Copyright

(c) 2010-2024 Jon L Gelman, All Rights Reserved.

Thursday, November 12, 2015

NY Corporate Workers' Compensation Fraud Leads to Criminal Charges

New York State Inspector General Catherine Leahy Scott announced today the arrests of four Central New York and Southern Tier business owners on fraud and theft charges as part of an ongoing series of investigations into employers and employees who defraud the State Workers’ Compensation system. Under State law, employers are required to maintain Workers’ Compensation coverage for their employees, and employees are expected to provide truthful information regarding their work activity to insurance carriers and the Workers’ Compensation Board during the time they are receiving benefits.

Today’s arrests are part of an ongoing coordinated effort by Inspector General Leahy Scott with local and State law enforcement partners involving multiple investigations across New York. Additional arrests are expected imminently. It also coincides with enhanced outreach efforts, including stakeholder trainings by the Inspector General, to increase public awareness of Workers’ Compensation fraud in the State.

“The Workers’ Compensation system is meant to assist and protect employees who are unable to work due to an illness or injury, and those who abuse the system should fully expect they will be caught,” said Inspector General Leahy Scott. “In these arrests today, the defendants are accused of using fraud and deceit to undermine their legal and moral responsibilities, and I will use the resources of my office to relentlessly pursue anybody who abuses the system at the expense of honest, hard-working New Yorkers.” Workers’ Compensation fraud impacts all New Yorkers, from increased insurance premiums to increased workloads for coworkers and an overall reduction in workforce productivity.

Arrested today were:

Douglas S. Griffen, 53, of 330 Halseyville Road, Ithaca, owner of Fingerlakes Excavating LLC, was charged with Grand Larceny in the Third Degree and Falsifying Business Records in the First Degree, felonies, as well as the Workers’ Compensation crimes of Fraudulent Practices, a felony, and Failure to Secure Compensation, a misdemeanor. Inspector General Leahy Scott’s investigation found that Griffen, last summer, provided a Tompkins County home building company false documents that purported to show that his own company had valid Workers’ Compensation coverage in order to qualify for two construction contracts with the home builder worth $72,000. Griffin had no Workers’ Compensation coverage and would not have been awarded the contracts if he had not provided the false documents to the home builder. Griffen was arraigned in Ithaca City Court and sent to Tompkins County Jail in lieu of $5,000 cash or $10,000 bond bail and is due back in court Tuesday, Nov. 17.

 Roger Camby, 60, of 1119 Teall Avenue, Syracuse, owner of an online retail candle business, was charged with the Workers’ Compensation crime of Fraudulent Practices, Insurance Fraud in the Second Degree and Grand Larceny in the Second Degree, all felonies. Inspector General Leahy Scott’s investigation found that Camby, a former truck driver out from work on a Workers’ Compensation claim since 2010, was operating several businesses while certifying to the Workers’ Compensation Board that he was not working in any capacity. Between early 2011 and the summer of 2013 he received more than $56,000 in Workers’ Compensation benefits while also running a candle business, Lovesoy Candles and Gifts, as well as working as a consultant for three multi-level marketing businesses.

Camby was arraigned in Town of Tully Court and is due to appear in Syracuse City Court tomorrow, Nov. 13. John A. Francher, 73, of 20 Vista Street, Auburn, owner of the Greenbriar Home for Adults in Homer, was charged with the Workers’ Compensation crime of Effect of Failure to Secure Compensation, a felony.

Inspector General Leahy Scott’s investigation found that Francher operated a business with more than five employees without obtaining required Workers’ Compensation coverage. He employed approximately 10 people at the Greenbrier Home. Francher was previously convicted in February 2014 of a misdemeanor charge of failure to secure compensation at Briarcliff Manor in Bath. Francher was arraigned in Town of Homer Court and is due back in court next Tuesday, November 17.

Steven M. Spratley, 58, of 179 Prospect Ave, Walton, owner of Spratley and Sons Tree Surgeons, was charged with Fraudulent Practices, a felony under the Workers’ Compensation Law. Inspector General Leahy Scott’s investigation found that Spratley falsely denied at a 2013 Workers’ Compensation Board hearing that a man who was severely injured while working for him in 2011 was actually an employee.

The investigation found that Spratley made the false statements to avoid liability for the employee’s claim for Workers’ Compensation due to the injury, which made him unable to work. Spratley is due to appear in the Town of North Norwich Court at a future date. Inspector General Leahy Scott thanked the Workers’ Compensation Board, the State Insurance Fund, Liberty Mutual Insurance and the Ithaca Police Department for their assistance during the investigations; the Ithaca Police Department and the New York State Police for their assistance with making the arrests; and Onondaga County District Attorney William J. Fitzpatrick, Tompkins County District Attorney Gwen Wilkinson, Cortland County District Attorney Mark D. Suben and Chenango County District Attorney Joseph A. McBride and their offices for prosecuting these cases.

The defendants are presumed innocent until and unless proven guilty in a court of law.

For an audio file of Inspector General Leahy Scott’s remarks, click HERE

Emerging Concepts for Future Workers' Compensation Benefits: Portability Now

Workers' Compensation as a benefit program is beginning to evolve under the concept of "The Shared Economy." Attacked from within and without, challenged by abuse and fraud, drained by the cottage industries and vendors, national lawmakers, labor leaders, insurance companies, governmental agencies, and the media, are speaking out to change the century old system that fails to integrate with current social, political, economic and medical programs.

A recent letter from national labor leaders has called for a "portable" system of benefits that will replace the current patch-work of systems called "workers' compensation programs.":

"We need a portable vehicle for worker protections and benefits.Traditionally, benefits and protections such as workers compensation, unemployment insurance, paid time off, retirement savings, and training/development have been, largely or partly, components of a worker’s employment relationship with an employer. The Affordable Care Act has disrupted that model, providing more independent workers a different avenue of access to health insurance. Another new model is needed to support new ways of work. We believe this model should be:

Independent: Any worker should be able to access a certain basic set of protections as an individual regardless of where they source income opportunities.

Flexible and pro-rated: People are pulling together income from a variety of sources, so any vehicle should support contributions that can be pro-rated by units of money earned, jobs done, or time worked, covering new ways of micro-working across different employers or platforms.

Portable: A person should be able to take benefits and protections with them in and out of various work scenarios.

Universal: All workers should have access to a basic set of benefits regardless of employment status.

Supportive of innovation: Businesses should be empowered to explore and pilot safety net options regardless of the worker classification they utilize.

California Workers' Compensation $25 Million Medical Fraud: US Attorney Charges Providers

San Diego Nov 10 2015: Eight medical professionals and associates are charged in federal grand jury indictments with buying and selling patients in a bribery scheme involving $25 million in improper claims for medical services and devices which were then billed to California Workers’ Compensation insurance companies.

FBI agents along with investigators from the California Department of Insurance and the San Diego County District Attorney’s Office served five search warrants and three seizure warrants today at locations in San Diego, Chula Vista, National City, Murietta and Los Angeles. Authorities arrested five people, including a radiologist, a chiropractor, a medical equipment provider, a medical clinic administrator and a so-called medical marketer. An attorney and a medical service provider were summoned to appear in federal court on Thursday.  One indicted defendant, Gonzalo Paredes, remains a fugitive and a warrant has been issued for his arrest.

These defendants, plus six corporations, are charged in three federal grand jury indictments unsealed today with conspiracy and honest services mail fraud. The indictments allege that these players either paid or received tens of thousands of dollars to buy or sell hundreds of patients, without the patients’ knowledge - therefore depriving those patients of their right to their doctors’ honest services.

“Today’s indictments are only the first wave of charges in what we believe is rampant corruption on the part of some physicians and chiropractors in their dealings with the health care system in general, and California’s Workers’ Compensation System in particular,” said U.S. Attorney Laura Duffy. “A patient puts his trust, and his very life, into the hands of his physician. A doctor’s decisions should never, under any circumstances, be influenced by anything other than the patient’s best interest.”

“Today's indictments show how the defendants in this case allowed greed and corruption to influence their patient care decisions and treated their patients as a commodity to be bought and sold,” said FBI Special Agent in Charge Eric S. Birnbaum. “The FBI will continue to use our intelligence and investigative expertise to identify, disrupt and dismantle sophisticated criminal conspiracies that unlawfully enrich individuals at the expense of patient care. The FBI and our law enforcement partners are committed to rooting out corruption in our health care system.”

“This criminal network bought and sold patients like cattle,” said District Attorney Bonnie Dumanis. “They cashed in on people who trusted them with their health and they conspired to illegally game the system on a level that we’ve not seen before. But, the game is over.”

“Our detectives from the California Department of Insurance worked closely with the FBI, United States Attorney's Office and San Diego District Attorney's office to investigate and arrest these medical providers for insurance fraud, which adds crippling costs to California's workers compensation system,” said Department of Insurance Commissioner Dave Jones. “These are not victimless crimes. When medical providers defraud insurers, those costs are passed on to California businesses and consumers, who already are struggling to make ends meet.”

This is how the schemes worked:

Patients who said they were injured on the job filed a workers’ compensation claim with the state of California and sought treatment for their injury. In this round of indictments, the workers sought help from a chiropractor.

The chiropractors were the gateway to a wide-array of health care fraud. In these cases alone they prescribed medical equipment, referred the patients for MRIs and X-Rays, and ordered specialized treatments such as Shockwave therapy.

As alleged in one of the indictments, Los Angeles radiologist Ronald Grusd paid bribes to a San Diego chiropractor in exchange for patient referrals. The bribes were funneled to the chiropractor via Grusd’s corporation, Willows Consulting, a shell company. The checks were labeled “professional services,” but this was a sham.

In order to further hide the illegal kickbacks, checks were issued to intermediaries - defendants Alexander Martinez and his father, Ruben - through their front companies, “Line of Sight” and “Desert Blue Moon.” The Martinezes took their “cut” and then, in turn, paid off the chiropractor.
Grusd’s practice, California Imaging Network Medical Group, has clinics in San Diego, Los Angeles, Beverly Hills, Fresno, Rialto, Santa Ana, Studio City, Bakersfield, Calexico, East Los Angeles, Lancaster, Victorville and Visalia.

In another indictment, a second San Diego chiropractor, Dr. George Reese, with offices on El Cajon Boulevard, referred patients to a Los Angeles area medical service provider (controlled by attorney Lee Mathis and Fernando Valdes, president of Foremost Shockwave Solutions ) in return for bribes. The bribes were set by the conspirators at $100 per patient and paid through an intermediary. After taking a cut amounting to $25 per patient, the intermediary would pay the remaining $75 per patient to Reese.

Although disguised as “office rent” payments, the illegal bribes were paid in cash during clandestine exchanges in restaurants and parking lots. For example, $6,000 in cash was delivered to Reese in the parking lot of the Jolly Roger in Oceanside, hidden in a gift bag. Other times, it was passed in envelopes or stashed inside newspapers.

According to the indictment, Reese and his codefendants generated and submitted bills to insurers totaling in the tens of millions of dollars. Most of these treatments involved the providing of “Shockwave therapy,” which uses low energy sound waves to initiate tissue repair. Proceeds from the insurance claims generated through this scheme were paid to Mathis and Valdes.

In the final indictment, a San Diego chiropractor referred patients to a licensed provider of durable medical equipment, Julian Garcia. In return Garcia paid the chiropractor $50 for each patient – in cash, to disguise the kickbacks. Garcia then improperly billed Workers Comp insurers millions for hot and cold packs for patients who had been secured by bribes.

Tuesday, November 10, 2015

NJ Governor Chris Christie Vetoes Supplemental Benefit Bill

SENATE BILL NO. 929

(First Reprint)

To the Senate:

Pursuant to Article V, Section I, Paragraph 14 of the New

Jersey Constitution, I am returning Senate Bill No. 929 (First

Reprint) without my approval.




Workers’ compensation is an important program in New

Jersey, providing compensation to employees who suffer job related

injuries or illnesses through no fault of their own. It

is especially significant to families who receive benefits after

a loved one has died in the line of duty.




In 1979, the State made comprehensive changes to the

workers’ compensation law, resulting in higher payments for

workers totally and permanently disabled after December 31,

1979. The changes, however, created a disproportionate effect

on workers’ compensation payments made to those who sustained

total and permanent disability or death before the

implementation of those changes. In recognition of this

disparity, the Legislature established a cost-of-living

adjustment (“COLA”) for those injured on or before December 31,

1979 to align their payments with those injured after the new

reforms.




This well-intended bill would extend the workers’

compensation COLA benefit to total disability beneficiaries and

those receiving survivors’ benefits where the injury occurred

after December 31, 1979. The estimated yearly cost for the COLA

is at least $58 million and would be funded solely through an

increase in the annual surcharge on private-sector employers

paid into the Second Injury Fund (“SIF”).




Employers in New Jersey already pay the third highest

workers’ compensation rates in the Nation. This bill would

further raise those rates, putting even more of a burden on

private sector businesses. I have worked tirelessly with my

Administration to maintain a business environment that fosters

the growth of private-sector jobs in the State, and we have been

successful. This bill represents a step in the wrong direction

because an increase in the annual SIF surcharge would threaten

the State’s ability to keep existing employers in the State and

undermine efforts to attract new ones. I cannot sign a bill that

will pile yet another unacceptable financial burden on the

businesses of this State.




Accordingly, I am returning Senate Bill No. 929 (First

Reprint) without my approval.

Respectfully,

[seal] /s/ Chris Christie

Governor

Attest:

/s/ Thomas P. Scrivo

Chief Counsel to the Governor




................

S929 Aca (1R) Concerns certain workers' compensation supplemental benefits.

Received by the Senate




Identical Bill Number: A1908 (2R)

Last Session Bill Number: A4514 S613 (1R)




Sweeney, Stephen M. as Primary Sponsor

Madden, Fred H., Jr. as Primary Sponsor

Burzichelli, John J. as Primary Sponsor

Riley, Celeste M. as Primary Sponsor

Moriarty, Paul D. as Primary Sponsor




1/16/2014 Introduced in the Senate, Referred to Senate Labor Committee

3/17/2014 Reported from Senate Committee, 2nd Reading

3/17/2014 Referred to Senate Budget and Appropriations Committee

6/5/2014 Reported from Senate Committee, 2nd Reading

6/12/2014 Passed by the Senate (21-15)

6/12/2014 Received in the Assembly, Referred to Assembly Labor Committee

10/27/2014 Reported and Referred to Assembly Appropriations Committee

3/16/2015 Reported out of Assembly Comm. with Amendments, 2nd Reading

6/25/2015 Substituted for A1908 (2R)

6/25/2015 Passed by the Assembly (43-31-2)

6/25/2015 Received in the Senate, 2nd Reading on Concurrence

9/24/2015 Passed Senate (Passed Both Houses) (24-12)

11/9/2015 Absolute Veto, Received in the Senate




Introduced - 5 pages PDF Format HTML Format

Statement - SLA 3/17/14 - 3 pages PDF Format HTML Format

Fiscal Estimate - 3/26/14; as introduced - 8 pages PDF Format HTML Format

Statement - SBA 6/5/14 - 4 pages PDF Format HTML Format

Statement - ALA 10/27/14 - 4 pages PDF Format HTML Format

Statement - AAP 3/16/2015 - 3 pages PDF Format HTML Format

Fiscal Estimate - 4/8/15; 1R - 8 pages PDF Format HTML Format

Reprint - 3 pages PDF Format HTML Format

Veto - Absolute veto - 2 pages PDF Format HTML Format

Committee Voting:

SLA 3/17/2014 - r/favorably - Yes {3} No {1} Not Voting {0} Abstains {1} - Roll Call

SBA 6/5/2014 - r/favorably - Yes {8} No {2} Not Voting {2} Abstains {1} - Roll Call

ALA 10/27/2014 - r/favorably - Yes {6} No {2} Not Voting {0} Abstains {1} - Roll Call

AAP 3/16/2015 - r/Aca - Yes {6} No {1} Not Voting {1} Abstains {1} - Roll Call




Session Voting:

Sen. 6/12/2014 - 3RDG FINAL PASSAGE - Yes {21} No {15} Not Voting {4} - Roll Call

Asm. 6/25/2015 - SUBSTITUTE FOR A1908 Aca - Yes {0} No {0} Not Voting {80} Abstains {0} - Voice Vote Passed

Asm. 6/25/2015 - 3RDG FINAL PASSAGE - Yes {43} No {31} Not Voting {4} Abstains {2} - Roll Call

Sen. 9/24/2015 - CONCUR ASMB AMEND - Yes {24} No {12} Not Voting {4} - Roll Call






RELATED ARTICLES

Governor Christie Vetoes First Responder Workers' Compensation Bill (workers-compensation.blogspot.com)
NJ Senate Passes Law To Help Injured Workers (workers-compensation.blogspot.com)
Christie, Cuomo veto N.J.-N.Y. Port Authority overhaul (workers-compensation.blogspot.com)
NJ COLA Bill Passed by Senate (workers-compensation.blogspot.com)

Monday, November 9, 2015

CMS Has a New Play Book for Conditional Payments - The Time Factor

The Centers for Medicare and Medicare Services  (CMS) has invoked the element of time to encourage workers' compensation settlements to be finalized. After almost 15 years has lapsed from the Patel Memo of July 11, 2001,  CMS is encouraging compensation claims to be resolved in a timely fashion when conditional payments are at issue.

Recently enacted Federal debt collection legislation has set the tone to encourage repayment of conditional payments in a timely fashion. 

Adding the element of a time deadline in any negotiation results in an acceleration  or resolution. CMS announced today:

"...Upcoming Updates to the Medicare Secondary Payer Recovery Portal (MSPRP) Modification for Inclusion of Final Conditional Payment (CP) Process Functionality"

"As part of the Strengthening Medicare and Repaying Taxpayers Act of 2012 (the SMART Act), the MSPRP will be modified to include Final CP process functionality by January 1, 2016. This new functionality will permit authorized MSPRP users to notify CMS that a recovery case is 120 days (or less) from an anticipated settlement and request that the recovery case be a part of the Final CP process.

"When the Final CP process is requested, any disputes submitted through the MSPRP will be resolved within 11 business days of receipt of the dispute. Once all disputes have been resolved, and the case is within 3 days of settling, the beneficiary or their authorized representative will be able to request a Final Conditional Payment Amount on the MSPRP. 

"Once calculated, this amount will remain the Final Conditional Payment Amount as long as:

  • The case is settled within 3 calendar days of requesting the Final Conditional Payment Amount, and
  • Settlement information is submitted through the MSPRP within 30 calendar days of requesting the Final Conditional Payment Amount.

Wednesday, October 21, 2015

Sanders, Pocan Introduce Legislation to Strengthen Workers’ Rights

Sen. Bernie Sanders (I-Vt.) and Rep. Mark Pocan (D-Wis.) introduced legislation today that would make it easier for workers to join unions and bargain for better wages, benefits and working conditions.

“Millions of Americans who want to join unions are unable to do so because of the coercive and often illegal behavior of their employers,” Sanders said. “The benefits of joining a union are clear: higher wages, better benefits and a more secure retirement. If we are serious about reducing income and wealth inequality and rebuilding the middle class, we have got to substantially increase the number of union jobs in this country.

The Workplace Democracy Act will make it easier for workers to join a union by allowing the National Labor Relations Board to certify a union if a simple majority of eligible workers sign valid authorization cards. The bill also requires companies to begin negotiating within 10 days after certification. If no first contract is reached after 90 days, either party can request compulsory mediation. After 30 days of mediation, the parties will submit the remaining issues to binding arbitration.

“For years, the ability of workers to unionize has given employees the opportunity to bargain for better wages and benefits. And unions have been one of our nation’s strongest voices for workplace safety and fairness. But over time, employers have steadily undermined workers’ ability to organize through nefarious tactics,” said Sen. Sherrod Brown (D-Ohio). “By allowing the use of the majority sign-up process and ensuring a timely contract negotiation, we can help restore this fundamental right to form a union.”

“The Workplace Democracy Act strengthens the middle class by restoring workers' rights to bargain for better wages, benefits, and working conditions,” said Pocan. “One of the root causes of declining wages is that workers’ ability to join together and bargain for higher wages and better working conditions has been has been severely undermined. This bill would make it easier for workers to have a voice in the workplace, providing a bigger paycheck to middle class families trying to pay the mortgage and find a way to send their kids to college.”

Joining Sanders and Pocan at the news conference outside the Capitol were workers who have faced retaliation for trying to organize their fellow workers. “Working moms shouldn’t have to strike and face threats just to join a union,” said Kellie Duckett, a federal contract worker at the U.S. Capitol. We should be able sign up for the union just like we sign up for the PTA.”

“I’m here to say that current labor laws don’t protect workers,” Mayra Tito, a federal contract worker, added. “I should know – I was fired from the Pentagon Starbucks after I went on strike for $15 and a union. That’s why we need the Workplace Democracy Act.”

“I was fired for speaking out in my workplace to improve patient care conditions by organizing a union,” Allysha Almad, a registered nurse from Pasadena, said. “My case is not unique. There are thousands of nurses and other workers who face retaliation when they try to raise their voices collectively to address unsafe condition – conditions that in hospitals and other workplaces actually endanger lives."

According to Bureau of Labor Statistics data released earlier this year, union workers’ wages are 27 percent greater than for non-union workers. Seventy-nine percent of unionized workers receive health insurance from their employers, compared to only 49 percent of non-union workers. Seventy-six percent of union workers have guaranteed defined-benefit pension plans, compared to only 16 percent of non-union workers. Eighty-three percent of union workers receive paid with sick leave compared to only 62 percent of non-union workers.

The bill is cosponsored in the Senate by Sens. Patrick Leahy (D-Vt.), Patty Murray (D-Wash.), Sherrod Brown (D-Ohio), Martin Heinrich (D-N.M.), Elizabeth Warren (D-Mass.), Kirsten Gillibrand (D-N.Y.), Debbie Stabenow (D-Mich.), Mazie Hirono (D-Hawaii) and Sheldon Whitehouse (D-R.I.).

Click here to read the bill.

Click here to read a summary of the bill.

Click here to read Sanders’ prepared remarks.
….

Jon L. Gelman of Wayne NJ is the author of NJ Workers’ Compensation Law (West-Thompson-Reuters) and co-author of the national treatise, Modern Workers’ Compensation Law (West-Thompson-Reuters). For over 4 decades the Law Offices of Jon L Gelman 1.973.696.7900 jon@gelmans.com have been representing injured workers and their families who have suffered occupational accidents and illnesses.

Related articles
The New Push for Paid Family Leave (workers-compensation.blogspot.com)
Senator Gillibrand: We Have a Moral Obligation to Care for 9/11 Heroes, Survivors & Their Families (workers-compensation.blogspot.com)
National Census of Fatal Occupational Injuries in 2012 (preliminary Results) (workers-compensation.blogspot.com)
New Testing Reveals Hidden Dangerous Chemicals in Popular Halloween Costumes and "Trick or Treat" Bags (workers-compensation.blogspot.com)
McDonald's charged with abusing workers over wage protests (workers-compensation.blogspot.com)

Tuesday, October 13, 2015

OSHA: NJ Fragrance Manufacturer Fined for Exposing Workers

Ambrosia Fragrance LLC fined more than $67K for federal workplace violations
Employer name: Ambrosia Fragrance LLC, 7 Turner Place, Piscataway, New Jersey.
Citations issued: On Sept. 30, the Occupational Safety and Health Administration cited the company for 19 serious violations.
Investigation findings: OSHA inspectors cited the company for lack of procedures and training related to preventing equipment from starting up during service and maintenance, a procedure known as lockout/tagout*. Citations were also issued for fire hazards and obstructed exits.
Proposed penalties: $67,200
Quote: "Machines that start up suddenly can seriously injure workers, or even kill them," said Patricia Jones, director of OSHA's Avenel Area Office. "These dangers are preventable, and the solution starts with training and implementing safe processes. Fixing these hazards isn't just the law - it's a vital step toward protecting workers' lives and limbs, and it's a step that Ambrosia Fragrance needs to take."