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August 28, 2000

State boosts hearing aid firm's repayment to $860,262

TUMWATER - Labor & Industries has increased a Puyallup-based hearing aid company's repayment order from $108,000 to $860,262 in a continuing investigation of the firm's business practices. The order is for fraudulently billing the state for services provided to injured workers.

The initial order against Ear-Tec Hearing Aid Specialists was issued last December as part of an investigation by the department. Ear-Tec's authorization to treat injured workers also is revoked.

Labor & Industries administers the state's workers' compensation system.

The department's investigation was triggered by complaints from former employees of the firm. Those complaints resulted in a review of the firm's billing practices. Discrepancies found in that review led to an expanded audit by the department, resulting in last December's action.

Ear-Tec requested L&I to reconsider its action last February. The department granted the request.

Ear-Tec has offices in Puyallup, Kent, Aberdeen, Centralia, Spokane and Kennewick.

The department's final order included findings from an audit of 286 claims for injured workers treated by Ear-Tec from March 1, 1996 through Feb. 28, 1999. Investigators reviewed about 10 percent of the total claims.

As part of its reconsideration request, Ear-Tec submitted explanations it said supported the firm's billing practices. L&I reviewed those documents as well as records seized by the Pierce County Sheriff's Office.

The department had requested the sheriff's assistance last December. At the department's request, a criminal investigation of Ear-Tec by the Pierce County Prosecutor's Office is continuing.

Among L&I's findings in today's final order:

  • Ear-Tec billed and was paid for providing medically unnecessary services provided to injured workers. L&I says the company needlessly replaced or repaired hearing aids and then billed the department. The original assessment for this finding was $16,243. The final order by the department assessed the finding at $163,993.
  • Ear-Tec's claimant files contained hearing aid serial number discrepancies. The original assessment for this finding was $1,250. The final order put it at $10,525.
  • Ear-Tec altered records they submitted to the department to review during reconsideration. The department ordered repayment of $1,876 for this finding.

The final order includes more than $200,490 for overpayments. State law allows for an additional penalty of up to three times that amount. The order includes $58,302 in interest and $601,470 in penalties, bringing repayment to $860,262.

Ear-Tec has 60 days to appeal the order to the Board of Industrial Insurance Appeals.

Labor & Industries manages the state's workers' compensation system. It provides coverage for about 163,000 employers and 1.9 million workers.

L&I is committed to preventing and fighting fraud. Anyone who suspects fraudulent activity may report it anonymously to L&I by calling 1-888-811-5974 or online at fraud.lni.wa.gov.

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