California Medical Board Increases Investigations, Search Warrants And Arrests In Medical Spas And Practices Offering Laser Skin and Hair Procedures, Botox and Injectibles: Time To Make Sure Your Practice Is Compliant!

If your medical practice or medical spa offers laser hair removal, botox, injectibles, laser skin treatment, or sales of prescribed items such as Latisse or Retin A – it is time to make sure your practice is compliant. Why? The Medical Board of California is aggressively investigating the unlicensed practice of medicine. It has a separate department called “Operation Safe Medicine.” 

This investigation is not limited to backroom medical practices but includes practices owned by physicians where the level of medical supervision is not sufficient, nurses operate a laser for hair removal where there has not been a good faith or "directed" medical exam by a physician or advanced practitioners such as a physician assistant or nurse practitioner, and receptionists selling Latisse to patients without a good faith medical exam and prescription. Nurses who are used to hospital settings are often surprised at the requirements in a clinic setting for seemingly routine procedures such as laser hair removal. 

If you are a “medical director” for any practice offering these medical services or a plastic surgeon or dermatologist using nurses, it is critical that the practice is compliant since you could be charged with aiding and abetting the unlicensed practice of medicine.

I recently concluded a criminal case where a physician did a “favor” and agreed to be an unpaid medical director for a location offering laser hair removal but did not have any presence at the facility. This led to a criminal case being filed and disciplinary charges. The case was resolved where the physician kept her license but if there had been compliance and the physician understood the law at the beginning – the case never would have happened. 

I had another case where a plastic surgeon client allowed an independent contractor registered nurse to inject Botox without a good faith medical exam by the physician. The compliance changes I drafted were instituted immediately and the Medical Board investigation was closed without incident. I have had numerous cases where compliance was successfully instituted to avoid the possibility of any Medical Board complaints or investigations.

Why am I writing this article? Just in the last three weeks, I know of 3 cases where there have been search warrants and/or arrests. Apart from the cases I am handling, the Medical Board issued a press release on June 8, 2012 where it announced the arrests and felony charges against a non-medical owner of Laser Solutions in Beverly Hills, CA for practicing medicine without a license. 

In the past OSM has focused on a variety of unlicensed practices (selling contact lenses without prescriptions, unlicensed midwifes, etc.) but lately the cosmetic practices are targeted. The climate is not favorable for these practices and the Medical Board is sending in undercover agents. There have been hearings at the Medical Board about the level of supervision for nurses in medical spas and cosmetic practices and one of the outcomes of these hearings was increased enforcement. 

How do these cases get initiated? Often they are complaints from competitors or former employees. The complaints are rarely filed by patients. In my experience, I have seen physicians and nurses remain vastly ignorant of the rules and regulations and unintentionally violate the law. If your practice is not compliant or you are not sure, now is the time to change your practices and procedures. In some cases, ownership also needs to be modified. Seek experience counsel and become compliant. Do not fear that by making changes you will be admitting guilt. Just become compliant.

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

 Any questions or comments should be directed to Tracy Green a very experienced Medical Board attorney, health care litigation attorney, medical spa attorney, physician attorney, and nurse attorney. She is very familiar with the issues of ownership, corporate practice of medicine, unlicensed practice of medicine and related issues in cosmetic areas. The firm website is: http://www.greenassoc.com/

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

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

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

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

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

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

How Does The Board Decide Who To Investigate?

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

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

How Can I Prepare For These Investigations?

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

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

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

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


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

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


What Type Of Cases Go Criminal?

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

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

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

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

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

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

Embezzlement Cases On Rise In California As Economy Is In Decline -- Will I Have To Go To Jail For Embezzlement?

I was in Los Angeles County Superior Court this week on a relatively small embezzlement case (under $5,000).  The judge remarked that he had over 20 embezzlement cases in his courtroom alone that week and his is not a settlement or early disposition court.  The economic pressures have made these cases more common even though embezzlement is more complex than the economy since there often can be an addictive component to the behavior.

In some other cases the past, the embezzlement was discovered and we were able to work out civil settlement agreements with the employer without any criminal action. In many cases, the client faces both the criminal and the civil case.  Some companies file civil cases so they can be in control of the litigation which they do not have in criminal cases.

In the small amount case this week, the client discovered the case when he was was contacted by a LAPD detective for an interview. I intervened and refused to let him be interviewed.  The detective shared the documentation against him and informed me that he had already decided to charge him. I arranged a self surrender and bail. The case against him was well documented and the client was very remorseful. There was an offer of no jail time if restitution was paid in full.  

In contrast, in downtown Los Angeles last week, I saw a plea and sentence on April 18 in Division 50 (the early disposition state court) by a woman who admitted to embezzling more than $4.6 million from 17 different companies from 2003 to 2009. She did not have a plea agreement with the D.A.'s Office but instead "plead open" to 17 counts of grand theft and Judge Horowitz sentenced her to 5 years in state prison. One interesting thing about this case was that she was not charged until April 4, 2012 -- which was over 3 years after she left the company and the charges related back to 2003.

I also did a consultation last week on another embezzlement case where the loss was over $200,000 and a civil case has been filed before the criminal case. Strategies considered included whether to stay the civil case, settle the civil case and seek cooperation if any criminal reporting has been done, and how to handle the client's inability to pay significant restitution. 

In some cases, we are able to use our expertise and show that there was no embezzlement or that the amounts are greatly overstated. For example, if the claim is that the client abused his or her expense account or was reimbursed for expenses that are now claimed to be unauthorized -- it is not a simple taking case.

In other cases, the evidence is overwhelming and the taking involves falsification of expenses, checks and the client has already confessed to his or her former employer or law enforcement. In those cases, a common question is "will I have to go to county jail or state prison?" There is no one answer to this question but it depends on a number of factors. 

Ten common factors include: (1) criminal history, (2) facts and how easy the case is to prove and whether there are any viable defenses, (3) ability to pay restitution including borrowing money or selling assets to do so, (4) venue or where the case is filed -- Los Angeles downtown can be very different from other parts of Los Angeles County or from Ventura or Orange Counties, (5) the victim's agreement to prefer no jail so restitution can be paid, (6) other factors like mental health, addiction, and family issues, (7) the effect the loss had on the victim, (8) the role the person had in the victim's company and life, (9) whether the client is able to work and pay a significant percentage of earnings to restitution in lieu of custody, and (10) other mitigating or favorable facts that can be developed. 

Each case is different and working up the facts and mitigating circumstances can go a long way in reducing the risk of custody time. However, courts are getting tougher on sentencing for all white collar crimes, including embezzlement. Restitution is king and can make all the difference in the case. I have structured many different ways and the only limitation is our own creativity and willingness to do everything we can to get the best result possible. 

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 criminal defense attorney and civil attorney who understands and is adept at the interplay between the two. The firm focuses its practice on the representation of businesses and licensed professionals, individuals and businesses in civil, administrative and criminal proceedings. Their website is: http://www.greenassoc.com/