When Investigation Solutions started 13 years ago, we opened an investigation into Prime Orthopedics, noting what seemed to be unreasonably high charges for durable medical equipment (DME), billed on California workers’ compensation claims.
DME must be prescribed by the attending physician. The actual equipment must be certified, and it must be billed with the appropriate code/price. Otherwise, an E-stim (muscle stimulator) machine costing $169 might be billed at $1,140 using the wrong code.
We interviewed patients, doctors, former clinic staff and DME retailers. We inspected DME devices at depositions and at the injured workers’ homes. We even bought some through Craigslist.
In many cases, what was billed was not what was provided. Instead of certified medical equipment, items were often drop shipped from China.
One doctor provided a statement under oath that signatures in his name on prescription forms were forged. An employee told us how she was instructed to alter prescriptions.
The business owner did not show up for depositions. Another official testified that there were “deficiencies” in some of their licensing and billing.
We blocked payments to providers. We referred the cases to law enforcement and reached a global settlement with the primary provider almost 10 years ago. From an overbilled E-stim machine to kickbacks, the fraud case got bigger. Doctors, attorneys and others were arrested. The business owner pled guilty and received a five-year prison sentence for fraudulently submitting more than $250 million in work comp claims. As part of his plea, he has cooperated with prosecutors on other cases. Another man was found guilty for conspiracy to commit honest services mail fraud, with a five-year prison sentence, and ordered to pay nearly $28 million in restitution. In 2015, a chiropractor and another man pled guilty. One received a four-year prison sentence for his involvement.
Last month, the Workers’ Compensation Appeals Board formally dismissed all liens with the following providers, putting an end to the collection and litigation challenges. Our primary focus is helping injured workers get the care they need and to get them back to work. When the bad actors get between the adjuster and the injured worker, it’s bad for all of us. When we detect and defend this fraud, we can deter their future efforts to hurt injured workers and the workers’ compensation system as a whole.
They sometimes take time, but it’s worth the effort.