Calif. Probing Employer-Clinic Comp Scams
By Daniel Hays
Last month, California authorities said they have fined a Georgia company $900,000 as part of a widespread investigation of medical clinics that help employers misstate their accident rates to workers compensation insurers.
U.S. Healthworks of Alpharetta, Ga., agreed to make the payment in restitution for civil penalties, investigative costs and fraud assessment, without admitting liability. An official there said the improper practices occurred before Healthworks bought its clinics in California.
Randy Platt, chief operating officer of Healthworks, also 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, which required a "Doctors First Report" to an employers 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 Attorneys 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 companys clinics in the state. The company, he said, has taken steps to rectify the problems since the investigation began. "Weve been compliant," he said.
Reproduced from National Underwriter Edition, May 5, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.
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