no questioning of the referring person or client.

Prevention and compliance is very important in a personal injury or workers compensation practice for attorneys and treating physicians. A compliance plan and audit is important to avoid these type of allegations and charges. Referral and marketing fees cause much of the fraud in my experience.

In addition, during economically depressed times or among low-income populations, there are clients/patients who will lie to insurance companies and their doctors and attorneys in order to make a couple of thousand dollars. However, at the end of it all, the prosecuting agencies will want the persons with licenses charged and will put as a lower priority the patients and clients who agreed to the fraud. The prosecutors will reason that if they can prevent the professionals from facilitating the fraud -- it will be much more difficult to perpetrate.

Any questions or comments should be directed to: tgreen@greenassoc.com or 213-233-2260. Tracy Green is a principal at Green and Associates in Los Angeles, California. Ms. Green focuses her practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. She has significant experience in defending individuals, licensed professionals and businesses in insurance fraud investigations. The firm website is: http://www.greenassoc.com/

New York Chiropractor Pleaded Guilty To Defrauding Private Insurance Companies

On August 21, 2009, chiropractor Michael Horowitz, a chiropractor, pleaded guilty in Manhattan Federal court to a scheme to defraud insurance companies of more than $750,000 by billing for medical services that were not performed. The plea was to one count of conspiracy to commit health care and mail fraud (Count Three of the Indictment) before United States Magistrate Judge James C. Francis IV.

According to the Complaint, the Indictment to which Dr. Horowitz, D.C., pleaded guilty, and statements made in court: Dr. Horowitz, D.C., practiced chiropractics at "Horowitz Family Chiropractic" in downtown Manhattan. In February 2002, Christopher Green joined Dr. Horowitz and opened "Wall Street Chiropractic" on Wall Street in New York City.

From at least 2003 to December 2006, it was alleged that Horowitz and Green defrauded insurance companies including, Empire Blue Cross Blue Shield, AETNA, and CIGNA. Specifically, it was alleged that the two billed insurance companies for providing chiropractic treatments that were not in fact provided. We see many cases where Medicare and Medicaid (Medi-Cal) fraud is prosecuted, but medical fraud cases where private insurers are the alleged victims are also on the rise.

In his plea, Dr. Horowitz admitted to false billings totaling $773,099.18. Christopher Green had plead guilty in August 2007 to participating in the same health care fraud conspiracy. Thus, it appeared that Green had plead out early was cooperating against Horowitz. Sentencing is set for December 3, 2009 by United States District Judge Richard M. Berman.

Posted by Tracy Green. Any questions or comments should be directed to: tgreen@greenassoc.com or 213-233-2260. The firm website is: http://www.greenassoc.com/

Practicing Medicine Without A License: Alternative Health Talk Show Host Arrested In San Diego

On April 9, 2009 San Diego County District Attorney’s Office charged Kurt Walter Donsbach, 73, of Bonita, with practicing medicine without a license and supplying patients with supplements containing non-FDA-approved drugs. An investigation led by the Federal Bureau of Investigation (FBI) in cooperation with the Food and Drug Administration (FDA) and District Attorney’s Office led to the arrest. Bail was initially set at $1.5 million.

Donsbach is charged with 11 felony counts including:

(A) 3 counts for treating patients without a license in violation of Business & Profession Code Section 2052(a);

(B) 2 counts of misbranding drugs for sale in violation of Health & Safety Code Section 111440;

(C) 2 counts of receiving or delivering a misbranded drug in violation of Health & Safety Code Section 111450;

(D) 1 count of fraudulent representations as to the method or treatment of cancer; and

(E) 1 count of grand theft in violation of Penal Code Section 487(a).

If convicted, he faces up to six years in state prison.

According to the arrest warrant declaration, Donsbach falsely identified himself as a “chiropractor and naturopathic doctor” in literature and online at http://www.letstalkhealth.com/. Through a weekly, online radio broadcast from Chula Vista, he claimed to offer “alternative,” “natural,” and “nutritional” remedies for many conditions and ailments including cancer and autoimmune disorders. Donsbach is not licensed as a physician, chiropractor, nor naturopathic doctor in the State of California.

An arrest warrant affidavit contains only allegations against an individual and all defendants must be presumed innocent unless and until proven guilty.
The arrest warrant declaration further stated that Donsbach’s clinic advised one patient to inject herself with “neuropeptides” to treat arthritis, saying it would “re-program” her body’s T-cells. FDA tests revealed the “neuropeptide” contained a steroid not disclosed on the packaging or labels. The patient paid thousands of dollars for the drugs and injected herself for six years, leading to severe bone density loss.

In another case, Donsbach allegedly claimed he had treated pancreatic cancer successfully about 60 percent of the time and provided a supplement to a patient. FDA tests of the supplement revealed the presence of the drug nimesulide, a non-steroidal anti-inflammatory not approved by the FDA. In Europe, marketing of nimesulide has been suspended because of high rates of liver failure that resulted in deaths and liver transplants.

Attorney Commentary: There are alternative health care treatments that can be done in a legal manner by non-licensed persons. Compliance with the federal and state law is necessary, however, in order to avoid criminal charges. There are numerous clients of Donsbach who have come to his defense. However, when there are non-FDA approved medications and false claims of being licensed, these will be red flags to law enforcement and regulatory agencies.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates in Los Angeles, California. They have represented those charged with the unlicensed practice of medicine (or the aiding and abetting of unlicensed practice) in internal investigations, disciplinary proceedings, search warrants and criminal matters.

Chiropractor Scope Of Practice - Proposed Regulations On Manipulation Under Anesthesia

The scope of practice of chiropractors is presently being addressed with respect to chiropractors performing manipulation under anesthesia (MUA). MUA is the manipulation of a patient who is sedated by the administration of anesthesia by a physician and surgeon or other health care provider who is legally authorized to administer anesthesia; and is performed by a licensed chiropractor.

The California Board of Chiropractic Examiners has taken the position that MUA is within the scope of practice of a chiropractor. However, as currently written, the boards regulations do not contain the standard of care or conditions under which MUA shall be performed. The Chiropractic Board has therefore proposed regulations because not all settings are appropriate for the safe performance of MUA. The board determined that facilities licensed or approved by the entities listed in this subdivision have the necessary safety equipment and standards in place to protect consumers undergoing MUA. The Board has assumed that chiropractors can perform MUA but simply wanted to regulate where it would be performed.

Therefore, the Chiropractic Board proposed that Section 318.1 be added to Title 16, Division 4, of the California Code of Regulations. This would establish the standard of care or procedures in which MUA may be performed. The Board's reasoning is that adoption of this proposal is necessary to better protect consumers by requiring that chiropractors adhere to specific standards when performing MUA and that without any standards in place, consumers are at risk for serious injury.

Not surprisingly perhaps, the California Medical Association (CMA is opposing this regulation and the entire idea of chiropractors performing MUA on the ground that they interpret this regulation as expanding the chiropractic scope of practice. CMA submitted objections to proposed regulations that would allow chiropractors to perform MUA. CMA contends that MUA raises important patient safety concerns and the regulations, as proposed by the Chiropractic Board, would allow chiropractors to perform a procedure that is not authorized under current law. It is also CMA’s contention that because the use of anesthesia is integral to the technique itself, MUA is not explicitly authorized under current law. CMA's position is that chiropractors’ scope of practice is limited by the Chiropractic Act (an initiative measure passed by California voters in 1922) and that the scope of chiropractic practice can only be expanded through the initiative process. Here is the CMA's letter opposing the regulation: http://www.calphys.org/assets/applets/mua_comments_030909.pdf

Commentary: There continues to be tension between licensed physicians and surgeons and other licensed health care providers who are non-physicians. CMA's position highlights the conflict and striking divergent viewpoints. As attorneys who represent both physicians and non-physicians in California, we see that there is support for both positions. However, non-traditional methods have gained wide acceptance in California and there is also a populist viewpoint that people should be able to choose their practitioner and their method of treatment.

Any questions or comments should be directed to: tgreen@greenassoc.com. Tracy Green is a principal at Green and Associates. They focus their practice on the representation of professionals, particularly health care professionals including individual physicians, corporate providers and group practices.

Illegal Referrals And Fraud: Chiropractors, Attorney And Office Employees Charged In Orange County Undercover Sting

On February 4, 2009, the Orange County District Attorney's Office (OCDA) reported that it had arrested and charged 12 defendants, including chiropractors, an attorney, and office employees in an undercover sting operation targeting illegal patient referral and insurance overbilling schemes.

As attorneys who protect people's rights under the Constitution, please remember that an indictment or felony complaint contains allegations that a defendant has committed a crime. Every defendant is presumed innocent unless proven guilty in court.

OCDA's Insurance Fraud Unit and Gatekeepers Insurance Fraud Team (GIFT) conducted an undercover operation called Operation K-Fraud (Knockout Fraudulent Attorneys and Unscrupulous Doctors). GIFT investigates provider professionals suspected of defrauding auto and Workers’ Compensation Insurance companies through undercover operations. It is in not clear but GIFT may be a unit organized by the National Insurance Crime Bureau (a non-profit organization funded by insurers). In this case, the NICB and OCDA worked closely together. Automobile Club of Southern California, Infinity Insurance, Mercury Insurance, and Sentry Insurance Companies cooperated with the investigation. The State Bar also worked with the OCDA.

Based on a list compiled by the NICB (a non-profit organization funded by insurers), the OCDA sent 248 letters to medical providers suspected of engaging in fraudulent practices or billing. The letter explicitly outlined the opportunity for the medical professional to engage in an illegal fee splitting scheme with a fake attorney’s storefront office set up by the OCDA. The scheme involved medical professionals agreeing to pay up to 30 percent of specific patient billings to the OCDA undercover investigators posing as law office administrators in exchange for that patient’s referral. OCDA undercover investigators also posed as “patients” claiming to be suffering from soft tissue damage from car accidents.

Of the 248 letters, 20 individuals responded to inquire about the scheme. Four of the 20 medical professionals did not show up after scheduling a meeting. Six others showed up for a meeting, but after meeting with undercover OCDA investigators, they abandoned the scheme, acknowledging it was illegal. The OCDA did not pursue three of the medical providers for other reasons.

As an example, in one alleged case, between March 18 and June 4, 2008, an undercover OCDAs investigator went to one of the chiropractors for 14 treatments under the pretense of having been involved in a car accident. That chiropractor is accused of overbilling an insurance company for 23 treatments, accepting $2,065 from the insurance company and illegally kicking back $1,020 to the OCDA's undercover investigator.

The OCDA has charged 12 defendants in nine criminal cases including eight chiropractors, one attorney, and three administrative staff members. In the storefront operation, the OCDA charged seven chiropractors and one chiropractic administrator/chiropractor’s wife for engaging in an illegal fee splitting scheme. Two of these eight defendants are also charged with billing for more services than rendered.

In addition to the law office storefront undercover investigation, the OCDA also conducted walk-in investigations of chiropractic clinics and law offices, where a chiropractor is accused of making a referral to an attorney and law office administrative staff are accused of making a referral to a chiropractor. In these cases, a chiropractor and an attorney have been charged with overbilling and engaging in an illegal fee splitting kickback schemes in 2005 and 2007. Additionally, the OCDA has charged one law office administrator, a chiropractor, and his chiropractic administrator with engaging in overbilling and an illegal fee splitting kickback scheme. For more and the names of those charged: http://www.ocregister.com/articles/law-chiropractor-chiropractic-2298514-office-westminster

Our Commentary On This Case: The law in California is clear that professionals who file insurance claims, such as medical doctors, chiropractors, and attorneys, are prohibited from paying monetary compensation or anything of value as a kickback or inducement to a patient or to anyone who refers a patient to them for their professional services. One of the reasons for this law is the public policy of requiring medical and legal professionals to attract patients and clients based on their skills and abilities -- and not based on whether they pay a referral fee. In addition, there is a legitimate concern that where professionals are paid a percentage (kickback) for referrals, unnecessary services will be provided and billed. There is no public benefit in having patients medically treated or clients represented by less qualified or unskilled practitioners.

General advertising and marketing to make one’s name known is not barred, but the exchange of money or other things of value (including cross-referring) for patients is illegal. The government will presume that any medical professional or attorney knows or should know through their education and training that such fee splitting is prohibited by law.

In our practice, we note that in the ethnic communities (and this case involved persons from the Vietnamese and Hispanic communities), where referral fees and kickbacks are often a way of doing business in their countries of origin -- the seriousness of these prohibitions are not always fully realized. It is viewed as "everyone is doing it" and there is a fear (perhaps legitimate) that their business will not succeed if they do not offer referral fees or kickbacks to patients or clients and referral sources. In addition, where the professionals or paraprofessions are immigrants, there is often a survivor mentality where they are doing everything they can to make their business or practice a success but forgetting that the rules in the United States are much stricter. While it is true that most people who engage in these activities are not caught -- if you are the one who is caught, the price is steep.

There are more complicated marketing and joint venture arrangements that need to be examined to ensure that they do not violate the law. For example, even internet marketing where there is a specific payment for a referral (versus a pay per click) has been deemed illegal. Run any marketing plan by your health care attorney to ensure compliance with the law. The potential consequences of criminal charges which could put your license and practice and jeopardy are too great not to be careful and seek competent legal advice and effective but legal marketing plans while you seek to grow your business.

Posted by Tracy Green, Esq. Any questions or comments should be directed to Tracy Green 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 and in health care fraud related matters in California and throughout the country. Their website is: http://www.greenassoc.com/