In its revocation order, the board said Launder "repeatedly provided excessive and unnecessary treatment, which he often did not even attempt to justify or describe in the medical records." The board said Launder "was motivated, at least in part, by the financial benefits of excessively treating his patients and that he derived a significant financial benefit."
Launder has appealed in Montgomery County Circuit Court, said his attorney, Conrad W. Varner, who rejected the board's conclusion.
"It's totally false," Varner said, adding that he believed his client was the subject of a "biased prosecution." He also took issue with the notion that Launder benefited financially, saying the doctor made just $6,000 over a decade from the alleged "up-coding" addressed in the board's opinion.
'Is that fraud?'
Local agencies say they rely on the state commission to refer possible fraud cases to the Maryland Insurance Administration. From there, local officials say, cases can be referred to state's attorneys' offices for prosecution.
But documents show that in a given year, only a handful of cases are referred — and those are seldom pursued. Last year, the commission forwarded just six potential fraud cases to the insurance administration.
"We can only make a referral if the facts are brought out during the course of the hearing that there was a potential fraud," said R. Karl Aumann, chairman of the commission. "It's a decision that the commissioner bases on her or his evaluation of the evidence as it's presented."
None of the six resulted in a prosecution. In some cases the insurance administration felt the case was weak, records show. In others, it was stymied because it generally lacks jurisdiction when an employer is self-insured, as the city and many counties are.
P. Matthew Darby, an attorney who represents employees with workers' comp claims, says that because pain and suffering are so subjective, it is difficult to prove that someone is lying.
"Although there may not be as many fraud referrals as one might expect, I think in terms of denial of benefits the commission does a very good job of ferreting out the malingerers and people who shouldn't get it," he said. "When we're talking about [proving] fraud, we're talking about beyond a reasonable doubt.
"If you're a commissioner and somebody says, 'I can't work because my back hurts too bad,' and they bring in surveillance and on Thanksgiving afternoon the person was out playing in a touch football game, is that fraud? Or is it somebody who's exaggerating their symptoms? Or somebody who was in bed for two days after that?"
Amy Lanham, safety and insurance manager for Anne Arundel County, says local officials focus on "the early detection of fraud and stopping payments as soon as possible."
In a recent case, county officials arranged for surveillance of an employee on the day he had a medical appointment. The man entered and left the doctor's office using a cane, and told the doctor that he was in such pain he could barely move, Lanham said.
But surveillance showed that the man didn't use a cane the rest of the day. An investigator recorded him carrying groceries and changing a tire, Lanham said. Based on the video, the doctor revised his opinion that the man was too disabled to work.
He was sent back to work and his benefits were cut, Lanham said, adding that the man no longer works for the county.
Asked why the county does not pursue suspected fraud cases in court, she said one challenge would be attracting the interest of prosecutors. "It would have to be a very blatant case involving enough money to justify that," she said.
Even solid evidence of deceit sometimes is not enough, said Terry Fleming, who retired in 2012 as Montgomery County's risk manager. He recalls the time a private investigator captured seemingly damning footage of a police officer who had reported a serious shoulder injury.
"We caught him building a garage. He was upside down hammering a nail with a shoulder he couldn't use," Fleming said. But at a commission hearing, the officer said he had been feeling fine that day and assured the commissioner that the severe pain resumed a day later. The officer's claim was upheld.
In Baltimore, Kerr says the city's primary focus is on defeating claims it does not deem legitimate by urging the commission to rule that an injury doesn't merit compensation. "We don't pursue the fraud after that," he said.
Another option is to appeal a commission ruling to Circuit Court. Baltimore might take that step when it hopes to reduce an award, Kerr said, or when it does not believe the employee should have received benefits.
The main drawback, apart from legal expenses, is that the city must keep paying benefits during an appeal. If the process takes long enough, the city might pay most or all of an award before the case goes to trial.
"Sometimes I'll say, 'Is it worth appealing since we've already paid it out?'" he said.
Despite the hurdles, Kerr personally reviews every claim that comes across his desk — including Fata's.
"People know if they get a [note] from me, which is daily, these are cases that don't pass the smell test," he said. "Somebody's sitting at the cubicle and gets really dizzy and sick? Just because that happened at work doesn't mean that's a workers' compensation claim.
"I don't just say, 'Here, you're a great guy, here's $50,000.'"