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Workers' Compensation Daily News for Mar 13, 2010
Still No Deals in Potential Sales of State Workers' Compensation Companies
Fri, 12 Mar 2010 04:15:05 - Pacific Time
There is no movement in the proposed California sale of assets of the State Compensation Fund. Colorado is still negotiating the price for the sale of the state owned Pinnacol Assurance, The author of legislation authorizing the sale of Oklahoma's workers' compensation insurance agency said Wednesday he does not have enough votes to pass it in the state House and that the bill appears dead for the year. But Rep. Dan Sullivan, R-Tulsa, said he hasn't given up on the plan to privatize CompSource Oklahoma. Sullivan said a task force formed last year to look into privatization will continue to study the idea as well as ways to make CompSource more competitive with private insurers. "The idea of privatization is not dead," Sullivan said. "We're going to continue to work on it." At the very least, Sullivan said he will urge lawmakers to make it easier for state agencies and other CompSource customers to secure private workers' compensation insurance and require CompSource to bid competitively against private insurers. He also said CompSource should be regulated by the state Department of Insurance like private workers' compensation insurers. "At least we're bringing the marketplace to a more competitive level," Sullivan said. State law requires employers to have insurance to compensate injured workers. CompSource, formerly known as the State Insurance Fund, was created by the Legislature in 1933 as the state's workers' compensation insurer of last resort, issuing the insurance to employers that private insurers wouldn't accept. Following a series of meetings last year, the task force recommended CompSource be privatized, but task force members were divided over how to do it. An actuary who studied CompSource last year said it could be worth up to $350 million if sold to a private insurer. Read More...
Ground Zero Workers Settle Injury Claims with NYC for $657.5 million
Fri, 12 Mar 2010 04:07:26 - Pacific Time
A settlement of up to $657.5 million has been reached in the cases of thousands of rescue and cleanup workers at ground zero who sued the city over damage to their health, according to city officials and lawyers for the plaintiffs. They said that the settlement would compensate about 10,000 plaintiffs according to the severity of their illnesses and the level of their exposure to contaminants at the World Trade Center site. Payouts to the plaintiffs would come out of a federally financed insurance company with funds of about $1.1 billion that insures the city. At least 95 percent of the plaintiffs must accept its terms for it to take effect. If 100 percent of the plaintiffs agree to the terms, the total settlement would be $657.5 million. But if only the required 95 percent agreed, the total would shrink to $575 million. The settlement, which took two years to negotiate, raises the prospect of an end to years of complex and politically charged litigation that has pitted angry victims against city officials, who questioned the validity of some claims and argued that the city should be immune from liability. Since 2003, thousands of firefighters, police officers, construction workers and emergency responders have filed lawsuits against 90 defendants — including the city and the private companies it hired to remove debris at ground zero — over illnesses they say developed after they spent days, weeks or months working at the World Trade Center site after the attacks. The plaintiffs claimed that their conditions — most commonly asthma and other respiratory illnesses — resulted from the toxic brew of contaminants at ground zero and the defendants’ failure to adequately supervise and protect them with safety equipment, like respirators. Among the first cases chosen for trial was that of a firefighter, Raymond W. Hauber, 47, who died of esophageal cancer in 2007 before his case could be heard. Lawyers for the plaintiffs would collect a third of the settlement amounts in legal fees. The insurance company, known as W.T.C. Captive Insurance and financed by the Federal Emergency Management Agency, has already paid out more than $200 million in legal fees to defend the city and its contractors and in administrative costs. Read More...
Bill Would Limit Medicare Secondary Payer fines
Thu, 11 Mar 2010 02:46:47 - Pacific Time
Legislation introduced in the U.S. House would cap penalties and set a three-year statute of limitations for failing to comply with reporting under Section 111 of the Medicare, Medicaid and SCHIP Extension Act. The law requires insurers or employers to notify the U.S. Centers for Medicare & Medicaid Services when workers compensation, liability or no-fault claims with a medical component involve Medicare-eligible beneficiaries. Employers and insurers who are deemed responsible reporting entities face a $1,000 per day penalty per claim for failing to properly notify CMS. But H.R. 4796, the Medicare Secondary Payer Enhancement Act of 2010, which was introduced Tuesday, would cap those penalties at $5,000 per claim. The bill also would protect Medicare beneficiaries by eliminating a requirement that claim notifications to CMS contain claimants’ Social Security numbers. Employers, insurers and TPAs have said they fear that, among other problems, obtaining claimant Social Security numbers in liability settlements could open them to liability should the information be misused. Among other measures, the legislation calls for CMS to provide claimants, insurers or employers with the amount of a “conditional payment” that the agency will demand before the parties settle a claim. Conditional payments are reimbursements that CMS demands for medical expenses it has paid on behalf of its beneficiaries. Currently, CMS notifies parties of their conditional payment obligations after they settle a claim. U.S. Reps. Patrick Murphy, D-Pa., and Tim Murphy, R-Pa., introduced the bill Tuesday with support from the Medicare Advocacy Recovery Coalition. MARC is an insurer and employer group that advocates for improvements in the Medicare Secondary Payer program. Read More...
California Attorney General Sues Farm Labor Contractor for Workers Safety Violations
Thu, 11 Mar 2010 02:42:46 - Pacific Time
Attorney General Edmund G. Brown Jr. has filed a lawsuit against an Imperial Valley, Calif., farm labor contractor Juan Munoz for failing to pay minumum wage and overtime, as well as committing "potentially deadly" worker safety violations by neglecting to provide rest breaks, potable drinking water or shade to field workers. Juan Munoz supplied field workers to onion farms in Kern County and in the Coachella Valley and Mojave Desert. In 2009, Brown's office conducted a routine field visit at a Southern California onion farm. During the visit, Brown's office interviewed more than 10 workers hired by Munoz.According to the workers, Munoz gathered workers from throughout Southern California and delivered them to an onion field that was often far from their home. Once at the fields, they worked split shifts throughout the day and night, slept in the fields and bathed in a nearby reservoir. The workers were not given rest breaks or potable drinking water, and the employees were not provided with training on how to recognize and prevent heat exhaustion. Growers paid Munoz a set price per piece, such as a four-gallon onion sack, and Munoz determined the rate of pay for the field workers. The workers were typically paid $1.23 for each four-gallon sack of onions they harvested. Employees worked split shifts totaling approximately 70 hours a week, but were not provided premium pay. Under state law, workers are entitled to an additional hour of pay if they have less than an eight-hour break between shifts. Workers were also denied overtime pay. State law requires employers to pay overtime (time and a half) to employees who work more than 10 hours a day. In addition, many of the workers were paid in cash below the minimum wage without a written statement of hours worked, rate of pay or deductions taken, also a violation of state labor laws. After working long hours in the fields, workers were often forced to wait up to two hours for their paycheck. The suit seeks a permanent injunction, civil penalties, and restitution to the workers. Read More...
Evidence Missing - In Evidence Based Medicine!
Wed, 10 Mar 2010 05:53:07 - Pacific Time
Comparing medical treatments to find the best and the cheapest may be a pillar of U.S. healthcare reform efforts, but very little such research is being done, according to a report published on Tuesday. Most of the so-called comparative effectiveness research is done at academic institutions or by other noncommercial enterprises, and less than 20 percent examine the safety of treatments, researchers reported in the Journal of the American Medical Association. "Most of the comparative effectiveness studies we reviewed simply tested whether medication 'x' is better than medication 'y,' rather than addressing fundamental questions such as: How can we use this medication more effectively? When is this medication better than surgery? Which among two effective approaches is the safest?" said Dr. Danny McCormick of Harvard Medical School in Boston, who led the study. McCormick and Dr. Michael Hochman of the University of Southern California in Los Angeles chose 328 studies in major medical journals that evaluated drugs. About a third, 104 of them, compared a drug to something else. Forty-three percent compared one drug to another, 11 percent compared a drug to a non-drug therapy, 15 percent focused on different dosing schedules, 19 percent looked at safety and just 2 percent included an analysis of cost effectiveness. While most drug trials are sponsored by companies, noncommercial entities paid for 87 percent of the comparative effectiveness studies, Hochman and McCormick found. "Many of our nation's research priorities are driven by the pharmaceutical industry," Hochman said in a statement. "These companies, not surprisingly, focus most of their attention on new therapies." "In particular, our findings suggest government and noncommercial support should be increased for studies involving nonpharmacologic therapies, for studies comparing different therapeutic strategies, and for studies focusing on the comparative safety and cost of different therapies." The Food and Drug Administration should require such studies for drug approvals when possible, they added. In a separate commentary, Dr. Alec O'Connor of the University of Rochester Medical Center in New York agreed. "Given the continued progress of science, approval of a new drug or device implies to physicians and the general public that the product represents an advance over older treatments," O'Connor wrote. But this is not always true. Recent studies have shown, for instance, that older, cheap drugs such as generic diuretics to treat high blood pressure, or metformin to treat diabetes, work better than newer drugs in many cases. Read More...
DWC Proposes Amendment to Air Ambulance Fee Schedule Preempted by Federal Law
Wed, 10 Mar 2010 05:33:11 - Pacific Time
The California Department of Workers' Compensation has issued a notice of rulemaking to amend the ambulance fee schedule section of the official medical fee schedule (OMFS). The amendment would exempt "air carriers" as defined in the federal Airline Deregulation Act of 1978, from the application of the fee schedule. The proposed regulation amends title 8, California Code of Regulations section 9789.70. In 2003, The Administrative Director adopted regulation 9789.70 which provided that the maximum fees for ambulance services were 120% of the fee prescribed in the relevant Medicare payment system, and which provided that for services not covered by the Medicare payment system, the maximum fee was the fee specified in the 2003 OMFS. Prior to the adoption of the OMFS, Congress had adopted the Airline Deregulation Act of 1978, which prohibited states from adopting or enforcing regulations which affected rates charged by air carriers as defined by the Act. In 2009, several air ambulance providers sued various workers' compensation payers in California, asserting that section 9789.70, as sought to be applied to them, was preempted by the federal Airline Deregulation Act of 1978. The plaintiffs have threatened to sue the Division of Workers’ Compensation and Department of Industrial Relations, seeking declaratory relief that section 9789.70 is preempted by the Airline Deregulation Act, and an injunction prohibiting the Division of Workers’ Compensation from enforcing this section as applied to air ambulance services. The Division has determined that application of section 9789.70 to air carriers as defined in the Airline Deregulation Act may likely be preempted by the supremacy clause of the United States Constitution. The proposed regulation, along with a notice of public hearing and an initial statement of reasons, can be found on the DWC Web site. A public hearing on the amendment will be held on April 13, 2010 from 10:00 a.m. to 5:00 p.m. or until conclusion of business at the Elihu Harris State Office Building – Auditorium, 1515 Clay Street, Oakland, California 94612. Members of the public may comment on the proposed regulation until 5 p.m. on April 13, 2010. Read More...
DWC Proposes Regulations for Electronic Medical Treatment Billing Standards
Tue, 9 Mar 2010 06:56:06 - Pacific Time
The Division of Workers' Compensation (DWC) has issued a notice of rulemaking to carry out provisions requiring the adoption of standardized paper billing forms and electronic billing standards. The regulations also propose amendments to conform the current medical billing and payment provisions to statutory amendments. This rulemaking is the next step in the division’s 12-point plan to help control medical and administrative costs announced last fall. "Implementing electronic billing eliminates unnecessary paper from the workers’ comp system and brings us into the 21st century. Our goal is to ensure doctors are paid promptly and accurately for services they provide, which will also help lessen the burden of liens on the system." said DWC acting Administrative Director Carrie Nevans. "Our 12-point plan allows us to monitor costs more effectively and take decisive action as needed." The proposed regulations satisfy Labor Code section 4603.4 requirements and amend title 8, California Code of Regulations section 9792.5, and would adopt new sections 9792.5.0, 9792.5.1, 9792.5.2, and 9792.5.3. The use of standardized billing forms for paper billing would be mandatory 90 days after adoption of the regulations. Claims administrators would be required to accept submission of electronic bills 18 months after adoption of the regulations. The use of electronic billing by medical providers is optional under the statute and the proposed regulations. The proposal regulations have been forwarded to the Office of Administrative Law for publication in the California notice registry and are posted on the DWC Web site . Public hearings on the regulations have been scheduled for:April 23 in Northern California, and April 26th in Southern California. It would be a good idea for the industry to read over these regulations before they become law, and attend either public hearing if there is language in the proposed regulations that causes any concern. Read More...
Common Pain Meds Linked to Hearing Loss
Tue, 9 Mar 2010 06:41:05 - Pacific Time
The adverse effect of treatment can become a compensable consequence of an industrial injury. Loud music or noise isn't the only thing that can damage your hearing. A new study in men hints that popping over-the-counter painkillers regularly can also lead to hearing loss, especially in younger men. In the study, researchers found that men younger than age 50 who regularly took acetaminophen more than two times a week had roughly double the risk of hearing loss compared to men who did not take acetaminophen regularly. Acetaminophen is the active ingredient in Tylenol and certain other pain relievers. The researchers also found that men younger than age 50 who regularly took ibuprofen (the main ingredient in Advil) or other non-steroidal anti-inflammatory drugs (NSAID) at least twice a week had a nearly two-thirds higher risk of hearing loss than men who took NSAIDs less often. Men who took aspirin twice a week had a one-third higher risk. So should middle-aged men empty the medicine cabinet of these pain relievers? Not necessarily, because each individual's actual, or absolute, risk of hearing loss with these medicines is likely fairly small. The overall absolute risk of hearing loss in the population is 1 percent per year. Those who take an analgesic have an increased risk beyond the 1 percent, Dr. Sharon G. Curhan, of Channing Laboratory and Brigham and Women's Hospital, Boston explained in an email to Reuters Health. "But if you consider that people continue to take the analgesic for years, then after 10 years the risk would be 10 percent in the overall population and the risk in those taking an analgesic would be proportionately higher," Curhan said. The findings, published in the American Journal of Medicine this month, stem from nearly 27,000 men enrolled since 1986 in the Health Professionals' Follow-Up Study. As part of the study, the men, who were between 40 and 74 years old at the outset, provided information on analgesic use, hearing loss and other relevant factors every 2 years for 18 years, during which time 3,488 men were diagnosed with hearing loss. In the group as a whole, the risk of hearing loss, after factoring out relevant risk factors, was 12 percent higher in men who used aspirin at least twice a week relative to men who used aspirin less than twice a week. The risk was about 21 percent higher in those who used NSAIDs or acetaminophen at least twice a week. Read More...
Division of Workers’ Compensation Posts Proposed Pharmacy Benefit Network Regulations
Mon, 8 Mar 2010 03:49:46 - Pacific Time
The Division of Workers' Compensation has posted an online forum for members of the public to review and comment on draft proposed pharmacy benefit network regulations. The regulations are formally called the contracted provision of medicines because they cover more than pharmaceuticals. These draft regulations represent the division’s next step in its 12-point plan to monitor and help control medical costs in California’s workers’ compensation system. The plan includes regulations recently enacted, regulations underway, and a set of proposals to be implemented in 2010. The regulations will be contained in Title 8, California Code of Regulations, article 3.7, sections 9769.1 et seq., and article 8.5, sections 9880 and 9881, and include:
- Section 9769.1, which establishes definitions
- Section 9769.2, which requires plans to comply with standards of the administrative director
- Section 9769.2, which establishes standards of access
- Section 9769.3, which provides for a notice to employees
- Amendment to section 9880 to amend the notice provided to new employees
- Amendment to section 9881 to amend the notice required to be posted
- Amendment to the form DWC-1, to include a mention of how to obtain drugs and supplies.
Postal Service Letter Carrier Indicted for Workers’ Comp Fraud
Mon, 8 Mar 2010 03:43:26 - Pacific Time
Nicki Lee Buxmann, 46, of Sacramento, who has been a letter carrier for the U.S. Postal Service, has been indicted by a federal grand jury on 15 counts of falsely claiming to have been injured on the job and falsely denying that she had outside employment and income. Prosecutors say she illegally got $278,000 in workers’ compensation benefits. The indictment alleges that Ms. Buxmann defrauded the United States Postal Service by first claiming that she had injured her back, neck, and shoulder while on the job, and then falsely denying that she had outside employment and income in order to continue receiving benefits. The indictment alleges that she owned and operated “TNT Takeover/MMA Boxing” and “Fitness 180” in Elk Grove and Roseville, which generated income, according to Assistant U.S. Attorney Laurel Loomis Rimon, who is prosecuting the case. It might be an interesting defense effort, since Ms. Buxmann is shown in a YouTube video showing off her gym. Ms. Buxmann is also charged with separate counts of theft of United States property and false statements or fraud to obtain federal employee’s compensation related to the false statements she made to the government in seeking compensation payments. "While the vast majority of postal employees who collect compensation benefits have legitimate claims, a small percentage abuse the system and cost the Postal Service millions of dollars," says U.S. Postal Service Area Special Agent in Charge Nichole Cooper. If convicted, Ms. Buxmann faces a maximum sentence of 20 years in prison for mail fraud, 10 years in prison for theft of U.S. property and a five-year term for false statements. Read More...
Past Work Comp Academy News Articles
• Employers Holdings Reports Full Year Income Decline: Fri, 5 Mar 2010 06:20:30 - Pacific Time: Read More...
• Injuries Among Public Sector Employees Increased for the First Time in Five Years.: Thu, 4 Mar 2010 21:02:56 - Pacific Time: Read More...
• CIGA Prevails Against City of Laguna Beach in Reimbursement Case: Thu, 4 Mar 2010 01:17:10 - Pacific Time: Read More...
• Calif. Construction Company Sued for Misclassifying, Underpaying Workers: Thu, 4 Mar 2010 01:17:02 - Pacific Time: Read More...
• DWC Proposed Changes to MPN and Employee Information Regulations: Wed, 3 Mar 2010 04:14:11 - Pacific Time: Read More...
• CWCI Scorecard Examines Restaurant Claims in the California Workers' Comp System: Wed, 3 Mar 2010 04:14:04 - Pacific Time: Read More...
• Talk Therapy Reduces Back Pain?: Tue, 2 Mar 2010 06:28:33 - Pacific Time: Read More...
• Contractor Guilty of Workers' Comp Fraud: Tue, 2 Mar 2010 06:34:09 - Pacific Time: Read More...
• Court Orders End to Furloughs for DWC, WCAB and Other State Workers: Mon, 1 Mar 2010 07:04:03 - Pacific Time: Read More...
• AIG Pumps $2.3 Billion Into "Long-Tail" Loss Reserves: Mon, 1 Mar 2010 03:12:46 - Pacific Time: Read More...