California chiropractors allege in a lawsuit filed in San Francisco Superior Court that an aggressive middleman in the workers’ compensation arena is employing a novel kickback scheme to steer patients to providers willing to share more of their fees with the company.
Sacramento-based California Chiropractic Association asserted in its court complaint that One Call Care Management is violating business and professions codes that have gotten health care practitioners prosecuted for fraud. The company, based in Jacksonville, Florida, bills itself as the nation’s leading provider of workers’ compensation care management.
“I was advised when I was negotiating my contract (with One Call) that the deeper the discount I took, the more referrals I would get,” said Wayne Whalen, a chiropractor in Santee who has led or co-led CalChiro’s workers’ compensation committee for roughly 20 years. “They said to me, ‘If you’re willing to take less, we could send you more business.’ It was clearly a quid pro quo. ... Doctors go to jail if we do stuff like that, soliciting improper payments and offering inducements for referrals.”
The chief legal officer for One Call, Steven Davis, said he would not comment on ongoing litigation.
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According to the CalChiro lawsuit, this is how One Call, which also does business as Align Networks, operates: It starts by contracting with employers, insurers and third-party administrators to handle the scheduling and payment of treatment visits for injured workers.
One Call agrees to do this at no cost to the insurer, administrator or employer. Instead of being paid, the company actually offers to pay its clients if it gets their business. Where does it get the money to make those payments? It comes from the fees that chiropractors and other providers of physical medicine get for their services.
When One Call inks a deal, it negotiates contracts with any practitioners of physical medicine – chiropractors, physical therapists, acupuncturists and the like – on their clients’ lists of medical providers authorized to treat their injured workers.
If these providers want to continue to do business with One Call clients, they must agree to surrender a portion of the fees they get paid to treat injured workers. For chiropractors, that fee is $120-$135 per visit.
If you were a chiropractor, how much of this fee would you give up to continue getting access to this steady stream of business?
Ten percent? That wouldn’t be enough. One Call gives 10 percent back to workers’ comp plan administrators to get their business. So, would you give up 20 percent? 30 percent? 40?
Whalen said: “My reimbursement is higher than many – $65. They’re keeping approximately 50 percent of every dollar I generate in services. All that money that the employer is paying for treatment of their injured worker: 50 cents of every dollar is going into (One Call’s) pocket.”
What does Whalen get for giving up half his fee?
“A couple of weeks ago, an orthopedic surgeon referred a patient to my office,” he said. “We called the patient and scheduled the patient visit. ... But we found out from the patient that Align, now One Call, had called the patient and was trying to send them to another office.”
Whalen said that it’s common for this to happen. One Call has told him that other offices in his region have accepted deeper discounts than he has, he said, and the company has told him that it steers patients to the lowest-cost providers. They weren’t successful with the patient referred to Whalen in late September.
“I’ve worked in workers’ comp for 20 years,” he said. “I know what the laws are. We told them, ‘No, no, no, you don’t have to listen to One Call. You can come here.’ The labor code is pretty clear. You have the right to select the physician you want off the (employers’) medical provider network.”
The CalChiro legal filing asserted that One Call is engaging in referral schemes that violate Labor Code sections 139.32(a)(1), 3820, 3215, and Business and Professions Code section 17200 by soliciting and receiving improper payments to steer health care business to the providers that agree to give up the highest percentages of their fees.
Of all the workers compensation clients Whalen sees, he said, he estimated that only 5 percent are referred to him by One Call. Most come from referrals from orthopedic surgeons, employers, among others.
When he does get the business, he said, there’s a hassle getting paid. Although insurers, providers and others in the medical community have installed electronic billing systems, Whalen said, One Call has not used any of the payments that he and other providers make to put such a system in place.
With electronic billing, Whalen said, he receives payments in his bank account in two weeks or less. One Call, however, often takes closer to 60 days to pay, and when it does, he said, it sends a paper credit card that his staff must run through his credit card machine.
Because that requires Whalen to pay a 3 percent transaction, he said, his staff requests a paper check, but that means waiting another 30 days for payment. The CalChiro lawsuit alleges the company’s payment processes violate labor codes 4603.2, 4603.4 and 4603.6.
What worries Whalen more than the slow payments and loss of income is that the One Call referrals have more to do with what he charges than with the quality of his services, he said. He and CalChiro Executive Director Dawn Benton said they have heard from hundreds of providers who tell them the only way they could continue practicing in the workers’ comp arena is by sharply increasing the number of patients they see and that affects the quality of the service delivery.
While some have done it, Benton said, a lot of high-quality providers have opted out of serving workers’ comp patients.
The CalChiro lawsuit comes after years of going to workers’ comp regulators and legislators with evidence of the kickback scheme – but seeing no action. The chiropractors are not the first provider association to sue One Call over deceptive business practices.
The Independent Physical Therapists of California sought relief in U.S. District Court in San Diego in 2017, also alleging a kickback scheme. Paul Gaspar, the president of the physical therapy group, said that, like the chiropractors, members of his group had consistently delivered the same evidence as the chiropractors to both regulators and legislators, only to be ignored.
“We’ve been very frustrated by the inaction,” he said. “The legislators have completely dropped the ball on this – and the regulators. The Division of Workers’ Comp, they laid an egg on this one, and they have done irreparable damage to thousands of injured workers with their lack of attention on this issue.”
Both Gaspar and Whalen said One Call can do plenty of lobbying with all the funds it has collected from chiropractors and physical therapists. Members of their professions, they said, lack clout.
“Who are the lowest-paid and smallest groups of health-care practitioners in the workers’ compensation system?” Whalen asked. “That would be chiropractors and the physical therapists. We’re not the big-ticket items. There are not tons and tons of us. We’ve been crying in the wilderness for a while.”
Gaspar said that his association decided to negotiate a settlement with One Call rather than go through the expense of a jury trial, but he said that patients need protection. Among the concessions from One Call: It would make referrals based upon the therapists quality ranking rather than the discounted rate. It would tell therapists what their quality scores are and how they were computed. It would not solicit deeper discounts for at least 18 months after the settlement. It would list contact information for physical therapists.
“(It) is not illegal to pay health care providers less than 50 percent of the medical fee schedule and pocket the change,” Gaspar said, “but if you get there by illegal means, we feel the offender should be prosecuted by authorities, such as the attorney general, insurance commissioner, and Division of Workers’ Compensation.”
Both lawsuits say: One Call is not licensed as a claims administrator but – in violation of labor, insurance, and business and professions codes – it is processing and paying claims. It is not licensed to run a medical provider network, but according to definitions in labor code 4616(a), it is acting as one and violating clauses of the labor code that require that patients be given direct access to providers. Rather than listing the providers’ contact information, One Call lists its phone number.
A spokesman for the California Division of Workers Compensation told The Sacramento Bee that, if they were provided documents or evidence that indicated improprieties related to an illegal referral scheme, unlicensed claims administrators and adjuster activities, or billing and payment violations, the division would definitely review it.
Gaspar said it’s a “boldfaced lie” to say that the state agency hasn’t been given evidence. Whalen said he’s made two trips a year to Sacramento to provide just that evidence to DWC regulators and to legislators, and nothing has been done. Rather, he’s been sent from one department to another, with each department telling him they don’t regulate what’s clearly defined in codes as their responsibility.
He and Gaspar said that they and those they represent are astounded and enraged that regulators and legislators are allowing One Call to flout the law simply because it has established a new category for itself. They say it is plain to see it is, without meeting licensing requirements, performing the same functions as other entities named in regulations and laws.
“I’ve done multiple laps through the Capitol, explaining our position, explaining what I know,” Gaspar said. “There needs to be tighter scrutiny over these relationships. Injured workers deserve quality care. They should consider putting a lid on how much these middlemen can take out of the system, given that they aren’t the ones providing the care.”