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SAN FRANCISCO -- Employers and insurers fear the dismissal of a fraud case against a California doctor could drive up workers compensation costs and undermine efforts to curb billing abuses.

Both the head of the California Division of Workers Compensation and the chairman of the Workers Compensation Appeals Board, however, say they believe the decision by an Orange County, Calif., judge to drop charges against Dr. Edward Boseker in the middle of a trial was an aberration not likely to be repeated.

Still, insurer trade groups and an employer coalition are seeking legislative review of how consistent workers compensation judges are in applying the law.

The controversy arose after an Orange County Superior Court judge used two retired WCAB judges' interpretation of the definition of face-to-face time as grounds for dismissing a 67-count indictment against Dr. Boseker, a Southern California orthopedist.

The Orange County District Attorney had charged the doctor with multiple felony counts of workers compensation fraud for submitting medical-legal reports that exaggerated the amount of face-to-face time he spent with injured workers; the amount of time he spent reviewing records; and the number of X-rays he ordered.

Fraud investigators from 20 insurers worked with the district attorney's office for months to build the case, in which 20 injured workers testified at trial that the amount of face-to-face time they spent with Dr. Boseker varied from five minutes to an hour, even though he had billed for two hours in each case.

The California workers comp system allows doctors to charge higher rates for medical-legal evaluations that meet certain criteria, including two or more hours of "face-to-face time by the physician with the patient," according to the California Code of Regulations Section 9795. The regulations define "face-to-face" time as "only that time the evaluator spends in direct face-to-face contact with an injured workers," not that time spent in the waiting room filing out forms or being X-rayed.

However, in defending the case, Dr. Boseker's attorney presented two retired WCAB judges who testified that local workers comp judges use a looser "door-to-door" standard, allowing doctors to count any time that an injured worker spends in the doctor's office as "face-to-face" time.

"In essence these judges were telling (the judge) that Dr. Boseker should receive credit for all of the time that the injured workers were reading magazines in the waiting room, filing out forms, having their medical history or X-rays taken by an office employee, etc.," Deputy District Attorney Doug Brannan said in a letter to insurers.

Mr. Brannan, who prosecuted the case at trial, said he was "very disappointed" with the judge's decision to dismiss all 67 counts against Dr. Boseker.

The judge dismissed the case after hearing the retired judges' testimony.

In an effort to find a witness to rebut this testimony, Mr. Brannan asked for a short delay and assigned investigators to interview three current judges at the Santa Ana, Calif., office of the WCAB. The investigators reported that the judges consistently interpreted "face-to-face" time to mean "door-to-door" time, rather than time actually in the presence of the doctor.

It was the investigators' findings, more than the outcome of the Boseker case, that ignited the controversy, according to Ed Woodward, executive director of the California Workers Compensation Institute.

"The narrow issue of face-to-face is really not the concern," said Mr. Woodward. "All these types of interpretations at local levels are going on all the time, and that's the problem."

The Boseker case signals that "the system is in desperate need of examination by the Legislature with a lot of experts saying this is what you need to do to have an efficient and effective administration of justice in workers comp," he asserted.

"Administrative reform needs to be a key component of any workers compensation reforms," said Mark Webb, vp of state affairs for the American Insurance Assn. in Sacramento. "It's useless to seek objective measures in the workers compensation context if there's lack of uniformity in the application of the labor code."

Lori Kammerer, executive director of Californians for Compensation Reform, an employer coalition based in Sacramento, Calif., said, "These added costs are passed on to employers in the form of higher workers compensation premiums."

Casey Young, administrative director of the California Division of Workers Compensation, said the Boseker decision was an "aberration" based on testimony of "a couple of retired judges who didn't know what they were doing."

Doug Moore, chairman of the seven-member WCAB in San Francisco, agreed. "As far as the board is concerned, this is a non-issue," he said.

Furthermore, Mr. Moore pointed out that since the trial, the judges who were interviewed by the district attorney's investigators denied saying they applied such a liberal interpretation to "face-to-face" time.

In fact, in a letter sent to Mr. Brannan, the deputy district attorney, Santa Ana WCAB Judge Marylynne Casey stated: "I categorically deny advising him at any time that in my opinion, 'face-to-face' meant 'door-to-door.' "

Still, Mr. Moore said he is assigning a WCAB judge the task of looking into whether judges are consistent in their interpretation of the law.

Meanwhile, because the judge dismissed the charges against Dr. Boseker in the middle of trial, the insurers cannot appeal.

"There's double jeopardy attached," explained Michael McClain, the CWCI's general counsel. "So they can't appeal; they can't recharge these counts."