DCA Quickly Denies Suit Seeking to Declare DWCs New Anti-Fraud Authority Unconstitutional

Last Friday, the First District Court of Appeal rejected a convicted chiropractor’s request to stop the DWC from suspending providers from the workers’ comp system and staying the medical liens of providers linked to fraudulent activities. On Thursday, the Division had issued a Newsline to announce that it had moved to suspend 7 providers and stay 8,500 liens with a total claim value of at least $59 million. The Division noted that it had undertaken these actions under new authority granted by SB 1160 and AB 1244, two measures enacted by state lawmakers last year to combat workers’ comp medical fraud.

On Wednesday, the day before the DWC released its Newsline, chiropractor Michael Barri, his company Tri-Star Medical Group (both tied to the Michael Drobot/Pacific Hospital of Long Beach spinal implant kickback scandal), and a newly formed nonprofit called the Coalition for Sensible Workers’ Compensation Reforms, had filed a suit that challenged the DWC’s new authority on constitutional grounds and sought to block the state’s actions. In their petition, Barri and Tri-Star claimed that he and other providers “face the loss of their constitutional right to counsel,” and that “lien claimants across the state risk the cancellation of their valid workers’ compensation liens and irreparable harm to their businesses.”

The DCA denial — issued Friday, just two days after the suit was filed — noted that, “The petition for peremptory and/or alternative writs of mandate, prohibition, or other appropriate relief is denied as premature, given that a hearing on the suspension under Labor Code section 139.21 is scheduled for February 24, 2017, before a hearing officer of the Division of Workers’ Compensation, and the suspension is stayed pending the outcome of that hearing.” 

The DCA denial further added that “The court also questions whether this is the proper appellate district to file this petition, given that none of the petitioners reside or have their principal place of business in this appellate district. The request for a stay is denied.”

As a result of the DCA action, the plaintiffs may seek to reinstate the lawsuit following the provider suspension hearing on February 24.