Adam Gray Credit: courtesy Adam Gray

California lawmakers are advancing a bill that would bar medical providers who’ve been convicted of felonies from treating injured workers.

The bill would require the state Department of Industrial Relations to ban medical providers who have also been stripped of a medical license or excluded from Medicare or Medi-Cal for a fraud-related offense.

Citing a recent investigation by Reveal from The Center for Investigative Reporting, bill author Assemblyman Adam Gray, a Merced Democrat, told the Senate labor committee on June 29 that the state needs to stop letting people care for injured workers after they are locked out of other government health programs.

“This is a classic example of the left hand not talking to the right hand, and it’s simply unacceptable,” Gray told the committee.

The committee’s chairman, Sen. Tony Mendoza, a Democrat from Los Angeles, has already called on a state board to review fraud in workers’ compensation, and the state’s labor secretary has asked the labor department to convene working groups to review the matter.

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Gray noted key findings from the recent news stories: Prosecutors have filed charges in cases totaling $1 billion in alleged fraud and touching on the care of more than 100,000 injured workers.

The investigation also found lapses in fraud prevention that allowed several health providers banned by Medicare to launch a second career in workers’ compensation.

They include Dr. Thomas Heric, an Orange County physician who was initially barred over a fraud-related conviction. He went on to work for a workers’ compensation sleep clinic, which has been brought into question in a subsequent insurance fraud prosecution.

Also, Fred Khalili ran workers’ compensation clinics even though he pleaded guilty in 1996 to fraud charges in a federal kickback case. Khalili was charged late in 2015 with fraud again, this time for allegedly taking kickbacks in exchange for providing expensive pain creams to injured workers.

One injured worker, Kim Reeder, encountered a chiropractor who had been excluded from Medicare at the start of her quest for treatment for lower back pain.

She said the Van Nuys practitioner referred her to providers who turned her case into a “fraud assembly line” as she got unwanted and expensive pain creams and discovered bogus medical bills in her name.

“I absolutely think if a provider is not qualified to handle Medi-Cal or Medicare, they absolutely should not be in the workers’ comp system,” Reeder said.

The pending bill would prevent providers like Reeder’s chiropractor from treating injured workers in the first place.

It would require the administrative director of the state Division of Workers’ Compensation to “promptly suspend any physician or practitioner from participating in the workers’ compensation system in any capacity” if they are convicted of a felony or a fraud-related misdemeanor. They would also be barred if they are banned from Medicare or lose their certificate or license to provide health care.

The bill would also prevent the newly banned providers from pursuing claims for payment, unless the violation is unrelated to the laws governing workers’ compensation.

Carl Brakensiek, a lobbyist for both the California Society of Industrial Medicine and Surgery and the California Neurology Society, said the physician groups oppose the bill unless it’s amended to ensure felonies leading to a ban involve “moral turpitude.”

He said the bill should not scare off doctors who made a youthful error, such as street racing or drug possession.

“I’m trying to make it as friendly as possible for doctors to encourage them to stick around and treat injured workers,” Brakensiek said in an interview.

During the committee hearing, Gray called the measure a “no-brainer good government bill.”

Jeff Stone, a Republican from Riverside County, backed the measure, saying “it’s common sense.”

The Senate Labor and Industrial Relations Committee unanimously voted on June 29 to move the bill to another Senate committee for an Aug. 1 hearing. Supporters include several labor unions, the California Chamber of Commerce and the California State Association of Counties.

Christina Jewett can be reached at Follow her on Twitter: @By_CJewett.

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Christina Jewett is a reporter for Reveal, covering labor and workplace issues with a focus on the workers' compensation system. With reporting partner Will Evans and CNN, she exposed widespread fraud and failed government oversight of California’s network of addiction treatment centers for the poor. The stories led to the defunding of more than 200 rehab clinics and changes in state law. The Emmy-nominated series won the 2013 broadcast award from Investigative Reporters and Editors. Jewett – as part of California Watch, a project of The Center for Investigative Reporting – won the 2011 George Polk Award for medical reporting with Lance Williams and Stephen K. Doig. The series exposed outsized rates of rare but lucrative medical conditions at a rapidly growing hospital chain and spurred a federal investigation. She was also a Livingston Award finalist in 2010. Previously, Jewett worked at ProPublica and The Sacramento Bee, where a story she broke about contracting malfeasance led to arrests and convictions. She and a colleague also chronicled jail abuse and medical mistreatment, spurring countywide policy reforms. Those stories were honored with awards from the John Jay College of Criminal Justice and the National Council on Crime and Delinquency. Jewett is based in Sacramento, California.