- Clinic Pays $750K to Resolve Illegal Use of Misbranded Implantson May 7, 2026 at 12:03 PM
Salud Para La Gente, is a nonprofit network of primary care clinics serving low-income individuals and families in Santa Cruz County and Monterey County. Salud was founded in 1978 as a single free clinic offering healthcare primarily to farmworkers living and working on California’s Central Coast. Since that time, Salud has become a federally qualified health center (FQHC), and grown to five clinics and four school-based health centers providing healthcare to nearly 27,000 patients.
Among the services it provides, Salud offers contraceptive care, including etonogestrel marketed under the brand name Nexplanon, to Medicaid beneficiaries. Nexplanon is a thin rod that is inserted under the skin of a patient’s upper arm that, once implanted, works to prevent pregnancy. It is a prescription birth control for the prevention of pregnancy for up to 5 years.
Salud has agreed to pay a total of $750,000 to resolve allegations that it submitted false claims for payment to the Medicaid program in connection with its purchase and administration of misbranded contraceptive implants.
United States Attorneys Office for the Northern District of California alleged that between May 17, 2017, and Sept. 11, 2020, Salud purchased misbranded Nexplanon from an unlicensed wholesaler and administered the misbranded Nexplanon to Medicaid patients. According to the United States, Salud knowingly submitted false claims for payment to Medicaid by using incorrect National Drug Code numbers, unique drug identifiers used by the FDA for reporting and patient safety purposes, for the misbranded Nexplanon and for its administration.
“Patient safety must be at the forefront of medical decision-making,” said United States Attorney Craig H. Missakian. Using misbranded drugs jeopardizes public health and constitutes a serious False Claims Act violation. We will continue to hold violators accountable.”
“It’s clearly dangerous and unethical for health care providers to administer misbranded drugs obtained from unlicensed sources to their patients,” said Special Agent in Charge Robb R. Breeden of the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG). “Working with our law enforcement partners, HHS-OIG will continue to aggressively protect the health and well-being of patients and the integrity of federal health care programs.”
Assistant U.S. Attorney Michelle Lo handled this matter. The resolution resulted from a coordinated effort between the U.S. Attorney’s Office for the Northern District of California, HHS-OIG, and FDA’s Office of Criminal Investigations.
The claims resolved by the settlement are allegations only, and there has been no determination of liability.
- WCRI Reports Comp Claim Costs Grew 6 Percent Annually 2022-2025on May 7, 2026 at 12:03 PM
New research from the Workers Compensation Research Institute (WCRI), based on data from 18 study states, found that total workers’ compensation claim costs grew by an average of 6 percent per year from 2022 to 2025 in the median study state.
“The increase reflects sustained growth in the last few years across all major components of a claim, including medical payments, indemnity benefits, and benefit delivery expenses,” said Sebastian Negrusa, vice president of research at WCRI. “Workers’ compensation costs were fairly flat through 2022, but in the last few years, costs began to rise again, driven by increasing wages, higher medical prices, longer disability duration, and rising costs to administer claims.”
Key findings from the studies include:
- - Medical payments per claim increased, primarily by price growth for medical services rather than changes in utilization, with high‑cost claims a key driver of growth in some states.
- - Indemnity benefits per claim continued to rise, as longer durations of temporary disability placed upward pressure on benefits; wages for injured workers continued to grow but at a slower pace in more recent years.
- - Benefit delivery expenses per claim grew steadily, reflecting increases in medical cost containment expenses and litigation expenses.
- - Cost growth was widespread across states, with most study states experiencing rising total costs per claim and increases in most cost components.
The findings are drawn from CompScope™ Benchmarks, 2026 Edition, a series of studies covering 18 states that monitor the changes in workers’ compensation claim costs and their components. The studies examine claims with more than seven days of lost time, evaluated at 12 months of experience through 2025. The study states are Arkansas, California, Delaware, Florida, Illinois, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Texas, Virginia, and Wisconsin.
California specific research questions include:
- - How have California’s system performance metrics changed recently?
- - How does California’s workers’ compensation system compare with 17 other states?
- - What has been the impact of changes in the economic environment during the recovery from the pandemic on California’s workers’ compensation system?
All state studies included in this edition are available free to WCRI members and for a fee to nonmembers.
- Staffing Company Arbitration Agmt. Not Applicable to Employeron May 6, 2026 at 3:10 PM
Robert Toothman was hired by Apex Life Sciences, LLC, a temporary staffing agency, which placed him on assignment at Redwood Toxicology Laboratory, Inc. As a condition of that placement, Toothman signed both an Employment Agreement and a companion Arbitration Agreement with Apex. The Arbitration Agreement bound "Employee" (Toothman) and "Company" — defined as Apex and "its affiliates, subsidiaries and parent companies" — to arbitrate any dispute "arising out of or related to" Toothman's employment with, or termination from, Company. It also waived class and representative claims.
Toothman's Apex assignment ended in April 2018. Two days later, Redwood hired him directly — without any new arbitration agreement and without any reference to the Apex documents. Toothman worked for Redwood until June 2022. In September 2022, he filed a class action against Redwood alleging Labor Code violations covering the period of his direct employment, starting no earlier than September 26, 2018 — well after his Apex tenure had ended.
After Redwood subpoenaed Apex and obtained a copy of the Arbitration Agreement, Toothman filed an amended complaint that redefined the proposed class to exclude workers staffed by third parties while on assignment, but retained individuals like Toothman himself who had transitioned from staffed to direct employment.
Redwood moved to compel arbitration of Toothman's individual claims and to dismiss his class claims, arguing three alternative theories: (1) it was a party to the Arbitration Agreement as an "affiliate" of Apex; (2) it could enforce the agreement as a third-party beneficiary; and (3) Toothman was equitably estopped from resisting arbitration. The Sonoma County Superior Court denied the motion in its entirety.
The First Appellate District affirmed the trial court's denial of the motion to compel arbitration in the published case of Toothman v. Redwood Toxicology Laboratory, Inc. Case No. A171567 (May 2026). The court reviewed the matter de novo, as the material facts were undisputed.
The court first addressed who bore the burden of proof. Because Redwood was not a signatory to the Arbitration Agreement, it could not simply produce the agreement and shift the burden to Toothman to defeat it. Relying on Jones v. Jacobson (2011) 195 Cal.App.4th 1, the court held that a nonsignatory moving party must affirmatively establish its entitlement to enforce the agreement as part of its own initial burden — whether proceeding as a party, a third-party beneficiary, or under equitable estoppel.
Redwood argued it qualified as an "affiliate" of Apex and was therefore a "Company" party to the agreement. The court rejected this, applying standard California contract interpretation principles. The term "affiliates," appearing alongside "subsidiaries and parent companies," plainly connoted relationships of common ownership or corporate control — not arms-length commercial arrangements. The companion Employment Agreement used the separate term "Clients" to describe businesses like Redwood, and the parties never incorporated that term into the Arbitration Agreement's definition of "Company." Accepted dictionary definitions — including Black's Law Dictionary (10th ed. 2014) at page 69 — confirmed that "affiliate" in a corporate context means entities related "by shareholdings or other means of control." The court also noted the practical absurdity of Redwood's theory: it would mean that Apex unilaterally prescribed dispute resolution procedures for its clients' own direct-hire employees without those clients' knowledge or consent.
Even assuming Redwood could qualify as a third-party beneficiary, the court held that Toothman's claims still fell outside the Arbitration Agreement's substantive scope. The agreement covered only disputes "arising out of or related to" employment with "Company" — i.e., Apex. Toothman's claims arose entirely from his direct employment with Redwood, which began after his Apex employment ended. The court cited Vazquez v. SaniSure, Inc. (2024) 101 Cal.App.5th 139 for the principle that an arbitration agreement from one period of employment does not automatically govern disputes arising in a separate, subsequent period.
Finally, the court rejected Redwood's argument that Toothman was equitably estopped from contesting arbitration. Equitable estoppel applies when a plaintiff's claims are "dependent upon, or founded in and inextricably intertwined with" the underlying agreement containing the arbitration clause — as articulated in Goldman v. KPMG, LLP (2009) 173 Cal.App.4th 209. Here, Toothman's Labor Code claims depended entirely on his employment agreement with Redwood, not on the Apex Arbitration Agreement. The court also rejected Redwood's contention that Toothman's amendment of the class definition was an implicit admission that his claims were intertwined with the Arbitration Agreement, finding no authority to support that proposition and noting that a plaintiff's decision to narrow or limit claims does not constitute the kind of "artful pleading" that triggers estoppel.
- Last Holdout Regeneron Signs On to Most Favored Nation Pricingon May 6, 2026 at 3:10 PM
When the White House announced a Most Favored Nation (MFN) drug pricing agreement with Regeneron Pharmaceuticals on April 23rd, it wasn't just another deal. It was the final piece of a puzzle the Trump administration had been assembling for over a year. Regeneron was the 17th — and last — of the major pharmaceutical companies targeted by the administration to sign on, completing a full sweep that few in Washington had expected to happen this quickly.
What Is "Most Favored Nation" Pricing? The concept is straightforward, even if the politics are anything but. For decades, Americans have paid dramatically more for prescription drugs than patients in other wealthy nations. The same medication sold in Germany, Japan, or Canada often carries a fraction of the U.S. price tag. The administration's MFN policy aims to fix that by tying what American patients pay to the lowest price offered in comparable developed nations — ensuring the U.S. gets the same deal as everyone else.
President Trump signed an executive order outlining the initiative in May 2025 and launched TrumpRx.gov on February 5, 2026, a government portal where patients can access drugs at MFN-aligned prices. Since then, administration officials have been negotiating voluntary pricing agreements one company at a time.
Under the deal, Regeneron committed to several significant concessions:
- - Medicaid access at MFN prices — Every state Medicaid program will now have access to Regeneron products at MFN pricing, with the White House projecting hundreds of millions in savings for the program that serves the country's most vulnerable patients.
- - Future drugs at MFN rates — Regeneron agreed to align pricing for all new innovative medicines it brings to market with prices set in the comparable group of developed nations — a notably forward-looking commitment.
- - Praluent on TrumpRx.gov — The company's cholesterol-lowering drug will be available at a discounted price through the government portal.
- - A free gene therapy — Coinciding with the announcement, Regeneron received FDA approval for Otarmeni, the first gene therapy for genetic hearing loss. As part of the deal, the company agreed to make it available at no cost to eligible U.S. patients.
- - $27 billion U.S. investment — Regeneron separately announced a commitment to invest $27 billion in American research, development, and manufacturing by 2029, more than doubling its domestic biologic production capacity.
Regeneron co-founder and CEO Dr. Leonard Schleifer didn't sound like a reluctant partner in his statement. "For too long, American patients and taxpayers have shouldered a disproportionate share of the cost of biotechnology innovation," he said, adding that other high-income nations have not been "paying their fair share" for the breakthroughs they rely on. Schleifer has reportedly made this argument privately for over a decade — the MFN framework, in his framing, gave him a mechanism to finally act on it.
The Regeneron deal brings the total number of MFN agreements to 17, encompassing pharma giants including Pfizer, AstraZeneca, Eli Lilly, Novo Nordisk, Amgen, Bristol Myers Squibb, Gilead Sciences, Merck, Novartis, Sanofi, Johnson & Johnson, and AbbVie, among others. The White House estimates that combined U.S. pharmaceutical investment commitments under President Trump now total $448 billion over just 15 months.
The administration has also signaled it intends to expand the framework beyond the original 17, with expectations of reaching similar agreements with most manufacturers of sole-source brand-name drugs and biologics. Efforts are also underway to codify the voluntary agreements into law through Congress, which would lock in the pricing protections for the long term.
Whether the MFN model delivers lasting relief for American patients will depend on several factors still unresolved: how aggressively the agreements are enforced, whether Congress acts to make them permanent, and how drug companies manage pricing globally as they balance domestic commitments against foreign markets. Critics have also raised questions about potential impacts on pharmaceutical innovation incentives over the long run.
For now, though, one chapter has clearly closed. Every company on the administration's list has signed on — and the last holdout brought a gene therapy giveaway and a $27 billion investment pledge along with it.
- California DOI Takes Enforcement Action Against State Farmon May 5, 2026 at 10:05 AM
The California Department of Insurance announced a major enforcement action against State Farm General Insurance Company after an expedited investigation uncovered significant mishandling of insurance claims filed by survivors of the 2025 Los Angeles wildfires. Acting on consumer complaints, Insurance Commissioner Ricardo Lara ordered a Market Conduct Examination that documented a pattern of unlawful behavior in more than half of the claims reviewed.
State Farm policyholders filed approximately 11,300 residential claims related to the Los Angeles wildfires, nearly one-third of the 38,835 claims filed across all insurers, according to the Department’s official claims tracker. The violations identified by the Department indicate that thousands of survivors may have been affected.
The Department’s enforcement action seeks millions of dollars in penalties, considered the largest amount pursued this century following a wildfire disaster. In addition to penalties, the Department is requiring State Farm to take corrective actions to speed up payments and resolve outstanding claims
Department examiners reviewed a sample of 220 claims and found 398 violations of state law in 114 of those claims, many of which contained multiple violations. Major violations mirror the delays and denials reported by wildfire survivors to the Department, including:
- - Slow and inadequate investigation: State Farm failed to begin investigating claims within 15 days, failed to accept or deny claims within 40 days, and failed to pay accepted claims or provide written notice of the need for additional time within 30 days, as required by law.
- - Underpayment of claims: State Farm made unreasonably low settlement offers and underpaid claims.
- - Multiple adjusters causing confusion: State Farm failed to assign adjusters within statutory timelines and reassigned adjusters repeatedly, creating what survivors described as “adjuster roulette.”
- - Smoke damage claim denials and delays: Smoke damage claims represented nearly half of all consumer complaints. Examiners found that State Farm failed to provide required written denials for hygienist and environmental testing, misclassified testing costs, and misrepresented policy provisions related to inspections.
- - Inadequate communication: State Farm failed to respond to policyholders, send required status letters, or provide notice when additional time was needed to determine claims.
Since last January, the Department has recovered more than $280 million from all insurance companies for survivors of the Eaton and Palisades fires through direct intervention. As of March 3, 2026, insurers have paid out more than $23.7 billion to residential, commercial, and auto policyholders impacted by the fires.
The Department has filed an Accusation and Order to Show Cause against State Farm -- the first step toward a public hearing before an administrative law judge. The filing alleges violations of the Unfair Insurance Claims Practices Act and related regulations, including the 398 violations identified in the Market Conduct Examination and 34 additional violations based on consumer complaints.
Under California Insurance Code Section 790.035, penalties may reach $5,000 per violation, or $10,000 for willful violations. Penalties may be imposed by the Commissioner following the administrative hearing.
Wildfire survivors experiencing delays, disputes, smoke damage issues, or other claim problems are encouraged to file a formal complaint with the Department of Insurance at insurance.ca.gov or by calling (800) 927-4357.
Separate from today’s action, the California Department of Insurance, Consumer Watchdog, and State Farm General recently reached a three-party settlement agreement over State Farm’s emergency rate request, now set to be reviewed by an impartial Administrative Law Judge.
State Farm said in a statement it rejected any suggestions it “engaged in a general practice of mishandling or intentionally underpaying wildfire claims" and called the state’s insurance market “dysfunctional.” The company said it has paid out more than $5.7 billion on 13,700 auto and home insurance claims related to the fires.
“The threat to suspend State Farm General’s ability to serve customers over primarily administrative and procedural errors is a reckless, politically motivated attack that could ultimately cripple California’s homeowners insurance market," the statement said.
- WCRI Compares 36 States Hospital Outpatient Surgery Paymentson May 5, 2026 at 10:05 AM
The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization founded in 1983. WCRI provides objective information through studies and data collection that follow recognized scientific methods and rigorous peer review..
A new report from the WCRI gives policymakers an understanding of how hospital outpatient payments for common knee and shoulder surgeries compare across states and how payment rules shape costs.
“With many states reexamining hospital fee regulations, this study provides meaningful state comparisons and shows how different regulatory approaches influence payment growth and payment levels,” said Sebastian Negrusa, vice president of research at WCRI.
The report, Hospital Outpatient Payment Index: Interstate Variations and Policy Analysis, 2026 Edition, benchmarks hospital outpatient payments related to surgeries in 36 states, covering 88 percent of U.S. workers’ compensation benefits.
States included in the study are Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wisconsin.
It also compares workers’ compensation payments with Medicare rates and examines the impact of major fee regulation changes from 2005 to 2024.
Key findings include:
- - Faster payment growth in states without fixed-amount fee schedules: From 2011 to 2024, hospital outpatient surgery payments rose by roughly twice as much in charge-based states and states without fee schedules, compared with the typical fixed-amount fee schedule state.
- - Higher payments in non-fee-schedule states: Payments were substantially higher—often more than double—than in fixed‑amount states.
- - Wide variation across states relative to Medicare: Payments ranged from 35 percent ($2,711) below Medicare in Nevada to 471 percent ($28,713) above Medicare in Alabama.
The study, authored by Drs. Olesya Fomenko and Rebecca Yang, is free for members and available to nonmembers for a fee.
- Railcar Repairman Not Under FAA Transportation Worker Exemptionon May 4, 2026 at 3:40 PM
Arturo Vela was hired by Harbor Rail Services of California, Inc. (Harbor) as a railcar repairman and was terminated five months later in October 2021. Before beginning work, Vela signed a mutual arbitration agreement covering all employment-related claims. The agreement also contained a class and representative action waiver, meaning Vela gave up his right to pursue claims on behalf of other workers.
Harbor was not itself a railroad, it was a repair and inspection contractor working under a service agreement with Pacific Harbor Line (PHL), a short-line railroad operating a train yard in Wilmington, California. Larger railroads Burlington Northern Santa Fe and Union Pacific would deliver freight cars to PHL's yard, where the cars were disconnected from locomotives, taken out of service, and left for inspection and repair. Vela's work consisted of changing wheels and brake pads, disassembling and reassembling train cars, and welding and fabricating metal components — all performed on decommissioned cars sitting in the yard. Once repaired, the cars were returned to PHL and eventually back to the freight railroads.
In October 2023, Vela filed suit in Los Angeles County Superior Court against Harbor, asserting a slate of California Labor Code violations — unpaid overtime, missed meal and rest period premiums, unpaid minimum wages, late final wages, noncompliant wage statements, and unreimbursed business expenses — along with an Unfair Competition Law claim. Vela brought these claims on his own behalf and on behalf of a proposed class of current and former Harbor employees.
Harbor moved to compel Vela's individual claims to arbitration and to dismiss his class claims. The trial court held multiple rounds of briefing and, after receiving supplemental evidence and argument, granted Harbor's motion in February 2025. The court ordered Vela's individual claims to arbitration and dismissed and struck his class claims, finding the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., governed the parties' agreement and that no exemption removed it from the FAA's reach.
The Court of Appeal affirmed the dismissal and striking of Vela's class claims in the published case of Vela v. Harbor Rail Services of California, Inc., Case No. B344723 (May, 2026).
Railroad Employee. Section 1 of the FAA exempts "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." Vela argued he qualified as a "railroad employee" because his work was performed for PHL under Harbor's service contract with that entity. The court rejected this theory on a threshold ground: a "contract of employment" under Section 1 must have the qualifying worker as one of its parties. Vela had no contract with PHL. Citing Fli-Lo Falcon, LLC v. Amazon.com, Inc., 97 F.4th 1190, 1196–1197 (9th Cir. 2024), and Amos v. Amazon Logistics, Inc., 74 F.4th 591, 596 (4th Cir. 2023), the court held that the Harbor–PHL service agreement — a business-to-business contract — could not qualify. The court also rejected Vela's reliance on the Railway Labor Act's definition of "employee," finding no evidence that PHL supervised or directed Vela's work; Harbor, by contract, retained exclusive control over its workers.
The FAA Exemption — Transportation Worker. The Supreme Court's decision in Southwest Airlines Co. v. Saxon, 596 U.S. 450 (2022), requires courts to (1) identify the class of workers to which the individual belongs based on the work they typically perform, and then (2) determine whether that class is "engaged in foreign or interstate commerce." Under Saxon, workers who are "directly involved in transporting goods across state or international borders" fall within the exemption. For workers whose duties are more removed from that activity, they must play a "direct and necessary role in the free flow of goods across borders" to qualify. The Ninth Circuit subsequently applied Saxon in Ortiz v. Randstad Inhouse Services, LLC, 95 F.4th 1152, 1160 (9th Cir. 2024), requiring that a worker's relationship to the movement of goods be "sufficiently close enough" to play "a tangible and meaningful role" in interstate commerce, and in Lopez v. Aircraft Service International, Inc., 107 F.4th 1096, 1101 (9th Cir. 2024), which found an airplane fuel technician qualified because refueling was a "vital component" of an aircraft's ability to engage in interstate transportation.
Applying this framework, the court held that Vela's class — workers who inspect and repair freight cars that have been removed from service and placed in a maintenance yard — is too far removed from actual transportation to qualify. The cars were decommissioned and unusable until Vela and his coworkers finished their tasks. It was only after repairs were completed that the cars re-entered service and resumed a role in moving goods. The court also noted the absence of any evidence that Vela's class typically worked on cars that still contained freight. Cases Vela cited in support, including Betancourt v. Transportation Brokerage Specialists, Inc., 62 Cal.App.5th 552 (2021) (package delivery driver), and Nieto v. Fresno Beverage Co., Inc., 33 Cal.App.5th 274 (2019) (delivery truck driver), were distinguished because those workers played active roles in moving goods — Vela did not.
Because the FAA applied and no exemption saved Vela from it, the class action waiver in his arbitration agreement was enforceable under federal law, which preempts California doctrine that would otherwise void such waivers. See Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348, 359 (2014).
- O.C. PET Scan Provider to Pay 8.3M to Resolve Kickback Caseon May 4, 2026 at 3:40 PM
Modern Nuclear Inc. (MNI), a La Habra-based mobile PET scan company, has agreed to pay more than $8.3 million plus additional money based on future revenue to resolve False Claims Act allegations that it violated federal law by paying referring cardiologists excessive fees to supervise positron emission tomography (PET) scans.
According to the Justice Department, from September 2016 to January 2025, MNI knowingly submitted false or fraudulent claims to federal health care programs arising from violations of the Anti-Kickback Statute. Specifically, MNI allegedly paid kickbacks to referring cardiologists in the form of above-fair market value fees, ostensibly for cardiologists to supervise PET scans for the patients they referred to MNI.
These fees substantially exceeded fair market value for the cardiologists’ services because MNI paid the referring cardiologists for time they spent in their offices caring for other patients or while they were not on site at all, or for additional services beyond supervision that were never or rarely actually provided.
MNI purported to rely on an attorney-opinion letter regarding fair market value that the United States alleged was premised on fundamental inaccuracies and that the consultant ultimately withdrew.
In connection with the settlement, MNI entered into a five-year corporate integrity agreement (CIA) with the United States Department of Health and Human Services Office of Inspector General (HHS-OIG). This agreement requires, among other compliance provisions, that MNI implement measures designed to ensure that arrangements with referring physicians are compliant with the Anti-Kickback Statute.
The agreement also requires that MNI implement a compliance program to identify and address the Anti-Kickback Statute risks associated with other financial arrangements and retain an Independent Compliance Expert to perform a review of the effectiveness of the compliance program.
The civil settlement resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act by relators Matt Lieberman and James Whitney. Under those provisions, a private party or relator can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States ex rel. Lieberman v. Modern Nuclear, Inc., et al. (No. 8:23-cv-01646-DOC-KES) (C.D. Cal.). The relators will receive 16% of the total recovery in this matter.
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Central District of California, with assistance from the HHS-OIG and the Defense Health Agency Office of Inspector General.
Assistant United States Attorney Paul B. La Scala of the Civil Division’s Civil Fraud Section and Senior Trial Counsel Sanjay M. Bhambhani of the Justice Department’s Civil Division handled this matter. The claims resolved by the settlement are allegations only and there has been no determination of liability.
- First Overhaul of Brain Injury Classification System in 50 Yearson April 30, 2026 at 11:30 AM
For half a century, the medical world has classified traumatic brain injuries using essentially the same tool: the Glasgow Coma Scale, a bedside scoring system developed in 1974 that rates a patient's eye opening, verbal responses, and motor function on a 15-point scale. A score of 13 to 15 is "mild," 9 to 12 is "moderate," and 3 to 8 is "severe." That three-tier system has driven clinical decision-making, research design, insurance determinations, and — critically for this audience — workers' compensation claims adjudication for decades.
That system is now being replaced. In May 2025, an international team of 94 experts from 14 countries, led by the National Institutes of Health and the National Institute of Neurological Disorders and Stroke, published a new classification framework in The Lancet Neurology. Called CBI-M, it represents the most significant change in how traumatic brain injuries are assessed and categorized since the Glasgow Coma Scale was introduced. Trauma centers nationwide are beginning to test it, and workers' compensation professionals handling head injury claims need to understand what is coming.
The problem with the mild/moderate/severe classification is not that it is inaccurate — it is that it is incomplete. Within the "mild" TBI category alone, there is enormous variation. One patient might sustain a brief blow to the head with no loss of consciousness and a momentary gap in memory. Another patient in the same "mild" category might lose consciousness for 20 minutes and have a small brain bleed visible on imaging. Under the current system, both receive the same classification, the same label, and — too often — the same clinical follow-up, which for "mild" TBI frequently means discharge from the emergency department with minimal arrangements for ongoing care.
The new framework does not discard the Glasgow Coma Scale — it expands on it. CBI-M stands for Clinical, Biomarker, Imaging, and Modifier, representing four pillars of assessment that together provide a multidimensional picture of the injury rather than a single number.
The clinical pillar retains the Glasgow Coma Scale but uses each component score individually rather than collapsing them into a single sum. It also incorporates pupillary reactivity — whether the pupils respond normally to light — which is a significant predictor of outcomes that the traditional GCS sum score alone does not capture.
The biomarker pillar is entirely new to TBI classification. It incorporates blood-based measures that can detect the presence and extent of brain injury. The FDA approved the first blood test for brain injury in 2018, and the technology has advanced rapidly since. Specific proteins released when brain tissue is damaged — including glial fibrillary acidic protein (GFAP), ubiquitin C-terminal hydrolase L1 (UCH-L1), and S100 calcium-binding protein B (S100B) — can now be measured from a standard blood draw within hours of injury. Elevated levels indicate that brain injury has occurred, even when the patient's clinical presentation appears mild and CT imaging looks normal.
The imaging pillar formalizes the role of brain imaging — CT and MRI — in characterizing the injury. Rather than simply asking whether a scan is "positive" or "negative," the framework categorizes the specific types of pathology present, such as contusions, hemorrhages, or diffuse axonal injury, each of which carries different implications for recovery.
The modifier pillar accounts for individual factors that influence clinical presentation and outcome: the mechanism of injury, the patient's age, preexisting medical conditions, prior head injuries, and psychosocial factors. These modifiers have always been relevant to prognosis, but the current classification system ignores them entirely.
Independent medical examinations will need to adapt. Medical evaluators who currently rely on the GCS classification to frame their opinions about injury severity and causation will need to engage with the new framework. The biomarker pillar deserves special attention because it introduces something the workers' comp system has never had for traumatic brain injury: an objective, measurable indicator of injury that does not depend on patient self-reporting or clinical judgment. Brain injury has historically been one of the most difficult conditions to evaluate in the claims context precisely because it lacks the kind of objective evidence — an X-ray showing a fracture, an MRI showing a disc herniation — that other orthopedic injuries produce. Blood-based biomarkers change that equation.
This does not mean biomarker testing will resolve all disputes. Elevated protein levels indicate brain injury but do not, by themselves, predict the duration of symptoms or the degree of functional impairment. And the science is still maturing — reference ranges, timing windows for testing, and interpretation standards are all subjects of active research. But the direction is clear: TBI evaluation is moving from subjective to objective, and the workers' comp system will need to keep pace.
The CBI-M framework is not yet in universal clinical use. The authors describe it as a framework that will require validation and refinement before full adoption. But it is being tested at trauma centers now, it was published in one of the world's leading neurology journals, and it carries the imprimatur of the NIH. The trajectory is unmistakable.
For further reading, the CBI-M framework was published in The Lancet Neurology in May 2025: A New Characterisation of Acute Traumatic Brain Injury: The NIH-NINDS TBI Classification and Nomenclature Initiative. The NIH-NINDS also published an accessible summary: New Framework for Classifying Traumatic Brain Injury.
- $2M Fraud Proceeds Seized From Pasadena Wound Care Clinicon April 30, 2026 at 11:30 AM
The DOJ has called Southern California a "high-risk environment" for health care fraud. The FBI's Los Angeles Field Office has also pledged to crack down on health care fraud with the National Fraud Enforcement Division within the DOJ.
This week a federal court has granted a request from the United States to seize more than $2 million from a Pasadena-based advanced wound care clinic accused of defrauding Medicare for reimbursements for skin graft substitutes and skin grafts that never were performed on patients.
According to an affidavit filed with a federal seizure warrant, from September 2025 to April 2026, Expert Wound Care submitted more than $46.6 million in claims to Medicare for skin substitute products and wound care services purportedly provided to 78 beneficiaries. Medicare approved payments of approximately $34,031,382 on these claims, which included skin substitutes and skin grafts as well as skin application procedures.
From January 2025 to June 2025, the national average for a billing provider’s allowed amount per claim for skin substitute grafts was $16,837. From July 2025 to March 2026, Expert Wound Care averaged approximately $37,449 in allowed amount per claim for substitute skin grafts, more than double the national average.
The clinic increased its Medicare billing from $4,975 in July 2025 to approximately $33 million in December 2025, according to the affidavit. One beneficiary had a total payment amount to Medicare of approximately $6,232,645, and the average paid amount per beneficiary was approximately $299,639.
One of the most alarming details involves a single patient. From October 2025 to February 2026, Expert Wound Care billed Medicare for approximately $2,611,105 and was paid approximately $2,039,792 for skin substitute grafts and 52 skin graft application services purportedly provided to one beneficiary. Law enforcement determined that the beneficiary did not receive any skin grafts as part of his treatment and did not receive any type of home service in December 2025 despite the fact Expert Wound Care filed 27 claims for services on this beneficiary’s behalf for that month.
And there seems to have been some statistical red flags. Expert Wound Care’s percentage of total beneficiaries receiving substitute skin grafts of 38.5%, more than six times the national average of 6%. Its percentage of total claims for substitute skin grafts was 63%, approximately nine times the national average. Finally, Expert Wound Care’s percentage of total allowed amount for substitute skin grafts was 99.9%, more than double the national average.
Homeland Security Investigations and the United States Department of Health and Human Services Office of Inspector General are investigating this matter. Assistant United States Attorney Jonathan S. Galatzan of the Asset Forfeiture and Recovery Section is handling this case.
The Department of Justice has created the National Fraud Enforcement Division. The core mission of the Fraud Division is to zealously investigate and prosecute those who steal or fraudulently misuse taxpayer dollars. Department of Justice efforts to combat fraud support President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chair by Vice President J.D. Vance to eliminate fraud, waste, and abuse within federal benefit programs.
- Clinic Pays $750K to Resolve Illegal Use of Misbranded Implantson May 7, 2026 at 12:03 PM
Salud Para La Gente, is a nonprofit network of primary care clinics serving low-income individuals and families in Santa Cruz County and Monterey County. Salud was founded in 1978 as a single free clinic offering healthcare primarily to farmworkers living and working on California’s Central Coast. Since that time, Salud has become a federally qualified health center (FQHC), and grown to five clinics and four school-based health centers providing healthcare to nearly 27,000 patients.
Among the services it provides, Salud offers contraceptive care, including etonogestrel marketed under the brand name Nexplanon, to Medicaid beneficiaries. Nexplanon is a thin rod that is inserted under the skin of a patient’s upper arm that, once implanted, works to prevent pregnancy. It is a prescription birth control for the prevention of pregnancy for up to 5 years.
Salud has agreed to pay a total of $750,000 to resolve allegations that it submitted false claims for payment to the Medicaid program in connection with its purchase and administration of misbranded contraceptive implants.
United States Attorneys Office for the Northern District of California alleged that between May 17, 2017, and Sept. 11, 2020, Salud purchased misbranded Nexplanon from an unlicensed wholesaler and administered the misbranded Nexplanon to Medicaid patients. According to the United States, Salud knowingly submitted false claims for payment to Medicaid by using incorrect National Drug Code numbers, unique drug identifiers used by the FDA for reporting and patient safety purposes, for the misbranded Nexplanon and for its administration.
“Patient safety must be at the forefront of medical decision-making,” said United States Attorney Craig H. Missakian. Using misbranded drugs jeopardizes public health and constitutes a serious False Claims Act violation. We will continue to hold violators accountable.”
“It’s clearly dangerous and unethical for health care providers to administer misbranded drugs obtained from unlicensed sources to their patients,” said Special Agent in Charge Robb R. Breeden of the U.S. Department of Health and Human Services Office of Inspector General (HHS OIG). “Working with our law enforcement partners, HHS-OIG will continue to aggressively protect the health and well-being of patients and the integrity of federal health care programs.”
Assistant U.S. Attorney Michelle Lo handled this matter. The resolution resulted from a coordinated effort between the U.S. Attorney’s Office for the Northern District of California, HHS-OIG, and FDA’s Office of Criminal Investigations.
The claims resolved by the settlement are allegations only, and there has been no determination of liability. - WCRI Reports Comp Claim Costs Grew 6 Percent Annually 2022-2025on May 7, 2026 at 12:03 PM
New research from the Workers Compensation Research Institute (WCRI), based on data from 18 study states, found that total workers’ compensation claim costs grew by an average of 6 percent per year from 2022 to 2025 in the median study state.
“The increase reflects sustained growth in the last few years across all major components of a claim, including medical payments, indemnity benefits, and benefit delivery expenses,” said Sebastian Negrusa, vice president of research at WCRI. “Workers’ compensation costs were fairly flat through 2022, but in the last few years, costs began to rise again, driven by increasing wages, higher medical prices, longer disability duration, and rising costs to administer claims.”
Key findings from the studies include:
- - Medical payments per claim increased, primarily by price growth for medical services rather than changes in utilization, with high‑cost claims a key driver of growth in some states.
- - Indemnity benefits per claim continued to rise, as longer durations of temporary disability placed upward pressure on benefits; wages for injured workers continued to grow but at a slower pace in more recent years.
- - Benefit delivery expenses per claim grew steadily, reflecting increases in medical cost containment expenses and litigation expenses.
- - Cost growth was widespread across states, with most study states experiencing rising total costs per claim and increases in most cost components.
The findings are drawn from CompScope™ Benchmarks, 2026 Edition, a series of studies covering 18 states that monitor the changes in workers’ compensation claim costs and their components. The studies examine claims with more than seven days of lost time, evaluated at 12 months of experience through 2025. The study states are Arkansas, California, Delaware, Florida, Illinois, Indiana, Iowa, Kentucky, Louisiana, Massachusetts, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, Texas, Virginia, and Wisconsin.
California specific research questions include:
- - How have California’s system performance metrics changed recently?
- - How does California’s workers’ compensation system compare with 17 other states?
- - What has been the impact of changes in the economic environment during the recovery from the pandemic on California’s workers’ compensation system?
All state studies included in this edition are available free to WCRI members and for a fee to nonmembers. - Staffing Company Arbitration Agmt. Not Applicable to Employeron May 6, 2026 at 3:10 PM
Robert Toothman was hired by Apex Life Sciences, LLC, a temporary staffing agency, which placed him on assignment at Redwood Toxicology Laboratory, Inc. As a condition of that placement, Toothman signed both an Employment Agreement and a companion Arbitration Agreement with Apex. The Arbitration Agreement bound "Employee" (Toothman) and "Company" — defined as Apex and "its affiliates, subsidiaries and parent companies" — to arbitrate any dispute "arising out of or related to" Toothman's employment with, or termination from, Company. It also waived class and representative claims.
Toothman's Apex assignment ended in April 2018. Two days later, Redwood hired him directly — without any new arbitration agreement and without any reference to the Apex documents. Toothman worked for Redwood until June 2022. In September 2022, he filed a class action against Redwood alleging Labor Code violations covering the period of his direct employment, starting no earlier than September 26, 2018 — well after his Apex tenure had ended.
After Redwood subpoenaed Apex and obtained a copy of the Arbitration Agreement, Toothman filed an amended complaint that redefined the proposed class to exclude workers staffed by third parties while on assignment, but retained individuals like Toothman himself who had transitioned from staffed to direct employment.
Redwood moved to compel arbitration of Toothman's individual claims and to dismiss his class claims, arguing three alternative theories: (1) it was a party to the Arbitration Agreement as an "affiliate" of Apex; (2) it could enforce the agreement as a third-party beneficiary; and (3) Toothman was equitably estopped from resisting arbitration. The Sonoma County Superior Court denied the motion in its entirety.
The First Appellate District affirmed the trial court's denial of the motion to compel arbitration in the published case of Toothman v. Redwood Toxicology Laboratory, Inc. Case No. A171567 (May 2026). The court reviewed the matter de novo, as the material facts were undisputed.
The court first addressed who bore the burden of proof. Because Redwood was not a signatory to the Arbitration Agreement, it could not simply produce the agreement and shift the burden to Toothman to defeat it. Relying on Jones v. Jacobson (2011) 195 Cal.App.4th 1, the court held that a nonsignatory moving party must affirmatively establish its entitlement to enforce the agreement as part of its own initial burden — whether proceeding as a party, a third-party beneficiary, or under equitable estoppel.
Redwood argued it qualified as an "affiliate" of Apex and was therefore a "Company" party to the agreement. The court rejected this, applying standard California contract interpretation principles. The term "affiliates," appearing alongside "subsidiaries and parent companies," plainly connoted relationships of common ownership or corporate control — not arms-length commercial arrangements. The companion Employment Agreement used the separate term "Clients" to describe businesses like Redwood, and the parties never incorporated that term into the Arbitration Agreement's definition of "Company." Accepted dictionary definitions — including Black's Law Dictionary (10th ed. 2014) at page 69 — confirmed that "affiliate" in a corporate context means entities related "by shareholdings or other means of control." The court also noted the practical absurdity of Redwood's theory: it would mean that Apex unilaterally prescribed dispute resolution procedures for its clients' own direct-hire employees without those clients' knowledge or consent.
Even assuming Redwood could qualify as a third-party beneficiary, the court held that Toothman's claims still fell outside the Arbitration Agreement's substantive scope. The agreement covered only disputes "arising out of or related to" employment with "Company" — i.e., Apex. Toothman's claims arose entirely from his direct employment with Redwood, which began after his Apex employment ended. The court cited Vazquez v. SaniSure, Inc. (2024) 101 Cal.App.5th 139 for the principle that an arbitration agreement from one period of employment does not automatically govern disputes arising in a separate, subsequent period.
Finally, the court rejected Redwood's argument that Toothman was equitably estopped from contesting arbitration. Equitable estoppel applies when a plaintiff's claims are "dependent upon, or founded in and inextricably intertwined with" the underlying agreement containing the arbitration clause — as articulated in Goldman v. KPMG, LLP (2009) 173 Cal.App.4th 209. Here, Toothman's Labor Code claims depended entirely on his employment agreement with Redwood, not on the Apex Arbitration Agreement. The court also rejected Redwood's contention that Toothman's amendment of the class definition was an implicit admission that his claims were intertwined with the Arbitration Agreement, finding no authority to support that proposition and noting that a plaintiff's decision to narrow or limit claims does not constitute the kind of "artful pleading" that triggers estoppel.
- Last Holdout Regeneron Signs On to Most Favored Nation Pricingon May 6, 2026 at 3:10 PM
When the White House announced a Most Favored Nation (MFN) drug pricing agreement with Regeneron Pharmaceuticals on April 23rd, it wasn't just another deal. It was the final piece of a puzzle the Trump administration had been assembling for over a year. Regeneron was the 17th — and last — of the major pharmaceutical companies targeted by the administration to sign on, completing a full sweep that few in Washington had expected to happen this quickly.
What Is "Most Favored Nation" Pricing? The concept is straightforward, even if the politics are anything but. For decades, Americans have paid dramatically more for prescription drugs than patients in other wealthy nations. The same medication sold in Germany, Japan, or Canada often carries a fraction of the U.S. price tag. The administration's MFN policy aims to fix that by tying what American patients pay to the lowest price offered in comparable developed nations — ensuring the U.S. gets the same deal as everyone else.
President Trump signed an executive order outlining the initiative in May 2025 and launched TrumpRx.gov on February 5, 2026, a government portal where patients can access drugs at MFN-aligned prices. Since then, administration officials have been negotiating voluntary pricing agreements one company at a time.
Under the deal, Regeneron committed to several significant concessions:
- - Medicaid access at MFN prices — Every state Medicaid program will now have access to Regeneron products at MFN pricing, with the White House projecting hundreds of millions in savings for the program that serves the country's most vulnerable patients.
- - Future drugs at MFN rates — Regeneron agreed to align pricing for all new innovative medicines it brings to market with prices set in the comparable group of developed nations — a notably forward-looking commitment.
- - Praluent on TrumpRx.gov — The company's cholesterol-lowering drug will be available at a discounted price through the government portal.
- - A free gene therapy — Coinciding with the announcement, Regeneron received FDA approval for Otarmeni, the first gene therapy for genetic hearing loss. As part of the deal, the company agreed to make it available at no cost to eligible U.S. patients.
- - $27 billion U.S. investment — Regeneron separately announced a commitment to invest $27 billion in American research, development, and manufacturing by 2029, more than doubling its domestic biologic production capacity.
Regeneron co-founder and CEO Dr. Leonard Schleifer didn't sound like a reluctant partner in his statement. "For too long, American patients and taxpayers have shouldered a disproportionate share of the cost of biotechnology innovation," he said, adding that other high-income nations have not been "paying their fair share" for the breakthroughs they rely on. Schleifer has reportedly made this argument privately for over a decade — the MFN framework, in his framing, gave him a mechanism to finally act on it.
The Regeneron deal brings the total number of MFN agreements to 17, encompassing pharma giants including Pfizer, AstraZeneca, Eli Lilly, Novo Nordisk, Amgen, Bristol Myers Squibb, Gilead Sciences, Merck, Novartis, Sanofi, Johnson & Johnson, and AbbVie, among others. The White House estimates that combined U.S. pharmaceutical investment commitments under President Trump now total $448 billion over just 15 months.
The administration has also signaled it intends to expand the framework beyond the original 17, with expectations of reaching similar agreements with most manufacturers of sole-source brand-name drugs and biologics. Efforts are also underway to codify the voluntary agreements into law through Congress, which would lock in the pricing protections for the long term.
Whether the MFN model delivers lasting relief for American patients will depend on several factors still unresolved: how aggressively the agreements are enforced, whether Congress acts to make them permanent, and how drug companies manage pricing globally as they balance domestic commitments against foreign markets. Critics have also raised questions about potential impacts on pharmaceutical innovation incentives over the long run.
For now, though, one chapter has clearly closed. Every company on the administration's list has signed on — and the last holdout brought a gene therapy giveaway and a $27 billion investment pledge along with it. - California DOI Takes Enforcement Action Against State Farmon May 5, 2026 at 10:05 AM
The California Department of Insurance announced a major enforcement action against State Farm General Insurance Company after an expedited investigation uncovered significant mishandling of insurance claims filed by survivors of the 2025 Los Angeles wildfires. Acting on consumer complaints, Insurance Commissioner Ricardo Lara ordered a Market Conduct Examination that documented a pattern of unlawful behavior in more than half of the claims reviewed.
State Farm policyholders filed approximately 11,300 residential claims related to the Los Angeles wildfires, nearly one-third of the 38,835 claims filed across all insurers, according to the Department’s official claims tracker. The violations identified by the Department indicate that thousands of survivors may have been affected.
The Department’s enforcement action seeks millions of dollars in penalties, considered the largest amount pursued this century following a wildfire disaster. In addition to penalties, the Department is requiring State Farm to take corrective actions to speed up payments and resolve outstanding claims
Department examiners reviewed a sample of 220 claims and found 398 violations of state law in 114 of those claims, many of which contained multiple violations. Major violations mirror the delays and denials reported by wildfire survivors to the Department, including:
- - Slow and inadequate investigation: State Farm failed to begin investigating claims within 15 days, failed to accept or deny claims within 40 days, and failed to pay accepted claims or provide written notice of the need for additional time within 30 days, as required by law.
- - Underpayment of claims: State Farm made unreasonably low settlement offers and underpaid claims.
- - Multiple adjusters causing confusion: State Farm failed to assign adjusters within statutory timelines and reassigned adjusters repeatedly, creating what survivors described as “adjuster roulette.”
- - Smoke damage claim denials and delays: Smoke damage claims represented nearly half of all consumer complaints. Examiners found that State Farm failed to provide required written denials for hygienist and environmental testing, misclassified testing costs, and misrepresented policy provisions related to inspections.
- - Inadequate communication: State Farm failed to respond to policyholders, send required status letters, or provide notice when additional time was needed to determine claims.
Since last January, the Department has recovered more than $280 million from all insurance companies for survivors of the Eaton and Palisades fires through direct intervention. As of March 3, 2026, insurers have paid out more than $23.7 billion to residential, commercial, and auto policyholders impacted by the fires.
The Department has filed an Accusation and Order to Show Cause against State Farm -- the first step toward a public hearing before an administrative law judge. The filing alleges violations of the Unfair Insurance Claims Practices Act and related regulations, including the 398 violations identified in the Market Conduct Examination and 34 additional violations based on consumer complaints.
Under California Insurance Code Section 790.035, penalties may reach $5,000 per violation, or $10,000 for willful violations. Penalties may be imposed by the Commissioner following the administrative hearing.
Wildfire survivors experiencing delays, disputes, smoke damage issues, or other claim problems are encouraged to file a formal complaint with the Department of Insurance at insurance.ca.gov or by calling (800) 927-4357.
Separate from today’s action, the California Department of Insurance, Consumer Watchdog, and State Farm General recently reached a three-party settlement agreement over State Farm’s emergency rate request, now set to be reviewed by an impartial Administrative Law Judge.
State Farm said in a statement it rejected any suggestions it “engaged in a general practice of mishandling or intentionally underpaying wildfire claims" and called the state’s insurance market “dysfunctional.” The company said it has paid out more than $5.7 billion on 13,700 auto and home insurance claims related to the fires.
“The threat to suspend State Farm General’s ability to serve customers over primarily administrative and procedural errors is a reckless, politically motivated attack that could ultimately cripple California’s homeowners insurance market," the statement said. - WCRI Compares 36 States Hospital Outpatient Surgery Paymentson May 5, 2026 at 10:05 AM
The Workers Compensation Research Institute (WCRI) is an independent, not-for-profit research organization founded in 1983. WCRI provides objective information through studies and data collection that follow recognized scientific methods and rigorous peer review..
A new report from the WCRI gives policymakers an understanding of how hospital outpatient payments for common knee and shoulder surgeries compare across states and how payment rules shape costs.
“With many states reexamining hospital fee regulations, this study provides meaningful state comparisons and shows how different regulatory approaches influence payment growth and payment levels,” said Sebastian Negrusa, vice president of research at WCRI.
The report, Hospital Outpatient Payment Index: Interstate Variations and Policy Analysis, 2026 Edition, benchmarks hospital outpatient payments related to surgeries in 36 states, covering 88 percent of U.S. workers’ compensation benefits.
States included in the study are Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Wisconsin.
It also compares workers’ compensation payments with Medicare rates and examines the impact of major fee regulation changes from 2005 to 2024.
Key findings include:
- - Faster payment growth in states without fixed-amount fee schedules: From 2011 to 2024, hospital outpatient surgery payments rose by roughly twice as much in charge-based states and states without fee schedules, compared with the typical fixed-amount fee schedule state.
- - Higher payments in non-fee-schedule states: Payments were substantially higher—often more than double—than in fixed‑amount states.
- - Wide variation across states relative to Medicare: Payments ranged from 35 percent ($2,711) below Medicare in Nevada to 471 percent ($28,713) above Medicare in Alabama.
The study, authored by Drs. Olesya Fomenko and Rebecca Yang, is free for members and available to nonmembers for a fee. - Railcar Repairman Not Under FAA Transportation Worker Exemptionon May 4, 2026 at 3:40 PM
Arturo Vela was hired by Harbor Rail Services of California, Inc. (Harbor) as a railcar repairman and was terminated five months later in October 2021. Before beginning work, Vela signed a mutual arbitration agreement covering all employment-related claims. The agreement also contained a class and representative action waiver, meaning Vela gave up his right to pursue claims on behalf of other workers.
Harbor was not itself a railroad, it was a repair and inspection contractor working under a service agreement with Pacific Harbor Line (PHL), a short-line railroad operating a train yard in Wilmington, California. Larger railroads Burlington Northern Santa Fe and Union Pacific would deliver freight cars to PHL's yard, where the cars were disconnected from locomotives, taken out of service, and left for inspection and repair. Vela's work consisted of changing wheels and brake pads, disassembling and reassembling train cars, and welding and fabricating metal components — all performed on decommissioned cars sitting in the yard. Once repaired, the cars were returned to PHL and eventually back to the freight railroads.
In October 2023, Vela filed suit in Los Angeles County Superior Court against Harbor, asserting a slate of California Labor Code violations — unpaid overtime, missed meal and rest period premiums, unpaid minimum wages, late final wages, noncompliant wage statements, and unreimbursed business expenses — along with an Unfair Competition Law claim. Vela brought these claims on his own behalf and on behalf of a proposed class of current and former Harbor employees.
Harbor moved to compel Vela's individual claims to arbitration and to dismiss his class claims. The trial court held multiple rounds of briefing and, after receiving supplemental evidence and argument, granted Harbor's motion in February 2025. The court ordered Vela's individual claims to arbitration and dismissed and struck his class claims, finding the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq., governed the parties' agreement and that no exemption removed it from the FAA's reach.
The Court of Appeal affirmed the dismissal and striking of Vela's class claims in the published case of Vela v. Harbor Rail Services of California, Inc., Case No. B344723 (May, 2026).
Railroad Employee. Section 1 of the FAA exempts "contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce." Vela argued he qualified as a "railroad employee" because his work was performed for PHL under Harbor's service contract with that entity. The court rejected this theory on a threshold ground: a "contract of employment" under Section 1 must have the qualifying worker as one of its parties. Vela had no contract with PHL. Citing Fli-Lo Falcon, LLC v. Amazon.com, Inc., 97 F.4th 1190, 1196–1197 (9th Cir. 2024), and Amos v. Amazon Logistics, Inc., 74 F.4th 591, 596 (4th Cir. 2023), the court held that the Harbor–PHL service agreement — a business-to-business contract — could not qualify. The court also rejected Vela's reliance on the Railway Labor Act's definition of "employee," finding no evidence that PHL supervised or directed Vela's work; Harbor, by contract, retained exclusive control over its workers.
The FAA Exemption — Transportation Worker. The Supreme Court's decision in Southwest Airlines Co. v. Saxon, 596 U.S. 450 (2022), requires courts to (1) identify the class of workers to which the individual belongs based on the work they typically perform, and then (2) determine whether that class is "engaged in foreign or interstate commerce." Under Saxon, workers who are "directly involved in transporting goods across state or international borders" fall within the exemption. For workers whose duties are more removed from that activity, they must play a "direct and necessary role in the free flow of goods across borders" to qualify. The Ninth Circuit subsequently applied Saxon in Ortiz v. Randstad Inhouse Services, LLC, 95 F.4th 1152, 1160 (9th Cir. 2024), requiring that a worker's relationship to the movement of goods be "sufficiently close enough" to play "a tangible and meaningful role" in interstate commerce, and in Lopez v. Aircraft Service International, Inc., 107 F.4th 1096, 1101 (9th Cir. 2024), which found an airplane fuel technician qualified because refueling was a "vital component" of an aircraft's ability to engage in interstate transportation.
Applying this framework, the court held that Vela's class — workers who inspect and repair freight cars that have been removed from service and placed in a maintenance yard — is too far removed from actual transportation to qualify. The cars were decommissioned and unusable until Vela and his coworkers finished their tasks. It was only after repairs were completed that the cars re-entered service and resumed a role in moving goods. The court also noted the absence of any evidence that Vela's class typically worked on cars that still contained freight. Cases Vela cited in support, including Betancourt v. Transportation Brokerage Specialists, Inc., 62 Cal.App.5th 552 (2021) (package delivery driver), and Nieto v. Fresno Beverage Co., Inc., 33 Cal.App.5th 274 (2019) (delivery truck driver), were distinguished because those workers played active roles in moving goods — Vela did not.
Because the FAA applied and no exemption saved Vela from it, the class action waiver in his arbitration agreement was enforceable under federal law, which preempts California doctrine that would otherwise void such waivers. See Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348, 359 (2014). - O.C. PET Scan Provider to Pay 8.3M to Resolve Kickback Caseon May 4, 2026 at 3:40 PM
Modern Nuclear Inc. (MNI), a La Habra-based mobile PET scan company, has agreed to pay more than $8.3 million plus additional money based on future revenue to resolve False Claims Act allegations that it violated federal law by paying referring cardiologists excessive fees to supervise positron emission tomography (PET) scans.
According to the Justice Department, from September 2016 to January 2025, MNI knowingly submitted false or fraudulent claims to federal health care programs arising from violations of the Anti-Kickback Statute. Specifically, MNI allegedly paid kickbacks to referring cardiologists in the form of above-fair market value fees, ostensibly for cardiologists to supervise PET scans for the patients they referred to MNI.
These fees substantially exceeded fair market value for the cardiologists’ services because MNI paid the referring cardiologists for time they spent in their offices caring for other patients or while they were not on site at all, or for additional services beyond supervision that were never or rarely actually provided.
MNI purported to rely on an attorney-opinion letter regarding fair market value that the United States alleged was premised on fundamental inaccuracies and that the consultant ultimately withdrew.
In connection with the settlement, MNI entered into a five-year corporate integrity agreement (CIA) with the United States Department of Health and Human Services Office of Inspector General (HHS-OIG). This agreement requires, among other compliance provisions, that MNI implement measures designed to ensure that arrangements with referring physicians are compliant with the Anti-Kickback Statute.
The agreement also requires that MNI implement a compliance program to identify and address the Anti-Kickback Statute risks associated with other financial arrangements and retain an Independent Compliance Expert to perform a review of the effectiveness of the compliance program.
The civil settlement resolves claims brought under the qui tam or whistleblower provisions of the False Claims Act by relators Matt Lieberman and James Whitney. Under those provisions, a private party or relator can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned United States ex rel. Lieberman v. Modern Nuclear, Inc., et al. (No. 8:23-cv-01646-DOC-KES) (C.D. Cal.). The relators will receive 16% of the total recovery in this matter.
The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the Central District of California, with assistance from the HHS-OIG and the Defense Health Agency Office of Inspector General.
Assistant United States Attorney Paul B. La Scala of the Civil Division’s Civil Fraud Section and Senior Trial Counsel Sanjay M. Bhambhani of the Justice Department’s Civil Division handled this matter. The claims resolved by the settlement are allegations only and there has been no determination of liability. - First Overhaul of Brain Injury Classification System in 50 Yearson April 30, 2026 at 11:30 AM
For half a century, the medical world has classified traumatic brain injuries using essentially the same tool: the Glasgow Coma Scale, a bedside scoring system developed in 1974 that rates a patient's eye opening, verbal responses, and motor function on a 15-point scale. A score of 13 to 15 is "mild," 9 to 12 is "moderate," and 3 to 8 is "severe." That three-tier system has driven clinical decision-making, research design, insurance determinations, and — critically for this audience — workers' compensation claims adjudication for decades.
That system is now being replaced. In May 2025, an international team of 94 experts from 14 countries, led by the National Institutes of Health and the National Institute of Neurological Disorders and Stroke, published a new classification framework in The Lancet Neurology. Called CBI-M, it represents the most significant change in how traumatic brain injuries are assessed and categorized since the Glasgow Coma Scale was introduced. Trauma centers nationwide are beginning to test it, and workers' compensation professionals handling head injury claims need to understand what is coming.
The problem with the mild/moderate/severe classification is not that it is inaccurate — it is that it is incomplete. Within the "mild" TBI category alone, there is enormous variation. One patient might sustain a brief blow to the head with no loss of consciousness and a momentary gap in memory. Another patient in the same "mild" category might lose consciousness for 20 minutes and have a small brain bleed visible on imaging. Under the current system, both receive the same classification, the same label, and — too often — the same clinical follow-up, which for "mild" TBI frequently means discharge from the emergency department with minimal arrangements for ongoing care.
The new framework does not discard the Glasgow Coma Scale — it expands on it. CBI-M stands for Clinical, Biomarker, Imaging, and Modifier, representing four pillars of assessment that together provide a multidimensional picture of the injury rather than a single number.
The clinical pillar retains the Glasgow Coma Scale but uses each component score individually rather than collapsing them into a single sum. It also incorporates pupillary reactivity — whether the pupils respond normally to light — which is a significant predictor of outcomes that the traditional GCS sum score alone does not capture.
The biomarker pillar is entirely new to TBI classification. It incorporates blood-based measures that can detect the presence and extent of brain injury. The FDA approved the first blood test for brain injury in 2018, and the technology has advanced rapidly since. Specific proteins released when brain tissue is damaged — including glial fibrillary acidic protein (GFAP), ubiquitin C-terminal hydrolase L1 (UCH-L1), and S100 calcium-binding protein B (S100B) — can now be measured from a standard blood draw within hours of injury. Elevated levels indicate that brain injury has occurred, even when the patient's clinical presentation appears mild and CT imaging looks normal.
The imaging pillar formalizes the role of brain imaging — CT and MRI — in characterizing the injury. Rather than simply asking whether a scan is "positive" or "negative," the framework categorizes the specific types of pathology present, such as contusions, hemorrhages, or diffuse axonal injury, each of which carries different implications for recovery.
The modifier pillar accounts for individual factors that influence clinical presentation and outcome: the mechanism of injury, the patient's age, preexisting medical conditions, prior head injuries, and psychosocial factors. These modifiers have always been relevant to prognosis, but the current classification system ignores them entirely.
Independent medical examinations will need to adapt. Medical evaluators who currently rely on the GCS classification to frame their opinions about injury severity and causation will need to engage with the new framework. The biomarker pillar deserves special attention because it introduces something the workers' comp system has never had for traumatic brain injury: an objective, measurable indicator of injury that does not depend on patient self-reporting or clinical judgment. Brain injury has historically been one of the most difficult conditions to evaluate in the claims context precisely because it lacks the kind of objective evidence — an X-ray showing a fracture, an MRI showing a disc herniation — that other orthopedic injuries produce. Blood-based biomarkers change that equation.
This does not mean biomarker testing will resolve all disputes. Elevated protein levels indicate brain injury but do not, by themselves, predict the duration of symptoms or the degree of functional impairment. And the science is still maturing — reference ranges, timing windows for testing, and interpretation standards are all subjects of active research. But the direction is clear: TBI evaluation is moving from subjective to objective, and the workers' comp system will need to keep pace.
The CBI-M framework is not yet in universal clinical use. The authors describe it as a framework that will require validation and refinement before full adoption. But it is being tested at trauma centers now, it was published in one of the world's leading neurology journals, and it carries the imprimatur of the NIH. The trajectory is unmistakable.
For further reading, the CBI-M framework was published in The Lancet Neurology in May 2025: A New Characterisation of Acute Traumatic Brain Injury: The NIH-NINDS TBI Classification and Nomenclature Initiative. The NIH-NINDS also published an accessible summary: New Framework for Classifying Traumatic Brain Injury. - $2M Fraud Proceeds Seized From Pasadena Wound Care Clinicon April 30, 2026 at 11:30 AM
The DOJ has called Southern California a "high-risk environment" for health care fraud. The FBI's Los Angeles Field Office has also pledged to crack down on health care fraud with the National Fraud Enforcement Division within the DOJ.
This week a federal court has granted a request from the United States to seize more than $2 million from a Pasadena-based advanced wound care clinic accused of defrauding Medicare for reimbursements for skin graft substitutes and skin grafts that never were performed on patients.
According to an affidavit filed with a federal seizure warrant, from September 2025 to April 2026, Expert Wound Care submitted more than $46.6 million in claims to Medicare for skin substitute products and wound care services purportedly provided to 78 beneficiaries. Medicare approved payments of approximately $34,031,382 on these claims, which included skin substitutes and skin grafts as well as skin application procedures.
From January 2025 to June 2025, the national average for a billing provider’s allowed amount per claim for skin substitute grafts was $16,837. From July 2025 to March 2026, Expert Wound Care averaged approximately $37,449 in allowed amount per claim for substitute skin grafts, more than double the national average.
The clinic increased its Medicare billing from $4,975 in July 2025 to approximately $33 million in December 2025, according to the affidavit. One beneficiary had a total payment amount to Medicare of approximately $6,232,645, and the average paid amount per beneficiary was approximately $299,639.
One of the most alarming details involves a single patient. From October 2025 to February 2026, Expert Wound Care billed Medicare for approximately $2,611,105 and was paid approximately $2,039,792 for skin substitute grafts and 52 skin graft application services purportedly provided to one beneficiary. Law enforcement determined that the beneficiary did not receive any skin grafts as part of his treatment and did not receive any type of home service in December 2025 despite the fact Expert Wound Care filed 27 claims for services on this beneficiary’s behalf for that month.
And there seems to have been some statistical red flags. Expert Wound Care’s percentage of total beneficiaries receiving substitute skin grafts of 38.5%, more than six times the national average of 6%. Its percentage of total claims for substitute skin grafts was 63%, approximately nine times the national average. Finally, Expert Wound Care’s percentage of total allowed amount for substitute skin grafts was 99.9%, more than double the national average.
Homeland Security Investigations and the United States Department of Health and Human Services Office of Inspector General are investigating this matter. Assistant United States Attorney Jonathan S. Galatzan of the Asset Forfeiture and Recovery Section is handling this case.
The Department of Justice has created the National Fraud Enforcement Division. The core mission of the Fraud Division is to zealously investigate and prosecute those who steal or fraudulently misuse taxpayer dollars. Department of Justice efforts to combat fraud support President Trump’s Task Force to Eliminate Fraud, a whole-of-government effort chair by Vice President J.D. Vance to eliminate fraud, waste, and abuse within federal benefit programs.