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Eight medical professionals and their associates have been charged in federal grand jury indictments
involving a workers’ compensation kickback scheme in Southern California. The bribery plot
resulted in $25 million in improper claims for medical services and devices that were billed to
California Workers’ Compensation insurance companies. Three federal indictments were
announced by the U.S. Attorney’s office, San Diego District Attorney’s office, FBI, and the
California Department of Insurance against the purported conspirators. The indictments allege that
the defendants, which include a chiropractor, a radiologist, a medical equipment provider, a medical
clinic administrator, and a medical marketer, plus six corporations with which they did business,
paid or received tens of thousands of dollars for referrals of workers’ compensation patients to
therapy companies and a medical equipment provider, who, in turn, paid for every patient referral.
The chiropractors prescribed medical equipment, referred patients for MRIs and X-Rays, and
ordered specialized treatments such as Shockwave therapy, which ostensibly uses low energy sound
waves to initiate tissue repair. U.S. Attorney Laura Duffy called the indictments “the first wave of
charges in what we believe is rampant corruption on the part of some physicians and chiropractors.”
Although the amount pocketed by the medical professionals for any given referral could appear
somewhat de minimis (ranging between $50 and $100), in the aggregate the bills submitted by the
defendants to insurers totaled tens of millions of dollars. The Commissioner of the California
Department of Insurance, Dave Jones, called the practice “insurance fraud, which adds crippling
costs to California’s workers’ compensation system.” He elaborated, “When medical providers
defraud insurers, those costs are passed on to California businesses and consumers.