Flash Report: Court Refuses To Block DWC Action

By: Dale Debber

The First District Court of Appeal took little time in rejecting a convicted chiropractor’s request to stop the state from suspending providers from the workers’ comp system, and staying their medical liens when the providers are linked to fraudulent activities.

The Division of Workers’ Compensation is moving to suspend providers and stay liens under new authority granted to it by the passage last year of SB 1160 and AB 1244.

Chiropractor Michael Barri, his company Tri-Star Medical Group and a newly formed nonprofit called the Coalition for Sensible Workers’ Compensation Reforms filed a constitutional challenge last week seeking a peremptory or alternative writ of mandate blocking the state’s action. The court took just two days to respond with a denial.

The arguments, in this case, are similar to the constitutional challenges that providers made in the Angelotti Chiropractic case – an unsuccessful attempt to have the state’s lien activation fee struck down. Attorney Glen Summers who worked on the Angelotti case also represented the Coalition in this unsuccessful challenge.

“The petition for peremptory and/or alternative writs of mandate, prohibition, or other appropriate relief is denied as premature, given that a hearing on the suspension under Labor Code section 139.21 is scheduled for February 24, 2017, before a hearing officer of the Division of Workers’ Compensation, and the suspension is stayed pending the outcome of that hearing,” the First District wrote.

“The court also questions whether this is the proper appellate district to file this petition, given that none of the petitioners reside or have their principal place of business in this appellate district. The request for a stay is denied.”

Barri and his firm Tri-Star Medical were caught up in the Pacific Hospital spinal surgery kickback scheme and is linked to the compound drug scheme allegedly perpetrated by Landmark Medical Management. Barri pled guilty to receiving illegal kickbacks to refer patients to Pacific Hospital over a 4-year period.

The U.S. District Attorney says that during one nine-month period, Barri admitted to receiving nearly $160,000 for referring a dozen patients to the hospital run by Michael Drobot Sr. As a result of the subsequent spine surgeries, Pacific Hospital billed carriers for $3.9 million.

Barri’s petition to the Court of Appeal claims that he and other similarly situated providers “face the loss of their constitutional right to counsel, and lien claimants across the state risk the cancellation of their valid workers’ compensation liens and irreparable harm to their business.”

The petition challenged a provision in the now chaptered SB 1160 by Sen. Tony Mendoza (D-Artesia) that imposes an automatic stay on all workers’ compensation liens filed by a provider who is criminally charged with workers’ compensation fraud, medical billing fraud, insurance fraud or fraud against the Medi-Cal or Medicare programs.

The petition also challenged a provision in AB 1244 by Assembly Adam Gray (D-Merced) for suspending providers from the workers’ comp system for fraudulent or abusive behavior or for losing their license. The petition also challenged AB 1244’s provisions for creating a new adjudication process for the liens filed by these providers, claiming that it violates the constitutional prohibitions against ex-post facto laws.