Recent Workers' Compensation News for Jul 07, 2015
So Much for Evidence Based Medicine - Drug Makers Fake the Evidence
Tue, 7 Jul 2015 10:51:54 - Pacific Time
You don’t have to look very far to get head-bangingly upset about the current state of medical and scientific research. Pfizer (maybe) hid evidence that Zoloft use by pregnant women caused heart defects in babies. GlaxoSmithKlein paid $3 billion in fines for a) generating a fake journal article saying Paxil was safe for kids b) paying doctors lavish speaker fees and using sham advisory boards to promote Wellbutrin for off-label use and c) failing to report that Avandia, a diabetes drug, could potentially cause heart problems. Merck, for its part, is currently being accused of lying about the efficacy of its mumps vaccine in order to maintain its market monopoly on the drug.
And you can’t necessarily just go straight to the source and trust an article in a "peer reviewed" journal either. Who can you trust? Well, the truth is out there. Here’s where to start.
Part of the delight of the public interest website Retraction Watch is that it exposes the many weird things that scientists study. Outer space dentistry? Check. Rabbit hepatitis? Check. The nutritional value of mushrooms? Yep. So that’s pretty fun, but then the less fun part is why are those guys lying about this stuff?.
It is generally believed that retractions help maintain the purity of science, help with the integrity of individual scientific journals and the whole of the scientific literature, and, when properly enforced, help keep scientists from bending the rules regarding scientific misconduct and publication. Yet several articles have appeared in the library literature concerning the fate of retracted articles. When researchers in one study tracked the fate of retracted, invalid articles they found that, after retraction, completely retracted articles were cited a total of 733 times.
Research misconduct became a public issue in the United States in 1981 when then Representative Albert Gore, Jr., chairman of the Investigations and Oversight Subcommittee of the House Science and Technology Committee, held the first hearing on the emerging problem. The hearing was prompted by the public disclosure of research misconduct cases at four major research centers in 1980. Some twelve cases of research misconduct were disclosed in this country between 1974-1981. Congressional attention to research misconduct was maintained throughout the 1980s by additional allegations of research misconduct and reports that the National Institutes of Health (NIH), universities, and other research institutions were inadequately responding to those allegations.
Congress took action in 1985 by passing the Health Research Extension Act. The Act, in part, added Section 493 to the Public Health Service (PHS) Act. Section 493 required the Secretary of Health and Human Services to issue a regulation requiring applicant or awardee institutions to establish "an administrative process to review reports of scientific fraud" and "report to the Secretary any investigation of alleged scientific fraud which appears substantial." Read More...
Medical Fraud - When You Think It Can't Get Worse, It Does!
Tue, 7 Jul 2015 10:51:46 - Pacific Time
A Michigan doctor who misdiagnosed patients with cancer and then bombarded them with unnecessary treatments will have to face his victims - who lost their health, savings and trust - at an emotional sentencing hearing that opened Monday.
Disabled auto worker Robert Sobieray is among those who plan to be in the Detroit courtroom when Dr. Farid Fata learns his fate for using patients as cash cows, telling some of them they were deathly ill with diseases they didn't actually have. In 2010, Fata diagnosed Sobieray with a rare blood cancer and subjected him to monthly infusions of chemotherapy and three weeks of radiation - expensive treatments that he said made his teeth fall out and his body twitch uncontrollably.
After Fata was arrested in 2013 and charged in what a prosecutor said was the "most egregious" case of health-care fraud in U.S. history, Sobieray went to a different oncologist and learned that he'd never even had cancer.
Federal prosecutors are seeking a 175-year sentence for Fata, who pleaded guilty to fraud in September, admitting he raked in millions from insurance companies for needless treatments at seven clinics in eastern Michigan. Fata, who lived in a sprawling mansion in ritzy Oakland Township and ran seven upscale clinics across eastern Michigan, declined to comment through his attorneys. The sentencing memorandum drafted by his lawyers is under seal.
The breadth of Fata's misdeeds was laid bare last month in a sentencing memo from prosecutors, who revealed for the first time that a total of 553 people allegedly got unnecessary treatment - amounting to 9,000 injections or infusions that cost insurance companies and patients millions.
While Fata told healthy patients they were sick, he sold false hope to the terminally ill in an effort to convince them to keep buying treatments that would not extend their lives, authorities charged. "Some of these terminal patients never knew they were dying because of Fata's lies," prosecutors wrote in a sentencing memo. The government says that Fata didn't just lie to his patients - he bullied them to keep them from finding out the truth.
In requesting a 175-year sentence, prosecutors compared Fata to Ponzi schemer Bernard Madoff, who was sentenced to 150 years even though he was in his 70s. "In many ways, he is worse than Madoff, in that he wreaked damage on not only his victims' bank accounts, but their bodies," they wrote. Read More...
Healthy Workplace Healthy Family Act of 2014 Now In Effect
Mon, 6 Jul 2015 09:03:52 - Pacific Time
The Department of Industrial Relations reminds employers of the labor law requirement to notify their workers in writing about their rights under the Healthy Workplace Healthy Family Act of 2014 (Assembly bill 1522) - California’s new paid sick leave law - that took effect on July 1, 2015.
All employers were required to post a notice about the new law in a conspicuous place at the worksite beginning January 1, 2015. More information on the requirements of the new law is available on the DIR website, including a Frequently Asked Questions page that was posted in February 2015.
Most employees must be individually notified: Employers must provide most employees with individual notices detailing their rights to paid sick leave per Labor Code sections 2810.5 and 246(h), even in situations where the employer’s policy exceeds the state provisions. Employees that fall within the following groups are not required to receive individual notification, per Labor Code section 2810.5(c) if they are:
1) Directly employed by the state, city, county, special district;
2) Exempt from payment of overtime or the Industrial Welfare Commission wages;
3) Covered by a valid collective bargaining agreement.
Notification template: Employers can print and complete a template available on the Labor Commissioner’s website in English, Spanish or Vietnamese, and provide it as an individual notification to each of their employees. Employers can also provide this same information in a notice of their own creation.
Delivery of notification: The notice can be submitted with the employee’s next wage payment after July 1, 2015. It can be printed on a detachable part of the paycheck itself or attached to the paycheck as a separate document. Alternatively, the notice can be handed to employees or mailed to them by Wednesday, July 8, 2015.
Employers and workers can refer to DIR’s webpage for more information on the new law, including a recorded training webinar and presentation slides, as well as FAQ’s. DIR has also produced a short video on the new law. Read More...
Shyp Reclassifies Its On-Demand "Independent Contractors"
Mon, 6 Jul 2015 09:03:47 - Pacific Time
The call for broader protections for on-demand workers is getting louder. And some companies are listening.WIRED reports that Shyp, a San Francisco-based startup that picks up, packages, and ships items on demand, said that it’s converting its couriers from independent contractors to full-fledged employees. The move, announced in a blog post by CEO Kevin Gibbon, makes Shyp one of the few on-demand companies to boast a workforce made up entirely of employees.
"This move is an investment in a longer-term relationship with our couriers, which we believe will ultimately create the best experience for our customers," Gibbon writes. "We want to provide our couriers with additional supervision, coaching, branded assets and training, which can only be done with employees, so a shift is needed."
According to Gibbon, while its van drivers and warehouse workers have been classified as W-2 employees all along, its couriers - workers who actually interact with the customers, picking up their items meant for shipping - were previously classified as independent contractors. This shift would convert all couriers into employees.
Shyp’s workforce of van drivers, warehouse workers, and couriers will consist of a mix of full-time and part-time employees, the company told WIRED. Newly classified W-2 couriers will get workers’ compensation and vehicle reimbursement as well as unemployment, Social Security, and Medicare. Additional benefits such as healthcare will be available to full-time workers.
Shyp’s move comes at a time when the debate around how to properly classify workers for on-demand companies is heating up. As startups like Uber and Instacart go mainstream, so has awareness - and criticism - of the so-called 1099 economy on-demand companies foster. These startups typically employ freelance contractors, a status they pitch as desirable because the work is relatively undemanding and flexible. (Instacart recently began offering its shoppers an option to convert from contractor to part-time; Uber is fighting a class-action lawsuit accusing the company of misclassifying its drivers as contractors.)
Shyp for its part is growing fast. After launching in San Francisco last year, it now has operations in New York City, Miami, and Los Angeles and plans to expand to Chicago soon. The number of packages shipped by Shyp has grown nearly 500 percent since closing its first round of funding, the company says, and its customer base is growing by more than 20 percent month over month Read More...
ACE Buys Chubb for $28.3 Billion
Thu, 2 Jul 2015 07:06:23 - Pacific Time
Insurer ACE Ltd. agreed to buy Chubb Corp. for $28.3 billion in cash and stock, creating one of the biggest property-casualty insurance companies in the world. The Wall Street Journal says that the deal comes as property-casualty insurers are facing pressure from what most people view as a stroke of good luck: relatively modest hurricane claims since 2012, the year of superstorm Sandy. With fewer claims checks being sent to individuals and businesses, insurers’ capital bases are growing, and their stepped-up competition with each other to put that capital to work is depressing prices.
This is one of several multibillion-dollar insurance tie-ups since late last year, most recently Tuesday’s announcement of an $18 billion combination of insurance broker Willis Group Holdings PLC and consulting firm Towers Watson and Co. Conditions are ripe for more big deals, analysts say.
The ACE deal, announced by both companies Wednesday, is one of the largest of the year and the biggest among life and property-casualty insurers on record. ACE is adding one of the most well-known names in the U.S. insurance industry. New Jersey-based Chubb is a leading provider of homeowners’ insurance to wealthy Americans through its Masterpiece coverage. ACE also targets high-net-worth customers in its personal-insurance business. Both companies have large operations selling insurance to midsize businesses.
Combined, the companies will have shareholder equity of nearly $46 billion and cash, investments and other assets of $150 billion.
ACE was formed in the Cayman Islands in 1985 by 34 blue-chip U.S. companies to provide then-hard-to-find excess-liability and directors-and-officers coverage. It expanded in 1999 when it acquired the property-casualty-insurance business of Cigna Corp. as that company was narrowing its focus to health insurance. Last year, ACE earned $2.9 billion with $17.8 billion in net premiums written.
Chubb, which operates in 25 countries, last year reported a profit of $2.1 billion on $12.6 billion in net premiums written.
The combined company will be based in Switzerland, as ACE is. Read More...
Former Senator Yee Pleads Guilty In Comp Related Corruption Case
Thu, 2 Jul 2015 07:06:15 - Pacific Time
Former state Sen. Leland Yee faces up to 20 years in prison and a $250,000 fine after a deal in federal court Wednesday in which he pleaded guilty to one felony count of racketeering. "Today’s news turns the page on one of the darker chapters of the Senate’s history," Senate President Pro Tem Kevin de León (D-Los Angeles) said in a statement. The pleas entered Wednesday by Yee; his political fundraiser and consultant Keith Jackson; Jackson’s son, Brandon Jackson; and sports promoter Marlon Sullivan bring an end to one of two cases connected to a massive federal probe that initially targeted a Chinatown figure known as "Shrimp Boy," now accused of organized crime activities.
According to the report in the Los Angeles Times, the case, with 29 defendants lumped into a single indictment (one had since died) and eventually split into two cases, has produced 9 million pages of documents and countless hours of audio recordings. Prosecutors alleged that Yee can be heard in the recordings speaking bluntly about granting legislative favors in exchange for campaign contributions, first for his failed 2011 bid for San Francisco mayor and later for his aborted run for secretary of state.
"We gotta drag it out, man. We gotta juice this thing," the indictment quoted Yee as telling an undercover agent who claimed to be connected to an NFL team that wanted to "help" Yee in exchange for his vote on a worker’s compensation bill affecting the athletes. Among the other charges, Yee admitted to conspiring to extort several individuals who, at the time, had an interest in pending legislation extending the state athletic commission and changing the workers’ compensation program for professional athletes.
Yee, who spared himself a trial where those sealed recordings and others would have been publicly shared, received no assurance that his prison sentence, which is scheduled to be handed down on Oct. 21, would fall below the 20-year maximum spelled out in federal guidelines. By pleading guilty to racketeering, Yee admitted that he "knowingly and intentionally agreed with another person" to take part in an enterprise, commit at least two offenses and affect state commerce.
The plea agreement is the culmination of a stunning political collapse for Yee, who spent more than a decade in the Legislature and was running for secretary of state when he was arrested in March 2014. Days later, he was suspended from the Senate with pay, and he served the remaining months of his term in exile. Read More...
Cities End Work Release Program Over Comp Liability Risks
Wed, 1 Jul 2015 07:49:11 - Pacific Time
The cities of Victorville and Adelanto have opted to divorce from the San Bernardino County Sheriff's Work Release program after being asked to provide medical treatment for inmate workers injured on the job - a shift in liability they deemed too dangerous. The story reported in the Daily Press says the key cause for the cities' concerns is that they may be held liable for all workers' compensation benefit obligations and expenses for injured workers. According to Victorville City Manager Doug Robertson, this responsibility represents a stark departure from the past, when the Sheriff's Department would have handled the administration of the claim, including legal or medical expenses. "Our biggest concern is that an inmate worker could go from earning nothing for working all day to realizing a pretty hefty claim amount if they were injured on the job," Robertson said.
In February, Victorville informed sheriff's officials that they would be terminating their agreement when new deals apparently shifted the liability from the county to the city. The city of Adelanto also opted not to renew its deal earlier this month for the same reason. At its core, Victorville's hesitation comes from not wanting to incentivize injuries.
Having participated since 1991 in the program, which allows inmates to serve time through manual labor, the city recently had used 20 to 30 workers on the weekends for tasks including pulling weeds and aiding code enforcement. But Robertson said the liability shift is akin to 20 to 30 potential windfalls every week, a risk he called "huge."
To fill the void left by the loss of inmate workers, the city recently included nearly $200,000 in its budget for part-time hours. Robertson said the known cost, despite a higher initial investment, is worth it if only to get rid of the liability.
Representing the Victor Valley as the vice chair on the county's Board of Supervisors, 1st District Supervisor Robert Lovingood said the cities' exodus from the program has not gone unnoticed. "We want to see the return of the program," Lovingood said. "We believe we want to restore this. This is something, again, we've been paying attention to."
But not all municipalities are flinching after the change. "The Town has chosen to continue our contract with the Sheriff's Department for the use of inmate labor," Apple Valley spokeswoman Kathie Martin said. "In weighing the cost of bearing the worker's comp burden with the value provided as a labor source, it still makes good business sense to continue." Martin said Apple Valley runs a lean organization that needs the supplemental workforce provided by inmate workers, who clean the animal shelter, maintain grounds, repair roads and also clean illegal dumping sites on weekends.
Hesperia spokeswoman Rachel Molina said their contract with the Sheriff's Department actually already included provisions for the city to provide workers' compensation insurance for the inmates, so the new contract "did not present a significant change."
Grand Terrace, which traces its program participation back to 1987, also opted to renew a deal this year despite acknowledging it would not know the incurred costs of the liability shift for at least a year.
Still, it remains unclear how many other cities, like Victorville and Adelanto, might be turned off by the change and how possible subsequent program dropouts could affect the program as a whole. Read More...
Medical Equipment Supply Company Owner Sent to Prison
Wed, 1 Jul 2015 07:49:04 - Pacific Time
The former owner of Ezcor Medical Supply was sentenced to serve 97 months in prison for her role in a fraud scheme that resulted in $3.5 million in fraudulent claims to Medicare and Medi-Cal.
Sylvia Ogbenyeanu Walter-Eze, 48, of Stevenson Ranch, California, was found guilty by a federal jury on March 20, 2015, of conspiracy to commit health care fraud, four counts of health care fraud, and one count of conspiracy to pay illegal health care kickbacks. In addition to imposing the term of imprisonment, U.S District Judge R. Gary Klausner ordered Walter-Eze to pay restitution in the amounts of $1,866,260 to Medicare and $73,268 to Medi-Cal.
The evidence presented at trial showed that Walter-Eze, the former owner of Ezcor, a durable medical equipment supply company located in Valencia, California, fraudulently billed more than $3.5 million to Medicare and Medi-Cal for DME that was not medically necessary. The trial evidence also demonstrated that Walter-Eze paid illegal kickbacks to patient recruiters in exchange for patient referrals. The evidence further showed that Walter-Eze paid kickbacks to physicians for fraudulent prescriptions for medically unnecessary, and expensive, power wheelchairs, which prescriptions Walter-Eze then used to support her fraudulent claims to Medicare and Medi-Cal. The evidence showed that, between 2007 and 2012, Walter-Eze submitted $3,521,786 in fraudulent claims to Medicare and Medi-Cal, and that she received $1,939,529 in reimbursement for those claims.
The case was investigated by the FBI, HHS-OIG’s Los Angeles Regional Office and the California Department of Justice, and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office of the Central District of California.The case was prosecuted by Trial Attorneys Blanca Quintero and Alexander F. Porter of the Criminal Division’s Fraud Section. Read More...
9th Circuit Rejects Constitutional Challenge to Lien Activation Fees
Tue, 30 Jun 2015 12:17:36 - Pacific Time
In 2012, California enacted Senate Bill 863 in part to combat an acute "lien crisis" in its workers’ compensation system. In an effort to clear an enormous and rapidly growing backlog of these liens, SB 863 imposed a $100 "activation fee" on entities like plaintiffs for each workers’ compensation lien filed prior to January 1, 2013. Plaintiffs sued in federal court, claiming that SB 863 violates the Takings Clause, the Due Process Clause, and the Equal Protection Clause of the United States Constitution.
The trial court issued a preliminary injunction in plaintiffs’ favor as to the Equal Protection claim, but not as to the other claims. Defendants appealed the district court’s issuance of the preliminary injunction and its denial of the motion to dismiss the Equal Protection claim. The 9th Circuit Court of Appeal reversed and vacated the injunction in the published case of Angelotti Chiropractic Inc. v Christine Baker.
The panel held that the district court properly dismissed the Takings Clause claim because the economic impact of SB 863 and its interference with plaintiffs’ expectations was not sufficiently severe to constitute a taking. The panel further concluded that the lien activation fee did not burden any substantive due process right to court access and also rejected plaintiffs’ claim that the retroactive nature of the lien activation fee violated the Due Process Clause.
Vacating the district court’s preliminary injunction, the panel held that the district court abused its discretion in finding that a "serious question" existed as to the merits of plaintiffs’ Equal Protection claim. Applying rational basis review, the panel held that Labor Code § 4903.06(b), which exempts certain entities other than plaintiffs from having to pay the lien activation fee, was rationally related to the goal of clearing the lien backlog. The panel also reversed the district court’s denial of defendants’ motion to dismiss the Equal Protection Clause claim because the panel’s ruling on the preliminary injunction necessarily resolved the motion to dismiss.
Here, one "plausible policy" goal, for the imposition of the lien activation fee is to help clear the lien backlog by forcing lienholders to consider whether a lien claim is sufficiently meritorious to justify spending $100 to save it from dismissal. In turn, the California Legislature’s decision to impose the activation fee on entities like plaintiffs, while exempting other entities, is rationally related to the goal of clearing the backlog because the Legislature might have rationally concluded that the nonexempt entities are primarily responsible for the backlog. In this regard, the Commission Report states that ten of the eleven top electronic lien filers are independent providers. Thus, the Legislature could have rationally found that independent service providers bore primary responsibility for the lien backlog, and therefore elected to focus on those entities in imposing the activation fee. Read More...
Court Orders Medical Marijuana in New Mexico Comp Case
Tue, 30 Jun 2015 12:17:31 - Pacific Time
The New Mexico Court of Appeals has again ruled that medical marijuana should be classified as "reasonable and necessary medical care" for an injured worker. This case is one more step in the process of involving workers' compensation in providing "medical" marijuana nationwide.
According to the report in Business Insurance, Sandra Lewis injured her lower back on the job in December 1998. She underwent several surgical procedures and took "numerous" drugs, but continued to suffer from chronic pain.
American General Media and third-party administrator Gallagher Bassett Services Inc. requested an independent medical examination in April 2012, as Ms. Lewis had been using medical marijuana and taking prescription pain medication, according to records. The psychologist appointed by the workers compensation judge said medical marijuana was a "reasonable and appropriate" treatment for Ms. Lewis. Ms. Lewis’ authorized health care provider also said the "benefits of medical marijuana outweigh the risk of hyper doses of narcotic medications."
In August 2013, the workers comp judge concluded that Ms. Lewis’ use of medical marijuana constituted "reasonable and necessary medical care" and American General Media and Gallagher Bassett were ordered to reimburse her for the receipts she submitted, leading them to appeal.
A three-judge panel of the New Mexico Court of Appeals on Friday unanimously affirmed the decision of the workers comp judge, ruling that Ms. Lewis’ medical marijuana should be classified as "reasonable and necessary medical care that required reimbursement." According to the ruling, there is no regulatory connection between the state’s Workers’ Compensation Act and the Lynn and Erin Compassionate Use Act, which allows patients with debilitating medical conditions to use medical marijuana.
Similarly, in Miguel Maez v. Riley Industrial and Chartis, a three-judge panel of the New Mexico Court of Appeals unanimously ruled on Jan. 13 that the Compassionate Use Act allows Mr. Maez’s medical marijuana authorization to be treated as a prescription for workers comp.
And in Vialpando v. Ben’s Automotive Services, a three-judge panel of the New Mexico Court of Appeals unanimously ruled, in May 2014 that an employer and insurer must reimburse an injured worker for medical marijuana pursuant to the Compassionate Use Act. Read More...
Past Week News Archive
Privette Doctrine Precludes Injured Worker Tort Claim: Mon, 29 Jun 2015 12:52:28 - Pacific Time: Read More...
Carriers Plan to "Ramp Up" Comp Business: Mon, 29 Jun 2015 12:52:16 - Pacific Time: Read More...
Flight Attendants Allege "Dirty Little Secret" Makes Them Sick: Fri, 26 Jun 2015 11:46:20 - Pacific Time: Read More...
Tree Trimming Company Faces Six Felony Counts: Fri, 26 Jun 2015 11:46:15 - Pacific Time: Read More...
Former San Diego Physician Convicted of Forging Doctors Signatures: Thu, 25 Jun 2015 10:08:06 - Pacific Time: Read More...
Prescription Costs Per Claim Increased 7.4% in 2014: Thu, 25 Jun 2015 10:07:59 - Pacific Time: Read More...
JAMA Publishes a Review of Cannabinoids for Medical Use: Wed, 24 Jun 2015 10:57:26 - Pacific Time: Read More...
Juliann Sum Confirmed to Head Cal/OSHA: Wed, 24 Jun 2015 10:57:18 - Pacific Time: Read More...
WCIRB Recaps Annual Conference: Tue, 23 Jun 2015 08:29:53 - Pacific Time: Read More...
24 Count Indictment Filed Against El Centro Medical Clinic: Tue, 23 Jun 2015 08:29:47 - Pacific Time: Read More...