Owner of Drug Rehab Facility Who Paid For Some Patients' Initial Health Insurance Payments and Waived CoPays and Deductibles Charged With Insurance Fraud by Riverside County District Attorney

There are times when health care facilities may contribute to paying a patients' insurance. For example, a patient who is hospitalized for some time where it is documented properly and financial need exists and it is disclosed.

However, can a health care facility pay for the initial premium that allows the patient to get treatment? Not usually. There are also some situations where copay and deductibles can be waived, but there are times when doing so is not allowed. These are two of the issues in a recent criminal case against the owner of a drug rehabilitation facility.

On March 25, 2018, David Leo Johnson, the owner of Southern California Detox Treatment and Recovery (SCDTR) in Temecula, was charged with 30 counts of insurance fraud and an aggravated white collar crime enhancement by the Riverside County District Attorney. The case is set for a felony settlement conference on August 29, 2018. The bail was set at $270,000 which is usually indicative of the alleged loss.

According to court pleadings, from February 2015 to May 2016, Mr. Johnson is accused of billing more than 90 Health Net policies for treatment SCDTR provided to its clients. This was a joint investigation by the DA’s Bureau of Investigation and the Federal Bureau of Investigation.

One issue is the payment of health insurance. It is alleged that an examination of the Health Net policies billed by SCDTR showed some policy applications used the SCDTR address as the policyholder’s residence and that Mr. Johnson's credit card was used to make the initial premium payments on 62 percent of the policies. 

Interviews with clients allegedly showed that they did not submit the applications for their health insurance policies and were not aware of how the coverage was obtained. When interviewed, the clients also allegedly advised that Mr. Johnson did not charge them any of the required patient costs, including deductibles and copayments.

CleanSlate Addiction Treatment Centers Settle Qui Tam Allegations of Prescribing of Suboxone by Nurse Practitioners and Physician Assistants Without Proper Physician Supervision and Improper Billing

The addiction industry is facing a great deal of scrutiny at every level. The laws and regulations are changing and compliance is lagging behind. Noble efforts to get patients treated quickly for substance abuse due to the growing opioid abuse epidemic will cause problems if the federal and state laws are not followed carefully especially where Suboxone and other scheduled drugs are involved (due to potential for misuse and diversion). Further, where there is Medicare/Medicaid or insurance billing involved issues of medical necessity, proper billing and proper medical supervision is key.

Treatment centers need to be mindful that federal rules and regulations regarding prescribing and billing must be followed carefully. A recent qui tam case addresses the prescribing of Buprenorphine (Suboxone), a Schedule III controlled substance that also can be used to treat pain, by mid-level practitioners and what happens when federal law changes but state regulations are not adopted. Providers must follow state and federal laws and regulations.  

How did this qui tam case come about? Until recently, only a physician could prescribe buprenorphine for addiction treatment. Congress modified the law in July 2016, allowing nurse practitioners and physician assistants to prescribe buprenorphine for addiction treatment, provided they meet certain training and state-law licensing requirements.  In Massachusetts, those requirements have not yet been established.

A recent case shows the legal issues. On November 22, 2016, the U.S. Attorney’s Office in Boston reached a $750,000 civil settlement yesterday with CleanSlate Centers, Inc. and Total Wellness Centers, LLC d/b/a CleanSlate. This civil settlement resolved allegations that the two companies, which together operate opioid addiction treatment centers in Massachusetts and other states, improperly prescribed buprenorphine (Suboxone®) for opioid addiction treatment and improperly billed Medicare.

Before You Submit Your License Application Or Report Your Conviction -- You May Be Eligible To Have Certain Felony Violations Designated As Misdemeanors Under Penal Code 1170.18 (Prop. 47)

If you have been convicted of certain felonies and are eligible under the recently passed Proposition 47 which enacted Penal Code Section 1170.18, you may be eligible to have the felony designated as a misdemeanor and/or resentenced as a misdemeanor.  

Here are some frequently asked questions our office is receiving:

Who Should Seek Relief Under Penal Code Section 1170.18 (Prop. 47)?
My recommendation is that anyone who is eligible should seek relief. Felony convictions can result in negative collateral consequences for future student loans, SBA loans, job opportunities, background checks for jobs, clearance for coaching kids' sports or volunteering, admission to colleges, and licensing by governmental agencies, among other things. Reducing to a misdemeanor will at least make some of these exclusions "discretionary" instead of mandatory.  

When Should I Seek Relief Under Penal Code Section 1170.18 (Prop. 47)?
I recommend doing it now. The statute provides that relief should be sought within 3 years of the enactment of the statute or later for good cause. You do not know what you could be doing in 3 years or how this can effect your future. Do not put it off and do it now.  

How Can Penal Code Section 1170.18 (Prop. 47) Affect A Licensing Board's Determination on Discipline?
If a felony is reduced to a misdemeanor, then the disciplinary guidelines will be more favorable to a misdemeanor conviction. With Section 1170.18, this gives individuals convicted of certain felonies the opportunity to reduce it to a misdemeanor.  In addition, this can be used to help show rehabilitation and mitigating evidence.  

Some felonies known as "wobblers" can be reduced to a misdemeanor under Penal Code Section 17(b) but that reduction is discretionary with the court. This new statute gives individuals convicted of felonies another avenue.

Who Is Eligible?
Anyone who has been convicted of the following  California state crimes (not federal) and meets the eligibility criteria:

Health and Safety Code Section 11350 [Possession of a controlled substance] 
Health and Safety Code Section 11357(a) [Possession of a concen. cannibis] 
Health and Safety Code Section 11377(a) [Possession of methamphetamine] 
Penal Code Section 459 [Second Degree Burglary] or Section 459.5
Penal Code Section 473 [Forgery]
Penal Code Section 476a [Bad Checks/Fraud]
Penal Code Section 496 [Receiving Stolen Property] 
Penal Code Sections 484/666 [Felony of Petty Theft With a Prior/Shoplifting]

For theft charges to be reduced, the amount at issue must have been less than $950.

Also the court will not change your charges from felonies to misdemeanors if you have certain strike priors, or if you are required to register pursuant to Penal Code Section 290(c). 
  
What Will Be The Effect of Having The Petition Granted? 
A re-designation means that the conviction is now deemed a misdemeanor for all purposes, except that re-designation does not permit the defendant to own, possess, or have in their custody or control, any firearm or prevent their conviction under Chapter 2 (commencing with Penal Code Section 29800 felon with a gun) of Division 9 of Title 4 of Part 6.  

What Does The Court Consider And Will Be The Effect of Having The Petition Granted? 
If the person is eligible under Section 1170.18(f), the court shall grant the petition.  Section (f) eligibility is where the felony conviction, whether by trial or plea, would have been a misdemeanor under this act had Section 1170.18 been in effect at the time of the offense. No hearing is necessary to grant or deny an application filed under subsection (f) but a hearing can be requested.

For other offenses, where there are no disqualifies present under Penal Code Section 1170.18(b)(1)-(3) and (i), a re-designation will be granted unless the court, in its discretion, determines that resentencing the petitioner would pose an unreasonable risk of danger to public safety. In exercising its discretion, the court may consider all of the following:

(1) The petitioner's criminal conviction history, including the type of crimes committed, the extent of injury to victims, the length of prior prison commitments, and the remoteness of the crimes.

(2) The petitioner's disciplinary record and record of rehabilitation while incarcerated.

(3) Any other evidence the court, within its discretion, determines to be relevant in deciding whether a new sentence would result in an unreasonable risk of danger to public safety.

"Unreasonable risk of danger to public safety" means an unreasonable risk that the defendant will commit a new violent felony within the meaning of Penal Code Section 667(e)(2)(C)(iv).

How Long Does This Process Take?  
The petition process may take between 15 to 60 days, depending on the details of the case and the amount of time it takes to prepare the petition.

Our office is handling these matters and contacting clients to make sure they take advantage of this new law.  If you want your case evaluated, feel free to call or email our office for a complimentary 15 minutes consultation.

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

Physicians With Substance Abuse, Depression, Burnout Issues - LA Times' Article Criticizes Proposed Assembly Bill 2346

In California, the State Bar has a program for attorneys that allows them to go in and get treatment at an early stage. In California, there is no such program for physicians. The only program for physicians is to wait until they have a problem that becomes so grave that it is noted by the California Medical Board and results in an Accusation. There is no incentive for early treatment or encouraging physicians to join a confidential treatment program. There was a Diversion Program but it was shut down some years ago.

Assembly Bill 2346 the "Physician and surgeon assistance program" provides as follows:

"Existing law, the Attorney Diversion and Assistance Act requires the establishment and administration of an Attorney Diversion and Assistance Program to provide services for the treatment and recovery of attorneys for the abuse of drugs or alcohol or mental illness, and who may be enrolled as inactive members of the State Bar."

"This bill would authorize establishment of a similar assistance program for physicians and surgeons. The bill would authorize the Medical Board of California to make available the means to rehabilitate a physician and surgeon with impairment due to abuse of dangerous drugs or alcohol, or mental or physical illness, that affects his or her competency so that a physician and surgeon may be treated in a manner that will not endanger the public health and safety. The bill would require the board, if the program is established, to contract with another entity for provision of the administrative services for the program. The bill would make participants in the program responsible for all expenses relating to treatment and recovery, and would authorize the board to charge a reasonable administrative fee to participants for the purpose of offsetting the costs of maintaining the program. The bill would require the board, if the program is established, to engage in outreach to make physicians and surgeons and others aware of the existence and availability of the program."

The Los Angeles Times' opinion writer Michael Hiltzik opposed this bill on the ground that it would compromise patient safety. I think his views are short sighted and show a lack of understanding about depression, mental health and addiction issues. The goal of this bill is not to cover up physician misdeeds but to encourage physicians to seek treatment. If a physician commits gross negligence, has a settlement over $20,000 to a patient or is the subject of a patient complaint - the Medical Board would still have jurisdiction to investigate and impose discipline. In fact, this bill would encourage someone to get treatment before there is misconduct.

I have represented many professionals with mental health issues such as depression, OCD, bipolar and other issues that do not mean there was a problem with patient care.  In fact, sometimes the depression is as a result of the physician being so obsessed with their practice that they have neglected their family and friends and have become isolated. In addition, alcohol and drugs can become an issue when the physician used drugs initially to work long non-stop hours or in an effort to sleep after long shifts or working at night.  That is often why physicians are at risk. However, if we expect physicians to be less than human and truly god like and not allow for confidential treatment before cases go to the Medical Board, and simply want a punitive approach after problems happen, then do not adopt AB 2346. 

I think AB 2346 is necessary and as physicians will see is no cakewalk or place to hide. In the State Bar program, I have seen attorneys who had some alcohol related arrests during college or law school be required to complete the program successfully as a condition of being admitted to the Bar. That committee is tough and has experts on addiction. They spot problems before they happen and can do it at the application process instead of waiting for clients to be harmed. I accompanied one client to an evaluation by that State Bar Committee and they knew every excuse and even though he was not an alcoholic, they required him to quit drinking because they saw that a couple of alcohol related arrests (without convictions) were signs of a potential future problem. I support AB 2346 and think it will help physicians and their patients in the long run.

Posted by Tracy Green, Esq.

Green and Associates, Attorneys at Law

Phone: 213-233-2260

Email: tgreen@greenassoc.com