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July 2, 2001

State terminates two more providers in hearing-aid case

TUMWATER - The Department of Labor & Industries issued orders to two providers this past week to stop rendering services to injured workers. One provider is an employee of Ear-Tec Hearing Aid Specialists. The other is a former employee.

The orders follow in the wake of the June 19 conviction of Ear-Tec owner Shahn Aaron Divorne in a month-long criminal trial in Pierce County Superior Court.

A jury convicted Divorne of 13 counts of theft in the first degree, one count of conspiracy to commit theft in the first degree and three counts of false statements to Labor & Industries. All are felonies. Sentencing is set for Aug 3.

Ear-Tec provides hearing aids for injured workers covered by Labor & Industries. The firm, headquartered in Puyallup, also has locations in Kent, Aberdeen, Centralia, Spokane and Kennewick. The firm has been under investigation by L&I for two years.

The orders apply to Michelle L. Sloan of Eatonville and Teressa L. Carpenter of Aberdeen. Both worked for Ear-Tec Hearing Aid Specialists while Labor & Industries was investigating the firm for over billing the department.

The agency's investigation led to criminal charges and the June 19 conviction of the owner.

"I'm very pleased with the jury's findings," said Gary Moore, Labor & Industries director. "Our goal is to stop this company from further cheating. This kind of scheme hurts the entire workers' compensation system - injured workers, employers and other providers."

Triggered by complaints from former Ear-Tec employees, Labor & Industries' Provider Fraud Unit began investigating Ear-Tec in May 1999. The investigation showed the firm was needlessly replacing and repairing hearing aids for injured workers and billing the department.

The department issued a repayment order of $860,262 against Ear-Tec last August for fraudulently billing the state for services provided to injured workers. The order includes more than $200,490 for overpayments, plus penalties and interest. The order also revoked the owner's ability to treat injured workers.

The company appealed that order to the Board of Industrial Insurance Appeals. The case is scheduled for hearing on Oct. 2.

Based on the L&I investigation, criminal charges against Divorne were brought forward by the Pierce County Prosecutor's Office.

"Labor & Industries' investigators did a good job uncovering this crime," Moore said. "We remain committed to identifying fraud in our workers' compensation system, and that commitment includes targeting the small percentage of providers who try to cheat workers and employers."

Labor & Industries administers the state's workers' compensation system. Employers and workers pay workers' compensation premiums into the State Fund. L&I administers benefits and pays medical bills when workers are hurt or become ill on the job. The agency provides coverage for about 163,000 employers and 1.9 million workers.

Sloan and Carpenter have 60 days to appeal the department's order to the Board of Industrial Insurance Appeals.

Anyone who suspects fraudulent activity may report it anonymously to L&I online at fraud.lni.wa.gov or by calling 1-800-547-8367.

Injured workers who have been treated by Ear-Tec Hearing Aid Specialists may contact their claim manager or 1-800-LISTENS (1-800-547-8367) if they have questions.

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