Judges Dismisses $18M in Liens Filed by California Medical Provider Convicted of Fraud

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An administrative law judge in California has dismissed liens valued at $18 million filed by convicted medical provider Michael E. Barri, bringing to a close one of the earliest cases aimed at combatting fraud in California’s workers’ compensation system., the state’s Division of Workers’ Compensation announced.

DWC suspended Barri from participating in California’s workers’ comp system after he pled guilty in 2016 to federal conspiracy charges and admitted receiving $206,506 in illegal kickbacks for referring dozens of patients for spinal surgeries and other medical services to Pacific Hospital of Long Beach and related entities.

The former owner of the hospital was sentenced to 63 months in prison in 2018.

The San Clemente chiropractor challenged his suspension in court and pursued collection of $18.1 million in liens he had filed in 944 individual workers’ comp cases through the entities he controlled.

An appeals court denied Barri’s writ in 2018 and upheld the anti-fraud legislation that led to his suspension, sending the matter of the liens back to the Workers’ Compensation Appeals Board.

Administrative Law Judge Alan Skelly held several hearings in which the lien claimants, insurance carriers and members of the Department of Industrial Relations’ Anti-Fraud Unit were represented by counsel. Barri contested discovery related to his 944 liens, then filed a Notice of Withdrawal with Prejudice of liens of Tristar Medical Group, Jojaso Management, Inc., Michael E. Barri Chiropractic Corporation and Michael E. Barri, D.C. Judge Skelly accepted the notice and issued the order dismissing the liens.

Barri was one of many chiropractors, physicians and others who received lucrative kickbacks for each lumbar surgery and cervical fusion surgery referred to Pacific Hospital. During the last eight years of the scheme, the hospital submitted more than $580 million in fraudulent bills. Because of his referrals, Pacific Hospital billed insurance carriers approximately $3.9 million for spinal surgeries and other medical services.

Worker’s compensation reforms that went into effect in January 2017 required DWC to suspend certain medical providers from participating in the workers’ comp system, including those who are convicted of a felony or misdemeanor involving fraud or abuse of any patient, the Medi-Cal or Medicare programs, or the workers’ compensation system itself.