The California Division of Workers’ Compensation (DWC) has dismissed almost 5,000 liens filed by companies associated with Michael R. Drobot, including Industrial Pharmacy Management and California Pharmacy Management. This marks the first major case involving a provision in AB 1244 which requires the DWC to dismiss liens held by individuals convicted of fraud.
Drobot agreed to dismiss all liens related to a 2017 consolidation order, totaling 4,771 cases. He also agreed to discharge carriers from liability for outstanding liens or bills that were not mentioned in the consolidation order. Drobot pleaded guilty to conspiracy in 2016, admitting that he helped his father facilitate the Pacific Hospital of Long Beach kickback scheme. Last year, the DWC consolidated over 2,500 liens filed by Pacific Hospital.
The AB 1244 provision raised some concerns over whether this law would lead to dismissal of liens for legitimate services provided outside of the time frame in which fraudulent activity occurred. However, an injunction enacted at the end of 2017 allows providers the opportunity to argue that a lien was improperly frozen.