L.A. County District Attorney’s Office Is To Receive $17.2 Million In 3 Grants From Dept. Of Insurance To Combat Workers' Comp & Auto Fraud

A spokesperson for Supervisor Michael D. Antonovich said that the Board had unanimously approved the grants, totaling $17.2 million, to combat automobile insurance and workers’ compensation fraud.

According to the spokesperson, a $5.3 million grant will be given to the District Attorney’s office “to combat fraudulent claims that cost taxpayers millions of dollars annually and have led to thousands of jobs being lost due to local business closures precipitated by escalating workers’ compensation costs caused by fraud.”

The remaining two grants will focus on auto insurance fraud organizations and using the spokeperson's own words the “unscrupulous doctors, chiropractors, lawyers and others who profit from fraudulent automobile insurance claims.”

Attorney Commentary: The funding of these special units explains why there is an increased prosecution in these cases. The reason is that this is not County money but grants for specified funding and the grants require the monies be used for the specified purposes. We can therefore expect to see more investigations and prosecutions involving professionals in the personal injury and workers' compensation fields.

It is not specified but usually these grants are from the Department of Insurance who obtain the funds by assessment on insurance policies. Representatives of the insurance companies are often on the committees who decide which counties receive these grants and whether they will be awarded grants the following year.

In other words, representatives of the victims of these insurance crimes have a say in the prosecution of these cases and are able to fund the prosecutions. It is different than the way almost all other crimes are prosecuted.

Any questions or comments regarding this post or your own situation should be directed to: tgreen@greenassoc.com or 213-233-2260. Tracy Green is a principal at Green and Associates in Los Angeles, California and 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/

Criminal Prosecution For Auto Insurance Fraud Continued To Rise: 2 Recent Cases

Up until a few years ago, if someone had filed a false auto insurance claim claiming their car had been hit in an accident – all that usually would have happened is for the insurance claim to be denied. The matter was handled as a civil dispute between the auto owner and his or her insurance carrier except in extreme cases. Those days are over. In these post-Madoff days, any type of fraud is being investigated and prosecuted. Moreover it is being punished more harshly. As an insurance fraud attorney, I review recent cases to see the trends in prosecution and sentencing.

Two cases from Ventura County illustrate what can happen when people make false insurance claims when they are either under financial stress or find themselves uninsured. Like most criminal cases, only a small percentage of insurance fraud is discovered – but when it is discovered, it is being punished harshly to deter others. In both cases, the individuals charged were first-time offenders and ordered to serve jail time for both a misdemeanor and a felony plea (30 to 60 days).

1^st Case – Falsely Reporting That Accident Occurred On A Different Date To Obtain Insurance

On December 9, 2009, Lauro Aguilar-Martinez of Glendale, California was sentenced after pleading guilty to misdemeanor auto insurance fraud. The facts alleged were as follows. On June 13, 2009, Mr. Aguilar-Martinez rear-ended a vehicle on Interstate Highway 5 in Los Angeles. At the time, Mr. Aguilar-Martinez was not insured.

He decided to become insured. Thus, on June 19, 2009, he purchased auto insurance from Alliance United Insurance Company in Ventura. On June 23, 2009, Aguilar-Martinez contacted the Alliance United claims department and made a claim for the June 13 rear-end collision. However, he falsely reported that the collision occurred on June 23, 2009, after he was insured.

Mr. Aguilar-Martinez was placed on probation for three years and ordered to serve 30 days in the Ventura County jail.

The new aggressiveness in prosecution is also evidenced by the fact that in the first case, the accident at issue occurred in Los Angeles but the Los Angeles County resident purchased auto insurance from a company in Ventura County while allowed Venture to prosecute the case.

2^nd Case – False Report of Stolen Truck

Last month, on December 9, 2009, Hidalgo Lopez Gomez of Oxnard was sentenced to serve 60 days in the Ventura County jail after having pleaded guilty to felony auto insurance fraud. Mr. Gomez was placed on formal probation for three years and was ordered to pay Infinity Insurance $3,547 in restitution prior to his sentencing.

The facts in this case are as follows. On January 29, 2009, at 5:00 a.m., Mr. Lopez contacted the Oxnard Police Department and reported his 2008 Dodge truck was stolen after he went inside a market on Saviers Road. Mr. Lopez claimed he left his truck running as he went inside the market to buy coffee. When he returned outside, his truck was gone. Later that same day, Mr. Lopez contacted Infinity Insurance and made a claim for the theft.

Mr. Lopez's claim was assigned to Infinity's Special Investigations Unit (SIU). An SIU investigator made an inquiry with the Department of Homeland Security and learned the license plate readers at the San Ysidro border crossing recorded Lopez's truck traveling into Mexico at 3:37 a.m. on January 29, 2009. There was no record of the truck returning to the United States.

Since Mr. Lopez's account of how and when his vehicle was “stolen” did not add up, Infinity Insurance referred the case to the California Department of Insurance, Fraud Division. After additional investigation by fraud detectives, Mr. Lopez was subsequently arrested and charged with felony auto insurance fraud.

Any questions or comments regarding this post or your own situation should be directed to: tgreen@greenassoc.com or 213-233-2260. Tracy Green is a principal at Green and Associates in Los Angeles, California and 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/

Ex-UCLA Healthcare Employee Enters Conditional Guilty Plea to Four Misdemeanor Counts of Violating HIPAA By Reading Patient Records In Federal Court

On January 8, 2010, a former UCLA Healthcare System researcher, Huping Zhou, entered a conditional guilty plea to four misdemeanor counts of of violating the federal privacy provisions of the Health Insurance Portability and Accountability Act (HIPAA) by reading private and confidential medical records. Mr. Zhou is one of the first people in the nation to be convicted of violating the privacy provisions of HIPAA.

Mr. Zhou's plea came just before trial was scheduled to begin this week. The plea was before United States Magistrate Judge Andrew J. Wistrich. In the plea, Mr. Zhou specifically admitted to knowingly obtaining individually identifiable health information without a valid reason, medical or otherwise. However, the plea was conditional because Mr. Zhou reserves the right to argue that his case should have been dismissed and that he can withdraw his guilty plea in appeals on the ground that he did not know this was a federal crime.

Mr. Zhou, who is a licensed cardiothoracic surgeon in China, was employed in 2003 at UCLA Healthcare System as a researcher with the UCLA School of Medicine. On October 29, 2003, Zhou received a notice of intent to dismiss him from UCLA Healthcare for job performance reasons unrelated to his illegal access of medical records. That night, Mr. Zhou, without any legal or medical reason, accessed and read his immediate supervisor’s medical records and those of other co-workers.

For the next three weeks, Zhou’s continued his accessing of patient records including confidential health records belonging to various celebrities. According to court documents, Mr. Zhou accessed the UCLA patient records system 323 times during the three-week period, with most of the accesses involving well recognized celebrities. There is no allegation that he disseminated these private records to any third party.

In a plea agreement filed in court, Mr. Zhou admitted that he obtained and read private patient health and medical information on four specific occasions after he was formally terminated from the UCLA Healthcare System. Mr. Zhou acknowledged that at the time he viewed these patients’ medical information, he had no legitimate reason, medical or otherwise, for obtaining the personal information. Mr. Zhoa had a Mandarin interpreter at the hearing on the change of plea.

Mr. Zhou is scheduled to appear in federal court on March 22 to be sentenced by Judge Wistrich. At sentencing, Zhou faces a maximum statutory penalty of four years in federal prison.

Attorney Commentary: Protecting the privacy of patients is an excellent goal but whether or not an employee should be criminally prosecuted for reviewing medical records where there is no other illegal conduct is another matter. Most employees sign HIPAA agreements with employers but most of those do not inform the employees that it is a federal crime to view medical records for which they do not have a medical reason or permission to view. Employers should amend their HIPAA agreements to include such notification and health care employees should be careful to not review any such records or document why such records were reviewed (training, etc.). As a health care fraud attorney and HIPAA attorney, it is my opinion that only cases that have criminal intent should be prosecuted.

Posted by Tracy Green. Should you have any questions regarding your own situation or this post, you can email Tracy at tgreen@greenassoc.com. Green & Associates in Los Angeles, California focuses their 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. Their website is: http://www.greenassoc.com/

Los Angeles Doctor Gets 5 Years For Injuring Cyclists - latimes.com

Los Angeles doctor gets 5 years for injuring cyclists - latimes.com

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Attorney Commentary: This is an example of how a physician's involvement in a non-health care related criminal offense can impact his license. This was a July 2008 crash where 2 cyclists were injured. The sentence was long since it came after a jury trial where the doctor was convicted and the doctor had a prior conviction for reckless driving involving a cyclist.

We handled a similar case where an attorney became incensed at a bicyclist, chased him down and hit him. Although the attorney was charged with a felony, we immediately reached a civil settlement with the cyclist and the charges were dropped against the attorney. This is a tougher case since there were a couple of cyclists involved.

This is a reminder for all professionals -- especially males where anger management issues can arise more quickly -- that making any physical contact with another person can jeopardize not only your liberty but your license. Walking away needs to be the motto for all professionals in any altercation unless there is a clear threat to your own danger or that of someone there.

Posted by Tracy Green. Should you have any questions regarding your own situation or this post, you can email Tracy at tgreen@greenassoc.com. Green and Associates in Los Angeles, California focuses their 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. Their website is: http://www.greenassoc.com/

Grand Jury Indicts Los Angeles Doctor Who Headed Liver Transplant Program on Charges of Allegedly Covering Up Patient Switch With Falsified Records

On January 6, 2009, Dr. Richard R. Lopez Jr., a Los Angeles surgeon who was the director of the liver transplant program at St. Vincent Medical Center in Los Angeles was indicted by a federal grand jury for lying to the national organ transplant network after a liver accepted on behalf of one patient was instead transplanted into another patient who was significantly lower on the national wait list.

The eight-count indictment accuses Dr. Lopez of conspiracy, one counts of concealment of a material fact, and six counts of falsification of records in a matter under the jurisdiction of the United States Department of Health and Human Services. Dr. Lopez is scheduled to make his initial appearance on January 25. An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty.

According to the indictment, in September 2003, St. Vincent was offered a liver for a St. Vincent patient, identified as A-H, who ranked second on the match list for that liver, but who was in his home country of Saudi Arabia. The backup patient for the liver was at another local hospital. Instead of advising the organ procurement organization of the intended switch and allowing the organ to be offered to the backup patient, Dr. Lopez approved acceptance of the liver and its transplantation into a patient at St. Vincent—a patient identified in the indictment as A-B, who was ranked 52nd on the match list behind nine other St. Vincent patients.

After A-B received the liver, Dr. Lopez and his co-conspirators are accused of falsely telling authorities at the national organ transplant network that A-H had received the liver, and later submitted a falsified pathology report on A-H’s “explanted” (removed) liver. As a result of the false reporting, A-H was removed from the liver transplant wait list in September 2003, and was thereafter deprived of the opportunity to have this life-saving operation, according the indictment.

However, it is alleged that Dr. Lopez continued to tell A-H that he was on the liver transplant wait list and instructed A-H return to the United States in April 2004, when A-H was found to be too ill to be transplanted. He subsequently returned to Saudi Arabia, where he later died.

The indictment alleges that in reports filed until 2005 with the authorities operating the national organ transplant network, Dr. Lopez and unnamed co-conspirators continued to maintain the fiction that A-H had received the liver transplant. In 2005, the switch and cover-up were discovered by senior management at St. Vincent, and the matter was reported to authorities.

Dr. Lopez has not been associated with St. Vincent since late 2005. The hospital has fully cooperated with federal authorities since the beginning of the investigation.

Seven of the eight counts in the indictment relate to the false reporting of the recipient of the liver offered for A-H. The last count relates to another incident in which a liver was switched to a different recipient and, following the transplant, Dr. Lopez allegedly misrepresented the circumstances of the switch.

If convicted of the eight counts in the indictment, Lopez faces a statutory maximum penalty of 130 years in federal prison. The case was investigated by agents from the Department of Health and Human Services, Office of Inspector General and the Federal Bureau of Investigation.

Attorney Commentary: This case is reflective of two important factors: (1) it was the falsification of records that created the criminal problems and (2) the world-wide shortage of organs. The organ shortage is going to get worse before it gets better.

The Jan. 9, 2010 Wall Street Journal has an interesting and educating article on this issue entitled "The Meat Market." According to experts in this field, there are options. To increase the supply of transplant organs, it would be helpful to have presumed consent, financial compensation for living and deceased donors and point systems. Many people have died but there is a push for innovation in organ donation that will save lives.

Posted by Tracy Green. Should you have any questions regarding your own situation or this post, you can email Tracy at tgreen@greenassoc.com. Green & Associates in Los Angeles, California focuses their 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. Their website is: http://www.greenassoc.com/

Visiting Physicians Association to Pay $9.5 Million to Resolve False Claims Case For Home Health Services: How To Avoid Qui Tam Cases

On December 23, 2009, Visiting Physicians Association, which is based in Farmington Hills, Michigan, agreed to pay the United States and the State of Michigan $9.5 million to settle allegations that the association violated the False Claims Act. Visiting Physicians Association is a Michigan professional corporation which has provided home health services at various times in Michigan, Ohio, Georgia and Wisconsin.

The agreement settled allegations that Visiting Physicians Association submitted claims to the Medicare, TRICARE and Michigan Medicaid for unnecessary home visits and care plan oversight services, for unnecessary tests and procedures, and for more complex evaluation and management services than the services that Visiting Physicians Association actually provided.

This settlement resolved four lawsuits filed by private plaintiffs under the qui tam or whistleblower provisions of the False Claims Act, which permit private parties to file an action on the government’s behalf and share in any recovery. This settlement provides that the four whistleblower plaintiffs will collectively receive a total of approximately $1.7 million.

Attorney Commentary: While many health care providers are careful to avoid any "criminal" conduct and they know they will probably never be prosecuted for health care fraud -- it is more difficult to avoid having a former employee hire a law firm to file a qui tam suit.

Question: What is the number one thing you can do to avoid a qui tam lawsuit?
Answer: Compliance plan. Have it and maintain it.

Compliance plans have many merits, several of which relate to possible qui tam actions. Many individuals, particularly nurses and health care employees, become relators because of frustration stemming from repeated unsuccessful reports of suspected misconduct to management. An effective compliance plan provides a mechanism for action to be taken on such reports and in some cases will foreclose potential relators from concluding they have no alternative other than filing a qui tam.

In addition, effective compliance plans are designed to prevent and/or detect inappropriate conduct through reliance on intensive training, internal auditing, hotlines and other mechanisms. It is obviously the preferable course to have identified and resolved a potential problem through a compliance plan than to have it uncovered by a relator and employed as the foundation for a whistleblower action.

Posted by Tracy Green. Should you have any questions regarding your own situation or this post, you can email Tracy at tgreen@greenassoc.com. Green & Associates in Los Angeles, California focuses their 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. Their website is: http://www.greenassoc.com/