State News : Texas

Two office administrators at medical clinics in Ft. Worth, Waco and Temple that treated workers’ compensation patients were arrested this month and charged with federal healthcare fraud. Melissa Sumerour and Latosha Morgan are alleged to have submitted more than $5.9 million in claims from 2011 to 2017 for services, including physical therapy, that were never performed.

For example, Sumerour is alleged to have billed for physical therapy sessions that were not provided – always billing five units of therapeutic activities, five units of therapeutic exercises, and four units of manual therapy.  This became known as the “5-5-4” rule of billing.

By maximizing billing amounts, Sumerour and Morgan allegedly received more money for themselves in monthly bonuses from the physician that operated the clinics. The complaint does not identify the physician, but media outlets identify him as Leslie Benson, M.D. Dr. Benson, who played football for the Dallas Cowboys in the 1970s, was indicted for healthcare fraud in 2017 and has relinquished his license to practice medicine in Texas.

-  Copyright 2018,David L. Swanson, Stone Loughlin & Swanson, LLP

Neal Wade Barker, M.D., a prominent bariatric surgeon in Dallas, is the seventh defendant to admit his role in an alleged $200 million scheme of health insurance fraud involving the former Forest Park Medical Center. Barker was one of 21 defendants indicted in late 2016 for what prosecutors described as a massive bribery and kickback scheme to steer business to Forest Park’s luxury hospitals at insurers’ expense. He is the seventh defendant to enter a plea of guilty. The remaining fourteen defendants await trial, currently scheduled for early 2019.

According to the indictment, Forest Park executives paid surgeons, primary care doctors, lawyers and others to refer patients to their high-end hospitals. The hospitals were designed as out-of-network facilities, enabling Forest Park to set its own prices instead of agreeing to payment rates negotiated with insurers.

While patients who treat in out-of-network facilities typically pay a higher portion of a procedure’s cost, Forest Park did not attempt to collect money from patients for those higher costs. Instead, it allegedly wrote off those payments as bad debt and made up for them by collecting exorbitant reimbursement rates from insurers. “Thousands of patients chose to have the exact same procedure performed by the exact same doctor at a facility where, absent the scheme, the costs likely would have been financially prohibitive,” the indictment said.

Federal officials have said that Barker faces five to seven years in prison. A sentencing date has not been set.

Until his indictment, Barker apparently was doing very well. Property tax records show that his home in Highland Park has an appraised value of $12,487,540.

-  Copyright 2018, David L. Swanson, Stone Loughlin & Swanson, LLP.

All work hardening and work conditioning services now require preauthorization.

The DWC has amended Rule 134.600, the preauthorization rule, to require preauthorization for all work hardening and work conditioning services, regardless of the facility where they are performed. The amendment was adopted on October 11 and became effective that date.

Prior to the amendment the preauthorization rule exempted work hardening and work conditioning services from the preauthorization requirement if they were performed at facilities accredited by the Commission on Accreditation for Rehabilitation Facilities (CARF) for which the DWC had granted an exemption. The amendment to the rule eliminates exemptions for such facilities.  The change was prompted by the results of a study by the Workers’ Compensation Research and Evaluation Group (REG) which concluded that there is no statistically significant difference between accredited and non-accredited programs in disability duration outcomes. 

-  Copyright 2018, David L. Swanson, Stone Loughlin & Swanson, LLP.

Speaking of hats, our hat is off to the DWC for revamping its much-maligned Designated Doctor program. This month it amended rules in chapter 127 and promulgated a newRequest for Designated Doctor Examination (Form DWC-32) and a new Designated Doctor Examination Data Report (Form DWC-68). The changes become effective December 6, 2018.

One goal of the changes is to increase participation of medical doctors and doctors of osteopathy. To that end, the DWC has changed the manner in which it assigns examinations. It will maintain two independent lists for each county from which the next designated doctor will be selected. One list will consist of doctors qualified to perform examinations under Rule 127.130(b)(1) –(4). These examinations involve musculoskeletal injuries for which medical doctors, doctors of osteopathy, and chiropractors are qualified to perform an exam. The other list will consist of doctors qualified to perform examinations under Rule 127.130(b)(5) – (9). These examinations involve specialized injuries for which medical doctors, doctors of osteopathy, doctor of optometry, and doctors of dental surgery  are qualified to perform an exam.  Those injuries include, but are not limited to, mental and behavioral disorders and injuries of the feet, teeth, eyes and internal systems. A qualified doctor can be on both lists. The DWC hopes that this change will result in more opportunities for medical doctors and doctors of osteopathy to receive assignments for multiple examinations in the same location on the same day, thereby making the examinations more profitable for the doctors.

These changes are sorely needed. Data released by the DWC this month shows that of the 509 available DDs, 345 are chiropractors and only 163 are medical doctors or doctors of osteopathy.

The rule amendments also will give the DWC more tools to weed out DDs that are just plain bad. Specifically, the Division now will be able to deny certification as a DD for a number of newly-specified reasons including, but not limited to, (1) the quality of the doctor’s past DD reports, (2) demonstrated lack of ability to properly apply the  Guides to the Evaluation of Permanent Impairment, and (3) a pattern of reports overturned by the DWC.

-  Copyright 2018,David L. Swanson, Stone Loughlin & Swanson, LLP.

Effective 10/01/18 through 09/30/19, the Division of Workers’ Compensation has increased the maximum weekly benefit rate to $938, and increased the minimum weekly benefit rate to $141.

The discount rate and interest rate provided in the Texas Workers’ Compensation Act have likewise increased effective 10/01/18. For the fourth quarter of 2018, 10/01/18 through 12/31/18, the rates will be 6.06 percent.

Independent contractor Selena Scola was a content moderator for Facebook. Her job was to review content flagged as “inappropriate” by a Facebook user and determine whether the flagged content should be removed from the platform. The job was difficult and stressful, requiring Ms. Scola and her fellow content moderators to review, among other things, photos and videos of “rapes, suicides, beheadings and other killings.” The job took its toll and, according to a lawsuit filed by Ms. Scola in California, caused PTSD. The lawsuit asks Facebook to provide treatment for the content moderators, including the independent contractors.See New York Times article here.

Placing aside the question of whether Ms. Scola’s PTSD-type claim would be a compensable injury under the Texas Workers’ Compensation Act, after reviewing unhinged political Facebook posts from crazy family and friends, don’t we all feel a little traumatized?

-  Copyright 2018, Stone Loughlin & Swanson, LLP.

Every month we publish a newsletter and, it seems, every month we report a new criminal indictment related to a provider involved in some sort of criminal activity. The latest compound cream scheme involved pain management doctor Adam Gallardo Arredondo of the Texas Anesthesia & Pain Institute. The federal grand jury indictment alleges Dr. Arredondo, a Texas physician, accepted kickbacks from an OK Pharmacy (an Oklahoma compounding pharmacy) for prescribing excessive – allegedly – compound drugs to patients insured under the federal workers’ compensation system and other federal programs. Dr. Arredondo also – allegedly – accepted payments for recruiting other physicians to prescribe compound drugs for the OK Pharmacy.

Maybe next month we won’t have any indictments to report . . . but I wouldn’t count on it.

HT www.workcompcentral.com.

-  Copyright 2018, Stone Loughlin & Swanson, LLP.

Last month we reported on fraud investigations pertaining to healthcare providers and pharmacies.  According to a recent Dallas Morning Newsarticle, such investigations are intensifying and expanding. The FBI is conducting raids of medical businesses in the hunt for further proof of illicit kickback arrangements in which doctors refer patients to specific pharmacies in return for remuneration. 
 
Most recently, Next Health, a Dallas-based network of labs and pharmacies, and its successive owners, Critical Health Care Management, were subject to search following a $100 million lawsuit filed by United Healthcare that the companies were involved in a kickback scheme. The owners of both businesses are already charged with health care fraud in another federal case involving Forest Park Medical Center. 
 
Among the allegations leveled against Next Health: that their pharmacies issued animal drugs, that they manipulated the ingredients of compounds to increase costs, and that unnecessary genetic and drug tests were administered as part of a “wellness study.” 
 
Other healthcare companies facing federal scrutiny include Medoc Health Services, Southwest Laboratories, Trilogy Pharmacy, and the ADAR Group.  However, the eight defendants from Ability Pharmacy may be the most impudent of all.  They are charged with committing a $158 million fraud for inflating the costs of so-called compound pain creams: on at least one occasion, one container of the miracle cream cost them $15.00 to produce; they charged $28,000.00 for it. That’s a mark-up of 186,667%. 

-  Copyright 2018,Dan Price, Stone Loughlin & Swanson, LLP

The Division of Workers' Compensation recently held hearings on the DWC proposed rules intended to provide guidelines for  penalties for Carrier administrative violations. The proposed rules, required by the Legislature, grew out of complaints by stakeholders that the Division's current method of levying penalties were inconsistent of overly harsh with little explanation of how a penalty was derived.

In Senate Bill 1895, the Legislature amended the Texas Labor Code Section 415.021, to require the Division to adopt rules to provide a degree of consistency and fairness to the administrative penalties imposed by the Division:
 

A series of criminal actions announced this month by both State and Federal authorities demonstrate the criminal justice system is taking workers' comp fraud seriously in Texas. The following are a few of the recent actions which seek to end the practice of double-dipping, i.e., earning unreported post-injury wages while collecting workers' compensation indemnity benefits based on an inability to work.
 

• Texas workers' compensation claimant Gary Hunt  was convicted and recently sentenced by a Travis County District Court for a "double-dipping" scam. Mr. Hunt alleged he was injured in the course and scope of employment for employer Reliant Plumbing Services, Inc., and filed a claim for workers' compensation benefits with the employer's carrier, Texas Mutual. Texas Mutual paid indemnity benefits to Mr. Hunt based on his inability to work as a result of the alleged compensable injury. As it turns out, Mr. Hunt could -- and did -- work as a comfort counselor earning wages without reporting those wages to the Carrier. The TDI-DWC prosecutor embedded in the Travis County District Attorney's office prosecuted the case and obtained the Class A misdemeanor conviction and  sentence of 1 year deferred adjudication.

• John E. Carroll, a federal workers' compensation claimant, was convicted and sentenced by the U.S. District Court for the Western District of Texas (Waco) of collecting federal benefits while working and earning wages in Botswana. Mr. Carroll was sentenced to 8 months home confinement and 1 year of probation.

• Christopher Colligan, a truck driver from Baytown, was also prosecuted by the TDI-DWC prosecutor in Travis County. Mr. Colligan alleged he was injured while driving a truck for his insured employer. The carrier, Texas Mutual, paid indemnity benefits to Mr. Colligan based on his inability to work.  Of course, Mr. Colligan was able to work. While continuing to collect benefits, Mr. Colligan began driving for another trucking company and earning wages. This double-dipper was convicted of a Class A misdemeanor and sentenced to 1 year probation. Restitution to the carrier was also ordered.