A U.S District judge has denied motions filed by State Compensation Insurance Fund (SCIF) and EK Health Services Inc. to dismiss conspiracy, trade libel and RICO claims against them, allowing Electronic Waveform Lab to proceed with its civil complaint, according to plaintiff attorney Nicholas Roxborough of Los Angeles based law firm Roxborough, Pomerance, Nye & Adreani LLP (RPNA).
“Now, neither State Fund nor EK Health can escape from the fact that they conspired in their attempt to put Electronic Waveform out of business, at the expense of injured workers who were suffering from pain and had work-related conditions,” says Roxborough.
In the matter of Electronic Waveform Lab v. EK Health Services, et al, Electronic Waveform Lab, Inc., the manufacturer of the H-Wave® device, alleged that State Fund, EK Health Services—a large utilization review (UR) services provider contracted by State Fund—and its UR physicians conspired to deny coverage for the H-Wave® device, disparaged the device to others, and intimidated prescribers. The suit also charged State Fund with creating a blanket policy to never approve H-Wave and utilizing EK Health and their so-called independent physicians to implement their policy to reject prescriptions for H-Wave in the treatment of patients’ injuries.
State Fund filed a motion to dismiss the entire complaint under California’s anti-SLAPP statute and won at the Trial Court, but that decision was later overturned by a California Appellate Court. RPNA then filed an amended complaint also naming as defendants EK Health’s medical director and director of quality assurance, as well as 11 physician reviewers who allegedly “denied 100% or nearly 100% of all UR requests for H-Wave.”
State Fund and EK Health asked the federal court to dismiss the complaint on the grounds that the workers’ compensation system is the exclusive remedy for Electronic Waveform Lab. However, the court denied this motion ruling that intentional interference and unfair competition claims arising from the allegation that the UR decisions were fraudulent are, in fact, prohibited by the exclusive remedy provision of the state’s workers’ compensation system.
The court’s decision confirms the validity of the plaintiff’s claims that SCIF and its defendants violated the federal RICO statutes, according to Roxborough.
“State Fund can’t make their own rules to deny injured workers legitimate treatment options, even if they are the largest workers’ comp carrier in the state,” he adds. “It will now be up to the jury to look at the evidence and decide if we are able to substantiate our claims.”
Roxborough, Pomerance, Nye & Adreani, LLP is a Los Angeles based law firm providing expert legal counsel and representation to the California business community. Established in 1995, the firm offers a broad range of legal services in all facets of civil litigation, with its primary focus on litigation, legislation and policymaking issues involving insurance and business related concern.