Sacramento Bee March 19, 1999
Major pain clinic faces big trouble
By Cathleen Ferraro
Bee Staff Writer
One of Sacramento’s most visible chiropractic businesses – California Back and Neck Pain Specialists – is enduring some spasms of its own.
During the past two weeks, the company has been sued by a major worker’s compensation firm, settled thousands of dollars in allegedly fraudulent insurance claims and is under court order to stop practicing unlicensed medicine.
It also is subject to an intensive investigation by the California Board of Chiropractic Examiners
California Compensation insurance – part of the state’s largest private worker’s comp corporation – filed the latest lawsuit accusing the firm of practicing medicine without a license, money laundering, false advertising and submitting more than $4 million in fraudulent bills. The Woodland Hills-based firm is the fourth worker’s comp insurer to sue Back and Neck Pain since 1996.
The others are Zenith Insurance Co., Superior National Insurance and Superior Pacific Casualty. All three resolved their claims last week when Ute G. Simmons, the wife of the firm’s primary owner, Lester Alwyn Simmons, paid them a combined $313,691.58.
The Simmonses and their employees admitted no wrongdoing in the settlement and Lester Simmons agreed to drop a countersuit.
" These are maverick insurance companies who are trying to restrict chiropractors from giving care to injured workers and punish doctors who file liens against them.", Lester Simmons said. "That’s what this is about. Our patients love us.."
California Back and Neck Pain’s only medical doctor, Robert A. McAuley, was dismissed from the consolidated case.
Meanwhile, Sacramento County Superior Court Judge John R. Lewis has ordered the seven clinics – which handled more than 4,000 patient visits in December – to stop engaging in unlicensed chiropractic medicine, physical therapy, false advertising and fraudulent billing.
At the heart of that dispute is Ute Simmons. She supervises a staff of nine chiropractors but does not have a medical, chiropractic or physical therapy license – which is required by state law.
The insurance firms contended the clinics offer free exams that are really cursory interviews meant to recruit patients for insurance-funded treatment. They also charged that the clinics promote themselves as full-service facilities with medical doctors even though none has worked there since last summer.
According to various legal papers, Lester and Ute Simmons own all of Sacramento-based Max-Practice Clinic Management, which handles billing, owns equipment and hires employees for Rx Spinal Care Medical Group – known as California Back and Neck Pain Specialists.
Lester Simmons holds an active California chiropractic license but has not treated patients in 10 years and doesn’t have a desk at any of the clinics, the most recent lawsuit says.
Since 1994, the suit contends, Lester Simmons used illegally obtained profits from the centers to purchase a $176,000 lot in Rocklin and maintain three houses and two condominiums in northern California and Arizona. He also allegedly bought a $450,000 certificate of deposit, transferred $900,000 to his Fidelity brokerage account and paid more than $2.2 million to a Dr. E. Eulenstein in Germany – who is Ute Simmons’ mother.
Ute Simmons did not return phone calls Thursday. Lester Simmons said he had not seen the suit but called the money laundering and tax evasion allegations "total nonsense."
Meanwhile, he faces related accusations from the state Board of Chiropractic Examiners, which has investigated him since 1997.
Those accusations include advertising physical therapy services without a licensed staff therapist, practicing for a year with an inactive chiropractic license, pressuring employees to give unnecessary treatments and submitting inflated insurance bills.
"Our position is that the whole thing is a sham," said Kent Harris, a deputy attorney general representing the board. "That (Simmons) runs the whole show and (Dr.) McAuley’s (majority stock ownership) role is B.S."
McAuley stopped working full time in June and is listed as "on call." He still is the firm’s medical director but has never received any corporate profits, said his lawyer.
Ultimately, the state wants to revoke Simmons’ chiropractic license. If successful, he would be barred from practicing or owning any piece of a chiropractic firm for at least a year.
A final decision is expected in April, which could lead to a shutdown of the clinics in Sacramento, Stockton and Modesto, said Harris.
Sacramento Bee March 25, 1999
Judge bars transactions in clinic trust account
By Cathleen Ferraro
Bee Staff Writer
A Sacramento judge slapped a temporary restraining order Wednesday on a key bank account linked to California Back and Neck Pain Specialists – currently the target of an intensive probe by both state and federal agencies.
Sacramento County Superior Court Judge Joe S. Gray said circumstances surrounding a Bank of America trust account in Folsom "raises suspicion" because payments were made to a German doctor several years after she reportedly died. The doctor, Elisabeth Eulenstein, is the mother of Ute Simmons, one of the chiropractic firm’s principals.
The 15-day restraining order isn’t expected to interrupt daily business at Back and Neck’s seven clinics in Sacramento, Stockton and Modesto.
Pushing for Wednesday’s court order was the state’s largest private worker’s compensation insurer, Woodland Hills-based California Compensation Insurance. It contends in a suit filed last week that Back and Neck Pain has engaged in money laundering, fraudulent billing, unlicensed medicine and tax evasion.
The insurance company wanted the court to freeze all business and personal bank accounts of Lester and Ute Simmons, principals of Back and Neck pain, and block Lester Simmons from selling or transferring his six residences in California, Nevada and Arizona. The company feared the Simmonses would try to flee the country with the money, said Cliff Sweet, the lawyer for Cal Comp and two other insurers who settled similar suits earlier this month against Back and Neck Pain.
Gray ultimately denied that request, citing insufficient evidence of a flight risk.
"Obviously, we’re pleased with the outcome," said Sacramento attorney Donald M. Wanland, who agreed to represent the Simmonses just hours before Wednesday’s hearing. "The judge’s decision doesn’t reflect negatively on the business. We’re confident a definite explanation of what has happened with that account will be presented in the next hearing."
Court documents filed by Sweet – including personal tax records for the Simmonses and business bank account statements – show that over a 14-year period, the consulting payments to the supposedly deceased Eulenstein went to a trust account of which Ute Simmons and her daughter, Marissa, are the beneficiaries.
A hearing is scheduled for April 8 to decide whether the court should continue supervising the account until the case is resolved.
Meanwhile, California’s Board of Chiropractic Examiners is trying to revoke Lester Simmons’ chiropractic license. He has been under its investigation since 1997.
Also, Back and Neck Pain’s medical director, Robert A. McAuley, may file a petition today asking the court to assign an independent party to take over the firm’s daily functions and eventually liquidate all operations. But attorneys for McAuley and Lester Simmons were negotiating late Wednesday to avert that move.
The doctor stopped working full time at the business in June. Legal papers filed Wednesday show that McAuley met with officials of the U.S. Attorney’s Office, the Internal Revenue Service and the Federal Bureau of Investigation on March 11 regarding alleged problems at Back and Neck Pain.
Sacramento Bee March 26, 1999
Operations at local clinics left unchanged
By Cathleen Ferraro
Bee Staff Writer
Plans to get a court-supervised party to take over daily functions and eventual liquidation of California Back and Neck Pain Specialists were scrapped Thursday.
The clinic’s medical director and co-owner, Robert A. McAuley, was expected to file a petition in Sacramento County Superior Court but postponed that move Thursday after he and the firm’s other owner, Lester Simmons, agreed to find alternative ways of running the business.
A resolution on how the seven clinics will be managed or whether they’ll stay open is expected in about two weeks.
McAuley want to divest completely his 51 percent ownership in the seven Central Valley clinics to pursue other interests, said his attorney. Simmons’ lawyer said the outcome would have no negative impact on patients.
California Back and Neck Pain has been embroiled in litigation with major insurance companies, and Simmons is a target of a probe by the state Board of Chiropractic Examiners.
California Workers’ Comp AdvisorVol. 9, No. 6 March 24, 1999
Chiropractic Clinics Settle With Three Insurers
California Back and Neck Pain Specialists, one of Sacramento’s most visible chiropractic businesses, has settled $313,692 in alleged fraudulent insurance claims. The company was also hit with a new lawsuit and is the subject of an investigation by the California Board of Chiropractic Examiners.
California Compensation Insurance filed the latest lawsuit, accusing the firm of practicing medicine without a license, money laundering, false advertising and submitting more than $3 million in fraudulent bills.
Earlier this month, California Back and Neck Pain Specialists, which operates seven Central California clinics, paid a $313,691 settlement to Zenith Insurance Co., Superior National Insurance and Superior Pacific Casualty. The insurers made allegations similar to those posed in the recent lawsuit.
Lester Simmons, the firm’s primary owner, said "maverick insurance companies" who want to restrict care to injured workers and punish doctors who file liens against them are targeting him.