Evening star., 1943-07-04
225 Doctors 10 Face
New York Inquiry
On 'kickback' Paw


On 'Kickback' Pay
BY CHARLES E. MERCER,
NEW YORK, July 3.-The New
York State Department Of Labor
will investigate more than 225 New
York physicians as q result Of an
inquiry into charges Of a "kickback'
payment system In the administra-
ton OF the State Workmen's Com
pensation Law.
Under the eye Of Gov. Thomas E.
Dewey, two special commissioners
have uncovered conditions which,
they say, have diverted more than
s., 5,000,00 in each Of the last five
years from the nearly 100000, 900
distributed annually In compensa-
ton benefits.
The commissioners, William F.
Bleakley and Herman T. Stichman,
said evidence accumulated in their
six-month investigation has revealed
bill-padding, overcharging and ex-
cessive treatments by physicians.
Cite Typical Case.
Michael j. Murphy, acting indus
trial commissioner Of the State
Labor Department, ordered the
probe Of practitioners-all licensed
to handle compensation cases-after
the commissioners had uncovered a
practice Of which they said this was
typical:
A laborer fell while on the job at
a war plant, and believing he had
fractured a rib went to doctor
recommended by a company or
union representative.
The physician, whose fee was paid
from insurance covering all workers
as required by law. referred him to
specific X-ray firm. The X-ray
firm received payment for its Jobs
and presented "kickback" in
money to the doctor who. in turn,
often gave q rake-on to the repre-.
sentative for referring the patient
to him.
Mr.. Stichman asserted he is pre-
pared to demonstrate that more
than 1000" doctors received kick
back payments In workmen's COM
pensation cases, and termed the
practice "a cancer injecting the
medical profession"
May Revoke Licenses.
After labor department hear
ings. physicians found guilty may be
penalized to the extent Of having
their licenses to practice In COM
pensation case revoked or sus-
pended.
Five medical societies in New York
also will conduct hearings, with the
power to suspend them from the
societies and make recommenda- =
tions to the State Department con-
corning those licensed In compensa-
ton.
Kickbacks are prohibited by both
the State labor department and the
medical societies.
Hundreds Of witnesses have been
questioned In the hearings. which
will continue In upstate cities this
summer.
The law. passed In 1914. requires
that all workers be insured against
injuries suffered while on the job.
When one is injured, his case gen.
orally is taken up by a licensed
Of the company or the
union of which he Is member.
Worker Caught In Web.
In many cases. the commissioners
the workingman becomes
q little man" caught In a web in
which employers or union agents
have tie-ups with licensed repre-
who, In turn, have con-
nections with doctors.
A licensed representative from
Brooklyn testified he had crossed
between $4,000 and $50 900 annually
for five years. He said he had rep
resented from 20 to IS unions since
he obtained his license in 1927 and
that in 1943 he had 1000 cases be-
fore the compensation bureau of the
labor department.
Elmer F. Andrews. former State
industrial commissioner. testified he
had been given bottles of cham
pagne by the head Of an x-ray
laboratory identified In earlier testi-
mony as one which paid thousands
Of dollars to doctors and others in
X-ray bill kickbacks.
Two physicians. both specializing
In X-rays. admitted they had paid q
total of $4,000 in kickbacks to other
in 194l and 1912.
In 1910 it was said that industry
In the State had paid more than
$500, 100000 to nearly 100000 in
jured workmen since the law had
been in force. But for a long time
workmen had been complaining that
all was not we'll with the admins
tration of the law.
La Guardia Asked Probe.
Mayor La Guardia appealed for
an investigation of the law in New
York City last November. Herbert
Lehman, Governor at the time, ap-
pointed Mr. Bleakley, who ran for
Governor on the Republican ticket
In 1886, to the job. When Gov.
Dewey assumed ONCE he reappointed
Mr.. Bleakley and also named Mr..
a former assistant United
States attorney. The investigation
swung into Aigh gear at the be-
ginning Of the year.
Much of the evidence was sup
piled by workmen who felt they had
been wronged. Typical was the case
of a painter who said he had suf-
fered broken bones when he fell from
a ladder. His employer referred him
to a physician by letter.
Suspicious of the letter. he opened
1t and discovered that it requested
the physician to make a negative
report" on his case. A Photographic
copy of the letter was entered as evi-
dence at the hearings.
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