Federal investigation looms over Perret Court of Appeal candidacy

by Mike Stagg

Seven local attorneys say they have been contacted by federal authorities looking into the controversial billing practices of a company owned by candidate Candyce Perret's husband and for which she worked as recently as 2014.

Candidate Candyce Perret with her father in law, Hank Perret, at her Jan. 9 campaign announcement
Photo by Robin May

[Editor’s Note: This is the first in a series of stories on the three Republican women running for the Third Circuit Court of Appeal. Candyce Perret, Susan Theall and Vanessa Anseman are seeking to serve out the unexpired term of Judge Jimmy Genovese, who was elected to the Louisiana Supreme Court in November. Genovese’s former Division B seat covers Acadia, Allen, Evangeline, Iberia, Lafayette, St. Landry, St. Martin and Vermilion parishes. The election is March 25.]

Candyce Perret’s campaign for a seat on Louisiana’s Third Circuit Court of Appeal has called public attention to a heretofore little known (except in some legal circles) but long-running federal probe into the medical billing practices of one of her husband’s companies, Louisiana Specialty Institute.

Federal investigators will neither confirm nor deny an investigation into Hunter Perret’s LSI, but seven Lafayette attorneys confirmed directly to The Independent that they were visited by federal agents regarding LSI in recent years. The attorneys each say that the federal agents asked them not to discuss their meetings, and they agreed to speak with The Independent on the condition that their names not be used.

One attorney says he was contacted by an FBI agent within the past three months.

Hunter Perret, 33, founded LSI in 2007, two years before he and Candyce Gagnard married. LSI operates at 501 W. St. Mary Blvd., and Hunter is the sole member of the limited liability company. He and Candyce are partners in The Perret Group through their marriage. In her campaign material, Candyce — who at age 46 is seeking public office for the first time — says that she is general counsel for The Perret Group.

While Candyce Perret has no ownership stake in LSI, she served of counsel for the firm starting in mid-2013 and was running the company while her husband was undergoing cancer treatment. She also signed off on documents as custodian of medical records for LSI in at least two court cases in 2014.

Hunter Perret at his wife's campaign announcement
Photo by Robin May

And while much of the medical industry is governed by negotiated rate and fee schedules set by insurance companies and public sector funders, Hunter Perret and LSI found a niche serving the clients of personal injury lawyers. LSI entered the field as a new industry sprang up to help finance the medical care needs of those injured in accidents while litigation proceeds through the courts. Many plaintiff attorneys use lines of credit negotiated with their respective banks, but that method can constrain a firm’s ability to grow its clientele, particularly if cases drag on.

A host of non-banks saw opportunity there, including some founded by successful plaintiff attorneys. The field is medical lien funding. Essentially, an attorney, a client and/or a provider pledge their share of a settlement related to medical expenses in exchange for a percentage of the face value of invoices for medical services paid shortly after services are rendered. That enables medical bills to be paid and for treatment to continue as needed.

Hunter Perret tells The Independent that LSI typically got 45 percent to 55 percent of the face value of the invoices it sold to medical lien funders. Perret says the invoices were sold within 30 days of services being provided and that funding was wired to LSI by the companies based on the agreed upon rate.

He tried to clarify the payment system using the analogy of a bill he might receive from his attorney, Alan Breaud. “At the end of the day, the simple explanation is, when Alan sends me a bill for legal services, he doesn’t want me to write him a check for 80 percent of the bill, he wants me to write it for the 100 percent,” Perret says. “We don’t, as a medical provider, want to take a discount from MedStar or Bayou Medical [Management], we’d rather get paid 100 percent. We’re forced to use them because the attorneys didn’t have the money and said, ‘You’ve got to use these financing companies.’ We would love to get paid 100 percent, obviously.”

MedStar Funding was an Austin-based medical lien finance company formed by plaintiff attorney Daniel Christensen that provided funding for patient care in personal injury cases. MedStar was sold in early 2016. Medical financing involves a patient/plaintiff assigning a portion of the proceeds from any case settlement to cover the cost of his medical treatment. The finance companies conduct a risk assessment of the accident and pay a percentage of the face value of the invoices based on that assessment.

Baton Rouge-based Bayou Medical Management, the second company Hunter Perret used in his analagoy, is a preferred provider organization catering to personal injury attorneys and their clients. The firm has a network of providers who work at contracted rates. Jack Onstott, Bayou Medical’s owner, tells The Independent his company pays providers 70 percent to 80 percent of the face value of invoices for services shortly after care is rendered so that patients can continue to receive the care while litigation continues. Onstott says his firm requires attorneys to guarantee payment of settlement funds to cover the balance of the bill.

Hunter Perret, who studied accounting at UL Lafayette but does not have a degree, identified a niche for LSI in the personal injury funding business by positioning his company as the intermediary between the funders and the providers in a way that enabled him to pay providers the full face value of their invoices. To do this, LSI would aggregate the provider invoices for a patient who had been referred to LSI, mark up the prices charged by the providers, then sell the higher priced invoice to funders like MedStar Funding or PPOs like Bayou Medical Management. The face value of the invoices purchased by the funders became medical bills included in the mix in the personal injury cases linked to the specific patient/clients.

It proved to be a lucrative niche for LSI and Perret. But it had the effect of calling attention to LSI’s pricing, which numerous sources tell The Independent is considered far out of line with other providers in the region.
LSI billing in personal injury cases became a flash point of contention not only between plaintiff and defense attorneys, but the paper has found instances where plaintiffs attorneys hired other attorneys to file suit against LSI over what were described in one case as the “grossly inflated” charges for medical procedures.

Keep in mind that those are merely allegations of grossly inflated medical bills, which may not be illegal. However, sources interviewed for this story believe such a practice, if proven, would certainly be unethical. But court records and attorneys interviewed by The Independent say that’s not all the feds are looking into.

For their part, the Perrets say they have no knowledge of an ongoing investigation into LSI.

In an on-the-record meeting at the paper's office on Wednesday, Jan. 25, Hunter and Candyce Perret — along with attorney Breaud — say they have actively sought out information regarding a possible investigation but found nothing to substantiate it.

“LSI has never been contacted or informed by the FBI of any investigation,” Breaud says. “They’ve never ever — ever — received a phone call, letter or memo from a federal investigative agency, FBI.”

“Put it to you this way,” Breaud avers, “We have made every reasonable effort to investigate whether there was an ongoing federal investigation, and our investigation found none. None. Zero.”

Primarily because of the revered standing of Hunter’s father, attorney Hank Perret, in the community at large and in legal circles (Hank once chaired the Louisiana Board of Ethics), The Independent was unable to find anyone willing to speak on the record about LSI, its billing practices and other questionable practices that have come up in court cases. District court records, though, provide a rich vein of information about LSI’s business practices and about the origins of the federal investigation into them.

LSI Exposed: the Stelly and Narcisse Cases

Court records show that LSI’s billing was at the heart of fierce legal fights in two personal injury cases involving separate motor vehicle accidents that occurred in 2009 and 2010. The 2009 accident resulted in the 15th Judicial District lawsuit Stelly v. Clemons in Vermilion Parish. The 2010 accident in St. Martin Parish led to the lawsuit Narcisse v. Zurich American Insurance Co., et al in the 16th Judicial District Court.

In each case, the plaintiff, represented by counsel from different law firms, obtained at least some medical treatments through LSI.

Personal injury cases can take a long time to settle, but by April 2013, it appeared that the attorney for plaintiff Stelly and the attorneys for the two insurance companies involved in the case had agreed upon a general outline of a settlement — with the exception of LSI’s charges for a neck and a back surgery performed on the plaintiff at Opelousas General Hospital and billed through LSI.

The case was in mediation. The Independent has confirmed that there was a mediation hearing held April 5, 2013, in attorney Clayton Burgess’ Lafayette office. Burgess represented Stelly, and Ian MacDonald of the Jones Walker law firm in Lafayette attended representing the primary insurance carrier, Progressive Casualty Insurance Company. Robert Mahtook Jr. was present representing excess lines insurance provider Markel Insurance Company.

Multiple sources tell The Independent that at some point during the session, two of the parties went to a phone in Burgess’ private office and placed a call to Hunter Perret. With one party listening to the conversation, one of the attorneys explained that LSI’s charges for the surgeries were the sticking point blocking a settlement and urged Perret to go to Burgess’ office to clear the matter, if he could. Perret did not show up.

Over the next week, at least three emails — which the paper has reviewed — were sent to Perret regarding the Stelly case and issues with the bills. Two of the emails were letters on an attorney’s letterhead. The second email contained a draft of the motion in limine that a defense attorney intended to file seeking to have LSI’s billings tossed out of the case. The third was from an attorney’s office informing Perret of the date of the critical hearing on the motion.

Ian MacDonald filed a motion in limine on April 12 asking presiding Judge Kristian Earles to disallow LSI’s medical charges for surgeries performed on the plaintiff in the case. Such a motion asks the court to limit or prevent certain evidence from being presented by the other side at the trial in a case.

In his memorandum supporting his motion, MacDonald argues that LSI was billing for services it had not provided:

Since LSI’s submission of its bills, Defendants have learned that some or all of the aforementioned providers of services to Stelly have no connection to LSI. Specifically, Dr. [George Raymond] Williams has testified that he has no affiliation with LSI. Furthermore, he has never had a contractual relationship with LSI and has no explanation why his services were billed through LSI. Dr. Kerry Thibodeaux also denies assisting Dr. Williams in performing surgery as indicated on LSI billing. Finally, defendants have learned that LSI arbitrarily added additional charges to the actual bills of Stelly’s medical providers on a routine basis and then billed the charges as its own.

In essence, MacDonald was making it clear that he wanted to pay the providers for the services they had rendered to Stelly, but that he wanted to toss out LSI’s markup on those services. The Jones Walker attorney further writes:

In Louisiana, a certified copy of medical bills for the services rendered by the health care provider who rendered treatment, which is certified or attested to by that provider, may be offered in evidence as prima facie proof of its content. Medical bills or expenses from someone who did not provide the treatment and/or which are unrelated to the actual treatment are not admissible. In this instance defendants have no objection to the bills from the actual providers. However, LSI’s bills represent nothing more than a misrepresentation of its involvement in Stelly’s treatment and an attempt to profiteer. Accordingly, they must not be admitted.

Surprisingly, Clayton Burgess, the attorney for plaintiff Stelly, did not object to MacDonald’s motion to dismiss LSI’s bills. In his written response to the motion in limine, Burgess writes:

The plaintiff is not relying on, does not intend to introduce into evidence and does not accept as accurate the certified bills presented by LSI for the services performed outside LSI. Plaintiff is not claiming $426,000 in medical bills as certified by LSI. The plaintiff will assist the Court in any form or fashion in its attempt to receive evidence on this matter. Rather, the plaintiff wishes solely to rely on the certified records from each facility, doctor or other medical health care provider accumulated in the instant case.

The plaintiff will make no attempt to rely on, introduce into evidence or accept as accurate the bills presented by LSI for services provided outside the LSI clinic; therefore, the plaintiff does not object to the defendant’s Motion in Limine.

With no objection to MacDonald’s motion, Judge Earles went down a spreadsheet of itemized charges for the surgeries on Stelly’s neck and spine. Charge by charge, Earles awarded payment to the actual provider of services and disallowed LSI’s charges. He also struck what appeared to be phantom services — charges for services that were not provided or could not be substantiated in the billing submitted by the individual providers when compared to the LSI invoices.

The worksheet submitted by attorney Ian McDonald in the Stelly case shows the grossly inflated LSI charges, all of which were thrown out by District Judge Kristian Earles. Click image to link to full worksheet.

Of the original $426,000 in combined LSI charges for the two surgeries on Stelly, $123,803 were approved for direct payment to providers for services rendered. Earles and the attorneys identified $17,367 in LSI charges for services that were not rendered or for which there should have been no charge. That number includes the $6,560 charged for Dr. Kerry Thibodeaux’s assistance on the neck surgery (Thibodeaux, who typically assisted Williams, was not present for this procedure, and LSI tells The Independent it was a billing error, an amount it refunded) and $9,560 for Osteogenesis Bone Growth, which apparently was billed by Dr. Williams on a later bill. (See sidebar "LSI's Stelly Numbers Reveal Its Business Model.")

Court documents in another case reveal that at the end of the session, after signing the judgment on the motion, Judge Earles told the attorneys on the case that he presumed the wrongdoing would be reported to the proper authorities.

Federal authorities, court records would later show, had years before been notified that something may be amiss at LSI, but that was not revealed until a March 7, 2014, hearing in the previously mentioned, Narcisse v. Zurich American case.

Collision in the 16th JDC

Like the Stelly case, the Narcisse case in the 16th Judicial District Court in St. Martin Parish resulted from a motor vehicle accident. Like the Stelly case, plaintiff Narcisse was treated for a time by providers at LSI. Unlike the Stelly case, however, there was no LSI bill for surgeries linked to injuries in the accident resulting in the Narcisse case.

Court records show that corporate defense attorney Bryan Scofield of Scofield & Rivera in Lafayette believed he could win Zurich Insurance and its trucking company clients some relief on medical expenses by questioning LSI’s charges in Narcisse, using the record of the Stelly motion in limine hearing as a pry bar to get access to more information about LSI’s practices and its relationships with providers.

The Narcisse case had been fiercely contested. Scofield went far back into the plaintiff’s life to get high school records and employment records, and had hired private investigators to tail the plaintiff, according to documents from the case file in St. Martinville.

The case was set for trial in March 2014, and on Feb. 12 Scofield subpoenaed former LSI physicians Albert Gros Jr. and Baylor Jewell to testify. In his subpoena Scofield asks that Jewell produce:

1. All documents relating to any complaints filed against Louisiana Specialty Institute, LLC.
2. All documents supporting the basis for any complaints against Louisiana Specialty Institute, LLC.

On Feb. 18, 2014, Scofield files his own motion in limine in the Narcisse case that includes a range of issues he wants excluded from the trial; the attorney leads with a multi-page attack on LSI billing practices based on the successful challenge to LSI in the Stelly case.

It is a very revealing motion.

In the court documents, attorney Scofield acknowledges that he has no conclusive evidence of misconduct by LSI in the Narcisse case: “However, based upon established conduct in prior cases and clear indications of impropriety in this case, Defendants request an evidentiary hearing to determine whether all or part of the LSI records and/or medical testimony should be excluded.”

Scofield says in the court records that he wants the hearing before the scheduled March 14, 2014, jury trial and stipulates he is not seeking a delay in the trial. He writes:

Questions concerning LSI began to arise with undersigned counsel and local defense counsel in other cases. Instead of offering “competitive prices” as mentioned in the promotional material, LSI invoices appeared to be significantly inflated. There were also suspicious medical reports. Undersigned attempted to schedule LSI’s 1442 deposition in other cases. However, cases settled before the depositions could be taken. One case settled for less than the medical expenses, presumably because LSI discounted their bills in order to avoid the depositions.

Scofield quotes extensively from the worksheet used in the Stelly case to strike LSI's charges, using the amounts billed by LSI versus the amounts actually billed by providers.

Scofield drops a bit of a bombshell on Page 3 of his motion:

The Judgment and worksheet established that LSI billed for phantom services that were never performed, and LSI grossly inflated the bills of the various health care providers. Judge Earles stated that LSI’s actions seemed fraudulent and asked if the attorneys had alerted the authorities. Mr. L. Clayton Burgess had already done so.

In a footnote on that page, Scofield writes that “Judge Earles’ comments are paraphrased from comments made by L. Clayton Burgess to undersigned counsel on February 12, 2014.”

Scofield says in his memorandum that Dr. Albert Gros reveals in a deposition a second instance of LSI being under investigation.

Dr. Gros confirmed that LSI is under investigation for billing and/or documentation improprieties. The LSI investigation began when Dr. Baylor Jewell filed complaints about procedures that were allegedly ordered by Dr. Jewell, but actually weren’t.

Scofield also points to testimony by Dr. Gros in his deposition that his signature was used by LSI after he had stopped seeing patients at the company in March 2011. LSI officials tell The Independent that Gros's physician's assistant appeared to have continued to use his signature, though the court testimony never establishes whether the PA had permission to do so.

On Feb. 24, 2014, 16th Judicial District Judge Edward Leonard signed an order setting an evidentiary hearing on Scofield’s motion in limine for 9 a.m. March 7 in the St. Mary Parish Courthouse in Franklin.

Two days later, Scofield subpoenaed Louisiana Specialty Institute through its registered agent, attorney Frank Slavich, to testify in the March 7 evidentiary hearing on the motion in limine. That would bring Hunter Perret to the witness stand.

On March 3, 2014, Candyce Gagnard (Perret) signs off on documents responding to Scofield’s subpoena for plaintiff Narcisse’s medical records filed in early February. In the Jan. 25 meeting at The Independent's office, candidate Perret says her signature indicated only that the records had been assembled and sent in response to the subpoena.

The Narcisse Evidentiary Hearing

Attorney Scofield subpoenaed four doctors linked to LSI to testify in the March 7 evidentiary hearing on LSI’s billing practices in Judge Leonard’s court. They were Drs. Peter Zimmerman, Steven Wyble, Albert Gros and Baylor Jewell. Only Jewell, a general practitioner/emergency room doctor now practicing in Prairieville, showed up.

Hunter Perret responds to the subpoena for LSI, appearing in court accompanied by his attorney Alan Breaud.

Clayton Burgess decides to attend the session, he has told associates, after he sees Breaud and Perret together earlier that morning in Lafayette. Through communications with Scofield, Burgess is aware of the hearing date. On a lark, he decides to attend.

In the hearing, Scofield moves to sequester the only two witnesses present to testify, Dr. Jewell and Hunter Perret.

Jewell testifies while Perret and Breaud wait in another room.

Under questioning by Scofield, Dr. Jewell, who had given an earlier deposition, testifies that he had worked for LSI for several months starting in the spring of 2011. He describes himself as “a part-time contract employee” of LSI, saying he saw patients two days per week and that he dictated reports on patient visits each of those days but rarely saw the reports unless he happened to see that patient again on a later visit. He says he was not given the opportunity to review the transcribed reports for accuracy.

Jewell testifies that an electronic signature was used on the encounter reports and that the use of that electronic signature became an issue between him and Hunter Perret.

[Scofield]: Okay. At some point did you prohibit LSI from using your electronic signature or ask them to ––
[Dr. Jewell]: Prohibit, no. I asked on multiple occasions.
Q: And why was that, sir?
A: Because, A) I was not seeing the reports for proofreading. B) There was incidents where government forms had been signed with my electronic signature that I had not initialed or even filled out the form.
Q: And had you even authorized the use of your signature on these medical forms?
A: When I first went to work there, but I unauthorized it within a month or two.
Q: And did the practice continue even after you unauthorized it?
A: It continued even after I ––

Jewell says the issue eventually led him to leave LSI. Scofield asks him to explain.

[Jewell]: Like I said, I had several conversations with Mr. Perret about the unauthorized use of my signature on the notes. I had contact with the U.S. Attorney about legality of what was going on. I had discussed it with the FBI. And there was some question of how long the FBI thought I should remain employed with Hunter Perret. And I walked into the office one morning with about twenty (20) patients sitting in the waiting room and there was a federal, I guess, Social Security application filled out on a patient I had never seen with my electronic signature on it. When I saw that I walked out of the exam room, picked up my briefcase and walked straight out of the office and the first time I’ve seen or talked to Hunter Perret was about ten minutes ago in this courtroom since that happened.
[Scofield]: Did you alert Hunter Perret that your signatures were being used?
A: Absolutely. I told him directly.
Q: Do you know what action he took with respect to that?
A: As far as what I have seen in previous depositions, no action, they continued to do it.

In response to questioning by attorney Scofield, Dr. Jewell also says he believes that the language in his encounter reports had been altered by someone at LSI. Asked how he discovered this, Jewell testifies:

At the –– when I would see a patient a second or third time every once in a while there would be a report that was actually in the file already been processed, already been done and it would be in the file and I noticed it on one or two occasions. Most of the time the report wasn’t in the file. And I noticed it on depositions. On every deposition that I’ve given I’ve offered the disclaimer that this was not my signature, that it was electronic and I had no opportunity to review and I had not initiated or cosigned the report.

Jewell testifies that he went to the FBI on the advice of his brother in law, Lafayette attorney Lane Roy, and that Hunter Perret had asked Jewell about it directly.

[Jewell]: Well, the FBI called some of my co-workers at LSI, somehow let the cat out the bag and when I showed up for work the second day afterwards Hunter Perret asked me why I had been talking to the FBI.
[Scofield]: What did you tell him?
A: Because I didn’t like what was going on, it wasn’t right. And, you know, I consulted with my lawyer, Lane Roy in Lafayette and he told me that if I quit and there was any legal action against Hunter I could be found guilty also, unless I filed, you know, unless I made it aware that I didn’t agree with it and that’s why we contacted the U.S. Attorney and U.S. Attorney contacted the FBI.

Scofield calls Hunter Perret to the witness stand while Dr. Jewell reviews records from patient encounters related to the Narcisse case.

Attorney Alan Breaud asks permission from the court to participate in the questioning of his client, Perret. Scofield objects, saying Breaud is not part of the case. Judge Leonard, according to the court record, says he doesn't see what position Breaud has in the proceeding.

Breaud replies:

Well, from what I’ve seen here there would be reason to object to leading him and misleading questions being asked of my client and I’m not sure that any party here other than me has interest in the integrity of the questions being presented to my client.

Judge Leonard denies Breaud’s request to take part in the examination of Perret.

Under questioning by Scofield, Perret contradicts Jewell’s claim that doctors were not given the opportunity to examine their reports before their signatures were affixed onto them: “They’re always given the opportunity, yes, sir.”

Perret testifies that Dr. Jewell did not quit LSI, maintaining that the doctor was fired. “We terminated him,” Perret says. “He fell asleep on some patients that he was seeing. We had some other scheduling issues with him.”

Scofield questions Perret about the use of Jewell’s electronic signature.

[Scofield]: Did he tell you of improper use of his electronic signature?
[Perret]: Yes. He talked about — No, he didn’t talk about inappropriate use. He said he wanted to start seeing every single one, so we started stacking up all the narratives for him so that he could see them before they went out.
Q: Okay. And did that happen?
A: Yes, sir.
Q: Did he also complain to you about someone changing and modifying his reports without his authority or consent or knowledge?
A: No, he did not.
Q: That would be improper, correct?
A: In my knowledge, yes.
Q: And that would place a question on all of the records of LSI, correct?
A: I don’t think so.

In response to a series of questions from Scofield, Perret denies knowledge of “any complaints of irregularities and improprieties and investigations of LSI,” any knowledge of the unauthorized use of electronic signatures, or of anyone modifying or changing physician reports.

Later in his time in the witness stand, Scofield asks Perret about his awareness of any federal agents contacting LSI employees.

[Scofield]: Are you aware of any –– I may have asked this and I apologize, but there was some testimony today that the FBI contacted some of your physicians. Are you aware that the FBI or some federal authority was investigating LSI?
[Perret]: No, sir.

Late in the day, after reviewing records connected with the Narcisse case, Dr. Jewell returns to the stand to say that he found what he believes to be inconsistencies between the transcribed record and his knowledge of the patient visit:

“So, I’m just testifying to the, do I think these are the words that I would have used. Okay. And I can’t tell you one hundred percent because I haven’t been given a copy of the tapes. Who knows where they are? Not me. So what I’m telling you is there is no reason for me to do a peripheral vascular or lymphatic exam on this patient because he’s in there because his back hurts.

“And in respect to the injuries I’ve treated, you know, it was written significant for muscle spasms with decreased strength and and tone secondary to pain and spasticity. I never put spasticity in any report. I can barely pronounce it. Okay. That’s something that makes the report seem greater injury than what it would have been, what I would have ever put in it.”

The hearing is continued until the trial date, March 14, but the case settles before the judge rules on the validity of the LSI charges.

Campaign Brings Federal Investigation to Light

In the interview at The Independent’s office, Candyce Perret was asked the question the paper has been hearing since the launch of her campaign, when one of her opponents, former 15th Judicial District Court Judge Susan Theall, spoke publicly about LSI’s legal troubles. With this kind of baggage — and the presumption that all of it would see the light of day — why would she seek public office?

The Perret campaign made a big splash with a half page ad filled with more than 140 endorsements, a move that likely scared off some potential candidates. Click on image for larger view.

The Perrets say they believed the questions about LSI and its business practices had been put to rest and that it would not be an issue in the campaign. They explain that they discussed the matter with family, friends and campaign advisers before Candyce decided to become a candidate. Candyce Perret came out strong with a half-page newspaper ad announcing her candidacy, burnished with the names of more than 140 people she says have endorsed her, including Louisiana House Speaker Taylor Barras, Democratic state Sens. Eric Lafleur and Gerald Boudreaux, Republican state Reps. Stuart Bishop and Dustin Miller, and Trent Brignac and Bo Duhe, district attorneys from the 13th and 16th judicial district courts, respectively. (Duhe's name has since been removed from the list of those endorsing her on her website).

In the sit-down with The Independent, Candyce Perret did take the opportunity to distance herself from the company’s legal problems, saying she did not work for LSI when the allegations of billing irregularities were made — though, if some of the more troubling allegations are true, she certainly would have been enriched by such a practice. She did say that during her time with LSI she instituted changes in the company's policies and procedures, including elimination of the controversial electronic doctors’ signature, which her husband defended in his court testimony.

Candyce says she was stunned that Theall spoke publicly about the matter at a meeting of the Lafayette Trial Lawyers Association the Monday before qualifying. Theall has told friends that she did so because of the ethical cloud that could hang over the Court of Appeal if Perret is elected.

“I was hoping that things would stay positive,” Candyce tells the paper. “And I certainly intend to run a positive campaign. It’s unfortunate that my opponent is trying to create a sideshow and divert attention from what the issues are in this campaign.

“I do feel that I’m the most qualified candidate in the race, with the most diverse legal background,” she continues. “I’ve litigated hundreds of cases from my time as a prosecutor, and I’ve handled every type of case that would come before the Third Circuit.” The Marksville native graduated from the University of Denver and Loyola Law School and has worked as city prosecutor for Marksville, and as city attorney for Arnaudville, Krotz Springs, Leonville and Port Barre. She also previously served as senior law clerk for the New Orleans-based 4th Circuit Court of Appeal for two years before joining the law firm of Morrow, Morrow, Ryan and Bassett, where she worked from 2006 to 2012. “I feel that I could walk in the door tomorrow and be able to do the job,” she says.

Political consultant Joe Castille outside of the Lafayette Parish Courthouse in May
Photo by Robin May

Theall, it turns out, might be the least of Perret’s political worries. Sources tell The Independent that Joe Castille, a scheming political operative, was well-versed on the legal problems of LSI prior to qualifying. Castille, who has done media and strategy for a number of high-profile Acadiana campaigns (chief among them Chad Leger’s unsuccessful bid for Lafayette sheriff in 2015), was seeking a candidate willing to use the information about LSI and the Perrets. (Castille's collusion with Lafayette Marshal Brian Pope to advance the Leger campaign was the basis for criminal indictments against the marshal. Read more here.)

Workers compensation attorney Tom Budetti tells the paper he spoke with Castille while he was contemplating entering the race during the week of qualifying. Castille, Budetti says, “seemed to know all about Hunter Perret, Candyce Perret and LSI.”

For a while, Vanessa Anseman appeared to be the candidate Castille had been hoping for. Anseman, whose husband is a partner at Jones Walker’s River Ranch office (headed by attorney Ian McDonald, the corporate defense attorney in the Stelly case), consulted with Castille early on.

Castille, however, is no longer involved with the Anseman campaign, having been replaced this week by political consultant Roy Fletcher of Baton Rouge.

“Joe and I decided to go our separate ways,” candidate Anseman tells The Independent. “It was completely amicable.”

But that may not mean Castille is out of the picture. Independent PACs have been the main source of attack ads in campaigns in recent judicial elections in Louisiana, giving candidates (when they want it) plausible deniability for some of the harsher attacks on their opponents. Castille, who has extensive ties in conservative and business circles, could still find a channel for his information albeit not tied directly to a particular campaign.

In other words, Candyce Perret is probably not going to get the positive campaign she hoped for.

Contact Mike Stagg at [email protected]


LSI’s Stelly Numbers Reveal Its Business Model

Hunter Perret, owner of Louisiana Specialty Institute, his attorney Alan Breaud and Third Circuit Court of Appeal candidate Candyce Perret maintain that LSI was not given an opportunity to participate in the 2013 motion in limine hearing before Judge Kristian Earles where the company’s charges for medical services in the Stelly case were disallowed.

The central issue in the hearing was whether LSI was the provider of the services rendered to patient Stelly. Judge Earles and attorneys on the case used a spreadsheet worksheet to itemize the services and charges in the April 15, 2013, hearing.

The Perrets and Breaud had been provided the worksheet prior to the Jan. 25 meeting at the paper's office. In the meeting, they claimed that they could not verify the accuracy of the LSI numbers in the worksheet. At the request of IND Media Editorial Director Leslie Turk, the Perret team delivered a single-page document to The Independent the following day, Jan. 26, that contains its numbers for the two surgeries performed on plaintiff Stelly that were at the heart of the legal fight.

What the LSI Sheet Tells Us

The sheet provided The Independent by the Perrets and Breaud establishes two important facts. The first is that LSI was paid for services rendered in the Stelly case invoices for the respective 2011 procedures (a cervical surgery on April 15 and a lumbar surgery on September 26) shortly after they were performed. The second fact is that the court in the Stelly case was absolutely working off LSI invoices when it considered the motion in limine when it struck LSI’s charges. That is established by the appearance of payments LSI says it received by two medical care financers on LSI invoices submitted as evidence in support of the 2014 motion in limine.

According to the document, LSI sold the cervical surgery invoice to Austin-based medical lien financing company MedStar for $99,572 on May 26, 2011. With that money, it paid the providers who were involved in the surgery. LSI wrote checks for the Stelly cervical procedure in 2011 totaling $77,033.

On June 1, 2014, LSI wrote a check to patient Stelly in the amount of $3,608. That check was to cover the billing of what was originally listed as a surgical assist by Dr. Kerry Thibodeaux. Dr. Thibodeaux submitted an affidavit in the Stelly case that he had not participated in the surgery on Stelly. That charge ($6,560 on the original LSI invoice) was thrown out by Judge Earles and the attorneys in the 2013 hearing. Hunter Perret says he only learned about the inaccurate billing in 2014 while a witness in the Narcisse case in the 16th Judicial District.

Perret says the decision to pay the plaintiff directly on the matter was made after determining that MedStar had closed the account on the case two years earlier and had no interest in the money.

However, there is no listing of a payment to Dr. Kerry Thibodeaux in connection with the Stelly cervical surgery in the Perret/Breaud sheet. Had a check been cut for that in 2011, it would have alerted LSI and Perret as to what he has since cited as a clerical error in listing Thibodeaux on the original 2011 bill.

The sheet shows that after Stelly and the providers were paid, LSI cleared $18,930.26 on the Stelly cervical surgery, primarily for its work of gathering the invoices of the actual providers, marking them up and selling the marked up invoice to MedStar.

LSI was paid by Bayou Medical Management for Stelly’s lumbar surgery on the same day as the surgery. The payment of $94,344 to LSI was used to pay providers involved in that second surgery.

The sheet indicates that LSI cleared $15,963 after paying providers involved in this second surgery.

The 94,344 payment to LSI for Stelly’s lumbar surgery invoice shows up as the Case Total Payments figure on LSI’s invoice for that surgery.

The Case Total Charges for that surgery are listed as $134,778 in LSI’s invoice. The payment from Bayou Medical Management represents 70 percent of the face value of the LSI invoice.

“That would be our money once the case settles,” Bayou Medical Management owner Jack Onstott tells The Independent of the Case Total Adjustments line ($40,433 on the Stelly lumbar surgery invoice).

Funding Medical Care for the Injured Uninsured

In the medical lien financing business, once a provider sells an invoice to a funder (in this case, lien buyer MedStar) the provider is no longer involved in the case. LSI’s involvement in the billing for the Stelly surgeries ended on the respective days that it sold the invoice for the cervical surgery to MedStar and the day it was paid for invoice for the lumbar surgery to Bayou Medical Management. Both those dates were in 2011. The hearing on the motion in limine to throw out LSI’s charges was held in April 2013.

The payments by MedStar and Bayou Medical Management show up in the LSI invoices submitted for the two surgeries.

In the cervical surgery, the payment from MedStar shows up as the Case Total Payments line item in the lower right corner of the invoice. Hunter Perret says LSI gets “between 45 percent and 55 percent” of the face value of its invoices funded through medical lien finance companies.

Bayou Medical Management operates as a preferred provider organization for plaintiffs attorneys, according to Onstott. Although it serves much the same function as medical lien finance companies, Bayou conducts its business on a different basis. It openly markets to plaintiff attorneys, works out provider rate agreements based on its own assessments of the market, then pays providers a percentage of the face value of the invoices from particular cases backed by a guarantee from the plaintiff’s attorney.

“We negotiate rates with provider and pay them a percentage of the invoice based on those rates – typically 70 percent to 80 percent, depending on the case — within about 30 days of them providing us an invoice,” Onstott explains via phone.

Onstott says his firm requires that attorneys involved in the particular case guarantee the payment.

Medical lien funders perform a risk analysis of the case involved in the litigation and the type of care and treatment involved. Typically medical lien funders pay a smaller percentage of the face value of medical treatment invoices. The plaintiff/patient typically assigns the proceeds from the litigation to the lien holder in exchange for their funding of medical treatment for their injuries.

Providers and Bills

LSI’s bills for the two surgeries in the Stelly case were the obstacles to a settlement in that case. The decision to disallow LSI’s charges was based on information gathered by the attorneys in that case that LSI had not, in fact, provided the services and that it did not have written agreements in place with the providers for whose services it had billed.

The court ordered the holders of the invoices — MedStar and Bayou Medical Management — to be paid only at the rates billed by the actual providers, not at the marked up rates that appeared in the LSI invoices for the two procedures. LSI didn’t incur the loss; MedStar and Bayou did.

LSI had been paid for providing the services when it sold the invoice to MedStar for the cervical surgery and when Bayou Medical Management paid for the lumbar surgery based on LSI’s invoice in 2011.

The Case Total Charges line in the cervical surgery shows a total of $181,040. The MedStar payment is 55 percent of the Case Total Charges for the April 2011 cervical surgery performed on Stelly.

The Case Total Charges line for the lumbar surgery was $134,778. Bayou Medical Management paid LSI 70 percent of the cost of the total services billed, which Onstott says was consistent with his firm’s agreements with providers in the region.

Onstott says his firm no longer does business with LSI primarily because he found the company’s rates too high. “We were able to find other providers who could provide the same quality services at more reasonable rates,” Onstott tells The Independent. — _MS


The LSI Markup and Move Strategy on Invoices

Hunter Perret maintains that he formed LSI in order to provide affordable access to health care, yet the company’s higher billing rates have brought it into conflict with insurance companies, plaintiff attorneys and even companies that finance the care provided in personal injury litigation.

A long-running dispute between LSI and Lafayette attorney Clé Simon over the company’s charges resulted in a Third Party Demand lawsuit being filed against LSI in April 2015 by attorney Kevin Duck. Duck was seeking relief for one of Simon’s clients from the cost of whiplash treatment provided by Hunter Perret’s company. Duck’s suit against LSI is part of the case record of Gabal v Belaire and Allstate Insurance Company in the 15th Judicial District Court in Lafayette.

Duck’s suit and the defense of LSI mounted by its legal counsel Perret Doise (Hunter Perret’s father’s law firm) provide keen insights into plaintiff attorneys’ frustration with LSI’s high rates as well as the company’s own view of its work as explained by its own legal team. Perret Doise also provides a possible explanation as to why Hunter Perret did not respond to entreaties from attorneys in the Stelly case to address issues with LSI’s bills in that matter. In the suit filed by Duck, Perret Doise asserts that LSI has no role in billing once it has sold or been paid on invoices assigned to other companies involved in payment of personal injury care costs.

Third-Party Demand

At the center of the dispute is the amount LSI billed Simon’s client Gabal for neck injection treatment for whiplash suffered in a 2010 motor vehicle accident. Gabal was rear-ended, according to Duck’s suit:

Initial billing records provided revealed medical charges that were not usual, customary, nor reasonable, but were grossly inflated and included charges for services not provided (hospital/facility fees). GABAL was never treated in any hospital or other facility. To the contrary, all services were provided in the same offices as were examinations. The medical charges initially totaled $11,022.00 (Exhibit 1)

Subsequent alleged corrected billing records from LSI confirmed the fact that the initial charges were grossly inflated and revealed much lesser charges for the very same procedures on the very same dates of service. The alleged corrected billing records show charges totaling $7,900.00. Although allegedly corrected to reveal the actual charges, the alleged corrected billing records include charges for services not provided (hospital/facility fees). (Exhibit 2)

On information and belief, LSI knowingly inflated its medical billing charges beyond the usual, customary and reasonable charges for the services provided and/or included charges for services never provided as part of a practice of LSI to inflate medical charges for personal profit. On information and belief this is not the first nor only instance of LSI inflating patient charges and, in fact, the practice of inflating patient medical charges is believed to be widespread and an unfair trade practice pursuant to LSA-RS 51:1401, et seq, commonly referred to as the UNFAIR AND DECEPTIVE TRADE PRACTICES ACT.

Jared O. Brinlee of Perret Doise responds to Duck for LSI by saying that the legal window for any cause for action against LSI has closed, while also claiming that the suit was premature:

Claims for delictual obligations or for violations of the Louisiana Unfair Trade Practices Act are prescribed after one year. Louisiana Specialty Institute, L.L.C (“LSI”) finished treating the Plaintiff and billed her for all services more than three years ago. But Plaintiff now asserts in her Third Party Demand (the “Petition”) causes of action for violation of the Louisiana Unfair Trade Practices Act and fraud years later. Both are prescribed based on the facts alleged on the Petition’s face.

Regardless of prescription, claims that are subject to arbitration by agreement between the parties will be premature if filed in the trial court. The contract between Plaintiff and LSI contains an arbitration provision, which will be binding as to LSI’s right to recover against Plaintiff’s settlement proceeds and Plaintiff’s waiver and release of the exact claims contained in the petition. As these matters must be submitted to arbitration, Plaintiff’s action is premature.

Brinlee, in his response to Duck’s suit, then addresses the issue of the cost of the services billed by LSI:

To avoid having to pay the cash sum for the medical treatment originally quoted by LSI, Plaintiff instead entered into an agreement with LSI to finance the future procedures at a higher cost. The agreement is attached to this memo as Exhibit A. Such an arrangement required billing at LSI’s credit price (rather than the usual cash price) in exchange for an assignment of a portion of Plaintiff’s recovery in her personal injury suit. That assignment was made before the services were provided, and Plaintiff expressly acknowledged that, by assigning the lien, she would have to pay more for LSI’s services than the case price of those services. On page 2 of that assignment, Plaintiff agreed that:

I acknowledge that fees paid to medical providers vary depending upon the method of payment, and that fees paid by one patient may be higher or lower than the fees paid by another patient, depending upon contractual rights, government regulations, or negotiated payment agreements between the provider and the payor. I further acknowledge that medical providers typically receive more for their services when paid by contractual agreements, such as this, than if they were paid by health insurance companies, government programs such as Medicare or Medicaid, or by the patient in cash. I hereby waive any right to object to any fees charged by the PROVIDER that are the subject of this contract/lien based upon a claim that they are unreasonable or excessive (as opposed to erroneous), and by signing this contract/lien, I and the undersigned attorney waive any rights to challenge or object to the amount of any such fees or charges on that basis. (emphasis added)

Pursuant to that agreement, Brinlee asserts that LSI sold the invoice for the treatments to MedStar, which was brought into the process by Gabal’s attorney, Clé Simon, in the original motor vehicle accident case.

Brinlee says the agreement with MedStar mandates that arbitration of fee disputes take place in its home in Travis County, Texas.

Duck’s response is blistering:

LSI’s various exceptions are not well founded in law or fact and should be denied. Indeed, as set forth hereafter, LSI has relied on inapplicable law and jurisprudence and has not only ignored the actual facts germane to this case, but has actually made factual representations that are knowingly false. For example, as will be demonstrated hereafter, the suggestion by LSI that “plaintiff failed to object to the billing during the years that have passed” is totally false as revealed by various written communications between LSI and plaintiff’s counsel of record.

Duck argues that LSI’s inflated medical bills approach fraud:

LSI provided medical treatment to Cheryl Gabal for injuries resulting from an automobile collision that occurred on July 27, 2010 at which time Cheryl Gabal was rear-ended. Billing records were not produced contemporaneous with the treatment that was provided and it was not until many months subsequent to treatment being provided that any billing records were provided, which billing records were only provided upon the repeated insistence of Cheryl Gabal through her attorney’s office. As with essentially every patient who was a client of plaintiff’s attorney’s office, Cheryl Gabal’s medical charges were grossly inflated to the extent such needless and grossly inflated medical charges are tantamount to fraud as contemplated by C.C. Art. 1953.

Duck then cites a litany of instances where Gabal’s attorney, Simon, questioned LSI’s billing practices and charges involving a variety of Simon Firm clients who had received treatment through LSI. Duck then summarizes:

Clearly, any suggestion by LSI that “plaintiff failed to object to the billing during the years that have passed” is totally false and inaccurate. As revealed by the attachments, since the very beginning plaintiff’s counsel has objected to the billing practices of LSI, has provoked and participated in meetings about the objectionable billing practices and secured an agreement to correct the grossly inflated billing charges. Regrettably, there has been no finality to the issue which provoked the filing of the Third-Party Demand so that the court may determine the issue.

Duck proceeds to explain the basis for his claim that LSI engaged in fraud in its medical charges. He also explains how plaintiffs (those injured in accidents) were harmed by LSI’s inflated bills:

Two elements essential to establishing fraud are: 1) an intent to defraud or to gain an unfair advantage and 2) a resulting loss or damage. First Downtown Dev. v. Cimochowski, 613 So. 2d 671 (La. App. 1993). It is obvious that the billing practices of LSI in grossly inflating bills was done with the intent to gain an unfair and unjust advantage in the nature of an economic benefit for LSI. As a consequence, plaintiff stands to suffer a loss or damage to the extent that plaintiff would be required to pay more for treatment provided her than is reasonable and customary.

In personal injury cases, medical costs generally come out of the plaintiff’s share of the money awarded or settled. LSI’s higher costs amounted to a transfer of funds from the plaintiff and to LSI or whichever entity owned the invoice at the time cases were resolved.

Duck continues to pursue his attack on what he characterizes as LSI’s fraudulent billing:

As the court is further aware, consent to a contract may be vitiated by error, fraud, or duress. C.C. Art. 1948. Specifically, C.C. Art. 1948 entitled “Vitiated Consent” states:

“Consent may be vitiated by error, fraud or duress.”

In other words, in the context of fraud, LSI’s reliance upon any alleged “contact” or “assignments” is misplaced to the extent that in the context of fraud, any such “contract” or “assignment” is a nullity and therefore unenforceable. In this regard, if this honorable court ultimately determines at trial on the merits that LSI has committed fraud in its billing practices then the contract is considered an absolute nullity pursuant to C.C. Art. 2030.

Duck argues that the specter of fraud in LSI’s medical billing extends the window for legal action to five years, keeping the fight over the bills alive.

Duck adds that the proper venue for any action regarding the billing issue is Lafayette Parish, where the contact was signed, where the treatment was provided and where the plaintiff and LSI are domiciled.

Not LSI’s Bill

Responding to Duck, Brinlee of Perret Doise says that Duck is barking up the wrong tree by suing LSI:

LSI is not the owner of the claims that Plaintiff seeks to avoid paying, and LSI is not asserting any claims against Plaintiff. LSI has already been paid for these services, years ago. Plaintiff’s claims are delictual actions, which prescribed no later than 2013.

Confronted with the reality of being paid a percentage of the face value of the invoices it sold or assigned companies like MedStar, Perret and LSI marked up Total Case Charges on its bills enough to generate the revenue needed to pay its providers 100 percent of the face value of their own invoices. LSI’s ability to quickly pay providers 100 percent of the face value of their bills was unique in the region. But that practice — and the significant markups needed to cover the actual costs versus what funders would pay — drove LSI’s charges to levels significantly higher than those of other providers in the region. Insurance companies and ultimately plaintiff attorneys began objecting to and then challenging the legitimacy of the charges.

In the Stelly case, documents submitted by Hunter Perret and Alan Breaud show that LSI was paid for the surgeries in that case shortly after they were performed in 2011. When the case was moving toward settlement in 2014, the costs of the respective surgeries billed by LSI became the final barrier to resolution. By that time, LSI had no incentive to settle or compromise, as Perret Doise’s Brinlee wrote in the Duck suit, having “already been paid for those services, years ago.”

Unlike the surgeries in the Stelly case, which were done at Opelousas General, the whiplash treatments for Gabal were all carried out at LSI.

In the end of Duck’s Third-Party Demand suit, on Jan. 14, 2016, Allstate Insurance paid MedStar $7,650 of the original $11,022 LSI bill (69.4 percent of its face value). It is not clear how much MedStar paid LSI for Gabal’s bill in 2011. Hunter Perret says LSI typically got between 45 percent and 55 percent of the face value of the invoices it sold to medical lien finance firms like MedStar.

One day later, Gabal got at least a partial refund when Allstate issued a check to her for $3,230.60. The Lafayette Parish Clerk of Court was paid $692.50 for court costs incurred in the Third Party Demand fight.

Cheryl Gabal's comment about LSI stayed up on the company's Facebook page for almost two years. It was taken down around the time Candyce Perret announced her candidacy.

All of the parties involved in the Gabal case signed a confidentiality agreement, and none would speak on the record to The Independent. Gabal, however, did share her thoughts about the company on its Facebook page, calling it "a bunch of crooks!!!" in a post that stayed up for approximately two years before being removed around the time Candyce announced her candidacy. — MS