Editor in Chief

Bernadette M. O'Brien is an attorney at law in California.

She is the author of the popular Lexis Nexis publication Labor and Employment in California; A guide to Employment Laws, Regulations and Practices Second Edition which has been in publication since 1992. The book covers an array of employment related issues including discrimination, sexual harassment, wage and hour, family Medical Leave Act, and Privacy in the workplace.

She is of counsel with the Law Offices of Floyd, Skeren & Kelly, LLP in the firm's Sacramento office.

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Rene Thomas Folse, JD, Ph.D. is an attorney at law and licensed psychologist in California.

He has practiced workers' compensation law for 35 years. His focus of practice involves claims of mental health injury where forensic psychology is involved in the evaluation of the claim. He has been an instructor and lecturer for many organizations and educational institutions and teches continuing education courses for attorneys, physicians and psychologists.

Recent Workers' Compensation News for Sep 16, 2014

California Bucks National Lower Comp Rate Trend
Tue, 16 Sep 2014 09:09:21 - Pacific Time
Although the WCIRB has recommended an increase in California compensation premiums, an improving workers compensation market - including better policy underwriting, increasing comp premiums and a national decline in claim frequency - is driving the National Council on Compensation Insurance Inc. to recommend more decreases in other state workers comp rates for next year.

Boca Raton, Florida-based NCCI, a nationwide workers comp ratings and research organization, is the comp rating agency for 35 states and the District of Columbia. It also provides actuarial data for ratemaking agencies in Indiana and North Carolina. According to an article in Business Insurance, NCCI has submitted workers comp advisory rate filings in 20 states so far this year. Of those filings, 15 have been for rate decreases and four have been for increases.The agency requested rates remain the same in 2015 for Colorado.

Major states in which NCCI has requested decreases include Illinois, which recently approved a 5.5% decrease in workers comp rates for next year, and Oklahoma, which is considering a 7.8% decrease after the state began allowing employers to opt out of the workers comp system this year. Florida also is weighing a 2.5% decrease, the first potential workers comp rate cut for the state in four years. Mr. Burton said the trend is expected to continue as NCCI continues its rate filing season this fall, and said he's 'optimistic that the majority ... of our filings will be approved as proposed." "Underwriting results are good, premium is growing, and what has been one of the great stories over the years is (that) lost-time claims frequency has gone down," Mr. Burton said of trends driving NCCI's ratemaking this year. This is the first time in several years that NCCI advisory rates are expected to include more decreases than increases.

NCCI said at its annual conference in May that private workers comp insurers' combined ratio declined to 101% in 2013 compared with 108% in 2012 and 115% in 2011. Meanwhile, private insurers' workers comp premiums grew 5.4% year over year to $37 billion in 2013, driven largely by payroll growth and insurer pricing increases. Mr. Burton said those positive developments now are starting to make their way into workers comp rate filings.

Pam Ferrandino, executive vice president and casualty practice leader for Willis North America Inc. in New York, agreed that NCCI's rate filings indicate favorable trends in the national workers comp landscape. She said that improved insurer profitability is allowing some to propose smaller renewal rate increases this year after years of pushing for policy pricing increases of up to 5%. "We're beginning to see payroll growth, which also allows carriers to back off on some of the rate increases because it gives them a bigger base to spread some of the fundamental expenses across," Ms. Ferrandino said.

Decreasing rate trends haven't reached other major states that use proprietary rating agencies. In May, the New York Compensation Insurance Rating Board proposed a 6.8% increase in state workers comp advisory rates, effective Oct. 1. However, the New York Department of Financial Services rejected the proposal in July, keeping rates unchanged from last year. The San Francisco-based California Workers' Compensation Insurance Rating Bureau has asked the California Department of Insurance to raise the state's pure premium workers comp rate to $2.77 per $100 of payroll as of Jan. 1, 2015, compared with $2.68 at the start of this year. A WCIRB spokesman said increased workers comp claim frequency in Southern California played a role in its request for a rate hike, and the agency is researching the cause, he said.

Workers comp experts say they're not surprised that California is outside the trend of falling state workers comp rates. They say reforms passed by the state in 2012 have helped hold down some cost pressures but haven't completely alleviated them. Read More...

Panelists Discuss Comp Reform at Dana Point Risk Conference
Tue, 16 Sep 2014 09:09:12 - Pacific Time
The California Workers’ Compensation and Risk Conference in Dana Point opened with a session featuring employers and stakeholders in the industry weighing in on the current state of California Workers’ Compensation and future outlook for 2015. As summarized by Property Casualty 360, panelists began with a look at where California Workers’ Compensation is today: California holds a quarter of the nation’s workers’ compensation business. To date, 80 new carriers have entered the California market since 2004. California is among the top three states in terms of average medical costs per claim. California has experienced double-digit increases in premiums over the last two years.

Cost drivers to the California Workers’ Compensation system include a high frequency of claims handling in the state relative to payroll, with Los Angeles County having the most claims in the region. A multitude of expensive permanent disability claims that include attorney involvement. An increased frequency of opioid prescriptions, which has doubled.

SB 863 is California’s answer to addressing these costs, however, it is too early to provide tangible data that supports if the reform has been successful. Some early data shows that costs related to liens are down but costs related to independent medical reviews (IMR) are significantly higher than expected. Panelists were split as to whether the SB 863 reforms have been successful. Some say that, although too soon to judge, they are seeing the following positive indications that it is working: Generally, rate increases have been cut in half due to costs taking a downward trend. The highest costs are coming from old medical claims, rather than recent claims. Because this is the first time that California has experienced cost decline in quite some time, panelists thought that the cost cuts may make the state appear more employer friendly and it will encourage companies to return.

Panelists noted that there are still some kinks to work out in the reform. One stated that the Independent Medical Review (IMR) process, which has been designed to take non-medical professionals out of the medical decision-making process, is working well. On the other hand, the opioid decision-making process in place is currently not solving the costly opioid problem. Overall, people are still learning the new process, but they think that outcomes will be positive over time. They think that the measures are in place to help get the injured worker healthy and back to work. Most on the panel felt that that peer-to-peer review is the right approach and the system is better than it was.

The California Applicants Attorney Association (CAAA) strongly disagrees, however, and views the reform as a failure that is harming citizens. A representative said that they saw more employees returning to work prior to the reform and the system is averaging 4.3 medical denials per patient. They cite the cost of administering workers’ comp as one of the largest costs that a business can endure. In addition, they believe that peer-to-peer review is not working efficiently. CAAA thinks that legislative efforts to reform workers’ compensation is aiming at the worst-case scenarios, rather than the majority and, therefore, has not provided the best solutions for most companies.

Each panelist was asked what changes they would make to the California workers’ compensation system if he or she was Governor for the day. Suggestions included: Taking a fresh look at the current 101-year old system overloaded with rules, legislation, audits and controls. It is time to simplify a system that currently has layers of new rules on top of old rules and, as a result, enormous costs related to it all. Do away with cumulative trauma, which is a major cost driver that creates complexity. Some states have already done this. Make use of alternative dispute resolution. California has gone from incentives and positive reinforcement for providing prompt payments and benefits to a system focused on penalties. It needs a system that rewards promptness and minimizes disability. Address the opioid abuse and CURE system to make every effort to avoid addiction. California needs to look at the system from eye of the injured worker and simplify accordingly. Employees can’t understand the current complex system that is why they seek legal representation.

The session served as a great kickoff for the conference, providing both an overview of the current workers’ compensation cost drivers and offering suggestions for improving the system. Read More...

DWC Streamlines QME Panel Process
Mon, 15 Sep 2014 11:46:40 - Pacific Time
The Division of Workers’ Compensation has posted draft Qualified Medical Evaluator (QME) regulations to the online forum where members of the public may review and comment on the proposals.

The draft regulations set forth how parties in a represented case will be able to submit initial QME panel requests online and immediately receive a QME panel. The requesting party will then serve the panel request form, any required documentation, and the QME panel on all parties with a proof of service. The draft regulations also simplify the QME form 105 for unrepresented injured workers.

According to the proposed regulations, "Requests may be made twenty-four hours a day, seven days a week. Requests made on Saturday, Sunday or a holiday will be deemed to have been made the next business day. Requests made Monday through Friday after 5:00 p.m. and before 12:00 a.m. will be deemed to have been made the next business day and requests made between 12:00 a.m. and 8:00 a.m. will be deemed to have been made 8:00 a.m. of the same business day.

There is also a major change to rule § 31.1 "QME Panel Selection Disputes in Represented Cases." Under the current rule, various disputes between the parties regarding the specialties of the physicians on the QME panel were to be resolved by the Medical Director, The several paragraphs pertaining to this administrative function are to be stricken from the new regulations. Instead, the proposed regulations simply provide that "Any disputes regarding the validity of the panel QME selection list or disputes regarding the appropriateness of the specialty designation may be resolved at the Workers’ Compensation Appeals Board."

"The division has spent the last year working hard to stay current with the increased volume of panel requests and has remained in compliance. We are excited to further improve upon the process by creating an online system for represented parties," said DWC Acting Administrative Director Destie Overpeck.

The forum can be found online on the DWC forums web page. Comments will be accepted on the forum until 5 p.m. on September 22. Read More...

Prospective Juror Arrested for Comp Fraud
Mon, 15 Sep 2014 11:46:34 - Pacific Time
The San Bernardino County District Attorney’s office reported that a 68-year-old Apple Valley man who claimed he fell and injured his knee on his way to jury duty before filing for workers’ compensation has been charged with fraud. According to DA officials, Scott Masters reported for jury duty at the Barstow courthouse in October 2010. While walking from his car to the jury room, he claimed he took a shortcut through a planter and fell, hurting his left knee.

Authorities said Masters filed a workers’ compensation claim through the San Bernardino County Superior Court, seeking benefits for a "work-related" injury as a prospective juror. The case was referred to the San Bernardino County District Attorney’s Workers’ Compensation Fraud Prosecution Unit in October 2012, DA officials said. According to District Attorney Senior Investigator Paul DeJong, who is assigned to the case, Masters retained an attorney to assist with the filing of the claim, and he received medical care.

"Mr. Masters failed to report prior medical conditions with his left knee and denied prior injury during his deposition and medical care," DeJong said in a DA news release. Court complaints state Masters "lied ... when he stated that the only body part diagnosed with arthritis in the past was the right knee" and "stated that he never had any type of knee pain prior to injury at the court."

As a result of the failure to report a preexisting injury, Masters was charged with nine felony counts. Court complaints show Masters has been charged with four counts of felony Worker’s Compensation Insurance Fraud, four counts of perjury under oath and one count of concealment or failure to disclose facts. Masters was arrested Sept. 4 by DA investigators and booked into the High Desert Detention Center in Adelanto. He was released on bail the next day and does not yet have a court date scheduled, according to county jail records. Read More...

Conviction is Good Example of Identity Theft in Pursuit of Pain Pills
Fri, 12 Sep 2014 08:55:07 - Pacific Time
Medical identity theft has become one of the fastest growing heathcare fraud problems in the nation. Some uninsured patients have been found to use false identification simply to secure free medical care. In a more serious situation, this case reported by the Monterey County District Attorney shows how identity theft can be used in an emergency room to obtain a free supply of illegal pain medication. The lesson here is to be more vigilant in workers' compensation claim processing to make sure that medical services were actually delivered to the injured worker, especially when pain medication is involved.

Julian Demitre Rosario, age 22, was sentenced by the Honorable Wendy Duffy for insurance fraud and unlawful use of personal identifying information. The defendant was placed on five years of felony probation, ordered to serve 210 days in custody, be subject to search and seizure and pay victim restitution. The court retained jurisdiction over victim restitution for Premier Insurance, Blue Shield, CHOMP and the two individuals whose identity the defendant used to obtain medical treatment. The estimation of the total restitution is approximately $50,000. The defendant was immediately remanded into custody after sentencing.

During the month of July, 2014 on four different dates, the defendant went to CHOMP’s emergency room complaining of abdominal pain. Each time the defendant was seeking to obtain narcotics. He informed personnel of his true name one time, a variation of his name another time and two other individuals’ names the other two times. On the last date while the defendant was receiving treatment from a doctor, another emergency room doctor recognized the defendant and that he was using a false identity and insurance. CHOMP personnel contacted Monterey Police who responded, interviewed the defendant and then arrested him. The defendant had been contacted by police regarding similar allegations on a previous occasion. During the two contacts, he gave inconsistent versions of who he was, his age, and why he was at the hospital.

The case was investigated by Monterey Police Officer Amy Carrizosa and District Attorney Investigator Mark Trueblood. This case was handled by the Healthcare Fraud Unit of the Monterey County District Attorney’s Office. This unit aggressively investigates and prosecutes prescription drug fraud and insurance fraud in Monterey County. The unit also investigates and prosecutes cases involving use of another's identity to secure healthcare benefits; healthcare related embezzlement; unlawful healthcare solicitations/referrals; fraudulent or inflated pharmacy billings; prescription fraud and abuse; out-patient surgery center fraud; and fraudulent disability claims. Read More...

Uninsured Seaside Contractor Convicted Again
Fri, 12 Sep 2014 08:54:56 - Pacific Time
The California underground economy of unlicensed contractors seems unrelenting in the state's battle to require licensure and insurance.

Jose Valdez, age 41 of Seaside, pled guilty to one felony count of fraudulent use of a contractor’s license in violation of Business and Professions Code section 7027.3 and one misdemeanor count of failing to secure workers’ compensation insurance in violation of Labor Code section 3700.5. Valdez was doing business as Angel Valdez Landscaping. The defendant will be sentenced by the Honorable Larry E. Hayes on November 4, 2014. Based upon his plea, Valdez was found in violation of probation of a 2010 case involving similar conduct.

On March 17, 2014, Contractor State License Board [CSLB] Investigator David Leary discovered Valdez’ employees working on a landscape remodel at a small condominium association in Seaside. Valdez had informed the association that he was a licensed contractor having been in business for twenty years. The project had been in the planning stage for several years and the association had gone through a bidding process ultimately accepting the defendant’s bid.

Investigator David Leary recognized Valdez from a prior case in 2010 that was prosecuted. The defendant admitted using his business license number as he did not have a contractor’s license. The defendant also admitted to having employees but did not have workers’ compensation insurance.

Fraudulent use of a contractor’s license has a penalty of sixteen months, two or three years in state prison and a fine of up to $10,000. Additionally, all employers are required to secure workers’ compensation insurance for their employees so that there is an assurance of adequate medical coverage and other benefits for employees for any work-related injuries that may occur. Failure to secure workers’ compensation insurance has a penalty of up to one year in jail and up to double the amount of the premium owed as a fine payable to the California State Treasury for the Uninsured Employers Fund. Homeowners can check to see if a contractor is licensed by going to the CSLB website.. Read More...

What to Shop For in Hip and Knee Implants
Thu, 11 Sep 2014 11:49:46 - Pacific Time
Surgeries for industrial claims that require implants are very costly. Surprisingly, few patients are even aware of who manufactured the implant, why the one they received was chosen, or what would have been the best choice. Neither is this analysis routinely performed by claims or UR. One would think that choice of product might make a difference in treatment outcome. But surprisingly, a new study reviewed by Medical News Daily says that several new and widely used hip and knee implants appear to have no clinically relevant improved benefits compared with older, more established implants. A review of the evidence was published on thebmj.com.

Furthermore, the safety of several new technologies "could be compromised," warn the researchers, who call for improved stakeholder oversight to prevent patients from being further exposed to new devices "without proper evidence of improved clinical benefits and safety." Since the failures of some metal on metal hip implants were brought to light, the introduction of new joint implants has been the focus of major scientific and policy discussions.

An International research team, led by Art Sedrakyan, Associate Professor at Weill Cornell Medical College in New York, argues that the momentum for change generated by these recent high profile failures is important and there is an urgent need to evaluate the evidence for introducing new implants. Working with the US Food and Drug Administration (FDA), they reviewed the evidence for five recently introduced and widely used implantable devices for total joint replacement surgery.

Data from clinical trials and observational studies involving 15,384 implants in 13,164 patients and data from national joint registries were used to compare safety and effectiveness over existing, well-proven and comparable devices for the same condition. After study design and quality were taken into account, none of the five device innovations was found to improve functional or patient-reported outcomes. Comparative data with well-established alternative devices (over 1.2 million implants in registries) did not show improved device survival.

The researchers also found higher rates of repeat surgery (revisions) associated with three of the new devices, used in both hip and knee replacement surgery. "We did not find convincing high-quality evidence supporting the use of five substantial, well-known and already implemented device innovations in orthopaedics," they say. "Furthermore, none of these five technologies were found to be safer or to have better survival compared to the established implants." This indicates that new technologies "are being introduced to the commercial market without sufficient high-quality evidence for improved benefit over existing, well-proven and safe but equally suitable alternative implant solutions," they argue.

They call for improved stakeholder oversight "to prevent patients from being further exposed to these or future innovations introduced without proper evidence of improved clinical efficacy and safety." These data "shine a light on the limited regulatory oversight that exists in Europe, the US, and other countries regarding incremental device innovations," write researchers at Brigham and Women's Hospital and Harvard Medical School, Boston, in an accompanying editorial.

They support the study authors' recommendation for controlled introduction of new versions of medical devices "so that they are not used widely until there is more clarity about their comparative effectiveness and safety." They also call for better communication of the benefits and risks of new technology to patents "to inform their health care decision-making." They conclude: "Reforms that provide for more robust post-market oversight of incremental innovations in medical device technologies will be key in helping to promote more rational use of these products."

It would seem wise that Utilization Review professionals not only consider the question of medical necessity for a proposed surgery, but the science behind the implantable devices to be used before they are bought, paid for, and installed in a surgical process; Read More...

DIR Schedules Meeting to Review Cal/OSHA PSM Standards
Thu, 11 Sep 2014 11:49:39 - Pacific Time
The Department of Industrial Relations has scheduled a Process Safety Management (PSM) advisory committee meeting to review proposed changes to Cal/OSHA’s PSM standard. The changes focus on strengthening regulatory oversight on California’s oil refineries.The two-day meeting is open to the public and will be held on Tuesday, September 16 and Wednesday, September 17 from 9 a.m. to 5 p.m. at the Elihu Harris State of California Building’s 13th Floor Training Room, 1515 Clay Street, Oakland CA 94612.

DIR developed the draft regulatory proposal for a new PSM standard for the refinery sector in response to recommendations in a February report by the state's Interagency Working Group on Refinery Safety.

"This advisory committee meeting is a pre-regulatory step in our ongoing efforts to strengthen oversight of refinery safety in California," said DIR Director Christine Baker. "The proposed changes will provide a framework for anticipating, preventing and responding to refinery safety problems at the earliest possible point." Cal/OSHA, the agency charged with enforcing workplace safety and health regulations, is the division of DIR which is leading the revision of PSM workplace safety requirements for refineries.

"I am pleased to see DIR take this important next step in accordance with the recommendations of the refinery safety working group," said David Lanier, Secretary of the Labor and Workforce Development Agency, which includes DIR. "The proposed revisions and their thorough review reflects the administration’s ongoing commitment to improving refinery safety for workers and surrounding communities."

In addition to proposing changes to existing PSM language, the draft proposal introduces new requirements in the following areas:

1) damage mechanism reviews
2) hierarchy of hazard controls analysis
3) human factors
4) management of organizational change
5) safeguard protection analysis
6) incident investigations
7) safety culture assessments

DIR’s notice of the proposed rulemaking along with the text of the proposed regulations have been posted online.

The draft proposal is part of an ongoing effort, coordinated by the Interagency Refinery Task Force, to improve the public and worker safety at the state’s oil refineries following the August 2012 explosion at Chevron’s Richmond Oil Refinery. The task force, headed by the California Environmental Protection Agency, was established to carry out the recommendations contained in the February report. In addition to the proposed PSM standard, the state has hired new inspectors to ensure that facilities are complying with health and safety laws. Read More...

Pharmacy Board Requests Comments on Proposed Compounding Regulations
Wed, 10 Sep 2014 10:41:24 - Pacific Time
In reaction to health hazards associated with compounded drugs, the California Pharmacy Board has been in the process of rulemaking to more closely regulate compounded drugs that are dispensed in California. The latest proposed regulations are now subject to a public regulation hearing: on November 4, 2014 at 10:30 a.m. at the Department of Consumer Affairs Headquarter Building Two located at 1747 N. Market Blvd., Room 186 in Sacramento, The 45-Day comment period: runs from September 5, 2014 to October 20, 2014.

Existing state and federal law specifically attempts to limit compounding to limited quantities for an identified patient with unique needs. This limit supposedly differentiates a manufacturer who is subject to FDA scrutiny, from a compounding pharmacist who is only scrutinized by individual states. The proposed regulations make changes to existing law on the topics of a definition of a "limited quantity" and how the distribution chain can occur from the compounding pharmacist to a dispensing physician who supposedly has a "limited quantity" of compounded medication on hand that escapes the definition of an FDA regulated "manufactured product."

Unfortunately, the proposed regulations do not seem to consider the abuse that occurs in the California workers' compensation arena when a seemingly endless supply of compounded pharmaceuticals are supplied in bulk to a dispensing physician, and then mechanically prescribed and dispensed to injured workers at inflated prices, all of which is claimed to be within the limits of existing federal and state law. What we see seems more like manufacturing than compounding for an identified patient. For this reason, NOW is a good time for the workers' compensation community to alert the Pharmacy Board about the unique situation that now occurs quite often in our claims. Perhaps with our guidance, the current version of its regulations could be yet amended again to address the concerns that we see in claims about compounded pharmaceuticals. For those so inclined to make any comments to the Board of Pharmacy on its proposed compounded pharmaceutical regulations, they may read the materials on this page..

Under the current federal regulatory system, drug manufacturers are regulated by the Food and Drug Administration (FDA). Prior to the enactment of the Drug Quality and Security Act, compounding pharmacies were regulated by their respective states of residence. Compounding pharmacies also make drugs, but they are limited to producing small amounts in response to a specific patient’s prescription, or to create a small supply for an identifiable patient population to ensure continuity of treatment. The state-by-state approach to regulating compounding organizations yields inconsistent standards and varying levels of enforcement on an industry that ships dangerous drugs across state lines.

Included as part of the federal Drug Quality and Security Act (HR 3204) that became law on November 27, 2013, are provisions that establish provisions for federal regulation and oversight of large scale drug compounding by "outsourcing facilities." The federal law sets forth voluntary requirements for licensure and enforcement of these entities. However, California’s law is more restrictive than the federal law in several areas. California will continue to require any pharmacy that is compounding sterile products for California residents or practitioners to possess licensure with the board and comply with California requirements as sterile compounding pharmacies.

SB 294 commencing July 1, 2014, expands the provisions of the California Pharmacy Law to prohibit a pharmacy from compounding or dispensing, and a nonresident pharmacy from compounding for shipment into this state, sterile drug products for injection, administration into the eye, or inhalation, unless the pharmacy has obtained a sterile compounding pharmacy license from the board. SB 294 also specifies requirements for the board for the issuance or renewal of a license, and requirements for the pharmacy as a licensee. SB 294 requires the board to adopt regulations to implement these provisions, and, on and after July 1, 2014, to review formal revisions to specified national standards relating to the compounding of sterile preparations to determine whether amendments to those regulations are necessary, as specified.

Additionally, there are compounding professional standards that are used across the nation known as the United States Pharmacopeia and The National Formulary (USP-NF). USP-NF is a book of public pharmacopeial standards. It contains standards for (chemical and biological drug substances, dosage forms, and compounded preparations), excipients, medical devices, and dietary supplements. USP-NF is a combination of two compendia, the United States Pharmacopeia (USP) and the National Formulary (NF). Monographs for drug substances, dosage forms, and compounded preparations are featured in the USP. Monographs for dietary supplements and ingredients appear in a separate section of the USP. Excipient monographs are in the NF. The U.S. Federal Food, Drug, and Cosmetics Act designates the USP-NF as official compendia for drugs marketed in the United States. A drug product in the U.S. market must conform to the standards in USP-NF to avoid possible charges of adulteration and misbranding.

At the October 2013 Board Meeting, the board moved to initial notice of proposed changes in the California’s compounding regulations (located in 16 California Code of Regulations Sections 1735 et seq. and 1751 et seq). This regulatory process has continued to develop the present version of proposed new regulations. . Read More...

"Medical Marijuana" Creeps Into New Mexico Comp System
Wed, 10 Sep 2014 10:41:17 - Pacific Time
In what many fear may become a workers' compensation national trend, if not an avalanche, the New Mexico Court of Appeals ruled. that medical marijuana a doctor recommended for an injured worker's pain must be paid for by the workers' employer and insurer. Despite the drug's federal classification as a controlled substance, the court found that New Mexico law entitled Gregory Vialpando to reimbursement for marijuana to treat the high-intensity pain that followed failed spinal surgeries for a workplace back injury.

Vialpando met the threshold for payments under workers' compensation laws when his doctor recommended medical marijuana as reasonable and necessary for his treatment, the ruling states. The Aug. 29 decision supports a lower court finding that Vialpando's participation in the New Mexico Department of Health's Medical Cannabis Program constituted reasonable and necessary medical care, the standard for reimbursement set by the state's Workers' Compensation Act.

A doctor cited in the lower court's 2008 compensation order said that Vialpando was taking narcotic-based pain relievers, but still suffered "from some of the most extremely high intensity, frequency, and duration of pain, out of all of the thousands of patients I've treated within my 7 years practicing medicine." Last year, Vialpando's doctor followed rules established by the 2007 Lynn and Erin Compassionate Use Act to recommended him for the medical marijuana program.

The New Mexico Court of Appeals rejected an argument from Vialpando's employer that reasonable and necessary medical services must come from a health care provider. "By defining 'services' as including a product from a supplier that is reasonable and necessary for a worker's treatment, the regulations do not contemplate that every aspect of a worker's reasonable and necessary treatment be directly received from a health care provider. Such a requirement would be unworkable. A worker's treatment may well require services that are not available from a health care provider. The most obvious of such services may be medical supplies or equipment," the appeals court ruled.

Ben's Automotive Services, Vialpando's employer at the time of the accident, and, Redwood Fire and Casualty, its insurer, argued that medical marijuana must be treated as a prescription drug, and that the state's medical marijuana program is not a licensed pharmacist or health care provider. The appeals court found that "medical marijuana is not a prescription drug," but if it were, "our analysis would lead to the same conclusion." "Indeed, medical marijuana is a controlled substance and is a drug. Instead of a written order from a health care provider, it requires the functional equivalent of a prescription - certification to the program. Although it is not dispensed by a licensed pharmacist or health care provider, it is dispensed by a licensed producer through a program authorized by the Department of Health," the court wrote.

Vialpando's employer and insurer claimed that an order to reimburse him for marijuana would force them to commit a federal crime, since federal law classifies the drug as a Schedule I controlled substance. "However, employer does not cite to any federal statute it would be forced to violate, and we will not search for such a statute," Court of Appeals Judge James J. Wechsler wrote for the unanimous three-judge panel.

Ben's and Redwood claimed that reimbursements would at the least violate federal public policy. But the appeals court rejected that, too. "Although not dispositive, we note that the Department of Justice has recently offered what we view as equivocal statements about state laws allowing marijuana use for medical and even recreational purposes." Read More...

Past Week News Archive


York Risk Services Acquires Sams and Associates: Tue, 9 Sep 2014 09:10:01 - Pacific Time: Read More...


Pacioma Insurance Broker Arrested for Premium Theft: Tue, 9 Sep 2014 09:09:54 - Pacific Time: Read More...


Clinical Laboratories Under Scrutiny for Kickbacks to Doctors: Mon, 8 Sep 2014 11:15:16 - Pacific Time: Read More...


From Nose to Knee: Engineered Cartilage Regenerates Joints: Mon, 8 Sep 2014 11:42:42 - Pacific Time: Read More...


Medical Industry Surpasses All Industries in Data Security Breaches: Fri, 5 Sep 2014 12:03:00 - Pacific Time: Read More...


DWC Revises WCIS Regulations and Requests Public Comment: Fri, 5 Sep 2014 12:02:53 - Pacific Time: Read More...


SCIF Claims it was Defrauded by Own Collection Company: Thu, 4 Sep 2014 08:28:15 - Pacific Time: Read More...


Tower Group Anticipates Merger With ACPre Ltd.: Thu, 4 Sep 2014 08:28:08 - Pacific Time: Read More...


AAA Copy LLC Convicted in Fraud Case: Wed, 3 Sep 2014 10:14:17 - Pacific Time: Read More...


CWCI Says PTP Reports Fail Requirements: Wed, 3 Sep 2014 10:14:09 - Pacific Time: Read More...