NY Court Rules Board Had Authority to Remove Chiropractor who Admitted Kickbacks

The New York State Workers’ Compensation Board acted within its authority when it barred a chiropractor accused of taking kickbacks from treating injured workers, a state appellate court ruled Thursday.

The Third Department of the Appellate Division affirmed the dismissal of a lawsuit filed by Brentwood chiropractor David Marlin Levi. The appellate panel rejected Levi’s assertion that the board was required to wait for the state chiropractic practice board to hold a hearing on the accusations against him before revoking his authorization to treat workers’ compensation patients.

The appellate panel said the board had the option of holding a hearing on allegations that Levi took payments from Elite Medical Supply of New York, but the hearing wasn’t mandatory.

“In an instance where questions of fact attend the asserted charges of professional misconduct or incompetency, a hearing would be in order,” the 3-0 decision says. “Here, however, petitioner has admitted and documented his receipt of payments from Elite for treatment rendered to workers’ compensation claimants in direct violation of Workers’ Compensation Law Section 13-l (10) (g).”

Board Chairwoman Clarissa M. Rodriguez signed an order revoking Levi’s authorization on Sept. 15, 2021. Her order stated that Levi had accepted payments from a durable medical equipment supplier, but did not identify Elite.

According to the Appellate Division’s opinion, the board learned in 2019 that Elite was making payments to chiropractors who prescribed its devices. During the investigation, Elite provided the board a list of medical providers who had accepted payments. Levi’s name was on that list.

Levi told investigators that he had entered into a “services agreement” with Elite in January 2018 that paid him to fit patients with the company’s devices and instruct them on the proper care of the equipment. He also produced records that showed Elite had paid him $6,800 for those services.

The state Workers’ Compensation Law prohibits medical providers who treat workers’ compensation patients from accepting payment from anyone other than the insurer or the patient’s employer, according to the opinion.

Levi persuaded the Albany County Supreme Court to issue a temporary restraining order that blocked revocation of his authorization, but the court later lifted the order and dismissed the petition.

Levi appealed, arguing that Workers’ Compensation Law Section 13-l(10) requires the state Chiropractic Board to hold a hearing before the board can take any action.

The appellate panel said the law does “contemplate” a hearing before the board makes a decision about alleged misconduct, but it doesn’t limit the board’s authority to investigate allegations independently.

“This dual-track system is nothing new,” the opinion says. The panel explained that previous appellate court decisions have found the board can remove a medical doctor’s authorization to treat injured workers without any hearing by the state Medical Board.

“Under these circumstances, no hearing was warranted and respondent’s decision to remove petitioner from the list of authorized providers was not arbitrary and capricious,” the opinion concludes.

Top photo: Lumbar braces, such as the device shown here, are among the durable medical equipment types sold by Elite Medical Supply of New York.