Tuesday, February 25, 2014

Help Me Keep Faith

On Friday the news broke about Michael Drobot's confessions and the indictment of Sen. Ron Calderon and his brother, former Assemblyman Tom Calderon.

Yesterday more in depth news about the scandal was published and today even more details surface.

And of course Sen. Calderon denies all of the allegations of wrong doing through his defense attorney, Mark Geragos.

Mr. Geragos is himself famous for defending the rich and famous, and was even involved in the Whitewater controversy.

And Calderon implicates Senate President Pro Tem Darrell Steinberg. Sen. Kevin de Leon, D-Los Angeles, is named in the leaked FBI affidavit as well, though allegedly is not part of the investigation.

DeLeon introduced Senate Bill 896 that proposed to repeal the pass-through but at the same time increase the fee schedule payment for performing fusions from 120% to 180% of what Medicare pays. In April, he amended his bill to increase the payment to 200% of Medicare and add language to preserve the pass-through.

De Leon pulled SB 896 from consideration before a hearing that was scheduled for May of that year. The leaked FBI affidavit alleges that Calderon persuaded de Leon to introduce SB 896 and later amend the measure on behalf of Drobot, and that de Leon pulled his bill because he had not received any money in exchange for his help.

So DeLeon switched allegiance and in 2012, he teamed up with Assemblyman Jose Solorio, D-Santa Ana, to introduce SB 863.

Back in November of last year, after Al Jazeera published the leaked affidavit used to obtain a warrant to search the senator’s Capitol offices, Calderon said that Steinberg essentially was retaliating.

In a motion seeking an order to show cause for why the federal government and its agents, including Asst. U.S. Attorney Doug Miller of Los Angeles, should not be held in contempt for leaking the affidavit, Calderon said then, “Sen. Steinberg, who was the target of the government’s investigation for his conduct, has stripped Sen. Calderon from his committee positions and, on Nov. 12, 2013, proclaimed he ‘will be damned’ if Sen. Calderon harms the reputation of the California state Senate.”

Calderon had gone on to say that the FBI or Miller engaged in a large scale campaign to smear his reputation “and convict him in the press and public before a grand jury was assembled and while it was still hearing evidence,” and that “[t]here is a systematic and systemic pattern of contempt for secrecy rules in AUSA Miller’s cases resulting in the complete corruption of the legal process and character assassination of his targets.”


Even yesterday after pleading not guilty, Garegos told reporters that Calderon will be making a decision about whether to resign from the Senate once he advises Calderon "how much of his time I'm going to need" in order to defend the case.

"All things being equal," Geragos said, "of course" Calderon would like to continue serving in politics. "It's what he loves to do," Geragos said.

Calderon and his cronies don't get it.

Our own government doesn't get it.

Evidence of the Drobot scheme had been presented to law enforcement and Division officials long ago, but no one seemed to care much. Who's driving the bus?

The seven procedures for which California's spinal-surgery implant pass-through was preserved last year due to the Drobot/Calderon connection cost insurers and employers an average of nearly 75% more than the seven procedures for which the pass-through was eliminated.

Senate Bill 863, passed in 2012, preserved extra charges ranging from $630 to $9,140 for implants used in procedures identified by Diagnostic Related Groups 453, 454, 455, 456, 028, 029 and 030.

The story by Greg Jones of WorkCompCentral this morning details the huge amount of money at stake - a difference of tens of millions of dollars per year compared to the new codes.

I was at one of the alphabet soup California conferences last year (forget which one) where the presenter was slightly baffled why medical costs were so much higher in Southern California, and concentrated in the Los Angeles area.

I don't think there's any real mystery...

Geragos told reporters yesterday, "everyone take a deep breath" before "jumping on the bandwagon and pillorying (his client)" because "there is still a presumption of innocence in this country."

True enough - innocent injured workers having their lives ruined by these treacherous villains.

And while the defendants say that the pass-through language in SB 863 was the result of a compromise between the California Hospital Association and Sen. Ted Lieu, D-Torrance, Amber Ott, vice president of finance for the California Hospital Association, said that isn't what happened. The seven procedures identified in SB 863 as being eligible for separate hardware reimbursement in 2013 were picked “in a vacuum,” Ott told Jones.

She said the California Hospital Association “argued those were not the best to choose” because they don't represent either the highest volume of procedures performed or the most expensive outlier cases.

Smear, power, politics, money - it all circles around a financial system that has lost its way - the footprint of workers' compensation on the rest of the world is so small that it just invites the nefarious to pillage because no one really cares.

Society doesn't understand workers' compensation, doesn't know anything about workers' compensation and doesn't care about it unless they are one of the 1% that get sucked into the system.

I got a message from one high level claims CEO that he lost one of his best adjusters to the scheme - succumbing to the sweet talk of a surgeon on the kick back scheme only to get a death sentence from the pain medication she became addicted to. So even those inside the system have fallen prey.

How many more of these stories will unfold?

I was talking to an Associated Press reporter yesterday. She was trying to quantify workers' compensation in a way that would matter to the average Joe on the street - she was trying to paint a picture to show how workers' compensation makes a difference to the average tax payer.

And honestly, beyond standing on high moral argument about our social structure and maintenance of a viable work force, I couldn't think of any way to do so.

Workers' compensation is a lot of money, but not compared to overall health care. Not compared to other lines of insurance. Not compared to the overall tax base. Not compared to most big industries.

Workers' compensation is looked upon mostly as a nuisance by the business world, and as a source of fraud and cheating by the working population.

And maybe it is. Maybe this story is just what workers' compensation has come down to.

It is sad. The social compass is broken. Workers' compensation seems to be more about financing the vendors rather than providing medical treatment and indemnity to workers.

I am not optimistic that this story will turn out any different than any of the other big fraud cases we have seen in workers' compensation - that is not much will come of it. We're content with prosecuting small fry cases because they're easy, and represent what the public understands about workers' compensation.

For that AP reporter trying to quantify workers' compensation to the rest of the world - take away the system and let's see what the cost is over the course of the next five or ten years while everyone fights in the civil courts about fault, and the last resort medical system, which translates to tax dollars, drowns under unpaid procedures.

Honestly, maybe we should just disband workers' compensation.

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