Calif. Probing Employer-Clinic Comp Scams

Randy Platt, chief operating officer of Healthworks, said the firm, which has 123 facilities in 14 states, has stopped the improper practices by Alternative Solutions and Advantage Care Medical Group and was helping investigators target competing firms that are still circumventing the law.

Nanci Kramer, a spokesperson for the California Insurance Department, said the clinics involved would improperly list serious injuries, that required a "Doctors First Report" to an employer's workers' comp carrier, as simple first aid treatment that required no workplace injury notification.

She said such activity was a violation of labor law and a "big concern," because avoiding injury reports that go to the Department of Industrial Relations as well, could hide a workplace that is unsafe. In addition, it distorts the risk experience used by underwriters to calculate premiums.

The result, she said is that other employers in the system were paying more because of the cheaters.

Ms. Kramer said that the fine paid by U.S. Healthworks was "one of the highest ever" and that the department is making a concerted effort to crack down on the misreporting of injury that has become a common practice.

Reacting to comments from Mr. Platt, that competing clinics are taking business from his firm by continuing to circumvent the law, Ms. Kramer promised, "not for long."

Mr. Platt said his firm has "cooperated to help uncover this concern throughout the state" and that Healthworks is encouraged that authorities including the Los Angeles County District Attorney's Office "will pursue other providers."

He said the investigation of Healthworks' California clinics commenced three years ago and involved "only a handful," not all 57, of the company's clinics in the state. The company, he said, has taken steps to rectify the problems since the investigation began. "We've been compliant," he said.