In a settlement that involves paying $1.5 million to avoid prison, the principal owners of a medical management company pleaded no contest to felony charges related to illegally acquiring patients in workers' compensation cases and submitting more than $60 million in medical bills.

Premier Medical Management Systems' President David Wayne Fish, 47, of San Diego, Calif., and former attorney Birger Greg Bacino, 50, of Rancho Santa Fe, were each charged with one felony count of compensation or inducement for referring clients. Premier was also charged in the complaint for submitting a false and fraudulent workers' compensation claim and for filing a false tax return.

"These defendants essentially served as brokers for so-called workers' compensation professionals, including doctors and attorneys," District Attorney Steve Cooley said. "In addition to victimizing the workers' compensation system, these defendants preyed on unsuspecting workers."

"It is essential that the workers' compensation system operate on an honest, level playing field on which people with injuries are not improperly referred to individuals who may not have their best interests at heart," Cooley added. "These types of criminal offenses are to the detriment of honest professionals who are dedicated to serving the workers' compensation community."

Albert MacKenzie, deputy-in-charge of the Fraud Interdiction Program, said the investigation revealed that Fish and Bacino engaged in the illegal acquisition of patients through an elaborate scheme through which they purchased several thousand workers' compensation client referrals from an attorney television advertising service.

When a referral was received for a prospective workers' compensation case, the client was sent to doctors and other healthcare providers within the defendants' business network. Premier Medical Management Systems handled the billing and collection work in return for a 50-percent or greater fee. After meeting with a healthcare provider, the client was sent to a workers' compensation attorney with whom the defendants also had a business relationship.

Fish and Bacino each pleaded no contest on Feb. 19, 2010 to one count of compensation or inducement for referring clients. Prior to this court appearance, Fish and Bacino paid $750,000 and $150,000 respectively to the State of California Department of Insurance Fraud Division for costs associated with carrying out the investigation. Under the terms of the plea agreement, Bacino will also be ordered to additionally pay $210,000 -- and Fish $390,000 -- to the California Franchise Tax Board in unpaid taxes.

As part of the negotiated settlement, the duo waives all rights to any benefits or proceeds from the more than $60 million in liens and bills pending in the workers' compensation system.

The defendants will return to court for sentencing on June 25, 2010.

Source: Los Angeles County District Attorney's Office

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Fraud of the Week: Medical Mismanagement

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