- Cal Hospital Association Sues Anthem Blue Cross for Authorization Delayson April 24, 2024 at 11:37 AM
According to the California Hospital association Anthem Blue Cross, one of California’s largest health insurance companies, consistently leaves thousands of its patients stranded in hospital beds long after they have been medically cleared for discharge, a violation of California law. These victims of discharge delays are forced to stay in hospitals longer, are deprived of timely post-hospital health care services, and cause backlogs for other patients who have to wait longer for hospital beds.
These failures, along with Anthem’s disregard of state requirements to maintain an adequate network of care providers and not paying for the additional hospital care it forces to be provided to patients, are the basis of a new lawsuit filed in Los Angeles County Superior Court against the insurance giant by the California Hospital Association (CHA) on behalf of the state’s more than 400 hospitals and health systems and the patients they serve.
"California has some of the strongest laws in the nation governing insurance company practices," said CHA President & CEO Carmela Coyle. "Regrettably, far too many insurance companies that put their bottom lines over patient care are violating these essential patient protection laws every day, hurting patients, hospitals, and the public good. By filing this lawsuit, we are asking the court to put a stop to these illegal practices and force insurers to do what is best for patients."
According to a statewide survey of hospitals conducted last year by CHA, an estimated 4,500 Californians are stuck every day in hospital beds and emergency departments waiting for their insurers to approve and arrange for their discharge to care settings such as skilled-nursing facilities, home health services, rehabilitation facilities, or behavioral health services. According to the survey, patients whose discharge is delayed by at least three days (~300,000 patients annually) spend, on average, an additional 14 days in the hospital after being medically cleared for post-acute care.
Other findings from the survey include:
- - California hospitals provide an estimated 1 million days of unnecessary inpatient care and 7.5 million hours of wasted emergency department care annually due to discharge delays.
- - In some extreme cases, patients - especially those experiencing behavioral health issues - have languished in hospital beds for as long as a year.
- - These delays result in at least $3.25 billion in avoidable hospital costs every year.
- - Patients enrolled in managed care plans - especially those covered by Medi-Cal - are more likely to experience delays than those who have fee-for-service coverage.
The lawsuit alleges that Anthem fails to meet its legal obligations to arrange for timely access to care for its members as required under California law. Anthem is also accused of not responding in a timely manner - or at all - "to requests for authorization" for post-acute care for its members.
Additionally, the complaint charges Anthem with "unilaterally discontinuing authorization" for hospitals to continue caring for patients while they need to remain in hospital beds longer as a result of the insurance company’s failure to arrange for timely post-acute discharge.
In the lawsuit, CHA is seeking an injunction against Anthem that would bar the insurer from engaging in these illegal and harmful business practices.
"It is time for the courts to hold insurers accountable by enforcing the law. Care that is delayed is care that is denied," Coyle said. Coyle also said the association has raised the issue with the Department of Managed Health Care, which oversees most health insurers.
In a statement, department spokesperson Kevin Durwara said the agency has been meeting with the hospital association to address hospitals’ "concerns and challenges" with insurance delays since 2021. The meetings resulted in a letter issued to insurers in Fresno County, where hospital capacity was particularly limited, instructing them to make it easier for hospitals to discharge patients.
According to CalMatters a spokesperson for Anthem said the company did not have an immediate response and would be investigating the allegations.
- Accreditation Agencies Launch New Telehealth Care Standardson April 24, 2024 at 11:37 AM
The National Committee for Quality Assurance (NCQA) has just announced the launch of its Virtual Care Accreditation Pilot program, a key step in NCQA’s development of a quality improvement framework for organizations that provide care via telehealth or other digital platforms.
NCQA selected as pilot organizations a diverse set of 18 organized and engaged entities from the more than 100 that applied. Based in 12 states and Puerto Rico, pilot organizations include health plans, health systems, Federally Qualified Health Centers, patient-centered medical homes and virtual first/virtual only organizations.
The pilot organizations will provide valuable input to the development of NCQA’s Virtual Care Accreditation, a first-of-its-kind program highlighting the quality of care patients receive through virtual or hybrid modalities from many kinds of health care organizations.
Virtual Care Accreditation will highlight and distinguish organizations using virtual modalities to identify gaps in care, provide high-quality care and report and track outcomes.
Early versions of the program will focus on primary care and urgent care. Later versions will provide opportunities for organizations to distinguish themselves for other kinds of care they deliver virtually. Likely options include behavioral healthcare and acute, post-acute or specialty care.
"Care delivery has evolved, and virtual care is a new normal in desperate need of standardization and reliable quality assessment," said NCQA President Margaret E. O’Kane. "Virtual Care Accreditation will be a roadmap and the foundation of the safe, effective and equitable virtual care people need."
Four phases compose the roughly 10-month pilot program: learning, testing, preparation and evaluation. An early adopter program and launch of Virtual Care Accreditation will follow the pilot program in mid- to late-2024.
The Joint Commission also just announced it is launching a new Telehealth Accreditation Program for eligible hospitals, ambulatory and behavioral healthcare organizations, effective July 1, 2024. This accreditation program provides updated, streamlined standards to provide organizations offering telehealth services with the structures and processes necessary to help deliver safe, high-quality care using a telehealth platform.
The Telehealth Accreditation Program was developed for healthcare organizations that exclusively provide care, treatment and services via telehealth. Hospitals and other healthcare organizations that have written agreements in place to provide care, treatment and services via telehealth to another organization’s patients have the option to apply for the new accreditation.
The Telehealth Accreditation Program’s requirements contain many of the standards similar to other Joint Commission accreditation programs, such as requirements for information management, leadership, medication management, patient identification, documentation, and credentialing and privileging. Requirements specific to the new accreditation program include:
- - Streamlined emergency management requirements to address providing care and clinical support remotely rather than in a physical building.
- - New standards for telehealth provider education and patient education about the use of telehealth platforms and devices.
- - New standards chapter focused on telehealth equipment, devices and connectivity.
- April 28 Workers Memorial Day Eventson April 23, 2024 at 2:18 PM
When the nation first observed Workers Memorial Day on April 28, 1970, an estimated 38 U.S. workers suffered fatal on-the-job injuries each day and many more endured debilitating respiratory diseases and other life-altering illnesses related to workplace exposures.
Today, work-related injuries in the U.S. claim about 15 people’s lives a day. In 2022, a reported 5,486 workers suffered fatal injuries, an increase of 296 worker deaths from 2021.
This year, the Department of Labor’s Occupational Safety and Health Administration and Mine Safety and Health Administration will remind the nation of the importance of protecting workers as families, friends, co-workers and the community at-large gather across the country for Workers Memorial Day events on Sunday, April 28 to honor people who didn’t come home at the end of their shift.
"As we honor our fallen workers on Workers Memorial Day, we must remember that behind each workplace fatality there are loved ones enduring unimaginable grief," said Assistant Secretary for Occupational Safety and Health Doug Parker. "It is for the lost workers and those left behind that we continue to fight for every worker’s right to a safe working environment. Our mission at OSHA is to ensure that when someone leaves for work, they know they’ll come home safe at the end of the day to the arms of their families and loved ones."
To commemorate Workers Memorial Day, the department will host a week-long series of events from April 22-25 to educate employers on the importance of safe and healthy workplaces. The series will culminate at an in-person and nationally livestreamed event at 1 p.m. EDT at its Washington headquarters where OSHA and MSHA leaders will join AFL-CIO President Liz Shuler and United Support & Memorial for Workplace Fatalities Board Member Stacy Sebald, whose 19-year-old son Mitchell McDaniel suffered fatally injuries in an agriculture incident in 2019.
"We come together on Workers Memorial Day to remember those we have lost in workplace accidents and to prevent work-related illnesses," said Assistant Secretary for Mine Safety and Health Chris Williamson. "At MSHA, we know a safe workplace isn’t a privilege - it’s every miner’s right. It is in the memory of fallen workers that we continue to advocate for each miner’s safety, health and dignity."
Join OSHA and MSHA representatives, families, workers, labor unions, advocates and others to remember the lives lost and raise awareness of workplace safety to help prevent future tragedies. Find a local Workers Memorial Day event.
Learn more about Workers Memorial Day events nationwide and view the April 25 livestream.
- DWC Updates and Posts Time of Hire Noticeon April 23, 2024 at 2:18 PM
The Division of Workers’ Compensation (DWC) has posted an updated time of hire notice on its website. The time of hire notice was previously referred to as the time of hire pamphlet.
The notice, which is posted in English and Spanish versions, meets the requirements under Labor Code section 3551 to notify new employees about California workers’ compensation rights and benefits either at the time of hire or by the end of the first pay period.
The time of hire notice was created in 2011 to help employers and claims administrators ensure that employees know what to do in case of workplace injury.
This notice can be customized as long as the text meets the "time of hire" legal requirements. Title 8, California Code of Regulations section 9883 allows insurers, employers or private enterprises to prepare and publish the notice upon prior approval of the form and content of the notice by the Administrative Director. A revised time of hire notice should be submitted via email to DWC for review, using the subject line “Time of Hire Notice Approval Request.”
- PAGA Plaintiff No Longer Required to Have an Individual Claimon April 22, 2024 at 3:18 PM
Lizbeth Balderas was a Fresh Start Harvesting, Inc employee. In June 2022, she filed a complaint for civil penalties for violations of the California Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.) on behalf of herself and 500 other current and former employees of defendant Fresh Start Harvesting, Inc
In her lawsuit she alleged, "Ms. Balderas is not suing in her individual capacity; she is proceeding herein solely under the PAGA, on behalf of the State of California for all aggrieved employees, including herself and other aggrieved employees."
Balderas claimed that Fresh Start did not provide employees with required meal break periods and rest periods, and that Fresh Start provided inaccurate wage statements, made untimely wage payments, and failed to pay wages at termination. Fresh Start filed a motion to compel arbitration.
Fresh Start filed a motion to compel arbitration.
On its own motion, the trial court gave notice of its intent to strike Balderas’s complaint. It said because she had not filed an individual action seeking PAGA relief for herself, she lacked standing to pursue a "non-individual" or representative PAGA action on behalf of other employees.
The trial court ruled Balderas lacked standing to bring a representative PAGA action on behalf of other employees because she did not allege "an individual claim" in the action. The Court of Appeal reversed in the published case of Balderas v. Fresh Start Harvesting, Inc. -B326759 (April 2024).
The Court of Appeal said that PAGA is a remedial statute intended to protect employees from employer misconduct. Remedial statutes must be broadly interpreted to achieve the legislative goals. (In re Delila D. (2023) 93 Cal.App.5th 953, 974.) PAGA provisions must be interpreted broadly to protect employees. (Adolph v. Uber Technologies, Inc., supra, 14 Cal.5th at p. 1122.)
Class or representative PAGA actions play an important function in enforcing [the Labor Code] by permitting employees . . . a relatively inexpensive way to resolve their disputes about unlawful employer conduct. (Piplack v. In-N-Out Burgers (2023) 88 Cal.App.5th 1281- 1286.)
The statutory goal is furthered by extending broad standing to aggrieved employees that does not depend on the viability or strength of a plaintiff’s individual PAGA claim. In fact, the inability for an employee to pursue an individual PAGA claim does not prevent that employee from filing a representative PAGA action. California courts have consistently held that " ' [p]aring away the plaintiff’s individual claims' " for one reason or another, " 'does not deprive the plaintiff of standing to pursue representative claims under PAGA.' " (Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104 - 1122.)
These broad-standing policies that allow employees the freedom to bring representative PAGA actions to challenge unfair employer policies had not been questioned until 2022 when the United State Supreme Court made some observations about PAGA standing that conflicted with what the California Legislature intended.
In Viking River Cruises v. Moriana (2022) _ U.S. _ [213 L.Ed.2d 179, 200-201] (Viking River), the United States Supreme Court wrote, "Under PAGA’s standing requirement, a plaintiff can maintain non-individual PAGA claims in an action only by virtue of also maintaining an individual claim in that action." (Italics added.) "When an employee’s own dispute is pared away from a PAGA action, the employee is no different from a member of the general public, and PAGA does not allow such persons to maintain suit." (Ibid., italics added.)
In reliance on this language, the trial court struck Balderas’s "non-individual" representative PAGA action. It noted that in her complaint Balderas alleged, "Ms. Balderas is not suing in her individual capacity; she is proceeding herein solely under the PAGA, on behalf of the State of California for all aggrieved employees, including herself and other aggrieved employees" of Fresh Start. Noting that she did not file her own individual PAGA claim, the court found under Viking River she could not bring this representative PAGA action for penalties.
In Adolph v. Uber Technologies, Inc., supra, 14 Cal.5th at page 1119, our Supreme Court held Viking River was incorrect on PAGA standing and its decision on that issue may not be followed by California courts. The court wrote, "Because ‘[t]he highest court of each State . . . remains "the final arbiter of what is state law" (Montana v. Wyoming (2011) 563 U.S. 368, 378, fn. 5 [179 L.Ed.2d 799]), we are not bound by the high court’s interpretation of California law."
The Adolph court concluded that the Viking River requirement of having to file an individual PAGA cause of action to have standing to file a representative PAGA suit was incorrect. There are only two requirements for PAGA standing. "The plaintiff must allege that he or she is (1) ‘someone "who was employed by the alleged violator" and (2) someone "against whom one or more of the alleged violations was committed." (Adolph v. Uber Technologies, Inc., supra, 14 Cal.5th at p. 1120.)
Balderas met the standing requirements.The order striking the pleading is reversed. Costs on appeal are awarded to appellant.
- Cal/OSHA Cites Construction Company $371K for Fatal Trench Collapseon April 22, 2024 at 3:18 PM
Cal/OSHA has cited D’Arcy & Harty Construction, Inc. $371,100 for failing to protect employees working in a trench excavation at a construction site in San Francisco. On September 28, 2023, an employee was replacing sewer parts inside the eight-foot-deep trench at 1101 Oak Street when the excavation collapsed, fatally burying the 24-year-old worker.
The 25-year-old man who died was identified as Javier Romero from Alameda County. Romero became trapped under 8 feet of dirt when the trench collapsed in the area of Oak and Divisadero streets.
He was working on part of the San Francisco Public Utilities Commission's Panhandle and Inner Sunset Large Sewer Rehabilitation Project to upgrade existing sewer mains and sewer laterals in the area, SFPUC officials said at the time.
Cal/OSHA investigators determined D’Arcy & Harty Construction, Inc. committed willful-serious safety violations by failing to provide a protective system for employees working in the trench and for failing to provide a means of escape such as a ladder in case of collapse - hazards the employer had been warned about weeks before.
In that earlier inspection, a Cal/OSHA investigator had told D’Arcy & Harty Construction Inc. that a trench excavation at 3475 22nd Street did not have adequate shoring and did not have a ladder or other means for workers to escape in case of collapse. The hazards at that San Francisco site were abated before work was able to continue.
Cal/OSHA cited D’Arcy & Harty Construction, Inc., for eight violations total in the fatal September 28 incident, including three categorized as serious accident-related for failure to conduct daily safety inspections of the trench for evidence of possible cave-ins before an employee is allowed to work inside the trench, and failure to properly use equipment and materials to prevent employee exposure to excavation and trenching hazards.
Cal/OSHA offers extensive information and resources on working safely in the construction industry, including how to safely perform trench and excavation operations. Before starting excavation work, the approximate locations of all underground installations that may be encountered during excavation operations must be determined and the proper notification must be made to the appropriate agency in either Northern or Southern California. A permit from the local Cal/OSHA district office must be obtained before the construction of excavations five feet or deeper into which any person is required to descend.
Acting Cal/OSHA Chief Debra Lee said: "Excavations are known hazards and trenches must be evaluated, shored or shielded before workers enter to protect them. This worker’s death is tragic because it was avoidable."
- EEOC Discrimination Form Facts Must Match Lawsuit Factson April 18, 2024 at 2:00 PM
In May 2015, Arno Patrick Kuigoua started working for the California Department of Veterans Affairs as a registered nurse at the Knight Veterans Home in Lancaster, California. His employment with the Department ended in October 2018. The Department fired him after determining he sexually harassed women and delivered substandard care that injured patients.
Kuigoua appealed his termination to the State Personnel Board, which, after a six-day hearing, rejected his appeal. The administrative law judge ruled Kuigoua’s dismissal was just and proper. Unsuccessful in altering this ruling were Kuigoua’s petition for rehearing, his petition for writ of mandate, his appeal of the writ denial, and his 2022 petition for review by the California Supreme Court.
Just before his State Personnel Board hearing, on April 2, 2019, Kuigoua filed an administrative charge of employment discrimination. He filed this charge concurrently with the California Department of Fair Employment and Housing and the federal Equal Employment Opportunity Commission.
Kuigoua’s Commission Form reported that, during three and a half months in 2018, someone discriminated against him on the basis of Kuigoua’s male gender. Kuigoua also suffered retaliation, apparently for reporting this discrimination. The retaliation took the form of denying him the opportunity to earn overtime pay. The Department failed to ameliorate these problems and finally discharged him altogether. Kuigoua said his direct antagonist was Julian Manalo.
An equal opportunity officer named Robert Hennig investigated these charges. Hennig found no evidence that Kuigoua had suffered discrimination because of his male gender and he was given a right-to-sue notice.
On March 5, 2020, Kuigoua sued the Veterans Department in state court on state statutory claims. This complaint asserted four causes of action and the factual allegations in this complaint cover about eight pages.
Kuigoua’s judicial complaint stated nothing about gender discrimination against males at the West Los Angeles facility. Now the site of the oppression was 60 miles north, in Lancaster. Neither was there mention of antagonist Manalo. The retaliation now was for complaining to Ancheta about harassment from Smith and Quintua: three people Kuigoua omitted from his Commission Form. The time frame was different: over the three-year interval from 2015 to 2018, rather than the three and a half months in 2018.
Defendant Veterans Department responded to Kuigoua’s lawsuit. The Department noted the lawsuit was about alleged events different from those Kuigoua alleged in his Commission Form. The Department moved for summary judgment on the basis Kuigoua had not exhausted his administrative remedies.
The trial court granted the Department’s motion. The court’s single-spaced eight-page statement of decision carefully applied the law to the disparity between Kuigoua’s factual allegations in his administrative and judicial complaints. Kuigoua appealed.
The Court of Appeal of the 2nd Appellate District affirmed the trial court in the published case of Kuigoua v. Dept. of Veteran Affairs -B323735 (April 2024).
The Court of Appeal said "Kuigoua loses this appeal because he changed horses in the middle of the stream. His agency complaint was one animal. On the far bank, however, his lawsuit emerged from the stream a different creature. Changing the facts denied the agency the opportunity to investigate the supposed wrongs Kuigoua made the focus of his judicial suit. The court rightly ruled Kuigoua failed to exhaust his administrative remedies. "
Employees like Kuigoua who wish to sue under the Fair Employment and Housing Act must exhaust the administrative remedy that statute provides. They do so by filing a complaint with the Department of Fair Employment and Housing. Filing this administrative complaint is a mandatory prerequisite to suing in court. (Guzman v. NBA Automotive, Inc. (2021) 68 Cal.App.5th 1109 at p. 1117; see Clark, supra, 162 Cal.App.5th at p. 308, fn. 21.)
Once the agency receives this complaint, it investigates the alleged unlawful practice and decides whether it can resolve the matter by conference, conciliation, and persuasion. If these measures fail, the agency may issue an accusation. If the agency decides against issuing an accusation, it issues a right-to-sue letter to the aggrieved person. (Guzman, supra, 68 Cal.App.5th at p. 1117.)
"Summary judgment is now recognized as a particularly suitable means to test the sufficiency of the plaintiff’s or defendant’s case."
- Private Equity Healthcare Bankruptcies are on the Riseon April 18, 2024 at 1:59 PM
The mission of the Private Equity Stakeholder Project is to identify, engage, and connect stakeholders affected by private equity with the goal of engaging investors and empowering communities, working families, and others impacted by private equity investments. It's vision is to bring transparency and accountability to the private equity industry and empower impacted communities.
According to a recent report by the Project 2023 was a record year for large healthcare bankruptcies, and healthcare companies owned by private equity firms accounted for some of the largest bankruptcies: KKR’s Envision Healthcare, American Securities’ Air Methods, and American Physician Partners, owned by Brown Brothers Harriman Capital Partners, all made major headlines.
The healthcare default and bankruptcy wave is projected to continue in 2024 as companies are increasingly facing credit rating downgrades and potential defaults - and most of the companies at the highest risk are owned by private equity firms.
Bankruptcies in healthcare are more than just legal or financial events - they can lead to closures, disruption or cessation of critical healthcare services, and layoffs. Such outcomes have ripple effects on the broader healthcare infrastructure, such as overburdening healthcare providers that need to fill the gaps left by closures. In addition, Medicare, Medicaid, and other government health programs make up a significant component of revenue for many healthcare companies, which means private equity-driven bankruptcies are not just threatening healthcare infrastructure, but in many cases publicly-funded healthcare infrastructure.
There were an estimated 80 healthcare bankruptcies in 2023, and PESP found that at least 17 of those companies were backed by private equity firms. That amounts to approximately 21% of all healthcare bankruptcies last year. There were also at least 12 bankruptcies by companies with venture capital backing, accounting for another 15% of the year’s total healthcare bankruptcies.
The number of private equity healthcare bankruptcies has increased substantially in recent years. In 2019, there were 8 private equity healthcare bankruptcies, marking a 112.5% increase over the last 5 years.
Some private equity firms are repeat offenders when it comes to healthcare bankruptcies and unmanageable debt. For example, private equity firm KKR owned two major healthcare companies that filed for bankruptcy in 2023: physician staffing giant Envision Healthcare and oncology provider GenesisCare. In addition, KKR owns three other companies that are distressed and carry heightened risk for default: Covenant Physician Partners, Global Medical Response, and One Call Corporation.
In another example, H.I.G. Capital’s weight management company Jenny Craig filed for bankruptcy in 2023, its mental health company Community Intervention Services filed for bankruptcy in 2021 after one of its subsidiaries paid a four-million-dollar settlement for alleged Medicaid fraud, and its correctional healthcare company Wellpath Holdings currently has "very high credit risk."
Moody’s Investors Service rates companies based on their probability of default. Out of 45 healthcare companies with a probability of default rating of B3 negative and lower, which is considered speculative, as of November 2023, all but three were owned by private equity firms - 93% of the most distressed healthcare companies in North America.
- Managing Personnel Not Outrageous Conduct to Avoid Work Comp Exclusivityon April 17, 2024 at 2:24 PM
Ferrellgas’s business is the transportation and installation of propane gas, a hazardous material regulated by the United States Department of Transportation (DOT).
Tom Faley was hired by Ferrellgas as a driver in 2016. On March 11, 2018, Faley was promoted to one of the district manager positions and in this role was directly supervised by Denise Whisman. Whisman was the general manager of Ferrellgas’s service center in San Diego (where Faley worked), and oversaw the center’s operations and employees. Two district managers reported to Whisman.
In June 2018, e-mails between Faley and Whisman document Faley’s deficiencies (primarily with customer and employee communication) and their back and forth to provide Faley with adequate training for his new role and to manage the work effectively. In August 2018, Faley underwent his first performance review as district manager with Whisman. Whisman reported that Faley was deficient in two areas, customer retention and business growth, and was meeting expectations in three others.
Performance problems continued and were well documented between Faley and Wishman for the next year. Ultimately in July 2029 . Whisman told Faley he was being terminated for performance reasons. Faley asked if he could stay on as a driver or technician, since the problems were related to his management. Whisman said no, and shortly after Faley was escorted from the premises.
Faley brought suit against Ferrellgas for retaliation under the Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.), failure to prevent retaliation under FEHA, retaliation under Labor Code section 1102.5, wrongful termination against public policy, and intentional and negligent infliction of emotional distress.
After discovery, Ferrellgas brought a successful motion for summary judgment against Faley. The trial court found that Faley failed to show that Ferrellgas’s "legitimate, documented non-retaliatory reasons" for terminating his employment were mere pretext and that no triable issue of fact was raised as to Faley’s claims for retaliation.
The trial court also found Faley’s claims for intentional and negligent infliction of emotional distress were not actionable because nothing in the record gave "rise to the sort of ‘outrageous, or ‘despicable’ conduct" necessary to support those causes of action and that they were barred by the exclusivity provisions of the Workers’ Compensation Act.
The Court of Appeal affirmed the dismissal of his case in the unpublished case of Faley v. Ferrellgas -D081184 (April 2024).
On appeal, Faley asserts the court erred because triable issues of fact remain as to whether Ferrellgas had a retaliatory motive for his termination. He also contends the court used the wrong legal standard for his retaliation claim under Labor Code section 1102.5, requiring reinstatement of that cause of action. Finally, with respect to his emotional distress claims, Faley asserts they are not barred by workers’ compensation exclusivity, and that triable issues of fact remain with respect to the claims.
The Court of Appeal rejected each of Faley’s arguments and affirm the judgment in favor of Ferrellgas, as it discussed its reasoning for each of the issues raised.
A cause of action for intentional infliction of emotional distress exists when there is ‘(1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff’s suffering severe or extreme emotional distress; and (3) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct.
A defendant’s conduct is "outrageous" when it is so extreme as to exceed all bounds of that usually tolerated in a civilized community. And the defendant’s conduct must be "intended to inflict injury or engaged in with the realization that injury will result." (Hughes v. Pair (2009) 46 Cal.4th 1035, 1050-1051.)
Further,an essential element of an Intentional Infliction of Emotional Distress claim is a pleading of outrageous conduct beyond the bounds of human decency.
Managing personnel is not outrageous conduct beyond the bounds of human decency, but rather conduct essential to the welfare and prosperity of society. A simple pleading of personnel management activity is insufficient to support a claim of intentional infliction of emotional distress, even if improper motivation is alleged. If personnel management decisions are improperly motivated, the remedy is a suit against the employer for discrimination. (Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55, 80)
- Omaha National Acquires California Work Comp Carrieron April 17, 2024 at 2:24 PM
Omaha National Group Inc., offers AM Best A- (Excellent) rated workers’ compensation coverage through more than 2,500 agencies. Since its marketing launch in 2017, the company has grown to more than 250 employees and is approaching $200 million of in-force premium.
Omaha National announced that it has acquired Sutter Insurance Company, a California domiciled insurance carrier that has been renamed Omaha National Casualty Company. Omaha National also owns Omaha National Insurance Company, which is domiciled in Nebraska.
"The acquisition of a carrier licensed in California, which is our largest market, is a major step forward in operating as a national full-stack carrier," CEO Reagan Pufall said.
"Since inception, our plan has been to combine strong growth with exceptional underwriting results and that’s what we’ve achieved. We’re approaching $200 million in-force premium while at the same time our loss ratio, including allocated loss adjustment expenses, has been below 60% every year we’ve been in operation."
"We are now licensed to issue policies in 37 states and continue to expand toward nationwide coverage," Omaha National General Counsel Jim Hempel said. "We enjoy excellent relationships with our fronting partners but writing on our own paper immediately enhances our underwriting results and allows us to better serve our policyholders and broker partners."
In another milestone, Omaha National is now implementing Oncore Underwriting, the company’s proprietary underwriting and policy management application.
"One of our core strategic principles is that we design and develop our own operational software entirely in-house," said Bryan Connolly, Omaha National’s Chief Operating Officer.
"When we implemented Oncore Claims in 2021 it generated remarkable improvements in our claims results, and we expect Oncore Underwriting to have a similarly profound impact. When Oncore CRM is implemented in 2025 all key functions within the company will be performed within a single proprietary application."
- Cal Hospital Association Sues Anthem Blue Cross for Authorization Delayson April 24, 2024 at 11:37 AM
According to the California Hospital association Anthem Blue Cross, one of California’s largest health insurance companies, consistently leaves thousands of its patients stranded in hospital beds long after they have been medically cleared for discharge, a violation of California law. These victims of discharge delays are forced to stay in hospitals longer, are deprived of timely post-hospital health care services, and cause backlogs for other patients who have to wait longer for hospital beds.
These failures, along with Anthem’s disregard of state requirements to maintain an adequate network of care providers and not paying for the additional hospital care it forces to be provided to patients, are the basis of a new lawsuit filed in Los Angeles County Superior Court against the insurance giant by the California Hospital Association (CHA) on behalf of the state’s more than 400 hospitals and health systems and the patients they serve.
"California has some of the strongest laws in the nation governing insurance company practices," said CHA President & CEO Carmela Coyle. "Regrettably, far too many insurance companies that put their bottom lines over patient care are violating these essential patient protection laws every day, hurting patients, hospitals, and the public good. By filing this lawsuit, we are asking the court to put a stop to these illegal practices and force insurers to do what is best for patients."
According to a statewide survey of hospitals conducted last year by CHA, an estimated 4,500 Californians are stuck every day in hospital beds and emergency departments waiting for their insurers to approve and arrange for their discharge to care settings such as skilled-nursing facilities, home health services, rehabilitation facilities, or behavioral health services. According to the survey, patients whose discharge is delayed by at least three days (~300,000 patients annually) spend, on average, an additional 14 days in the hospital after being medically cleared for post-acute care.
Other findings from the survey include:
- - California hospitals provide an estimated 1 million days of unnecessary inpatient care and 7.5 million hours of wasted emergency department care annually due to discharge delays.
- - In some extreme cases, patients - especially those experiencing behavioral health issues - have languished in hospital beds for as long as a year.
- - These delays result in at least $3.25 billion in avoidable hospital costs every year.
- - Patients enrolled in managed care plans - especially those covered by Medi-Cal - are more likely to experience delays than those who have fee-for-service coverage.
The lawsuit alleges that Anthem fails to meet its legal obligations to arrange for timely access to care for its members as required under California law. Anthem is also accused of not responding in a timely manner - or at all - "to requests for authorization" for post-acute care for its members.
Additionally, the complaint charges Anthem with "unilaterally discontinuing authorization" for hospitals to continue caring for patients while they need to remain in hospital beds longer as a result of the insurance company’s failure to arrange for timely post-acute discharge.
In the lawsuit, CHA is seeking an injunction against Anthem that would bar the insurer from engaging in these illegal and harmful business practices.
"It is time for the courts to hold insurers accountable by enforcing the law. Care that is delayed is care that is denied," Coyle said. Coyle also said the association has raised the issue with the Department of Managed Health Care, which oversees most health insurers.
In a statement, department spokesperson Kevin Durwara said the agency has been meeting with the hospital association to address hospitals’ "concerns and challenges" with insurance delays since 2021. The meetings resulted in a letter issued to insurers in Fresno County, where hospital capacity was particularly limited, instructing them to make it easier for hospitals to discharge patients.
According to CalMatters a spokesperson for Anthem said the company did not have an immediate response and would be investigating the allegations. - Accreditation Agencies Launch New Telehealth Care Standardson April 24, 2024 at 11:37 AM
The National Committee for Quality Assurance (NCQA) has just announced the launch of its Virtual Care Accreditation Pilot program, a key step in NCQA’s development of a quality improvement framework for organizations that provide care via telehealth or other digital platforms.
NCQA selected as pilot organizations a diverse set of 18 organized and engaged entities from the more than 100 that applied. Based in 12 states and Puerto Rico, pilot organizations include health plans, health systems, Federally Qualified Health Centers, patient-centered medical homes and virtual first/virtual only organizations.
The pilot organizations will provide valuable input to the development of NCQA’s Virtual Care Accreditation, a first-of-its-kind program highlighting the quality of care patients receive through virtual or hybrid modalities from many kinds of health care organizations.
Virtual Care Accreditation will highlight and distinguish organizations using virtual modalities to identify gaps in care, provide high-quality care and report and track outcomes.
Early versions of the program will focus on primary care and urgent care. Later versions will provide opportunities for organizations to distinguish themselves for other kinds of care they deliver virtually. Likely options include behavioral healthcare and acute, post-acute or specialty care.
"Care delivery has evolved, and virtual care is a new normal in desperate need of standardization and reliable quality assessment," said NCQA President Margaret E. O’Kane. "Virtual Care Accreditation will be a roadmap and the foundation of the safe, effective and equitable virtual care people need."
Four phases compose the roughly 10-month pilot program: learning, testing, preparation and evaluation. An early adopter program and launch of Virtual Care Accreditation will follow the pilot program in mid- to late-2024.
The Joint Commission also just announced it is launching a new Telehealth Accreditation Program for eligible hospitals, ambulatory and behavioral healthcare organizations, effective July 1, 2024. This accreditation program provides updated, streamlined standards to provide organizations offering telehealth services with the structures and processes necessary to help deliver safe, high-quality care using a telehealth platform.
The Telehealth Accreditation Program was developed for healthcare organizations that exclusively provide care, treatment and services via telehealth. Hospitals and other healthcare organizations that have written agreements in place to provide care, treatment and services via telehealth to another organization’s patients have the option to apply for the new accreditation.
The Telehealth Accreditation Program’s requirements contain many of the standards similar to other Joint Commission accreditation programs, such as requirements for information management, leadership, medication management, patient identification, documentation, and credentialing and privileging. Requirements specific to the new accreditation program include:
- - Streamlined emergency management requirements to address providing care and clinical support remotely rather than in a physical building.
- - New standards for telehealth provider education and patient education about the use of telehealth platforms and devices.
- - New standards chapter focused on telehealth equipment, devices and connectivity. - April 28 Workers Memorial Day Eventson April 23, 2024 at 2:18 PM
When the nation first observed Workers Memorial Day on April 28, 1970, an estimated 38 U.S. workers suffered fatal on-the-job injuries each day and many more endured debilitating respiratory diseases and other life-altering illnesses related to workplace exposures.
Today, work-related injuries in the U.S. claim about 15 people’s lives a day. In 2022, a reported 5,486 workers suffered fatal injuries, an increase of 296 worker deaths from 2021.
This year, the Department of Labor’s Occupational Safety and Health Administration and Mine Safety and Health Administration will remind the nation of the importance of protecting workers as families, friends, co-workers and the community at-large gather across the country for Workers Memorial Day events on Sunday, April 28 to honor people who didn’t come home at the end of their shift.
"As we honor our fallen workers on Workers Memorial Day, we must remember that behind each workplace fatality there are loved ones enduring unimaginable grief," said Assistant Secretary for Occupational Safety and Health Doug Parker. "It is for the lost workers and those left behind that we continue to fight for every worker’s right to a safe working environment. Our mission at OSHA is to ensure that when someone leaves for work, they know they’ll come home safe at the end of the day to the arms of their families and loved ones."
To commemorate Workers Memorial Day, the department will host a week-long series of events from April 22-25 to educate employers on the importance of safe and healthy workplaces. The series will culminate at an in-person and nationally livestreamed event at 1 p.m. EDT at its Washington headquarters where OSHA and MSHA leaders will join AFL-CIO President Liz Shuler and United Support & Memorial for Workplace Fatalities Board Member Stacy Sebald, whose 19-year-old son Mitchell McDaniel suffered fatally injuries in an agriculture incident in 2019.
"We come together on Workers Memorial Day to remember those we have lost in workplace accidents and to prevent work-related illnesses," said Assistant Secretary for Mine Safety and Health Chris Williamson. "At MSHA, we know a safe workplace isn’t a privilege - it’s every miner’s right. It is in the memory of fallen workers that we continue to advocate for each miner’s safety, health and dignity."
Join OSHA and MSHA representatives, families, workers, labor unions, advocates and others to remember the lives lost and raise awareness of workplace safety to help prevent future tragedies. Find a local Workers Memorial Day event.
Learn more about Workers Memorial Day events nationwide and view the April 25 livestream. - DWC Updates and Posts Time of Hire Noticeon April 23, 2024 at 2:18 PM
The Division of Workers’ Compensation (DWC) has posted an updated time of hire notice on its website. The time of hire notice was previously referred to as the time of hire pamphlet.
The notice, which is posted in English and Spanish versions, meets the requirements under Labor Code section 3551 to notify new employees about California workers’ compensation rights and benefits either at the time of hire or by the end of the first pay period.
The time of hire notice was created in 2011 to help employers and claims administrators ensure that employees know what to do in case of workplace injury.
This notice can be customized as long as the text meets the "time of hire" legal requirements. Title 8, California Code of Regulations section 9883 allows insurers, employers or private enterprises to prepare and publish the notice upon prior approval of the form and content of the notice by the Administrative Director. A revised time of hire notice should be submitted via email to DWC for review, using the subject line “Time of Hire Notice Approval Request.” - PAGA Plaintiff No Longer Required to Have an Individual Claimon April 22, 2024 at 3:18 PM
Lizbeth Balderas was a Fresh Start Harvesting, Inc employee. In June 2022, she filed a complaint for civil penalties for violations of the California Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.) on behalf of herself and 500 other current and former employees of defendant Fresh Start Harvesting, Inc
In her lawsuit she alleged, "Ms. Balderas is not suing in her individual capacity; she is proceeding herein solely under the PAGA, on behalf of the State of California for all aggrieved employees, including herself and other aggrieved employees."
Balderas claimed that Fresh Start did not provide employees with required meal break periods and rest periods, and that Fresh Start provided inaccurate wage statements, made untimely wage payments, and failed to pay wages at termination. Fresh Start filed a motion to compel arbitration.
Fresh Start filed a motion to compel arbitration.
On its own motion, the trial court gave notice of its intent to strike Balderas’s complaint. It said because she had not filed an individual action seeking PAGA relief for herself, she lacked standing to pursue a "non-individual" or representative PAGA action on behalf of other employees.
The trial court ruled Balderas lacked standing to bring a representative PAGA action on behalf of other employees because she did not allege "an individual claim" in the action. The Court of Appeal reversed in the published case of Balderas v. Fresh Start Harvesting, Inc. -B326759 (April 2024).
The Court of Appeal said that PAGA is a remedial statute intended to protect employees from employer misconduct. Remedial statutes must be broadly interpreted to achieve the legislative goals. (In re Delila D. (2023) 93 Cal.App.5th 953, 974.) PAGA provisions must be interpreted broadly to protect employees. (Adolph v. Uber Technologies, Inc., supra, 14 Cal.5th at p. 1122.)
Class or representative PAGA actions play an important function in enforcing [the Labor Code] by permitting employees . . . a relatively inexpensive way to resolve their disputes about unlawful employer conduct. (Piplack v. In-N-Out Burgers (2023) 88 Cal.App.5th 1281- 1286.)
The statutory goal is furthered by extending broad standing to aggrieved employees that does not depend on the viability or strength of a plaintiff’s individual PAGA claim. In fact, the inability for an employee to pursue an individual PAGA claim does not prevent that employee from filing a representative PAGA action. California courts have consistently held that " ' [p]aring away the plaintiff’s individual claims' " for one reason or another, " 'does not deprive the plaintiff of standing to pursue representative claims under PAGA.' " (Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104 - 1122.)
These broad-standing policies that allow employees the freedom to bring representative PAGA actions to challenge unfair employer policies had not been questioned until 2022 when the United State Supreme Court made some observations about PAGA standing that conflicted with what the California Legislature intended.
In Viking River Cruises v. Moriana (2022) _ U.S. _ [213 L.Ed.2d 179, 200-201] (Viking River), the United States Supreme Court wrote, "Under PAGA’s standing requirement, a plaintiff can maintain non-individual PAGA claims in an action only by virtue of also maintaining an individual claim in that action." (Italics added.) "When an employee’s own dispute is pared away from a PAGA action, the employee is no different from a member of the general public, and PAGA does not allow such persons to maintain suit." (Ibid., italics added.)
In reliance on this language, the trial court struck Balderas’s "non-individual" representative PAGA action. It noted that in her complaint Balderas alleged, "Ms. Balderas is not suing in her individual capacity; she is proceeding herein solely under the PAGA, on behalf of the State of California for all aggrieved employees, including herself and other aggrieved employees" of Fresh Start. Noting that she did not file her own individual PAGA claim, the court found under Viking River she could not bring this representative PAGA action for penalties.
In Adolph v. Uber Technologies, Inc., supra, 14 Cal.5th at page 1119, our Supreme Court held Viking River was incorrect on PAGA standing and its decision on that issue may not be followed by California courts. The court wrote, "Because ‘[t]he highest court of each State . . . remains "the final arbiter of what is state law" (Montana v. Wyoming (2011) 563 U.S. 368, 378, fn. 5 [179 L.Ed.2d 799]), we are not bound by the high court’s interpretation of California law."
The Adolph court concluded that the Viking River requirement of having to file an individual PAGA cause of action to have standing to file a representative PAGA suit was incorrect. There are only two requirements for PAGA standing. "The plaintiff must allege that he or she is (1) ‘someone "who was employed by the alleged violator" and (2) someone "against whom one or more of the alleged violations was committed." (Adolph v. Uber Technologies, Inc., supra, 14 Cal.5th at p. 1120.)
Balderas met the standing requirements.The order striking the pleading is reversed. Costs on appeal are awarded to appellant. - Cal/OSHA Cites Construction Company $371K for Fatal Trench Collapseon April 22, 2024 at 3:18 PM
Cal/OSHA has cited D’Arcy & Harty Construction, Inc. $371,100 for failing to protect employees working in a trench excavation at a construction site in San Francisco. On September 28, 2023, an employee was replacing sewer parts inside the eight-foot-deep trench at 1101 Oak Street when the excavation collapsed, fatally burying the 24-year-old worker.
The 25-year-old man who died was identified as Javier Romero from Alameda County. Romero became trapped under 8 feet of dirt when the trench collapsed in the area of Oak and Divisadero streets.
He was working on part of the San Francisco Public Utilities Commission's Panhandle and Inner Sunset Large Sewer Rehabilitation Project to upgrade existing sewer mains and sewer laterals in the area, SFPUC officials said at the time.
Cal/OSHA investigators determined D’Arcy & Harty Construction, Inc. committed willful-serious safety violations by failing to provide a protective system for employees working in the trench and for failing to provide a means of escape such as a ladder in case of collapse - hazards the employer had been warned about weeks before.
In that earlier inspection, a Cal/OSHA investigator had told D’Arcy & Harty Construction Inc. that a trench excavation at 3475 22nd Street did not have adequate shoring and did not have a ladder or other means for workers to escape in case of collapse. The hazards at that San Francisco site were abated before work was able to continue.
Cal/OSHA cited D’Arcy & Harty Construction, Inc., for eight violations total in the fatal September 28 incident, including three categorized as serious accident-related for failure to conduct daily safety inspections of the trench for evidence of possible cave-ins before an employee is allowed to work inside the trench, and failure to properly use equipment and materials to prevent employee exposure to excavation and trenching hazards.
Cal/OSHA offers extensive information and resources on working safely in the construction industry, including how to safely perform trench and excavation operations. Before starting excavation work, the approximate locations of all underground installations that may be encountered during excavation operations must be determined and the proper notification must be made to the appropriate agency in either Northern or Southern California. A permit from the local Cal/OSHA district office must be obtained before the construction of excavations five feet or deeper into which any person is required to descend.
Acting Cal/OSHA Chief Debra Lee said: "Excavations are known hazards and trenches must be evaluated, shored or shielded before workers enter to protect them. This worker’s death is tragic because it was avoidable." - EEOC Discrimination Form Facts Must Match Lawsuit Factson April 18, 2024 at 2:00 PM
In May 2015, Arno Patrick Kuigoua started working for the California Department of Veterans Affairs as a registered nurse at the Knight Veterans Home in Lancaster, California. His employment with the Department ended in October 2018. The Department fired him after determining he sexually harassed women and delivered substandard care that injured patients.
Kuigoua appealed his termination to the State Personnel Board, which, after a six-day hearing, rejected his appeal. The administrative law judge ruled Kuigoua’s dismissal was just and proper. Unsuccessful in altering this ruling were Kuigoua’s petition for rehearing, his petition for writ of mandate, his appeal of the writ denial, and his 2022 petition for review by the California Supreme Court.
Just before his State Personnel Board hearing, on April 2, 2019, Kuigoua filed an administrative charge of employment discrimination. He filed this charge concurrently with the California Department of Fair Employment and Housing and the federal Equal Employment Opportunity Commission.
Kuigoua’s Commission Form reported that, during three and a half months in 2018, someone discriminated against him on the basis of Kuigoua’s male gender. Kuigoua also suffered retaliation, apparently for reporting this discrimination. The retaliation took the form of denying him the opportunity to earn overtime pay. The Department failed to ameliorate these problems and finally discharged him altogether. Kuigoua said his direct antagonist was Julian Manalo.
An equal opportunity officer named Robert Hennig investigated these charges. Hennig found no evidence that Kuigoua had suffered discrimination because of his male gender and he was given a right-to-sue notice.
On March 5, 2020, Kuigoua sued the Veterans Department in state court on state statutory claims. This complaint asserted four causes of action and the factual allegations in this complaint cover about eight pages.
Kuigoua’s judicial complaint stated nothing about gender discrimination against males at the West Los Angeles facility. Now the site of the oppression was 60 miles north, in Lancaster. Neither was there mention of antagonist Manalo. The retaliation now was for complaining to Ancheta about harassment from Smith and Quintua: three people Kuigoua omitted from his Commission Form. The time frame was different: over the three-year interval from 2015 to 2018, rather than the three and a half months in 2018.
Defendant Veterans Department responded to Kuigoua’s lawsuit. The Department noted the lawsuit was about alleged events different from those Kuigoua alleged in his Commission Form. The Department moved for summary judgment on the basis Kuigoua had not exhausted his administrative remedies.
The trial court granted the Department’s motion. The court’s single-spaced eight-page statement of decision carefully applied the law to the disparity between Kuigoua’s factual allegations in his administrative and judicial complaints. Kuigoua appealed.
The Court of Appeal of the 2nd Appellate District affirmed the trial court in the published case of Kuigoua v. Dept. of Veteran Affairs -B323735 (April 2024).
The Court of Appeal said "Kuigoua loses this appeal because he changed horses in the middle of the stream. His agency complaint was one animal. On the far bank, however, his lawsuit emerged from the stream a different creature. Changing the facts denied the agency the opportunity to investigate the supposed wrongs Kuigoua made the focus of his judicial suit. The court rightly ruled Kuigoua failed to exhaust his administrative remedies. "
Employees like Kuigoua who wish to sue under the Fair Employment and Housing Act must exhaust the administrative remedy that statute provides. They do so by filing a complaint with the Department of Fair Employment and Housing. Filing this administrative complaint is a mandatory prerequisite to suing in court. (Guzman v. NBA Automotive, Inc. (2021) 68 Cal.App.5th 1109 at p. 1117; see Clark, supra, 162 Cal.App.5th at p. 308, fn. 21.)
Once the agency receives this complaint, it investigates the alleged unlawful practice and decides whether it can resolve the matter by conference, conciliation, and persuasion. If these measures fail, the agency may issue an accusation. If the agency decides against issuing an accusation, it issues a right-to-sue letter to the aggrieved person. (Guzman, supra, 68 Cal.App.5th at p. 1117.)
"Summary judgment is now recognized as a particularly suitable means to test the sufficiency of the plaintiff’s or defendant’s case." - Private Equity Healthcare Bankruptcies are on the Riseon April 18, 2024 at 1:59 PM
The mission of the Private Equity Stakeholder Project is to identify, engage, and connect stakeholders affected by private equity with the goal of engaging investors and empowering communities, working families, and others impacted by private equity investments. It's vision is to bring transparency and accountability to the private equity industry and empower impacted communities.
According to a recent report by the Project 2023 was a record year for large healthcare bankruptcies, and healthcare companies owned by private equity firms accounted for some of the largest bankruptcies: KKR’s Envision Healthcare, American Securities’ Air Methods, and American Physician Partners, owned by Brown Brothers Harriman Capital Partners, all made major headlines.
The healthcare default and bankruptcy wave is projected to continue in 2024 as companies are increasingly facing credit rating downgrades and potential defaults - and most of the companies at the highest risk are owned by private equity firms.
Bankruptcies in healthcare are more than just legal or financial events - they can lead to closures, disruption or cessation of critical healthcare services, and layoffs. Such outcomes have ripple effects on the broader healthcare infrastructure, such as overburdening healthcare providers that need to fill the gaps left by closures. In addition, Medicare, Medicaid, and other government health programs make up a significant component of revenue for many healthcare companies, which means private equity-driven bankruptcies are not just threatening healthcare infrastructure, but in many cases publicly-funded healthcare infrastructure.
There were an estimated 80 healthcare bankruptcies in 2023, and PESP found that at least 17 of those companies were backed by private equity firms. That amounts to approximately 21% of all healthcare bankruptcies last year. There were also at least 12 bankruptcies by companies with venture capital backing, accounting for another 15% of the year’s total healthcare bankruptcies.
The number of private equity healthcare bankruptcies has increased substantially in recent years. In 2019, there were 8 private equity healthcare bankruptcies, marking a 112.5% increase over the last 5 years.
Some private equity firms are repeat offenders when it comes to healthcare bankruptcies and unmanageable debt. For example, private equity firm KKR owned two major healthcare companies that filed for bankruptcy in 2023: physician staffing giant Envision Healthcare and oncology provider GenesisCare. In addition, KKR owns three other companies that are distressed and carry heightened risk for default: Covenant Physician Partners, Global Medical Response, and One Call Corporation.
In another example, H.I.G. Capital’s weight management company Jenny Craig filed for bankruptcy in 2023, its mental health company Community Intervention Services filed for bankruptcy in 2021 after one of its subsidiaries paid a four-million-dollar settlement for alleged Medicaid fraud, and its correctional healthcare company Wellpath Holdings currently has "very high credit risk."
Moody’s Investors Service rates companies based on their probability of default. Out of 45 healthcare companies with a probability of default rating of B3 negative and lower, which is considered speculative, as of November 2023, all but three were owned by private equity firms - 93% of the most distressed healthcare companies in North America. - Managing Personnel Not Outrageous Conduct to Avoid Work Comp Exclusivityon April 17, 2024 at 2:24 PM
Ferrellgas’s business is the transportation and installation of propane gas, a hazardous material regulated by the United States Department of Transportation (DOT).
Tom Faley was hired by Ferrellgas as a driver in 2016. On March 11, 2018, Faley was promoted to one of the district manager positions and in this role was directly supervised by Denise Whisman. Whisman was the general manager of Ferrellgas’s service center in San Diego (where Faley worked), and oversaw the center’s operations and employees. Two district managers reported to Whisman.
In June 2018, e-mails between Faley and Whisman document Faley’s deficiencies (primarily with customer and employee communication) and their back and forth to provide Faley with adequate training for his new role and to manage the work effectively. In August 2018, Faley underwent his first performance review as district manager with Whisman. Whisman reported that Faley was deficient in two areas, customer retention and business growth, and was meeting expectations in three others.
Performance problems continued and were well documented between Faley and Wishman for the next year. Ultimately in July 2029 . Whisman told Faley he was being terminated for performance reasons. Faley asked if he could stay on as a driver or technician, since the problems were related to his management. Whisman said no, and shortly after Faley was escorted from the premises.
Faley brought suit against Ferrellgas for retaliation under the Fair Employment and Housing Act (FEHA; Gov. Code, § 12900 et seq.), failure to prevent retaliation under FEHA, retaliation under Labor Code section 1102.5, wrongful termination against public policy, and intentional and negligent infliction of emotional distress.
After discovery, Ferrellgas brought a successful motion for summary judgment against Faley. The trial court found that Faley failed to show that Ferrellgas’s "legitimate, documented non-retaliatory reasons" for terminating his employment were mere pretext and that no triable issue of fact was raised as to Faley’s claims for retaliation.
The trial court also found Faley’s claims for intentional and negligent infliction of emotional distress were not actionable because nothing in the record gave "rise to the sort of ‘outrageous, or ‘despicable’ conduct" necessary to support those causes of action and that they were barred by the exclusivity provisions of the Workers’ Compensation Act.
The Court of Appeal affirmed the dismissal of his case in the unpublished case of Faley v. Ferrellgas -D081184 (April 2024).
On appeal, Faley asserts the court erred because triable issues of fact remain as to whether Ferrellgas had a retaliatory motive for his termination. He also contends the court used the wrong legal standard for his retaliation claim under Labor Code section 1102.5, requiring reinstatement of that cause of action. Finally, with respect to his emotional distress claims, Faley asserts they are not barred by workers’ compensation exclusivity, and that triable issues of fact remain with respect to the claims.
The Court of Appeal rejected each of Faley’s arguments and affirm the judgment in favor of Ferrellgas, as it discussed its reasoning for each of the issues raised.
A cause of action for intentional infliction of emotional distress exists when there is ‘(1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff’s suffering severe or extreme emotional distress; and (3) actual and proximate causation of the emotional distress by the defendant’s outrageous conduct.
A defendant’s conduct is "outrageous" when it is so extreme as to exceed all bounds of that usually tolerated in a civilized community. And the defendant’s conduct must be "intended to inflict injury or engaged in with the realization that injury will result." (Hughes v. Pair (2009) 46 Cal.4th 1035, 1050-1051.)
Further,an essential element of an Intentional Infliction of Emotional Distress claim is a pleading of outrageous conduct beyond the bounds of human decency.
Managing personnel is not outrageous conduct beyond the bounds of human decency, but rather conduct essential to the welfare and prosperity of society. A simple pleading of personnel management activity is insufficient to support a claim of intentional infliction of emotional distress, even if improper motivation is alleged. If personnel management decisions are improperly motivated, the remedy is a suit against the employer for discrimination. (Janken v. GM Hughes Electronics (1996) 46 Cal.App.4th 55, 80) - Omaha National Acquires California Work Comp Carrieron April 17, 2024 at 2:24 PM
Omaha National Group Inc., offers AM Best A- (Excellent) rated workers’ compensation coverage through more than 2,500 agencies. Since its marketing launch in 2017, the company has grown to more than 250 employees and is approaching $200 million of in-force premium.
Omaha National announced that it has acquired Sutter Insurance Company, a California domiciled insurance carrier that has been renamed Omaha National Casualty Company. Omaha National also owns Omaha National Insurance Company, which is domiciled in Nebraska.
"The acquisition of a carrier licensed in California, which is our largest market, is a major step forward in operating as a national full-stack carrier," CEO Reagan Pufall said.
"Since inception, our plan has been to combine strong growth with exceptional underwriting results and that’s what we’ve achieved. We’re approaching $200 million in-force premium while at the same time our loss ratio, including allocated loss adjustment expenses, has been below 60% every year we’ve been in operation."
"We are now licensed to issue policies in 37 states and continue to expand toward nationwide coverage," Omaha National General Counsel Jim Hempel said. "We enjoy excellent relationships with our fronting partners but writing on our own paper immediately enhances our underwriting results and allows us to better serve our policyholders and broker partners."
In another milestone, Omaha National is now implementing Oncore Underwriting, the company’s proprietary underwriting and policy management application.
"One of our core strategic principles is that we design and develop our own operational software entirely in-house," said Bryan Connolly, Omaha National’s Chief Operating Officer.
"When we implemented Oncore Claims in 2021 it generated remarkable improvements in our claims results, and we expect Oncore Underwriting to have a similarly profound impact. When Oncore CRM is implemented in 2025 all key functions within the company will be performed within a single proprietary application."