One Call Medical Management (OCM) and the California Chiropractic Association (CalChiro) are fighting over the legality of OCM’s contracts with chiropractors. The fight will be in federal court after the medical management company got the case transferred from San Francisco Superior Court to the U.S. District Court for Northern California.
The chiropractic association is looking for the court to declare OCM’s contracts with chiropractors in California void. It alleges they are based on unlawful, unfair, deceptive and/or fraudulent business practices.
The meat of CalChiro’s assertion is that One Call’s contracts through its Align Network amount to an illegal kickback scheme that is harming chiropractors not contracted with the network. The association alleges that the contracts are structured in such a way that chiropractors who accept the most competitive reimbursement rate get the most referrals and that One Call then leverages these accepted rates to get other chiropractors to accept as deep or deeper discounts to receive referrals.
CalChiro maintains that this is a violation of Labor Code section 3215 that prohibits paying for referrals. The labor code section has been key in many of the recent kickback cases being prosecuted in Southern California.
Cal Chiro points out that Labor Code Section 3215 states that Except as otherwise permitted by law, any person acting individually or through his or her employees or agents, who offers, delivers, receives, or accepts any rebate, refund, commission, preference, patronage, dividend, discount or other consideration, whether in the form of money or otherwise, as compensation or inducement for referring clients or patients to perform or obtain services or benefits pursuant to this division, is guilty of a crime.
OCM contracts with workers’ comp payors to help control workers’ comp costs. CalChiro alleges that it then serves as a middleman handling all of the chiropractic referrals for the covered workers, as well as paying the chiropractors for the services rendered. CalChiro alleges that One Call then pockets the difference between the rate the chiropractor agreed to accept and the rate it negotiated with the workers’ comp payor.
Competition
“Chiropractors who acquiesce to OCM contracts, with the steepest discounts, receive the vast majority of referrals from OCM. OCM expresses to chiropractors, the higher the discount they are willing to accept, the greater the number of referrals they will receive,” CalChiro alleges in its complaint. “OCM handles the scheduling of appointments for the vast majority of these injured workers, and otherwise makes it difficult or impossible for the injured workers or their primary treating physicians to schedule appointments themselves. Thus, OCM is benefited by steering injured workers who require chiropractic treatment services, directly to those providers who capitulate to its demands.”
The association also alleges that One Call and Align are acting as a claims administrator without authorization as it pays the contracted chiropractors and collects from the workers’ comp payers. “Because of these practices, injured workers find it difficult to access the care they need, health care professionals are forced to bid against each other and extorted to accept significantly below standard rates to obtain any referrals, and payors pay inflated amounts to OCM because they may not be provided key information about how much OCM pays the treating health care professionals,” the complaint states.
CalChiro originally filed the lawsuit in San Francisco Superior Court. One Call got the case removed to federal court based on the different jurisdictions where each party is based. CalChiro is a California organization while Onc Call Medical Management is a New Jersey corporation with a principal place of business in Jacksonville, FL. Align Networks is also a Florida corporation operating out of Jacksonville.