Daily News for November 10th, 2026

• 9th Cir. Blocks California Climate-Risk Law and Scope 3 Reporting
  on November 10, 2026 at 10:04 AM

  In 2023, California enacted two companion climate-disclosure statutes. The Climate Corporate Data Accountability Act, known as SB 253 and codified at Health and Safety Code § 38532, applies to entities doing business in California with more than $1 billion in annual revenue. It requires them to report their greenhouse gas emissions each year under the Greenhouse Gas Protocol in three categories: Scope 1 (direct emissions from sources the company owns or controls), Scope 2 (emissions from energy the company purchases), and Scope 3 (indirect upstream and downstream emissions across the company’s value chain, from sources it does not own or control). The Climate-Related Financial Risk Act, known as SB 261 and codified at Health and Safety Code § 38533, applies to companies with more than $500 million in annual revenue doing business in California. It requires a biennial report on the company’s “climate-related financial risk” under the framework of the Task Force on Climate-related Financial Disclosures, along with the measures the company has adopted to reduce and adapt to that risk. According to the dissent, both laws carry administrative penalties and annual fees payable to the California Air Resources Board (CARB).
  
  The U.S. Chamber of Commerce, the California Chamber of Commerce, the American Farm Bureau Federation, the Los Angeles County Business Federation, the Central Valley Business Federation, and Western Growers Association sued the CARB chair and executive officer and the California Attorney General in the Central District of California. They alleged that both statutes facially violate the First Amendment by compelling speech. Other, non-First Amendment claims were not part of this appeal.
  
  The district court denied the business groups’ motion for a preliminary injunction. It concluded that both laws regulate commercial speech, so strict scrutiny did not apply. It reviewed SB 261 under intermediate scrutiny and SB 253 under the more deferential standard of Zauderer v. Office of Disciplinary Counsel (1985) 471 U.S. 626, and found that the plaintiffs had not shown a likelihood of success, irreparable harm, or that the equities and public interest favored them. The plaintiffs appealed under 28 U.S.C. § 1292(a)(1). On November 18, 2025, the Ninth Circuit enjoined enforcement of SB 261 pending appeal, but declined to do the same for SB 253.
  
  In the published case of Chamber of Commerce of the United States of America v. Sanchez, No. 25-5327 (November 2026), the Ninth Circuit Court of Appeals affirmed in part, reversed in part, and remanded the district court’s order denying a preliminary injunction. The panel affirmed the denial as to SB 253’s Scope 1 and Scope 2 emissions disclosures, which may therefore proceed. It reversed the denial as to SB 253’s Scope 3 disclosure requirement and as to SB 261 in its entirety, finding both likely unconstitutional. It remanded for the district court to decide in the first instance whether the Scope 3 provision can be severed from the rest of SB 253, which contains a severability clause.
  
  The court began with the governing framework. Content-based compelled speech is presumptively unconstitutional and draws strict scrutiny, as in X Corp. v. Bonta (9th Cir. 2024) 116 F.4th 888 and National Institute of Family & Life Advocates v. Becerra (2018) 585 U.S. 755. Commercial speech generally receives intermediate scrutiny under Central Hudson Gas & Electric Corp. v. Public Service Commission (1980) 447 U.S. 557, and purely factual, uncontroversial disclosures may receive the lighter Zauderer review. The preliminary-injunction factors came from Winter v. Natural Resources Defense Council (2008) 555 U.S. 7.
  
  Scope 1 and Scope 2. Relying heavily on Pharmaceutical Research & Manufacturers of America v. Stolfi (9th Cir. 2025) 153 F.4th 795, the majority held that these provisions compel factual emissions information bearing on a company’s own operations and its risk profile in capital markets, and therefore regulate commercial speech. It rejected the argument that commercial speech is limited to speech proposing a transaction. The court did not decide whether Zauderer or intermediate scrutiny applied, because the provisions likely survive the tougher intermediate test. The State had substantial interests in giving investors better information and in reducing emissions, though the court found no record support for a separate anti-“greenwashing” rationale. Studies showing that mandatory Scope 1 and 2 reporting produced emissions reductions of roughly 7 to 8 percent persuaded the court that the requirements directly advance those interests and are not more extensive than necessary. The facial challenge also failed under Moody v. NetChoice, LLC (2024) 603 U.S. 707, because most covered companies are publicly traded, so any unconstitutional applications do not substantially outweigh the lawful ones. On the remaining factors, the plaintiffs showed no irreparable harm, and the equities favored the State.
  
  Scope 3. The court reached a different result for value-chain emissions. Because Scope 3 concerns diffuse conduct by third parties rather than the company’s own operations, the panel held it is not tethered closely enough to the company’s commercial transactions to qualify as commercial speech, so strict scrutiny applies. The State could not carry that burden. Companies do not hold Scope 3 data the way they hold their own emissions data, and the record did not show their estimates would be more reliable than the State’s own. The link to investor decisions was too attenuated, and no study examined mandatory Scope 3 reporting, so the emissions-reduction evidence did not support it.
  
  SB 261. The court held that climate-risk reports require predictive and normative judgments, under a state-prescribed framework, on a politically charged subject. That makes them noncommercial speech subject to strict scrutiny, which the majority said the State had “all but concede[d]” it could not satisfy. Even assuming compelling interests, SB 261 was not narrowly tailored, because less restrictive options existed, such as publicizing voluntary disclosures or regulating emissions directly. For both SB 261 and Scope 3, the loss of First Amendment freedoms constituted irreparable harm, and the equities and public interest favored the plaintiffs.
  
  The partial dissent. Judge Bennett would have treated both statutes as compelling noncommercial speech and enjoined them both. In his view, commercial speech requires a close tie to a specific product or service, and firm-level emissions data informs readers about companies, not particular products. He warned that equating investors’ interest in companies with consumers’ interest in products could justify broad compelled disclosures, including ones aimed at people in employment markets, citing Valle del Sol Inc. v. Whiting (9th Cir. 2013) 709 F.3d 808.
  
  In a same-day client alert, Foley & Lardner observed that SB 253’s Scope 1 and 2 filing deadline remains November 10, 2026, the day after the ruling, and said it expects the district court to enter a preliminary injunction against the Scope 3 and SB 261 requirements in line with the opinion. That November 10 date reflects CARB’s extension of the original August 10, 2026 first-year deadline, as described in CARB’s rulemaking materials. Further review, either by the full Ninth Circuit or the U.S. Supreme Court, remains possible.
  

• Drivers Too Late to Intervene and Challenge Class Settlement
  on November 10, 2026 at 10:04 AM

  Apria Healthcare provides home healthcare services. Its products are delivered by drivers and couriers, some of them employed through staffing agencies. In February 2022, former Apria licensed vocational nurse Travis Smith filed a wage-and-hour class action in Sutter County Superior Court on behalf of nonexempt Apria employees, and he later filed a separate action seeking civil penalties under the Private Attorneys General Act (PAGA), Labor Code § 2698 et seq. A 2023 stipulated order dismissed the class action, sent Smith’s individual PAGA claims to arbitration, and stayed the representative claims.
  
  Meanwhile, a separate Los Angeles case, Quintero v. Apria Healthcare, produced a certified class of delivery drivers and settled for $16.5 million. In July 2024, the same plaintiffs’ firm filed a new class action in Los Angeles County Superior Court on behalf of drivers Angela Tisdale and Terrance Pratt, asserting the Quintero claims for drivers hired after September 14, 2021. Apria removed that case to federal court in November 2024.
  
  Back in Sutter County, the Smith parties accepted a mediator’s proposal around June 2024 and signed a memorandum of understanding in October 2024. With Apria’s agreement, Smith filed an amended class and representative complaint on November 1, 2024 that revived the wage-and-hour claims and added a delivery driver, Uriel Arauz, along with courier claims mirroring those in the Tisdale/Pratt case. The settlement totaled $5.75 million, with $977,500 allocated to roughly 350 delivery drivers. Counsel for Tisdale and Pratt said the per-person value for the Quintero couriers was nearly 50 times that of the Smith couriers.
  
  Beginning in August 2024, Tisdale and Pratt’s lawyers accused the Smith parties of a “reverse auction,” in which a defendant facing several class actions settles with the weakest plaintiffs’ counsel in hopes of winning approval of a cheap deal that bars the other claims. They repeated that charge in an October 15, 2024 brief in the federal case. Apria refused to disclose the memorandum’s terms. The Smith settlement won preliminary approval on April 21, 2025. Tisdale and Pratt say they learned of it on April 30, and on May 8, 2025 they filed an ex parte application to intervene, reconsider preliminary approval, and transfer the case to Los Angeles.
  
  The Sutter County Superior Court denied the application, finding the reverse-auction theory had no basis beyond hope and conjecture. Its June 6, 2025 order denied the motion to intervene without making an express finding on timeliness. Tisdale and Pratt appealed. While the appeal was pending, the court granted final approval and entered judgment in August 2025. According to evidence Apria submitted on appeal, Tisdale and Pratt opted out of the settlement, and settlement checks went out in September 2025.
  
  In the published case of Smith v. Apria Healthcare, No. C104113 (November 2026), the California Court of Appeal, Third Appellate District, affirmed the trial court’s order denying intervention. Before reaching the merits, the court denied Apria’s motion to dismiss the appeal as moot. It held that, even assuming the settlement was inadequate, the application to intervene was untimely, which defeated both mandatory and permissive intervention. Apria and the Smith plaintiffs were awarded their costs on appeal.
  
  Apria argued that the final judgment, the lack of an appeal from it, and the distribution of settlement funds made the appeal moot under Hindman v. Owl Drug Co. (1935) 4 Cal.2d 451. The court disagreed. A 1977 amendment to Code of Civil Procedure § 387 permits intervention even after judgment, as recognized in Mallick v. Superior Court (1979) 89 Cal.App.3d 434. In addition, a separate pending appeal by a non-objecting class member, Ahsaki Hudson (No. C105695), challenging the denial of her motion to vacate the judgment could theoretically revive the Smith action and give Tisdale and Pratt a path back in. The court expressed no view on the merits of that appeal.
  
  Both mandatory and permissive intervention under section 387 require a “timely application.” Noting that the standard of review for mandatory intervention is unsettled, the court presumed the trial court impliedly found the application untimely and reviewed that finding for abuse of discretion, following Britt v. East Side Hardware Co. (1914) 25 Cal.App. 231. Tisdale and Pratt effectively conceded that standard.
  
  Timeliness is judged by the totality of the circumstances, as stated in Crestwood Behavioral Health, Inc. v. Lacy (2021) 70 Cal.App.5th 560, and runs from when a would-be intervener knew or should have known its interests were not being adequately protected. Borrowing from R&G Mortgage Corp. v. Federal Home Loan Mortgage Corp. (1st Cir. 2009) 584 F.3d 1, the court held that awareness of a measurable risk is enough; certainty is not required. Tisdale and Pratt’s own evidence showed they suspected a reverse auction by late August 2024 and got no answers from Apria or the Smith plaintiffs. By the time they publicly raised the charge on October 15, 2024, the court said, that “should have been their cue to act.” Not knowing the precise settlement terms did not excuse waiting.
  
  First, the stage of proceedings weighed against intervention, because the application came after preliminary approval and class notice, on the eve of final settlement. Second, the prejudice to the settling parties was significant: intervention in October 2024 might have spared months of work, but intervention in May 2025 would have scuttled the deal with no assurance of a better outcome for the class. Third, the delay of more than six months was unjustified. Because untimeliness defeated both forms of intervention, the court did not reach the remaining arguments or decide whether the settlement was fair.

• SCIF’s $555K Premium Win Grows by $908K in Prejudgment Interest
  on November 9, 2026 at 8:14 AM

  This unpublished California Court of Appeal opinion, which under California Rules of Court, rule 8.1115 generally may not be cited or relied on by other courts or parties, is the latest chapter in a long-running dispute over payment by an employer for SCIF insurance over a single policy year. State Compensation Insurance Fund (SCIF) issued a 2005 workers' compensation policy to ReadyLink Healthcare, Inc., a nurse staffing company, with an estimated premium of $250,000 that ReadyLink paid up front. After the policy year closed, SCIF audited ReadyLink's payroll and other records to set the final premium retroactively, with any difference to be settled by an additional payment or a refund.
  
  The dispute centered on per diem payments to ReadyLink's nurses, which were generated by proprietary software and which ReadyLink did not require nurses to document. Counting those payments as compensation produced an additional premium of $555,327.53. As the Court of Appeal recounted in an earlier published opinion, the Insurance Commissioner approved SCIF's application of the relevant regulation, and ReadyLink's writ challenge to that decision failed. SCIF then sued for breach of contract in Riverside County Superior Court to collect the additional premium.
  
  The trial court first granted SCIF judgment on the pleadings, but the Court of Appeal reversed in State Comp. Ins. Fund v. ReadyLink Healthcare, Inc. (2020) 50 Cal.App.5th 422. At the jury trial on remand, SCIF presented a premium collection specialist and a certified public accountant to support the $555,327.53 figure. ReadyLink did not rebut them, stipulated that the invoice arithmetic was correct, and relied on a waiver defense. The jury rejected waiver but nonetheless found that ReadyLink owed no additional premium. The trial court granted judgment notwithstanding the verdict for the full $555,327.53, and the Court of Appeal affirmed in the unpublished opinion of State Compensation Ins. Fund v. ReadyLink Healthcare (May 8, 2026, D083359).
  
  While ReadyLink's appeal from that judgment was pending, SCIF moved for prejudgment interest under Civil Code § 3287. SCIF asked for $907,998.38 under subdivision (a), measured from 30 days after it invoiced ReadyLink through the date of judgment. In the alternative, it proposed $912,562.71 under subdivision (a) measured from the invoice date, or $493,404.61 under subdivision (b) measured from the filing of the action. After oral argument, the Riverside County Superior Court (Judge Kira L. Klatchko) awarded the $907,998.38. ReadyLink appealed, without disputing SCIF's math.
  
  In the unpublished case of State Compensation Insurance Fund v. ReadyLink Healthcare, Inc., No. D086046 (November 2026), the California Court of Appeal, Fourth Appellate District, Division One, affirmed the postjudgment order awarding SCIF $907,998.38 in prejudgment interest.
  
  The panel started with the two parts of section 3287. Subdivision (a) provides for nondiscretionary interest on liquidated damages, while subdivision (b) gives courts discretion over interest on unliquidated contract damages, as explained in Hewlett-Packard Co. v. Oracle Corp. (2021) 65 Cal.App.5th 506. Reviewing the subdivision (a) award de novo under KGM Harvesting Co. v. Fresh Network (1995) 36 Cal.App.4th 376, the court noted that the provision "requires both certainty and vesting," quoting International Currency Technologies v. ICT, Inc. (2025) 112 Cal.App.5th 639. That test compensates plaintiffs for the lost use of their money, and it protects defendants by limiting mandatory interest to cases where the amount owed is certain, drawing on Watson Bowman Acme Corp. v. RGW Construction, Inc. (2016) 2 Cal.App.5th 279.
  
  The court found both requirements met. The damages were certain because the amount came from ReadyLink's own payroll records, two witnesses corroborated it without being impeached or rebutted, and ReadyLink's counsel conceded at trial that he would not dispute the calculation. The damages vested on the day SCIF's properly calculated invoice had remained unpaid for 30 days, so interest ran from that day and the award was mandatory.
  
  ReadyLink argued that SCIF was not obligated to collect the premium, could have enforced its position only prospectively, and offered no evidence that it needed the money. The panel found these points indistinguishable from those it had already rejected as irrelevant to damages in its May 2026 opinion, which it could cite as law of the case under rule 8.1115(b)(1). That opinion reasoned that a promisee is injured by a breach even if it can get by without the money: "If it received less than what it bargained for, it is harmed."
  
  Two further arguments failed in footnotes. Having to prove the amount at trial did not make it uncertain, the court said, because damage and its amount are elements of every breach of contract action. ReadyLink also contended at oral argument that the disputed per diem inputs made the damages uncertain, but its reply brief acknowledged it never disputed that the invoice arithmetic was calculable, and the court noted an administrative law judge's conclusion that ReadyLink did not require nurses to document per diem expenses.
  
  Finally, ReadyLink asked the court to shorten the interest period under subdivision (b) by excluding the time before SCIF filed suit and the time its appeal of the pretrial judgment was pending. Because subdivision (b) applies only to unliquidated damages and these damages were liquidated, the trial court had no discretion to shorten the period.

• SoCal Clinical Lab and Owner Resolves Kickbacks Case for $1.25M
  on November 9, 2026 at 8:14 AM

  A Fountain Valley clinical laboratory and its co-owner have agreed to pay $1.25 million to resolve federal allegations that they paid volume-based commissions to marketers and structured the invoices to look like flat fees, the U.S. Attorney's Office for the Eastern District of California announced on November 6, 2026. It is at least the third announced resolution to come out of a whistleblower lawsuit brought by two men with roots in the laboratory marketing business.
  
  According to the Justice Department, Lab Genomics LLC and owner Leena Dalal knowingly and willfully paid value- and volume-based commissions to three independent contractor marketers from January 2020 through September 2022. The payments allegedly were meant to induce the marketers to arrange for or recommend that healthcare providers order and refer laboratory tests to Lab Genomics. The government further alleges the defendants knew the payments did not comply with the Anti-Kickback Statute, making resulting claims actionable under the False Claims Act. The release refers to Medicare, Medicaid and other federally funded programs, while the covered conduct defined in the settlement agreement is limited to Medicare claims. These are allegations only. There has been no determination of liability, and the agreement states it is not an admission by the defendants.
  
  The settlement agreement supplies details the press release does not. It describes Dalal as a founder and co-owner, designates $625,000 of the payment as restitution, and spreads the obligation over four principal installments of $312,500 through August 2027, with 4 percent annual interest bringing the scheduled total to $1,301,095.89. An uncured default would accelerate the balance at 12 percent interest and could lead to exclusion from federal health programs until the balance is paid. The agreement does not mention a corporate integrity agreement, and it does not release criminal liability or the government's administrative rights, including exclusion.
  
  The whistleblowers, Sunil Wadhwa and Ken Newton, will receive $225,000, or 18 percent of the settlement. The False Claims Act sets a range of 15 to 25 percent when the government proceeds with a whistleblower's case. The Justice Department earlier identified the pair as co-founders of Financial Halo LLC/MedXPrime, a former third-party marketer for Admera Health LLC, which agreed in July 2024 to pay $5,389,648 to resolve claims from their suit, with $862,343 going to the relators. In December 2025, Virginia's NEXT Bio-Research Services LLC agreed to pay at least $758,000, with $113,700 to the relators, over alleged sham physician fees and marketer commissions. By this publication's tally, the three announced settlements total at least about $7.4 million, roughly $1.2 million of it to the whistleblowers. The release captions the suit as United States ex rel. Wadhwa and Newton v. Admera Health, LLC, et al. (E.D. Cal.), while the agreement lists it as United States ex rel. Wadhwa, et al. v. Lab Genomics, LLC et al., No. 2:19-cv-01288-JAM-JDP.
  
  U.S. Attorney Eric Grant said in the release that "It is unlawful to evade the safeguards that protect federal health care programs." HHS-OIG's Miranda L. Bennett said such schemes put financial incentives ahead of independent medical decision-making. The release also ties the case to the Administration's new Task Force to Eliminate Fraud and National Fraud Enforcement Division. The Civil Division's Fraud Section and the Eastern District handled the matter with assistance from HHS-OIG.
  
  Commission arrangements with outside sales contractors have drawn government attention for years. In United States ex rel. Lutz v. Mallory (4th Cir. 2021) 988 F.3d 730, the Fourth Circuit upheld a judgment of more than $100 million in a case involving volume-based commissions that blood-testing laboratories paid to independent sales contractors. The picture is more nuanced under the separate Eliminating Kickbacks in Recovery Act (EKRA), which is not cited in the Lab Genomics release. In United States v. Schena (9th Cir. 2025) 142 F.4th 1217, the Ninth Circuit said percentage-based pay for marketers, without more, is not a per se EKRA violation, while affirming the conviction of a lab operator whose marketers were directed to mislead referring providers. The Lab Genomics settlement resolves no such legal question.
  
  The broader enforcement climate remains active. The Justice Department reported more than $6.8 billion in False Claims Act recoveries for fiscal 2025, a single-year record, with over $5.7 billion tied to health care and a record 1,297 whistleblower suits filed.
  
  For insurers and employers, the case involves federal programs only. Neither the release nor the agreement mentions private insurance or workers' compensation. But the same sales practices can reach other payers. EKRA extends to private plans, and according to an analysis by the law firm Mintz, the Justice Department in a September 25, 2026 Federal Register notice denied a clinical laboratory trade group's request to permit variable pay for employed sales representatives, citing concerns that volume-linked pay can compromise patient choice, encourage overutilization and raise costs. In California's workers' compensation system, Labor Code § 3215 separately makes it a crime, except as otherwise permitted by law, to offer or accept consideration for referring clients or patients for compensation services.

• New DOL Rules Allow Employers to See What Their PBMs Earn
  on November 5, 2026 at 8:09 AM

  For years, employers have paid pharmacy benefit managers to hold down prescription drug costs without being able to see how much those PBMs were earning along the way. A new federal rule is meant to change that. The Department of Labor’s Employee Benefits Security Administration released a final regulation on October 29, 2026, and published it in the Federal Register on November 2. It requires PBMs, along with brokers and consultants affiliated with them, to disclose in dollars the rebates, fees, markups and other compensation they collect when serving large self-insured employer health plans. Whether the rule actually lowers drug spending will depend on what employers do with that information.
  
  Why did PBMs become a lightning rod. PBMs sit in the middle of the prescription drug supply chain. They negotiate rebates from drug manufacturers, build formularies, set up pharmacy networks and process claims for health plans. According to the Labor Department, the self-insured employer plans they serve cover about 90 million Americans. The industry is highly concentrated: CVS Caremark, Cigna’s Express Scripts and UnitedHealth’s Optum Rx handle roughly 80 percent of U.S. prescriptions. Each is also part of a company that owns insurers and pharmacies.
  
  Critics say those arrangements produce conflicts of interest. When a PBM’s revenue rises with the size of the rebates it negotiates, it may prefer drugs with high list prices and big rebates over cheaper alternatives. “Spread pricing” lets a PBM bill a plan more for a drug than it pays the pharmacy and keep the difference. PBMs can also steer patients to pharmacies they own. A January 2025 Federal Trade Commission staff report found that pharmacies affiliated with the three largest PBMs earned more than $7.3 billion above estimated acquisition costs on specialty generic drugs from 2017 through 2022. Those drugs included medications for cancer and HIV. The PBM industry rejects these criticisms and maintains that its negotiating power lowers net drug costs for plans and patients.
  
  What has been done so far. Reform has moved slowly. Congressional packages stalled repeatedly, including a bipartisan deal stripped from a year-end spending bill in December 2024. In the meantime, states passed their own laws, but federal courts have often blocked them. Arkansas’s first-in-the-nation ban on PBMs owning pharmacies was put on hold in Express Scripts, Inc. v. Richmond (E.D. Ark. July 28, 2025), No. 4:25-cv-00520. The district court found the law likely violates the Commerce Clause and is likely preempted by federal law governing TRICARE. Arkansas appealed, and the Eighth Circuit heard argument on September 22, 2026. A ruling is still pending. Separately, in Flowers v. Caremark PCS Health (8th Cir. June 29, 2026), No. 25-3068, the Eighth Circuit held that ERISA preempts Arkansas’s requirements for how close network pharmacies must be to patients. That decision narrows how far states can regulate PBMs that serve employer plans.
  
  At the federal level, the pace finally picked up this year. In April 2025, President Trump signed an executive order directing the Labor Department to write PBM disclosure rules, and the department proposed them in January 2026. On February 3, 2026, Congress enacted PBM reforms in the Consolidated Appropriations Act, 2026. Beginning in 2028, the law ties PBM pay in Medicare Part D to flat service fees rather than drug prices or rebates. For employer plans, it confirms that PBMs must disclose their compensation under ERISA. It also requires PBMs to pass 100 percent of rebates and similar payments through to ERISA plans for plan years beginning on or after August 3, 2028. Meanwhile, the FTC’s 2024 lawsuit accusing the three largest PBMs of inflating insulin prices has largely ended in settlements. Express Scripts settled in February and Caremark in July, and a proposed settlement with Optum Rx is under review. All three PBMs denied the FTC’s allegations.
  
  Much of this is still on paper. The major federal changes do not take effect until 2027 through 2029, so employers and patients have not yet felt most of the effects.
  
  What the new rule requires.The final rule is built on ERISA section 408(b)(2). That provision lets a plan pay a service provider only if the arrangement is reasonable and the compensation is no more than reasonable. It applies to self-insured plans of employers that averaged at least 100 employees in the prior year, and to similarly sized multiemployer plans, where a PBM expects at least $1,000 in compensation. According to an analysis by Mayer Brown, fully insured plans are excluded from the detailed requirements. So are plans sponsored by drug manufacturers, wholesalers or PBMs.
  
  Before a contract is signed or renewed, a PBM must disclose its direct fees and the manufacturer rebates it expects, broken out drug by drug and showing how much it keeps versus passes through. It must also disclose spread compensation by drug and dispensing channel, money clawed back from pharmacies, formulary incentives, payments due on termination and the net price per fill. After that, it must report what it actually received every six months, or quarterly if the plan asks, within 30 days after each period ends. Any category that exceeds the estimate by 5 percent or more must be explained. Plans also get an annual audit right using an auditor of their choosing. The PBM must produce the data within 60 days, at its own expense.
  
  The consequences fall on both sides. If a PBM fails to comply, the arrangement becomes a prohibited transaction under ERISA. The PBM faces civil penalties, and the plan’s fiduciaries are protected only if they follow the rule’s steps for requesting the missing information, reporting the failure to the Labor Department and deciding whether to keep the PBM. The rule takes effect January 4, 2027, and applies to plan years beginning on or after July 1, 2027. For calendar-year plans, that means January 1, 2028.
  
  What difference it might make. The Labor Department estimates the rule could lower drug costs for plans and participants by as much as $22 billion over 10 years. Labor Secretary Keith Sonderling called it “a win for every American worker.” Community pharmacists, through the National Community Pharmacists Association, applauded the rule. A bipartisan group of 45 state attorneys general had backed the proposal. The industry sees it differently. The Pharmaceutical Care Management Association, which represents PBMs, argued that the rule duplicates the 2026 law and will burden smaller PBMs. PCMA President David Marin said detailed “pharmacy-by-pharmacy transparency is already law.” In its comments on the proposal, the group pointed to the Supreme Court’s 2024 decision limiting deference to agency interpretations, which suggests a court challenge is possible.
  
  The rule’s limits are significant. It does not set drug prices, cap PBM fees or by itself require PBMs to pass savings through; that pass-through comes from the 2026 law in 2028. Small employers and fully insured plans fall outside its detailed requirements. Because the rule applies only to ERISA group health plans, it does not reach workers’ compensation pharmacy costs, which are governed by state law.
  
  For covered employers, the rule offers leverage and creates new duties. Plan sponsors will be able to compare PBM bids on actual dollars instead of advertised rebate guarantees. They will also be expected to review the disclosures, follow up when information is missing and document their conclusions. Benefits attorneys are already advising clients to build at least 90 days into renewals to receive the initial disclosures, and to negotiate audit and termination rights now. The rule gives employers the information. Whether costs come down depends on whether they use it.

• FRISS Survey: Insurers See AI Fraud Coming but Few Are Ready
  on November 5, 2026 at 8:09 AM

  Insurance fraud is splitting into two different problems, and most insurers are not yet equipped for the more dangerous one. That is the central argument of The State of Insurance Fraud 2026, a survey-based report from fraud-detection software provider FRISS. Rather than issue one report, the company has released it in four chapters between late August and early November 2026. The final installment, on industry collaboration, appeared November 4.
  
  FRISS surveyed fraud practitioners across the insurance industry, but the published chapters do not say how many people responded, where they work or when the survey was fielded. Several charts also contain totals that do not add up to 100 percent. The figures below are best read as a directional snapshot of what fraud professionals are seeing, not as precise measurements. FRISS sells the kinds of detection and data-sharing tools the report recommends.
  
  The first chapter describes the current fraud landscape. Auto insurance dominates: 71 percent of respondents named it their primary fraud challenge, compared with 16 percent for property and general lines and 11 percent for commercial lines. The most common scheme is still the ordinary one. Forty-four percent cited opportunistic exaggeration of legitimate claims, and 29 percent cited fake injury claims. Organized crime (13 percent) and rate evasion (9 percent) followed.
  
  Asked what will drive fraud over the next two years, respondents most often pointed to economic and cost-of-living pressure (67 percent). Advances in fraud technology (60 percent) and organized fraud rings (58 percent) were close behind. A majority, 58 percent, said schemes have grown in volume or complexity. FRISS reads these results as two separate threats. One is high-volume opportunistic fraud that rises with financial stress. The other is a smaller but more sophisticated tier of organized, technology-enabled schemes. FRISS says no single strategy handles both.
  
  The second chapter examines how far insurers have gotten with their own AI defenses. The answer is not very far. Only 9 percent of respondents said AI-based fraud detection is fully implemented. Another 36 percent are piloting or partially deployed, 36 percent are still planning and 19 percent have no plans. The most-cited barriers were budget constraints (29 percent) and data quality (27 percent), followed by lack of internal buy-in (18 percent) and regulatory or privacy concerns (16 percent). The most widely used tools are still traditional ones: automated red flags and business rules, and cross-checks against external databases, each used by 60 percent. Among adopters, 70 percent said AI has sped up fraud detection. FRISS argues the gap is organizational rather than technical, and that planning alone offers no protection.
  
  The third chapter turns to how criminals are expected to use AI. Practitioners most often expect synthetic documents or identities (76 percent) and deepfake photos, audio or video (71 percent). Fewer cited automated large-scale application fraud (44 percent) and AI-coordinated fraud networks (33 percent). Fifty-eight percent expect deepfakes to become the dominant fraud tool in the near term. Yet only 20 percent treat document and media verification as a critical operational priority.
  
  The chapter’s most striking finding concerns “agentic” AI, meaning software that can carry out multi-step tasks on its own instead of waiting for human direction at each step. Seventy-eight percent of respondents said such systems are somewhat or very likely to influence insurance fraud within two years. Just 2 percent said their organization is very well prepared for that.
  
  The final chapter, also published by Insurance-Canada.ca, argues that no single insurer can keep up on its own. Sharing fraud data and alerts across insurers was the most popular form of cooperation, at 76 percent. Respondents also favored joint investigative task forces (56 percent), public-private partnerships with regulators and law enforcement (51 percent), partnerships with insurtech vendors (40 percent) and international cooperation (29 percent). Budget and resource limits (27 percent) and keeping pace with evolving tactics (24 percent) topped the list of obstacles. FRISS concludes that the industry needs a shared fraud-intelligence layer as basic infrastructure. It also warns that insurers whose internal data is in poor shape will have little to contribute to such a network.
  
  The FRISS findings echo Verisk’s State of Insurance Fraud Study from earlier this year, which surveyed U.S. consumers and claims professionals. Both point to the same tension. AI tools are making fabricated photos and documents easy to produce. Insurers widely recognize the threat, but far fewer feel confident they can catch it, and both reports call for cross-carrier data sharing. Neither report breaks out workers’ compensation. Still, the forecasts about synthetic documents, deepfaked evidence and fake injury claims apply as much to medical reports, wage records and injury photos as to auto and property claims.
  

• FBI Most Wanted Healthcare Fraud Fugitive to Serve 20 Years
  on November 4, 2026 at 9:27 AM

  Herbert “Herb” Kimble, the Chicago call-center operator whom federal prosecutors describe as a central architect of one of the largest Medicare fraud schemes on record, will spend 20 years in federal prison. That sentence comes nearly two years after he skipped his original sentencing and fled to the Philippines. According to an October 26, 2026 announcement from the U.S. Attorney’s Office, a federal judge sentenced 60 year old Kimble to 240 months in prison followed by three years of supervised release. There is no parole in the federal system. The court also ordered him to pay more than $199 million in restitution to Medicare and to forfeit more than $195 million in money and property.
  
  According to the Justice Department, Kimble ran offshore call centers that used deceptive advertising to recruit Medicare beneficiaries, many of them elderly, and persuade them they needed orthotic back, shoulder, wrist and knee braces. Telemedicine companies then supplied signed doctors’ orders, often for braces that had been chosen in advance. Prosecutors say the doctors and other practitioners rarely conducted a real consultation. Kimble’s operation sold the beneficiaries’ information and the signed orders to durable medical equipment (DME) suppliers, which shipped the braces and billed Medicare. The suppliers paid kickbacks dressed up as ordinary business payments. The HHS Office of Inspector General’s fugitive profile adds detail: from about 2014 to April 2019, callers responding to TV and internet ads for pain braces were screened, talked into a brace and often upsold on more. The invoices the call center sent to DME companies were written to hide the fact that they were buying prescriptions.
  
  The sentencing announcement says the scheme billed Medicare more than $365 million in fraudulent claims, of which Medicare paid more than $199 million. Prosecutors say Kimble personally pocketed more than $195 million and used part of it to buy a luxury condominium at the Shangri-La hotel in the Philippines. Larger figures appear elsewhere because they measure different things. HHS-OIG says the DME companies that bought prescriptions from Kimble’s call center caused more than $1.2 billion in Medicare charges, the same headline figure attached to the broader 2019 investigation.
  
  Kimble’s case grew out of Operation Brace Yourself, an April 2019 Justice Department crackdown that charged 24 defendants. They included executives of five telemedicine companies, owners of DME companies and three licensed medical professionals, in a scheme the department tied to more than $1.2 billion in losses. At the same time, the Centers for Medicare & Medicaid Services took administrative action against 130 DME companies that had billed Medicare more than $1.7 billion. KFF Health News later reported how the schemes looked from the beneficiary’s side. One elderly man was billed for 10 braces from four suppliers, prescribed by four practitioners he had never spoken to.
  
  Kimble pleaded guilty in 2019 to conspiracy against the United States under 18 U.S.C. § 371. The conspiracy’s objects included health care fraud and violations of the federal Anti-Kickback Statute. He then spent years cooperating against co-conspirators, according to HHS-OIG.
  
  That cooperation ended in the fall of 2024, when Kimble failed to appear at three scheduled court proceedings, including two sentencing hearings, and a bench warrant was issued. He resurfaced on June 4, 2026, as one of eight fugitives on the FBI’s newly launched Most Wanted Fraudsters list. Within days he was in custody. The Philippine Bureau of Immigration said its Fugitive Search Unit arrested him in Pasig City, part of Metro Manila, and deported him, permanently barring him from re-entering the country (Daily Tribune). He was then indicted on three counts of failure to appear under 18 U.S.C. § 3146. That case was folded into the Justice Department’s 2026 National Health Care Fraud Takedown, which charged 455 defendants in connection with more than $6.5 billion in alleged fraud.
  
  On August 11, 2026, Kimble entered a new plea agreement covering both the 2019 conspiracy and the failure-to-appear counts. Under the deal, according to IRS Criminal Investigation, both sides agreed the court should impose 15 to 20 years, and Kimble agreed to pay nearly $200 million in restitution, including $9 million at sentencing. Judge Anderson imposed the top of that range.
  
  U.S. Attorney Bryan Stirling called the case one of the largest international health care fraud schemes in the nation’s history. Colin M. McDonald, who leads the Justice Department’s new National Fraud Enforcement Division, said “fleeing overseas won’t spare healthcare fraudsters” from prosecution. HHS-OIG Special Agent in Charge Kelly Blackmon said Kimble exploited Medicare beneficiaries to generate hundreds of millions of dollars in false claims. Officials from the FBI’s Columbia field office and IRS-CI’s Charlotte field office also commented. The administration has presented the case as an early success for the White House Task Force to Eliminate Fraud, chaired by Vice President JD Vance, and for the FBI’s fraudster list. The case was investigated by the FBI, HHS-OIG and IRS-CI and prosecuted by Assistant U.S. Attorney Samantha Usher.
  
  The Kimble prosecution involved only Medicare claims, and the announcement names no other payers. But the business model behind it has turned up repeatedly in later federal enforcement waves: harvest patient leads at scale, buy telemedicine prescriptions without real exams, and route the orders to suppliers willing to pay per referral. Those waves have reached genetic testing, topical pain creams and other DME. For workers’ compensation carriers, self-insured employers and group health plans, the pattern is a familiar set of red flags. They include out-of-area prescribers who never examined the patient, clusters of identical brace or device orders, suppliers with no local footprint, and patients who say they never asked for the equipment.

• Meloxicam Drives Surge in Comp Anti-Inflammatory Spending,
  on November 4, 2026 at 9:27 AM

  An inexpensive, once-a-day arthritis pill has quietly become the biggest anti-inflammatory drug expense in California workers’ compensation, and nearly all of the increase traces to a handful of specialty capsules. In a November 3, 2026 release, the California Workers’ Compensation Institute (CWCI) reported that meloxicam’s share of anti-inflammatory drug spending in the state’s comp system rose from 1.7 percent in 2020 to 30.8 percent in 2025. Over the same period, its share of anti-inflammatory prescriptions grew much more slowly, from 10.3 percent to 14.7 percent.
  
  The gap shows up most clearly in the average payment per prescription. According to CWCI, it climbed every year, from $9 in 2020 to $13 in 2021, $30 in 2022, $41 in 2023, $63 in 2024 and $92 in 2025. Yet most meloxicam prescriptions remain cheap: in 2025 the median payment was still under $14, and 56 percent of prescriptions were paid at less than $15. At the other end, 4.7 percent of prescriptions were paid between $500 and $2,287.
  
  CWCI traced that spread to dosage form. When it reviewed the National Drug Codes on 2025 meloxicam prescriptions, it found four high-cost generic 5-mg and 10-mg capsule products, from Lupin Pharmaceuticals or Novitium Pharma and dispensed in quantities of 30 or 60. Those capsules made up 12.6 percent of meloxicam prescriptions but 75.7 percent of meloxicam payments. Conventional 7.5-mg and 15-mg tablets accounted for about 87 percent of prescriptions at about $23 each, but only about 22 percent of spending.
  
  According to CWCI, the capsules use a fine-particle formulation first developed for the brand-name product Vivlodex, which has since been discontinued. The institute points to the FDA-approved labeling, which says the capsules have not shown systemic exposure equivalent to other oral meloxicam and are not interchangeable with them, even at the same milligram strength (see the Vivlodex label on DailyMed). The labeling does not establish any reduction in cardiovascular risk, and the capsules carry the same NSAID warnings as other forms.
  
  The release also flags a regulatory gap. CWCI says the Division of Workers’ Compensation’s Pharmacy and Therapeutics Committee discussed treating the capsules separately from conventional tablets on the MTUS Drug Formulary, and the distinction appeared in 2020 and 2021 draft drug lists. It was not carried into the final published lists. CWCI says the current lists can’t tell the products apart because the RxNorm identifier fields needed to do so are incomplete. Committee members have repeatedly urged DWC to complete those fields, and CWCI expects the issue to come up again at the committee’s January meeting. The release was corrected after publication: an earlier version had said the capsules were already classified as non-exempt. CWCI also cautions that its data cannot establish the clinical rationale for any individual prescription.
  
  How meloxicam became a top seller.  Meloxicam is a nonsteroidal anti-inflammatory drug (NSAID) developed by Boehringer Ingelheim. The FDA approved it in 2000 under the brand name Mobic. Its rise came largely from the downfall of a competitor. After Merck withdrew the COX-2 inhibitor Vioxx in September 2004, a Consumer Reports Best Buy Drugs analysis found that Mobic prescriptions jumped 136 percent in six months, the biggest gain among Vioxx alternatives. Mobic had been heavily advertised as a substitute (The Pharma Letter). Generics then made it cheap: in July 2006 the FDA approved the first generic versions, clearing 13 applications at once under a new “cluster” review process (UPI).
  
  Meloxicam’s pharmacology helps explain why prescribers stayed with it. Its elimination half-life of 15 to 20 hours allows once-daily dosing, according to the FDA-approved tablet label. Pharmacology references also describe it as COX-2 preferential, meaning that at usual doses it leans toward the enzyme behind inflammation. That property has been linked to somewhat less stomach irritation, though it does not remove the drug’s gastrointestinal or cardiovascular risks. Today it is the most-prescribed NSAID in the country. The ClinCalc DrugStats database, which draws on federal survey data, estimates about 20.7 million U.S. prescriptions in 2023, ranking it 27th among all drugs. The low-dose capsule came later. Iroko Pharmaceuticals won FDA approval for Vivlodex in October 2015 and promoted its submicron-particle technology as a way to follow FDA advice to use the lowest effective NSAID dose (Drugs.com).
  
  Meloxicam tablets are approved for the signs and symptoms of osteoarthritis and rheumatoid arthritis, and for juvenile rheumatoid arthritis in patients weighing at least 60 kg. The 5-mg and 10-mg capsules are approved only for osteoarthritis pain. For payers and prescribers, the drug’s appeal is a non-opioid, once-daily anti-inflammatory that costs pennies in generic tablet form.
  
  Like all prescription NSAIDs, meloxicam carries a boxed warning. It raises the risk of serious cardiovascular events, including heart attack and stroke, which can be fatal and can occur early in treatment. It can also cause serious gastrointestinal bleeding, ulcers and perforation, sometimes without warning. The FDA strengthened the cardiovascular warning in 2015, noting that the risk was seen most consistently at higher doses. The tablet label lists diarrhea, upper respiratory infections, indigestion and flu-like symptoms as the most common side effects in trials. It also warns of high blood pressure, heart failure and fluid retention, liver injury, serious skin reactions and anemia.
  
  Kidney risks are the most relevant for long-term users. The tablet label warns that long-term NSAID use can cause kidney tissue damage (renal papillary necrosis), kidney insufficiency and acute kidney failure, and can raise blood potassium. Risk is highest in older patients and in those who already have reduced kidney function, are dehydrated, or have heart failure or liver problems. Patients taking diuretics, ACE inhibitors or angiotensin receptor blockers are also at higher risk. The label advises against using meloxicam in advanced kidney disease unless the benefits clearly outweigh the risk. It caps the dose at 7.5 mg a day for hemodialysis patients and calls for monitoring kidney function in at-risk patients. For the capsules, the Vivlodex label sets a 5-mg maximum for dialysis patients. The research generally supports these cautions. A 2017 systematic review in BMC Nephrology estimated that current NSAID use raised the odds of acute kidney injury by about 73 percent in the general population, with higher risk in older people. A 2019 JAMA Network Open study of more than 760,000 active-duty Army soldiers found that the highest prescribed NSAID doses carried modestly higher risks of acute and chronic kidney disease, even in young and middle-aged adults, although absolute rates were low. In 2020, the FDA also warned against NSAID use at about 20 weeks of pregnancy or later because of rare but serious kidney problems in the unborn baby.
  
  For employers and claims administrators, the CWCI findings point in two directions. On cost, nearly all of the growth in meloxicam spending comes from capsules that the labeling says are not interchangeable with cheap tablets, and the formulary does not yet treat them differently. On safety, long courses of meloxicam in injured workers, particularly older workers and those taking blood pressure medications, call for the kind of kidney monitoring the label already recommends.

• LC 3600(a)(10) Post-Termination Defense Waived if Not Plead in Answer
  on November 3, 2026 at 8:49 AM

  Frank Deville worked as a furnace and blast operator for Exide Technologies in Vernon, California, from December 2, 1986 until he was laid off on August 14, 2014. On April 24, 2015, about eight months after the layoff, he filed an application claiming cumulative injury to his nervous, respiratory, skin and internal systems from heat and chemical exposure. Exide’s carrier, Zurich American Insurance Group, administered by Tristar Risk Management, denied the claim on July 13, 2015.
  
  Deville handled most of the case without a lawyer. An attorney represented him from April 2015 to October 2017, and after that he proceeded with a guardian. The guardian barred him from testifying at trial, which ran over several days in 2022. The parties disputed twelve issues. One of them was whether the claim was barred by the post-termination defense of Labor Code § 3600(a)(10). Except for psychiatric injuries, that provision bars compensation for a claim filed after a notice of termination or layoff unless the employee proves one of the statutory exceptions.
  
  In a Findings and Award issued November 22, 2022, the workers’ compensation judge at the Riverside district office found that Deville sustained an industrial cumulative injury limited to sleep, rated at 13 percent permanent disability, with a need for limited future medical care. Relying on the neurology panel QME, the WCJ found no injury to the nervous, respiratory, circulatory, skin or other internal systems. The WCJ also disallowed EDD’s lien and found no unreasonable denial of benefits.
  
  On the post-termination issue, the WCJ ruled that the claim was not barred by § 3600(a)(10). In the opinion on decision, the WCJ found that the defendant had waived the affirmative defense because it never filed an Answer to the application. The judge relied on Labor Code § 5505, which allows evidence on matters not pleaded by answer only on terms the Appeals Board or judge imposes. The WCJ also cited the parallel WCAB rule, Cal. Code Regs., tit. 8, § 10465, which gives the judge discretion over unpleaded matters and affirmative defenses. The WCJ declined to allow the defense in the interest of “substantial justice under the law,” noting that Deville had represented himself, with a guardian, for most of the case.
  
  In the WCAB panel decision of Deville v. Exide Technologies, No. ADJ9932404 (October 2026), the Workers’ Compensation Appeals Board granted the applicant’s petition for reconsideration and, as its decision after reconsideration, affirmed the WCJ’s November 22, 2022 Findings and Award in full. This is a panel decision of the Appeals Board, not a court opinion, and it is not designated a significant panel decision. Panel decisions do not bind other panels or WCJs, though they may be cited as persuasive authority. The decision was signed by Commissioner Craig L. Snellings, with Commissioner Katherine Williams Dodd concurring and Chair Katherine A. Zalewski, and was filed October 22, 2026.
  
  The reconsideration petition came from the applicant, who was challenging the limited scope of his injury and other adverse findings. The Board found his petitions hard to follow and thinly supported by the record. After independently reviewing the evidence, it concluded that the medical reports supported the WCJ. The toxicology and neurology evaluators found that Deville’s lead exposure was below that of the general population, and the psychiatric evaluator questioned psychological testing completed with help from Deville’s wife. Because Deville did not testify, the Board relied on the paper record. The Board declined to consider the applicant’s unsolicited supplemental filings under Cal. Code Regs., tit. 8, § 10964.
  
  The Board did not separately analyze the post-termination ruling, and nothing in the decision indicates that the defendant challenged it on reconsideration. The WCJ’s waiver finding therefore stands as part of the affirmed award. The decision also doesn’t say whether the defendant first raised the defense at the pretrial stage, or what evidence, if any, it offered on notice of layoff.
  
  For defense practitioners, the waiver ruling is the practical lesson. Section 5505 contemplates an answer within 10 days after service of the application, setting out the facts the defendant intends to rely on. Rule 10465 requires the answer to be on the Board’s prescribed form and states that a general denial does not qualify as an answer. A claim denial letter is not a substitute. Here, the layoff came roughly eight months before the application was filed, a timeline that might otherwise have supported the defense. Even so, the defendant’s failure to plead it left its fate to the judge’s discretion, and the judge weighed the applicant’s largely self-represented status against allowing it. Because the rule is discretionary, a WCJ could rule differently on other facts. Still, the safest course is to file a timely Answer that expressly pleads § 3600(a)(10) and every other affirmative defense the defendant intends to pursue.

• WCIRB Reports Medical Care Using New Resource-Based Yardstick
  on November 3, 2026 at 8:49 AM

  When the Workers’ Compensation Insurance Rating Bureau of California counts physician care the way it always has, injured workers appear to be getting less of it. When it weighs that care by how much time, skill and expense each service actually demands, the picture flips. That is the central finding of A New Measure of Medical Service Utilization: Physician Services and the Factors Driving Change, a research report the WCIRB released on October 30, 2026. Using its new resource-based yardstick, the bureau estimates that utilization of physician services rose 8 percent from 2020 through 2025. Its traditional measure shows a 5 percent decline over the same period.
  
  The report, written by Lucy Chen, ACAS, and Julia Zhang, PhD, is the first in a planned series on medical service utilization. It starts with physician and non-physician practitioner services, which the WCIRB describes as the largest medical service category in its medical transaction data. The stakes are significant: according to the report, medical costs made up 52 percent of total loss payments in California’s workers’ compensation system in 2025.
  
  Medical costs are driven by price and utilization. Until now, the WCIRB has generally measured utilization as medical transactions per claim (or visits per claim for physical medicine, acupuncture and chiropractic care). Those counts are simple, but they treat a brief office visit and a spinal surgery as equal units of care.
  
  The new measure fixes that by borrowing the relative value units (RVUs) from the Resource-Based Relative Value Scale that Medicare uses to set physician fees. The Division of Workers’ Compensation adopted the RBRVS for the physician services section of the Official Medical Fee Schedule (OMFS) in 2014 (see the DWC’s RBRVS fact sheet). Each procedure carries three RVU components — physician work, practice expense and malpractice expense — and the WCIRB adjusts each with the geographic practice cost index, then multiplies by the number of procedures billed. Services that have no RVU in the fee schedule, such as unlisted procedure codes, anesthesia and California-specific report codes WC001 through WC012, are measured by the quantity of services per claim instead. Services with RVUs accounted for about 86 percent of physician services payments and 83 percent of transactions from 2014 through 2025.
  
  The report illustrates the difference with two hypothetical claims. Three routine office visits for an established patient in Los Angeles add up to about 8.7 utilization units, while a single lumbar laminotomy performed in the Bay Area comes to about 31.6. Under the old transaction count, the office-visit claim would look like the heavier user of care; under the new measure, the surgical claim does.
  
  Applied to WCIRB medical transaction data for services rendered from 2014 through 2025, the two measures tracked each other closely through 2019, with the old measure showing a 12 percent decline and the new measure a 9 percent decline. They diverged beginning in 2020. The WCIRB reads that gap as evidence that the resource intensity of care has been rising even as the raw number of services has fallen. Both measures did show utilization increasing in 2024 and 2025.
  
  The new measure also redraws the line between price and utilization. Over the full 2014–2025 period, physician services cost per claim rose 31 percent under either approach. The original measure splits that into an 11 percent drop in utilization and a 48 percent jump in price per transaction. The new measure attributes it to a 7 percent increase in utilization and a 22 percent increase in price per utilization unit. Under the new measure, prices grew about 2 percent a year, versus about 4 percent under the old one. The report notes that the slower figure lines up better with the roughly 2.2 percent annualized increase in the OMFS conversion factor, which reflects inflationary fee schedule adjustments. In other words, much of what looked like price inflation was really more intensive care. Even so, the WCIRB found that from 2020 through 2025 the cost increase was still driven mostly by price, which rose 14 percent, compared with an 8 percent rise in utilization, for a 24 percent increase in cost per claim.
  
  The second half of the report uses the new measure to identify what is driving the trend. Southern California has consistently shown the highest physician services utilization, and by 2025 it stood 23 percent above its 2014 level, though all regions have grown faster since 2019. Cumulative trauma (CT) claims are another factor. Non-CT claims generally use more physician services during the first 12 months, but utilization tied to CT claims has grown faster since 2022, largely because CT claims make up a growing share of the claim mix. CT claims also show heavier use of certain treatments, including nerve-damage diagnostics, psychotherapy and carpal tunnel neuroplasty. The WCIRB examined the rise of CT claims in more depth in its June 2026 report, Emerging Patterns of Cumulative Trauma Claims.
  
  By type of service, evaluation and management (E&M) visits and physical medicine did most of the work. E&M, the largest component at roughly 35 percent of utilization, jumped sharply in 2021, which the report associates with Medicare’s higher RVUs for common office-visit codes and coding rule changes allowing visit complexity to be set by medical decision-making or total clinician time. Since 2021, low-complexity office visits have declined, while high-complexity visits in 2025 ran 35 percent above their 2021 level. Physical medicine grew from 22 percent of utilization in 2014 to 26 percent, and its utilization in 2025 was 26 percent above the 2014 level. The report credits much of that to a shift toward higher-intensity services such as neuromuscular reeducation and therapeutic activities, while lower-intensity therapeutic exercise and manual therapy declined modestly.
  
  Surgery moved the other way and was the main offset. Its share of utilization dropped from 14 percent in 2014 to 8 percent in 2025. Nervous system surgical utilization fell 50 percent and musculoskeletal surgery 35 percent over the study period, although arthroplasty has recently climbed back above its 2014 level.
  
  Separately, utilization of services not subject to the fee schedule ran 30 percent above its 2021 level in 2024, driven largely by the unlisted physical medicine code 97799, before moderating in 2025.
  
  The WCIRB notes that the analysis reflects insured employers only, excludes COVID-19 claims, and uses data evaluated as of June 7, 2026, so figures may change as the data mature. Some procedures lack RVUs and are measured by service counts, and because RVUs are updated yearly, changes in Medicare valuations can register as changes in measured utilization.
  

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