AB 1422: Workers’ compensation insurance: fraud.

Existing law governing workers compensation requires a lien filed by or on behalf of a physician or provider of medical treatment services or medical-legal services, and any accrual of interest related to the lien, to be automatically stayed upon the filing of criminal charges against that physician or provider for an offense involving fraud against the workers compensation system, medical billing fraud, insurance fraud, or fraud against the Medicare or Medi-Cal programs. Existing law makes the stay effective from the time of the filing of the charges until the disposition of the criminal proceedings.

This bill, among other things, would revise and recast these provisions to require the liens of a physician, practitioner, or provider and the liens of an entity controlled by a physician, practitioner, or provider who has been charged with specified crimes involving the federal Medicare or Medicaid programs, the Medi-Cal program, or the workers compensation system to be automatically stayed, along with any interest accruing, until disposition of the criminal proceedings, except as provided. The bill would also provide that upon conviction of a physician, practitioner, or provider of those specified crimes the automatic stay would be required to remain in effect for any liens not dismissed, as specified, until the commencement of lien consolidation procedures, as provided. The Administrative Director of the Workers Compensation System would be authorized to adopt regulations to implement these provisions.

Existing law requires the administrative director to promptly suspend any physician, practitioner, or provider from participating in the workers compensation system as a physician, practitioner, or provider if the individual or entity has been convicted of certain crimes, including crimes involving fraud or abuse of the Medi-Cal program, Medicare program, or workers compensation system, or fraud or abuse of any patient, or if the individual or entity has been suspended, due to fraud or abuse, from the federal Medicare or Medicaid programs or the individuals license, certificate, or approval to provide health care has been surrendered or revoked. Existing law establishes procedures for the adjudication of any liens of a physician, practitioner, or provider who is suspended pursuant to this provision.

This bill, among other things, would provide that an entity would be subject to suspension as described above if it is controlled, as defined, by an individual who has been convicted of the specified crimes. The bill would specify that the suspension requirements also apply to crimes involving fraud or abuse of the federal Medicaid program and financial crimes that relate to the federal Medicaid program. The bill would authorize the administrative director to adopt regulations specifying any exemptions that would not serve as a basis for exclusion under these provisions.

This bill would also make conforming changes.