- Policy Cancellation OK For Nonpayment of Earned or Unearned Premiumon September 24, 2026 at 2:16 PM
State Compensation Insurance Fund (State Fund) had insured Dynamic Nutraceutical, Inc. for many years. The policy at issue ran from January 1, 2012 to January 1, 2013, with a total estimated annual premium of $640 and a required deposit premium of the same amount. On January 20, 2012, State Fund sent Dynamic a notice revising the required deposit. It told Dynamic to pay $71.20. The decision does not explain the difference between the two figures.
On February 21, 2012, State Fund sent a notice cancelling the policy effective March 8, 2012 for failure to pay premium when due, citing the $71.20 balance. Dynamic's principal testified that he did not recall receiving the notice until much later, because at the time he was caring for his mother, who had cancer and was frequently hospitalized. He found the letter in June and then sent State Fund a check for $71.20.
The policy listed nonpayment of premium as a ground for cancellation. State Fund had attached letters telling policyholders that, starting January 1, 2012, it would no longer send cancellation warning letters and would move to a new billing system built around a premium deposit. Nicolas Garcia's workers' compensation claim against Dynamic turned on whether the policy was still in force. The decision does not state his date of injury. The Uninsured Employers Benefits Trust Fund was among the parties served.
In a February 2, 2026 Findings and Order, the arbitrator found that part of Dynamic's deposit premium remained unpaid as of February 21, 2012. However, the arbitrator also found that State Fund had not shown any unpaid earned premium, meaning premium for coverage already provided. The arbitrator concluded that neither the policy nor Insurance Code § 676.8 allows cancellation on 10 days' notice for an unpaid deposit premium. He declared the cancellation void and returned the case to the trial level to address injury and benefits. His later report recommended that State Fund's petition for reconsideration be denied, and Dynamic filed no answer.
In the panel decision of Nicolas Garcia v. Dynamic Nutraceutical, Inc.; State Compensation Insurance Fund, ADJ9109258, (September 2026), the Board panel (Commissioners Paul F. Kelly, Katherine Williams Dodd, and Joseph V. Capurro) granted reconsideration and rescinded the arbitrator's decision. It substituted a finding that State Fund properly canceled the policy on March 8, 2012 because Dynamic failed to make a required premium payment when due.
The panel first confirmed that its decision was timely. Under the version of Labor Code § 5909 in effect from July 2, 2024 through June 30, 2026, the Board had 60 days from the case's transmission on July 15, 2026 to act. That period ended on a Sunday, so the deadline moved to Monday, September 14, 2026 under Cal. Code Regs., tit. 8, § 10600(b). The arbitrator's report had been served months before the transmission, so serving it did not give the parties notice that the 60-day clock had started. However, the district office's July 15 minutes of hearing did give that notice.
On the merits, the panel held that the statute and the policy were both unambiguous. Section 676.8(b)(1) allows cancellation for the policyholder's failure to make any premium payment when due. The panel reasoned that the statute makes no distinction between earned and unearned premium and does not exempt a premium deposit. It read the word “any” as removing doubt that every kind of premium payment is covered. The policy likewise allowed cancellation for nonpayment of premium without distinguishing between types of premium. Neither the statute nor the policy sets a minimum amount, so it did not matter that the shortfall was only $71.20.
The panel said the arbitrator's distinction between deposit and earned premium went well beyond the plain meaning and obvious purpose of requiring timely payment. It cited the Third District's recent published decision in Employers Preferred Ins. Co. v. Workers' Comp. Appeals Bd. (2026) 122 Cal.App.5th 467 for the rule that courts will not adopt strained readings to create ambiguity. That case also upheld a carrier's cancellation of a policy. The panel also found the notice procedurally sound: § 676.8(c) requires at least 10 days' written notice for nonpayment, and State Fund gave 15.
Finally, the panel admonished State Fund's counsel for citing an unpublished Court of Appeal opinion to explain what a deposit premium is. Under California Rules of Court, rule 8.1115, unpublished opinions generally may not be cited or relied on in other cases. The panel found that none of the rule's exceptions applied.
- WCAB Moves CT Liability Window - Releasing 2014 Carrieron September 24, 2026 at 2:16 PM
Guadalupe Gutierrez worked for almost 40 years as a cemetery groundskeeper in Colma for Hills of Eternity/Home of Peace Management Group. American Family Home Insurance Company (AFH) insured the employer during calendar year 2014, and Insurance Company of the West (ICW) insured it during 2015. Gutierrez had three claims pending. The first was an admitted specific back injury on April 12, 2015, for which ICW furnished benefits. The second was a cumulative trauma claim, filed in November 2016, alleging back injury over the year ending April 12, 2015. The third was a separate claim that was ultimately denied.
In October 2019, Gutierrez elected on the record to proceed against AFH on the cumulative trauma claim under Labor Code § 5500.5(c). In a February 3, 2020 report, the agreed medical evaluator, Dr. William Campbell, concluded that Gutierrez had suffered specific injuries on January 1 and April 12, 2015. He also concluded that the back condition reflected cumulative trauma over almost four decades of heavy work, during which Gutierrez had worked through many unreported smaller injuries. In a later report, Dr. Campbell addressed whether Gutierrez's harmful exposure ended in November 2015 or continued until he stopped working on April 27, 2016. He pointed to treatment records showing that all work restrictions were lifted from November 3, 2015 onward, and concluded the exposure continued through April 27, 2016.
In a November 2022 decision, the workers' compensation judge (WCJ) found both the specific injury and the cumulative trauma injury compensable. For the cumulative trauma claim, the WCJ used the pleaded end date of April 12, 2015 to set the one-year liability period under § 5500.5. The WCJ did not include a formal finding on the date of injury under Labor Code § 5412. However, the WCJ's opinion reasoned that because Gutierrez had a disabling specific injury on April 12, 2015, he must have known that same day that his disability was work-related. The WCJ awarded 46 percent permanent disability, future medical care, and attorney fees on the cumulative trauma claim against the employer, AFH, and ICW jointly and severally. The WCJ deferred the questions of which insurer would administer benefits and how the insurers would share costs.
AFH petitioned for reconsideration. It argued that both the last date of harmful exposure and the date of injury fell in April 2016, which would put the liability period entirely outside AFH's 2014 coverage. ICW petitioned separately, arguing that Gutierrez's 2019 election against AFH meant AFH alone should be liable, so the administration and contribution issues should not have been deferred.
In the panel decision of Guadalupe Gutierrez v. Hills of Eternity/Home of Peace Management Group, ADJ10656667, ADJ10656647, ADJ13080462 (September 2026), the Board panel (Deputy Commissioner Anne Schmitz, Chair Katherine A. Zalewski, and Commissioner JosÉ H. Razo) rescinded the WCJ's decision and substituted new findings on the cumulative trauma claim. The last day of harmful exposure is April 27, 2016. The § 5412 date of injury is February 3, 2020. The § 5500.5 liability period is the 365 days ending April 27, 2016. The panel removed AFH from the award and made the award, including the 46 percent permanent disability, joint and several against the employer and ICW only. It deferred all other issues on that claim and returned the matter to the trial level. The WCJ's findings on the specific injury and the denied third claim were carried forward.
On the end of the exposure period, the panel noted that § 5500.5(a) limits cumulative trauma liability to employers and insurers during the year before the last date of harmful exposure or the § 5412 date of injury, whichever comes first. Dr. Campbell had squarely addressed whether the exposure ended in November 2015 or April 2016. Because his opinion, and the work-status records it relied on, were uncontroverted, the panel saw no good reason to reject it. It cited Power v. Workers' Comp. Appeals Bd. (1986) 179 Cal.App.3d 775 and fixed the last exposure date at April 27, 2016.
On the date of injury, the panel held that the WCJ applied the wrong test. A cumulative trauma injury, as defined in Labor Code § 3208.1, occurs when its combined effect ripens into compensable disability and the worker knows, or reasonably should know, that the disability was caused by work. The panel relied on Federal Ins. Co. v. Workers' Comp. Appeals Bd. (2013) 221 Cal.App.4th 1116 and State Comp. Ins. Fund v. Workers' Comp. Appeals Bd. (Rodarte) (2004) 119 Cal.App.4th 998. Knowing that a specific incident was work-related is not the same as knowing that years of cumulative trauma caused a disability. Under City of Fresno v. Workers' Comp. Appeals Bd. (Johnson) (1985) 163 Cal.App.3d 467, a worker is generally not presumed to have that knowledge without medical confirmation. The panel found no evidence that Gutierrez knew or should have known of a disabling cumulative injury before Dr. Campbell's February 3, 2020 report. Because the April 27, 2016 exposure date came first, it controls the liability window.
On ICW's argument, the panel agreed with the WCJ. Under § 5500.5(c) and Colonial Ins. Co. v. Industrial Acc. Com. (Pedroza) (1946) 29 Cal.2d 79, an injured worker may elect to proceed against any one of several liable insurers. But that election does not relieve any other insurer of its liability, so deferring administration and contribution was proper. The panel then noted that its own findings moved the liability period entirely outside AFH's 2014 coverage, so the record no longer supported any award against AFH. That left ICW, which covered 2015, jointly liable with the employer. The panel added that ICW may still identify whichever insurer covered the employer in 2016, join it in the case, and seek contribution.
- 9th Circuit Rules 2013 Insurance Code Notice Mandate Not Retroactiveon September 23, 2026 at 12:27 PM
In 2007, New York Life Insurance and Annuity Corporation issued a life insurance policy to Mr. Linhart, who owned the policy and named his wife, Barbara Linhart, as sole beneficiary. The policy did not require fixed premium payments, but Mr. Linhart had to pay enough to keep the policy's account value above the insurer's monthly deduction charge, which covered the monthly cost of coverage plus fees.
In 2012, the Legislature enacted Insurance Code § 10113.71 and Insurance Code § 10113.72, effective January 1, 2013. Together they created a mandatory grace period and pre-termination notice rules for life policies. Subdivision (a) of § 10113.72 bars an individual life policy from being issued or delivered until the applicant has been given the right to designate a third person to receive lapse or termination notices, and requires the insurer to give each applicant a form for that purpose. Subdivision (b) requires the insurer to remind the policy owner annually of the right to make or change a designation, and subdivision (c) requires at least 30 days' notice before a policy lapses for nonpayment.
Starting in August 2013, the insurer sent Mr. Linhart an annual policy summary that included notice of his right to designate a third party to receive lapse notices. It never sent a standalone designation form, and Mr. Linhart never named a designee. On June 1, 2021, the policy entered a grace period because the account value could not cover the monthly charges. The insurer mailed a notice telling Mr. Linhart he needed to make a sufficient payment by August 3, 2021. The policy lapsed on that date, and Mr. Linhart died four days later. When his estate asked about benefits, the insurer responded that the policy had lapsed and declined to pay.
Barbara Linhart filed a putative class action alleging that the insurer violated § 10113.72(a) by failing to send designation forms to owners of policies issued before 2013. According to the district court's order, her amended complaint pleaded claims for breach of contract and breach of the implied covenant of good faith and fair dealing. The district court granted summary judgment to the insurer, concluding that under the plain language of § 10113.72(a) and the California Supreme Court's decision in McHugh v. Protective Life Ins. Co. (2021) 12 Cal.5th 213, the insurer had no duty to send Mr. Linhart a designation form. The court then denied class certification. Ms. Linhart appealed under 28 U.S.C. § 1291.
In the published case of Linhart v. New York Life Insurance and Annuity Corporation, No. 25-490 (September 2026), a Ninth Circuit panel affirmed the summary judgment for the insurer. The panel held that life insurers are not required to send § 10113.72(a) designation forms to owners of policies issued before the statute took effect on January 1, 2013.
The panel treated the question as already answered by the California Supreme Court, whose interpretation of state law binds federal courts. In McHugh, the high court stated that § 10113.72(a) “unmistakably applies only to new policies.” McHugh reasoned that the subdivision repeatedly refers to the “applicant” rather than the “policy owner,” and that its command that a policy shall not be issued or delivered until the designation right is given signals forward-looking application. Because Mr. Linhart's 2007 policy was not a new policy, the panel concluded that subdivision (a) never applied to it, and the insurer had no obligation to send him a form while he was alive.
Ms. Linhart relied on other language in McHugh holding that §§ 10113.71 and 10113.72 apply to all policies in force when they took effect, regardless of issue date. The panel found that argument unpersuasive. It explained that McHugh's general statement about the sections as a whole does not answer whether one particular subdivision reaches existing policies. Subdivisions (b) and (c) impose ongoing notice obligations that can sensibly apply to every in-force policy, while subdivision (a) is tied to a single moment, the application process before a policy issues. Requiring pre-issuance forms for policies already issued, the panel wrote, would make nonsense of subdivision (a)'s text. The panel added that McHugh's description of the provisions as a single, unified pre-termination notice scheme supports, rather than undercuts, reading the subdivisions to operate differently.
The opinion addressed only subdivision (a). It did not decide whether the insurer's annual policy summaries satisfied subdivision (b) or whether its grace-period notice satisfied § 10113.71 or § 10113.72(c), as those issues were not the basis of the appeal. For insurers administering pre-2013 individual life policies in California, the ruling confirms that the pre-issuance designation form requirement does not apply retroactively, while McHugh's holding that the ongoing notice and grace-period protections apply to all policies in force on January 1, 2013 remains in place.
- Flight Surgeon/QME Named "Hidden Gem" at 2026 Comp Conferenceon September 23, 2026 at 12:27 PM
Dr. Leslie Cadet is a former U.S. Air Force flight surgeon who was named Air Force Global Strike Command's 2015 Command Flight Surgeon of the Year, was just named one of two 2026 “Hidden Gems” among the 12 professionals honored at the second annual Work Comp Changemaker© Awards. The awards were presented at the ELEVATE® Work Comp Conference at the Hotel del Coronado in Coronado, California this September.
The honorees were announced on the Deconstructing Comp website. The organizers say the Hidden Gem category recognizes professionals whose leadership is quiet but has a significant effect on the industry. Dr. Cadet, a board-certified occupational and environmental medicine physician, QME, educator, and entrepreneur, shares the designation with Nicholas Fonner, a workers' compensation case manager at Brooks Rehabilitation.
According to her honoree profile on the Deconstructing Comp website, Dr. Cadet began her career in the Air Force as a flight surgeon and occupational health consultant. The profile says her work supported 1,080 combat missions and 2,000 airlift missions in support of Operations Inherent Resolve and Enduring Freedom. As medical director of her flight medicine clinic, she led a 23-person team that cared for more than 700 beneficiaries and supported the medical readiness of about 5,100 active-duty personnel. Her patients included aviators, aircraft mechanics, intelligence personnel, and other service members working in specialized, high-demand jobs. In addition to the Command Flight Surgeon of the Year award, she was named her squadron's 2015 Company Grade Officer of the Year.
After leaving the military, Dr. Cadet completed a residency in occupational and environmental medicine at the Harvard T.H. Chan School of Public Health and earned a Master of Public Health degree there. She later served as Employee Health Medical Director at Loma Linda University Health. She still teaches as an assistant professor at the Loma Linda University School of Medicine and as an attending physician in its occupational and environmental medicine residency program. According to her profile, the residents she trains named her Teacher of the Year in 2022, 2023, 2024, and 2026.
Her current work is aimed directly at employers and claims professionals. Dr. Cadet founded and leads ASCEND Occupational Medicine Consulting, a physician-led firm that works with self-insured employers, claims professionals, attorneys, and others on complex workers' compensation claims. Her profile says the firm provides medical oversight of those claims. That work includes testing whether diagnoses and treatment plans are supported by objective evidence, identifying barriers to recovery, setting realistic recovery timelines, and strengthening return-to-work plans so claims do not slide into prolonged disability. The profile describes the gap she is trying to close this way: claims decisions are usually guided by financial, claims-handling, and legal experts, but often without a physician at the table. Her approach, as the profile summarizes it, favors appropriate care over more care, function over disability, and early intervention over letting a claim grow more complex.
Ten other professionals were named 2026 Work Comp Changemaker© Honorees. They are Catherine Benavidez of Injury Management Organization; Anthony Culpepper, Jr., of Employer Defense Group and the African American Workers' Compensation Professionals; Dr. Geralyn Datz of Southern Behavioral Medicine Associates; Dr. Steven Feinberg of Feinberg Medical Group; Kimberly George of Sedgwick; Agnes Hoeberling of AvonRisk; Kirsten Kaiser Kus of Downey, Lenkov, Milstein & Kus Law Firm; Roberta Serena Mike of Strategic Comp and the Workers' Compensation Career Mentorship Group; Dave Taylor of Charter Communications; and Licia Thompson-Young of Licia Thompson Coaching & Consulting. Profiles of all honorees are on the Deconstructing Comp website.
The awards were created by Yvonne Guibert and Rafael Gonzalez, co-hosts of the Deconstructing Comp Podcast. They are not lifetime achievement awards. Instead, they recognize emerging and established professionals for their leadership, impact, integrity, and mentorship over the past two to five years. According to the organizers, honorees are chosen by an advisory committee of workers' compensation professionals in three rounds. First, each committee member nominates five people. Next, each member champions two nominees they did not nominate, interviews them, and presents them to the committee. Finally, the committee ranks the finalists, and the rankings determine the honorees. Guibert described this year's class as “people to watch” in the release.
And Dr. Cadet, thank you so very much for your service to our country.
- Insurance Payment Service Accused of Illegal Price Fixingon September 22, 2026 at 9:54 AM
MultiPlan Corporation was founded in 1980 in New York City as a hospital network aimed at giving patients access to care and controlling costs when they went outside a narrow insurance network. Over the following decades it built out a preferred provider organization (PPO) business and grew through consolidation into a national network.
In April 2024, a New York Times investigation by Chris Hamby ("Insurers Reap Hidden Fees by Slashing Payments. You May Get the Bill") reported that MultiPlan and the insurers using its services shared a financial incentive to push reimbursements as low as possible, since both parties' fees rose as the amount paid to providers fell — leaving patients exposed to larger balance bills.
The article resulted in a wave of private antitrust litigation from hospital systems and providers, which was consolidated into the multidistrict litigation In re MultiPlan Health Insurance Provider Litigation in the Northern District of Illinois — the same MDL whose 2025 ruling on a motion to dismiss the Court of Appeal relied on in this VHS Liquidating Trust case. In February 2025, amid this litigation and reputational pressure, the company rebranded from MultiPlan to Claritev Corporation, moving its NYSE ticker from MPLN to CTEV.
Last June, the Arizona AG announced a lawsuit against MultiPlan and several large health insurers, alleging they quietly built and operated a system that slashed payments to doctors and hospitals — and left Arizonans having to pay more for out-of-network care.
In this September 2026 published California court of appeal decision, VHS Liquidating Trust is the bankruptcy liquidator for Verity Health System of California, a former not-for-profit operator of six hospitals in the San Francisco, Los Angeles and San Jose areas that went bankrupt in 2018. Verity, like other hospitals, was paid for patient care by a mix of patients, government payors, and private insurers. Where a hospital has no contract covering a particular service, the service is billed as “out-of-network” (OON), and the insurer typically reimburses the provider at a rate based on the “usual, customary, and reasonable” (UCR) rate for the area.
Based on these allegations, VHS sued MultiPlan (without naming the insurers, who had separately compelled arbitration) for horizontal price fixing, price tampering, and unlawful exchange of competitively sensitive information under the Cartwright Act (Bus. & Prof. Code § 16700 et seq.), plus a derivative Unfair Competition Law claim.
VHS's complaint alleges that MultiPlan Corporation (now Claritev Corporation), which markets algorithm-driven data analytics to health insurers, offers a “repricing” service that insurers use to set OON reimbursement rates. Insurers send MultiPlan a claim; MultiPlan's proprietary algorithm, built on a pooled database of roughly a billion claims from more than 700 insurers, recommends a price; and MultiPlan then presents that price to the provider on a take-it-or-leave-it basis. By 2020 MultiPlan was repricing 370,000 OON claims per day, and insurers reportedly followed its recommendations without human review 87 percent of the time. VHS alleges this scheme is the successor to an earlier practice, involving a MultiPlan predecessor called Ingenix, that a 2009 New York Attorney General enforcement action forced to shut down. VHS contends that MultiPlan operates as the "hub" of a "hub, spoke, and rim" conspiracy: insurers (the spokes) know from MultiPlan's own public statements that their competitors also submit sensitive claims data to MultiPlan and follow its recommended prices the vast majority of the time, giving each insurer the assurance it needs to accept suppressed rates without fear that a rival will out-compete it by paying more.
The San Francisco County Superior Court sustained MultiPlan's demurrer to the entire complaint without leave to amend. The trial court reasoned that an insurer's reimbursement for OON services is not a standalone product or service but is simply part of the insurance policy the insurer already owes its subscriber; without a discrete product, the court held, there is no "price" that the Cartwright Act's price-fixing and price-tampering provisions can reach. Because the information-exchange claims and the UCL claim were premised on the same theory, those fell with the price-fixing claims, and final judgment was entered for MultiPlan.
In the published case of VHS Liquidating Trust v. MultiPlan Corporation et al., No. A171914 (1st Dist., Div. 3, Sept. 2026): Reversed and remanded. The Court of Appeal held that OON reimbursements are not categorically exempt from Cartwright Act scrutiny, reversed the judgment on the demurrer, and sent the case back to the trial court to consider MultiPlan's remaining, unaddressed arguments in the first instance.
Writing for a unanimous panel, the court held that the trial court's exemption for OON reimbursements has no basis in the Cartwright Act's text or in case law. The statute broadly prohibits combinations that fix or tamper with the price of an "article, commodity or transportation," and California courts have long read it to cover services as well, and to reach buyers' price-fixing (not just sellers'). The court reasoned that an insurer's contractual duty to its subscriber and its separate market transaction with a provider are analytically distinct: just as a general contractor's obligation to a homeowner does not exempt its payments to subcontractors from antitrust scrutiny, an insurer's coverage promise to its subscriber does not exempt its reimbursement negotiations with providers.
Because no California case had addressed the question directly, the court also surveyed federal authority, noting that under the Cartwright Act federal precedent is instructive but not binding, since the Act is "broader in range and deeper in reach" than the Sherman Act (Cianci v. Superior Court (1985) 40 Cal.3d 903, 920). The court declined to follow three federal district court decisions the trial court had relied on—Franco v. Connecticut General Life Insurance Co. (D.N.J. 2011) 818 F.Supp.2d 792, In re Aetna UCR Litigation (D.N.J. 2015), and Pacific Recovery Solutions v. Cigna Behavioral Health, Inc. (N.D. Cal. 2021)—because those cases analyzed the question from the perspective of insurance subscribers, not providers, and did not address whether a provider-insurer transaction could itself be price-fixed. Instead, the court found persuasive the federal multidistrict litigation against MultiPlan itself, where the presiding judge rejected the identical argument as a "sleight of hand" that analyzed the wrong market (In re MultiPlan Health Insurance Provider Litigation (N.D. Ill. 2025) 789 F.Supp.3d 614).
The court further relied on U.S. Supreme Court and First Circuit authority holding that an insurer's payments to providers are legally distinct from its coverage obligations to policyholders. In Group Life & Health Insurance Co. v. Royal Drug Co. (1979) 440 U.S. 205, the Supreme Court held that an insurer's pharmacy reimbursement agreements were "merely arrangements for the purchase of goods and services," separate from the insurer's obligations under its policies. In Kartell v. Blue Shield of Massachusetts, Inc. (1st Cir. 1984) 749 F.2d 922, the First Circuit similarly held that any distinction between "purchasing" and "insurance reimbursement" is "irrelevant for antitrust purposes." Applying that same logic, the panel concluded it would be illogical to hold that providers can be liable for fixing the prices they charge insurers, but insurers cannot be liable for fixing the prices they pay providers.
Because it reversed on this threshold ground, the court did not reach MultiPlan's other arguments, including one based on the Knox-Keene Act, and remanded for the trial court to address them in the first instance. In a footnote, the court added—without resting its holding on the point—that it viewed the trial court's rule as posing a policy concern, since it would exempt a significant portion of the healthcare industry from antitrust scrutiny at a time when courts have also been reluctant to let insurance subscribers challenge similar conduct.
- Guilty Plea in $400K Medi-Cal Fraud Case Results in 2 Year Sentenceon September 22, 2026 at 9:54 AM
The California Attorney General announced that Maki Martinez-Gruninger pled guilty to a felony charge of defrauding the Medi-Cal program and will serve two years in state prison for stealing more than $400,000 from the State of California through a scheme that exploited a disabled family member.
California’s In-Home Supportive Services program, known almost universally as IHSS, is the state’s main way of paying for help in the home so that older adults, people who are blind, and people with disabilities—including children—can stay where they live instead of moving into a nursing home or other institution.
IHSS grew out of the independent-living and disability-rights movements of the 1970s and remains one of the largest consumer-directed personal-care programs in the country. Recipients are not patients waiting for an agency to assign a worker; they are the employer. They choose who comes through the door, train that person, set the schedule, and can fire them. About seven in ten hire a family member.
Today the program reaches on the order of 850,000 to 900,000 Californians. It is a Medi-Cal benefit, which means federal Medicaid dollars cover a large share of the cost, with the state and each of the 58 counties paying the rest. The California Department of Social Services sets the rules; county social workers do the day-to-day work.
The California Department of Justice received a complaint alleging that Martinez-Gruninger fraudulently claimed to be the In-Home Support Services provider for a disabled family member. According to the complainant — who was the individual's sole caregiver — they discovered in December 2019 that Martinez-Gruninger secretly applied to be the disabled family member's In-Home Support Services provider in November 2007. As a result, Martinez-Gruninger allegedly submitted false claims to the IHSS program for over a decade.
The investigation determined that Martinez-Gruninger unlawfully took the State of California's Medi-Cal program money, intended to defraud the State of California, and presented false IHSS and Respite Care claims for payment totaling $413,643.30.
She pled guilty to a single felony count of Medi-Cal false claims.
The Division of Medi-Cal Fraud & Elder Abuse is a division within the Department of Justice whose mission is to protect the public and the state’s Medi-Cal program from those who defraud taxpayers and divert state health care resources. The investigation was made possible through the collaboration of government agencies and those who reported incidences of Medi-Cal fraud or elder abuse.
The Medi-Cal Fraud & Elder Abuse receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling nearly $78 million for Federal Fiscal Year 2026. The remaining 25 percent, totaling nearly $26 million for Federal Fiscal Year 2026, is funded by the California Attorney General’s Office. Federal Fiscal Year 2026 is from October 1, 2025 through September 30, 2026.
- Newsom Orders Feasibility Study of Mandating AI Kill Switchon September 21, 2026 at 1:45 PM
Gov. Gavin Newsom signed Executive Order N-9-26 on Friday, September 18, directing a state agency to speed up California’s new independent AI-auditor programs and to report by November 16 on whether state law should require a “kill switch” for the most advanced AI models. The order does not itself impose requirements on AI developers. It sets deadlines for the Government Operations Agency, asks for recommendations, and states that it creates no enforceable rights or benefits. Any new mandate would require changes to state law.
The order accelerates two statutory programs. It does not name the bills, but Government Technology reported that the code sections it cites correspond to SB 813 (McNerney) and AB 1405 (Bauer-Kahan), both approved September 9. According to the governor’s press release, SB 813 creates a framework for certifying independent verification organizations that assess AI systems and models for safety risk, and AB 1405 creates a state registry of AI auditors with independence, transparency and integrity standards. The order gives the agency until May 1, 2027, to develop application requirements and criteria for verification organizations under Government Code § 8898.1, and until December 1, 2027, to complete the registry work under Government Code § 11549.82(a) and begin the actions in subdivision (b). Government Technology reported that those dates pull forward original statutory deadlines of January 1, 2028, and January 1, 2029.
Separately, the order asks the agency, working with the Governor’s Office of Emergency Services and unnamed national experts, to submit recommendations to the governor’s office by November 16, 2026. The recommendations must address the technical feasibility and likely efficacy of at least four amendments to state AI safety law. The first would require the largest frontier developers to embed designated independent verification organizations onsite in their labs for periodic audits and evaluations. The second would require independent verification of the safety frameworks, transparency reports and risk assessments those developers already must file under SB 53, the 2025 frontier-AI transparency law. The third would require a kill switch for frontier models, with its effectiveness verified on an ongoing basis by an independent verification organization. The fourth would expand the definition of reportable “critical safety incidents” to include loss-of-control incidents. The order does not say whether the recommendations will be made public.
Coverage has not been uniform about what the order does. The governor’s office described it as advancing the creation of a kill switch, and Fox Business reported that it requires frontier developers to build one. The text, however, asks only whether such a requirement would be technically feasible and effective. In a video message reported by Fox Business, Newsom himself acknowledged that the concept is still taking shape and means different things to different people.
The order’s recitals cite reports of apparent attempts to use AI to create bioweapons and of AI agents defeating company security protocols and hacking other companies, in some cases undetected for months. The order names no companies or incidents and attaches no evidence. The governor’s press release refers to the “Hugging Face attack,” and a Yahoo News report describes a July breach of that platform by autonomous agents built on OpenAI models that escaped a testing environment. Those details come from press accounts, not from the order. The order also faults federal leaders for inaction, and the governor’s office called on Congress and President Trump to adopt California’s framework as a national floor.
Reaction has followed political lines and, in places, technical ones. State Sen. Scott Wiener, who authored the vetoed 2024 kill-switch bill and co-led SB 53, issued a statement of support, calling the order a challenge to lawmakers and saying the Legislature must follow with strong guardrails early next year. Politico, as carried by Yahoo News, reported that some in the tech industry oppose kill switches as technically infeasible, that LinkedIn co-founder Reid Hoffman voiced support for the idea at a Politico event this week, and that Newsom had said he was weighing further options, including a special legislative session. The Washington Examiner reported that critics contend existing product-liability rules already address the risks and that the push for new regulation is an orchestrated effort that could let large technology companies form a cartel and suppress competition. On the federal side, Fox Business reported that Sen. John Kennedy’s attempt to advance a federal kill-switch bill was blocked this week by Sen. Rand Paul, who cautioned against hastily regulating an entire industry.
For employers and insurers, the order’s significance is indirect. Its subject is the developers of frontier AI models, and it does not address employer use of AI, workers’ compensation or insurance. But California is building a certified third-party audit structure around AI, and the November recommendations will show how far the state may go in requiring outside verification of safety claims behind models that some workplace tools may rely on. The order also sits alongside the governor’s May 21 workforce order, which directs agencies to study AI-driven job disruption and to recommend revisions to the state WARN Act within 180 days. The next fixed date is November 16.
- Physician Must Exhaust Hospital Peer Review Before Litigationon September 21, 2026 at 1:45 PM
Dr. Sunil Sujan, a board-certified internist, practiced at Corona Regional Medical Center (CRMC) from 2010 to 2016. He alleged that three rival physicians on staff, competing with his growing practice, orchestrated a campaign to file dozens of false internal "MIDAS" incident reports accusing him of being unresponsive to nursing staff, with the goal of getting him censured or suspended.
After a patient under Sujan's care died of heart failure in June 2016, CRMC's medical executive committee (MEC), chaired by one of the rival physicians, summarily suspended his admitting privileges without, Sujan alleged, any real investigation. Facing the prospect that a suspension lasting 14 days or longer would have to be reported to the California Medical Board and the National Practitioner Data Bank, Sujan signed a lengthy settlement agreement to have his suspension lifted. The agreement did not fully exonerate him: it recited CRMC's continuing concerns about his patient care and record-keeping and imposed a dozen onerous conditions, including mandatory training courses, a monitored backup-physician arrangement, and a mentor who would report on him to the MEC every 90 days.
Sujan later left CRMC voluntarily; when a prospective employer, Good Samaritan Hospital, sought to verify his employment history in 2017, CRMC allegedly conditioned its cooperation on Sujan releasing it from liability, jeopardizing the job offer. Sujan sued CRMC and the three physicians for conversion, interference with economic relations and contract, conspiracy, defamation, and intentional infliction of emotional distress; his wife, Nina Patel, brought a derivative loss-of-consortium claim.
The Riverside County Superior Court granted summary judgment for the defendants on the interference claims, finding Sujan had failed to exhaust the administrative remedies available to him under CRMC's medical staff bylaws before suing for damages, as required by Westlake Community Hospital v. Superior Court (1976) 17 Cal.3d 465. The court rejected Sujan's argument that pursuing an administrative hearing would have been futile, distinguishing Joel v. Valley Surgical Center (1998) 68 Cal.App.4th 360, because — unlike the physician in Joel, who received full, unconditional reinstatement in exchange for withdrawing his hearing request — Sujan's settlement was heavily conditioned and did not represent the maximum relief he could have obtained administratively. The court entered judgment for the defendants and later ruled, based on a fee provision in CRMC's bylaws making a physician who sues without exhausting his remedies liable for the hospital's "full costs, including legal fees," that defendants could recover attorney fees from Sujan, though not from Patel, who never signed the bylaws. The court also found defendants' evidence insufficient to support fees for five prior law firms that had represented them, and it reduced the hourly rates claimed by two of their current partners to align with Riverside County market rates, ultimately awarding $313,830 of the $892,417 defendants had requested. Both sides appealed the fee ruling; Sujan also appealed the underlying summary judgment.
In the published case of Sujan et al. v. UHS Corona, Inc. et al., No. E084185 (Cal. Ct. App., 4th Dist., Div. 2, Sept. 2026). The Court of Appeal affirmed the judgment and the postjudgment attorney fees order in full, rejecting both Sujan's appeal and the defendants' cross-appeal.
On exhaustion, the court held Sujan bore the burden of proving the narrow futility exception and failed to meet it. His settlement, unlike the one in Joel, restated CRMC's ongoing concerns about his competence and imposed a dozen substantive conditions rather than restoring him unconditionally; it therefore did not give him "the maximum relief" an administrative hearing could have provided. The court also found Sujan offered no evidence — only his own declaration — to support his claim that a report to the Medical Board would have been professionally "ruinous," distinguishing the Supreme Court's decision in Mileikowsky v. West Hills Hospital & Medical Center (2009) 45 Cal.4th 1259, and finding persuasive an unpublished federal decision, Ennix v. Stanten (N.D. Cal. 2007), which similarly held that a settlement short of full reinstatement does not excuse exhaustion.
On fees, the court held Business and Professions Code section 809.9, which allows fee awards only when a lawsuit challenging a reportable peer-review action was frivolous or in bad faith, did not apply, because Sujan's suspension lasted less than 14 days and was therefore never required to be reported under section 805. That left CRMC's one-sided contractual fee provision to govern. The court found the provision procedurally unconscionable, as a non-negotiable term of staff bylaws, but not substantively unconscionable, reasoning under Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, that the policies behind the exhaustion doctrine — preserving hospital expertise, mitigating damages, and promoting judicial economy — reasonably justified charging fees only against physicians who bypass peer review and then lose.
On the cross-appeal, the court agreed CRMC could not recover fees from Patel, since her loss-of-consortium claim was not based on the bylaws and, under the reciprocity principles of Civil Code section 1717 (which only applies to contract claims), CRMC would not itself have owed her fees had she won. The court also held defendants forfeited any challenge to the exclusion of their prior attorneys' billing records by failing to request oral argument or seek reconsideration after the court's tentative ruling flagged the issue, and, independently, agreed the supporting declaration was inadmissible hearsay as to work it did not personally witness. Finally, the court found no abuse of discretion in capping the hourly rates of defendants' Los Angeles-based partners at Riverside County market rates, noting defendants offered no evidence that competent local counsel was unavailable.
- DOL Spells Out Mental Health Parity Enforcement Prioritieson September 17, 2026 at 8:20 AM
In simple terms, "mental health parity" is a federal requirement that employer health plans and insurers cover mental health and substance use disorder care on the same terms as they cover physical health care. That means comparable co-pays and deductibles, but it also means comparable rules behind the scenes, like how strict a prior-authorization process is or how a plan decides which providers count as "in network." A plan cannot make it noticeably harder to get therapy or addiction treatment covered than it is to get a knee surgery covered. "Compliance" is the ongoing work employers, insurers, and their administrators do to prove, on paper and in practice, that those rules really do match up.
The U.S. Department of Labor's Employee Benefits Security Administration published two new documents on September 8, 2026, that together reshape how the agency says it will police mental health parity compliance: Field Assistance Bulletin No. 2026-03, which sets out "guiding principles" for enforcing the nonquantitative treatment limitation (NQTL) comparative-analysis requirements of the Mental Health Parity and Addiction Equity Act (MHPAEA), and an updated Self-Compliance Tool plan sponsors and issuers can use to test their own coverage against the law.
The bulletin is an internal EBSA policy memorandum, from Assistant Secretary Daniel Aronowitz to the agency's enforcement staff, and by its own terms creates no enforceable rights for plans, issuers, or participants. But it is the clearest public signal yet of how EBSA intends to direct its MHPAEA investigations following an 18-month stretch of regulatory limbo, and it follows through on an enforcement priority the agency flagged on January 15, 2026, when it overhauled its national enforcement projects for fiscal year 2026 to include barriers to mental health and substance use disorder (MH/SUD) benefits alongside cybersecurity, surprise billing, and benefit distributions.
Some background explains why EBSA felt the need to clarify things. In September 2024, the Departments of Labor, Health and Human Services, and the Treasury issued a final rule under MHPAEA, as amended by the Consolidated Appropriations Act, 2021 (CAA), adding new requirements for the NQTL comparative analyses plans and issuers must prepare (the 2024 Final Rule, 89 Fed. Reg. 77,586). Four months later, the ERISA Industry Committee sued in the U.S. District Court for the District of Columbia, arguing the rule was arbitrary and capricious and exceeded the agencies' statutory authority. Then came Executive Order 14219, directing agencies to identify and de-prioritize enforcement of regulations seen as imposing outsized compliance burdens (90 Fed. Reg. 10,583). In May 2025, the three Departments responded to both developments with a formal nonenforcement statement, agreeing not to enforce the new provisions of the 2024 Final Rule until the litigation concludes, plus an additional 18 months, while stressing that MHPAEA's underlying statutory obligations remain fully in effect.
That litigation has since moved further away from the 2024 Final Rule rather than toward defending it. According to a joint status report the Departments and the ERISA Industry Committee filed with the court in late March 2026, the Departments have now decided that, rather than defend the rule as written, they will issue a new proposed rule with anticipated substantial revisions to the challenged provisions, with a notice of proposed rulemaking targeted for no later than December 31, 2026 (see the March 30, 2026 joint status report in ERISA Indus. Comm. v. Dep't of Health & Hum. Servs., No. 1:25-cv-00136 (D.D.C.)). In the meantime, plans and issuers are left navigating NQTL compliance under the pre-2024 regulatory framework, without a finalized replacement rule.
It is against that backdrop that the new bulletin narrows EBSA's enforcement focus to three categories the agency says carry the highest potential for participant harm. The first is separate treatment limitations, including blanket exclusions of MH/SUD treatments where comparable medical or surgical treatments are covered; EBSA says it will prioritize wholesale exclusions but may still pursue narrower ones, especially in response to complaints. The second is medical necessity standards and review, with particular attention to prior authorization, concurrent review, and retrospective review; plans may rely on proprietary clinical guidelines, the bulletin notes, but must make them available on request during investigations and to participants. The third is network adequacy, with emphasis on provider admission standards and reimbursement methodologies, on the theory that a thin MH/SUD network pushes participants toward costlier out-of-network care. EBSA says it may still investigate other categories of NQTLs as complaints arise, but these three will get the bulk of its attention.
The companion Self-Compliance Tool, a roughly 40-page document plan sponsors, plan administrators, issuers, and state regulators can use as a self-audit checklist, is required to be updated every two years under Section 13001(a) of the 21st Century Cures Act. This edition walks through MHPAEA's six benefit classifications, the "substantially all" and "predominant" tests used to evaluate financial requirements and quantitative treatment limits, and a four-step method for analyzing NQTLs: identifying the limitation, the factors behind it, the evidentiary sources for those factors, and whether the whole process is applied comparably to MH/SUD and medical/surgical benefits, both on paper and in practice. It also folds in DOL's existing guidance on medication-assisted treatment for opioid use disorder and eating-disorder benefits, both of which the tool says remain subject to MHPAEA's parity requirements notwithstanding the rulemaking uncertainty.
For insurers and self-funded plans specifically, the tool's most operationally significant addition may be Appendix II, a framework for benchmarking provider reimbursement rates against Medicare as a way of self-testing network-related NQTLs before DOL auditors do it for them. The tool flags, as possible warning signs warranting further review, MH/SUD reimbursement rates set at or near Medicare levels while medical/surgical rates run well above Medicare, and psychiatrists reimbursed less than other physicians for identical evaluation-and-management billing codes. The tool is explicit that outcomes and denial-rate disparities are not, by themselves, proof of a violation, but it treats them as red flags that can trigger closer scrutiny of the underlying process. The Self-Compliance Tool also complements benchmarking resources the National Association of Insurance Commissioners has developed for state regulators and issuers.
Employee-benefits practitioners who reviewed the bulletin in the days after its release were, by and large, measured about how much it actually changes. One law firm client alert characterized the bulletin as reaffirming existing enforcement priorities rather than establishing new compliance standards, and separately noted that neither the bulletin nor the tool fills the gap left by the 2025 nonenforcement policy on what a compliant NQTL comparative analysis must contain, since a new final rule remains pending. For employers and issuers, the practical takeaway is that while the 2024 Final Rule's new provisions remain unenforced pending litigation and rulemaking, MHPAEA's statutory NQTL comparative-analysis obligations under the CAA are still live and enforceable, and EBSA has now told the regulated community, in some detail, where it plans to look first.
This summary is for general informational purposes only. Readers should consult the full Field Assistance Bulletin and Self-Compliance Tool, and the underlying rules and court filings linked above, for complete details and methodology and consult with legal counsel before making compliance decisions.
- FDA Approves First Motion-Preserving Alternative to Spinal Fusionon September 17, 2026 at 8:20 AM
Low back pain is the single most common driver of lost work time and one of the most contested diagnoses in the workers' compensation system, and spinal fusion surgery — the procedure most often authorized as a last resort — remains among the most expensive, slowest-recovering, and most heavily litigated treatments claims professionals encounter. That landscape shifted in mid-December 2025, when the U.S. Food and Drug Administration granted full premarket approval to the DIAM Spinal Stabilization System, the first posterior, motion-preserving implant cleared in the United States as an alternative to fusion for chronic low back pain caused by degenerative disc disease.
The device, manufactured by Companion Spine, received FDA approval on the strength of a prospective, randomized, multicenter Investigational Device Exemption trial with an average follow-up of 11.5 years, according to the company's December 15, 2025 announcement. Notably, the FDA granted the approval without requiring a post-approval confirmatory study, a step the agency reserves for applications it considers to be supported by unusually strong clinical evidence.
To understand why this approval matters, it helps to understand the treatment gap it is meant to fill. When a worker develops chronic low back pain from degenerative disc disease that does not resolve with physical therapy, medication, and injections, the traditional next step has long been spinal fusion — permanently joining two or more vertebrae together with screws, rods, and bone graft to eliminate motion at the painful segment. Fusion can be effective, but it is also invasive, requires a lengthy recovery, eliminates natural spinal motion at the treated level, places additional mechanical stress on adjacent vertebrae, and forecloses future treatment options if it fails. Many patients with moderate symptoms have historically been left in a gap: too impaired for continued conservative care, but not considered good candidates for the invasiveness of fusion.
The DIAM system is designed for that gap. It is an H-shaped spacer made of silicone and polyester that is implanted between the spinous processes — the bony protrusions at the back of each vertebra — at a single level from L2 to L5. Secured with polyester tethers and titanium crimps, the device is intended to offload stress from the painful disc and posterior joints while preserving natural motion at the treated segment, rather than eliminating it. The procedure is performed on an outpatient basis through a minimally invasive posterior approach, and because it does not fuse the spine, it is designed to be removable and to leave future surgical options, including fusion, open if needed. The implant itself is not new internationally: more than 250,000 units have been implanted in over 200,000 patients across 76 countries since 1997, but this approval marks its first full U.S. clearance after a 20-year regulatory path that included a 2016 FDA advisory panel rejection over insufficient trial data.
The pivotal trial measured a composite clinical success endpoint at 24 months — combining pain relief, functional improvement, and the absence of device-related reoperation — and found a 67.4 percent success rate for DIAM patients compared with 11.9 percent for patients who continued non-operative care, a difference the company describes as showing a Bayesian posterior probability of superiority exceeding 0.999. Secondary measures reported by Companion Spine included a 77 percent responder rate on the Oswestry Disability Index and an 83.2 percent back pain responder rate at 24 months, with durability holding up over the long term: among the long-term follow-up cohort tracked for an average of 11.5 years, 86.4 percent maintained both disability and pain responder status, and 87 percent of patients said they would choose the same treatment again more than a decade later.
On safety, the company reported a 1.6 percent rate of device-related serious adverse events, no reported device migrations or mechanical failures through 11.5 years of follow-up, and a 95.7 percent freedom-from-device-removal rate at the same interval. Notably, according to the trial investigators quoted in the FDA announcement, none of the study patients who received the DIAM implant required conversion to spinal fusion during the study's long-term follow-up period. Independent verification of these figures beyond the company's own release and the underlying FDA premarket approval documentation will accumulate as the device enters broader U.S. use and registry data develops, and claims professionals should treat single-manufacturer clinical trial results with the same scrutiny they would apply to any sponsor-funded study, while recognizing that the FDA's decision to waive a post-approval confirmatory trial reflects the agency's own confidence in the existing evidence base.
Because DIAM is indicated only for patients with single-level lumbar degenerative disc disease who remain symptomatic after at least six months of non-operative care, utilization reviewers will need to confirm that conservative treatment was genuinely exhausted before a request reaches this stage — the same threshold question that already governs fusion requests, but now with a second surgical option in the mix rather than a binary choice between continued conservative care and fusion.
DIAM enters the U.S. market at a moment when spine surgeons and payers alike have been rethinking the "fusion-first" default for degenerative disc disease, a theme that was prominent at the 2026 annual meeting of the International Society for the Advancement of Spine Surgery, where motion-preserving technologies and their long-term economic sustainability were a central focus. Whether DIAM becomes a meaningful presence in workers' compensation treatment plans will depend on real-world outcomes as more U.S. surgeons gain experience with the device, on how commercial and workers' compensation payers approach coverage and fee-schedule classification for a device without an established coding history in this country, and on whether the favorable trial-population results hold up in the more medically and psychosocially complex population typical of workers' compensation claims. Claims professionals reviewing lumbar spine treatment requests over the coming months should ask whether DIAM or a similar motion-preserving device was considered, and utilization review protocols may need updating as this option becomes more familiar to treating physicians and reviewers alike.
- Policy Cancellation OK For Nonpayment of Earned or Unearned Premiumon September 24, 2026 at 2:16 PM
State Compensation Insurance Fund (State Fund) had insured Dynamic Nutraceutical, Inc. for many years. The policy at issue ran from January 1, 2012 to January 1, 2013, with a total estimated annual premium of $640 and a required deposit premium of the same amount. On January 20, 2012, State Fund sent Dynamic a notice revising the required deposit. It told Dynamic to pay $71.20. The decision does not explain the difference between the two figures.
On February 21, 2012, State Fund sent a notice cancelling the policy effective March 8, 2012 for failure to pay premium when due, citing the $71.20 balance. Dynamic's principal testified that he did not recall receiving the notice until much later, because at the time he was caring for his mother, who had cancer and was frequently hospitalized. He found the letter in June and then sent State Fund a check for $71.20.
The policy listed nonpayment of premium as a ground for cancellation. State Fund had attached letters telling policyholders that, starting January 1, 2012, it would no longer send cancellation warning letters and would move to a new billing system built around a premium deposit. Nicolas Garcia's workers' compensation claim against Dynamic turned on whether the policy was still in force. The decision does not state his date of injury. The Uninsured Employers Benefits Trust Fund was among the parties served.
In a February 2, 2026 Findings and Order, the arbitrator found that part of Dynamic's deposit premium remained unpaid as of February 21, 2012. However, the arbitrator also found that State Fund had not shown any unpaid earned premium, meaning premium for coverage already provided. The arbitrator concluded that neither the policy nor Insurance Code § 676.8 allows cancellation on 10 days' notice for an unpaid deposit premium. He declared the cancellation void and returned the case to the trial level to address injury and benefits. His later report recommended that State Fund's petition for reconsideration be denied, and Dynamic filed no answer.
In the panel decision of Nicolas Garcia v. Dynamic Nutraceutical, Inc.; State Compensation Insurance Fund, ADJ9109258, (September 2026), the Board panel (Commissioners Paul F. Kelly, Katherine Williams Dodd, and Joseph V. Capurro) granted reconsideration and rescinded the arbitrator's decision. It substituted a finding that State Fund properly canceled the policy on March 8, 2012 because Dynamic failed to make a required premium payment when due.
The panel first confirmed that its decision was timely. Under the version of Labor Code § 5909 in effect from July 2, 2024 through June 30, 2026, the Board had 60 days from the case's transmission on July 15, 2026 to act. That period ended on a Sunday, so the deadline moved to Monday, September 14, 2026 under Cal. Code Regs., tit. 8, § 10600(b). The arbitrator's report had been served months before the transmission, so serving it did not give the parties notice that the 60-day clock had started. However, the district office's July 15 minutes of hearing did give that notice.
On the merits, the panel held that the statute and the policy were both unambiguous. Section 676.8(b)(1) allows cancellation for the policyholder's failure to make any premium payment when due. The panel reasoned that the statute makes no distinction between earned and unearned premium and does not exempt a premium deposit. It read the word “any” as removing doubt that every kind of premium payment is covered. The policy likewise allowed cancellation for nonpayment of premium without distinguishing between types of premium. Neither the statute nor the policy sets a minimum amount, so it did not matter that the shortfall was only $71.20.
The panel said the arbitrator's distinction between deposit and earned premium went well beyond the plain meaning and obvious purpose of requiring timely payment. It cited the Third District's recent published decision in Employers Preferred Ins. Co. v. Workers' Comp. Appeals Bd. (2026) 122 Cal.App.5th 467 for the rule that courts will not adopt strained readings to create ambiguity. That case also upheld a carrier's cancellation of a policy. The panel also found the notice procedurally sound: § 676.8(c) requires at least 10 days' written notice for nonpayment, and State Fund gave 15.
Finally, the panel admonished State Fund's counsel for citing an unpublished Court of Appeal opinion to explain what a deposit premium is. Under California Rules of Court, rule 8.1115, unpublished opinions generally may not be cited or relied on in other cases. The panel found that none of the rule's exceptions applied. - WCAB Moves CT Liability Window - Releasing 2014 Carrieron September 24, 2026 at 2:16 PM
Guadalupe Gutierrez worked for almost 40 years as a cemetery groundskeeper in Colma for Hills of Eternity/Home of Peace Management Group. American Family Home Insurance Company (AFH) insured the employer during calendar year 2014, and Insurance Company of the West (ICW) insured it during 2015. Gutierrez had three claims pending. The first was an admitted specific back injury on April 12, 2015, for which ICW furnished benefits. The second was a cumulative trauma claim, filed in November 2016, alleging back injury over the year ending April 12, 2015. The third was a separate claim that was ultimately denied.
In October 2019, Gutierrez elected on the record to proceed against AFH on the cumulative trauma claim under Labor Code § 5500.5(c). In a February 3, 2020 report, the agreed medical evaluator, Dr. William Campbell, concluded that Gutierrez had suffered specific injuries on January 1 and April 12, 2015. He also concluded that the back condition reflected cumulative trauma over almost four decades of heavy work, during which Gutierrez had worked through many unreported smaller injuries. In a later report, Dr. Campbell addressed whether Gutierrez's harmful exposure ended in November 2015 or continued until he stopped working on April 27, 2016. He pointed to treatment records showing that all work restrictions were lifted from November 3, 2015 onward, and concluded the exposure continued through April 27, 2016.
In a November 2022 decision, the workers' compensation judge (WCJ) found both the specific injury and the cumulative trauma injury compensable. For the cumulative trauma claim, the WCJ used the pleaded end date of April 12, 2015 to set the one-year liability period under § 5500.5. The WCJ did not include a formal finding on the date of injury under Labor Code § 5412. However, the WCJ's opinion reasoned that because Gutierrez had a disabling specific injury on April 12, 2015, he must have known that same day that his disability was work-related. The WCJ awarded 46 percent permanent disability, future medical care, and attorney fees on the cumulative trauma claim against the employer, AFH, and ICW jointly and severally. The WCJ deferred the questions of which insurer would administer benefits and how the insurers would share costs.
AFH petitioned for reconsideration. It argued that both the last date of harmful exposure and the date of injury fell in April 2016, which would put the liability period entirely outside AFH's 2014 coverage. ICW petitioned separately, arguing that Gutierrez's 2019 election against AFH meant AFH alone should be liable, so the administration and contribution issues should not have been deferred.
In the panel decision of Guadalupe Gutierrez v. Hills of Eternity/Home of Peace Management Group, ADJ10656667, ADJ10656647, ADJ13080462 (September 2026), the Board panel (Deputy Commissioner Anne Schmitz, Chair Katherine A. Zalewski, and Commissioner JosÉ H. Razo) rescinded the WCJ's decision and substituted new findings on the cumulative trauma claim. The last day of harmful exposure is April 27, 2016. The § 5412 date of injury is February 3, 2020. The § 5500.5 liability period is the 365 days ending April 27, 2016. The panel removed AFH from the award and made the award, including the 46 percent permanent disability, joint and several against the employer and ICW only. It deferred all other issues on that claim and returned the matter to the trial level. The WCJ's findings on the specific injury and the denied third claim were carried forward.
On the end of the exposure period, the panel noted that § 5500.5(a) limits cumulative trauma liability to employers and insurers during the year before the last date of harmful exposure or the § 5412 date of injury, whichever comes first. Dr. Campbell had squarely addressed whether the exposure ended in November 2015 or April 2016. Because his opinion, and the work-status records it relied on, were uncontroverted, the panel saw no good reason to reject it. It cited Power v. Workers' Comp. Appeals Bd. (1986) 179 Cal.App.3d 775 and fixed the last exposure date at April 27, 2016.
On the date of injury, the panel held that the WCJ applied the wrong test. A cumulative trauma injury, as defined in Labor Code § 3208.1, occurs when its combined effect ripens into compensable disability and the worker knows, or reasonably should know, that the disability was caused by work. The panel relied on Federal Ins. Co. v. Workers' Comp. Appeals Bd. (2013) 221 Cal.App.4th 1116 and State Comp. Ins. Fund v. Workers' Comp. Appeals Bd. (Rodarte) (2004) 119 Cal.App.4th 998. Knowing that a specific incident was work-related is not the same as knowing that years of cumulative trauma caused a disability. Under City of Fresno v. Workers' Comp. Appeals Bd. (Johnson) (1985) 163 Cal.App.3d 467, a worker is generally not presumed to have that knowledge without medical confirmation. The panel found no evidence that Gutierrez knew or should have known of a disabling cumulative injury before Dr. Campbell's February 3, 2020 report. Because the April 27, 2016 exposure date came first, it controls the liability window.
On ICW's argument, the panel agreed with the WCJ. Under § 5500.5(c) and Colonial Ins. Co. v. Industrial Acc. Com. (Pedroza) (1946) 29 Cal.2d 79, an injured worker may elect to proceed against any one of several liable insurers. But that election does not relieve any other insurer of its liability, so deferring administration and contribution was proper. The panel then noted that its own findings moved the liability period entirely outside AFH's 2014 coverage, so the record no longer supported any award against AFH. That left ICW, which covered 2015, jointly liable with the employer. The panel added that ICW may still identify whichever insurer covered the employer in 2016, join it in the case, and seek contribution. - 9th Circuit Rules 2013 Insurance Code Notice Mandate Not Retroactiveon September 23, 2026 at 12:27 PM
In 2007, New York Life Insurance and Annuity Corporation issued a life insurance policy to Mr. Linhart, who owned the policy and named his wife, Barbara Linhart, as sole beneficiary. The policy did not require fixed premium payments, but Mr. Linhart had to pay enough to keep the policy's account value above the insurer's monthly deduction charge, which covered the monthly cost of coverage plus fees.
In 2012, the Legislature enacted Insurance Code § 10113.71 and Insurance Code § 10113.72, effective January 1, 2013. Together they created a mandatory grace period and pre-termination notice rules for life policies. Subdivision (a) of § 10113.72 bars an individual life policy from being issued or delivered until the applicant has been given the right to designate a third person to receive lapse or termination notices, and requires the insurer to give each applicant a form for that purpose. Subdivision (b) requires the insurer to remind the policy owner annually of the right to make or change a designation, and subdivision (c) requires at least 30 days' notice before a policy lapses for nonpayment.
Starting in August 2013, the insurer sent Mr. Linhart an annual policy summary that included notice of his right to designate a third party to receive lapse notices. It never sent a standalone designation form, and Mr. Linhart never named a designee. On June 1, 2021, the policy entered a grace period because the account value could not cover the monthly charges. The insurer mailed a notice telling Mr. Linhart he needed to make a sufficient payment by August 3, 2021. The policy lapsed on that date, and Mr. Linhart died four days later. When his estate asked about benefits, the insurer responded that the policy had lapsed and declined to pay.
Barbara Linhart filed a putative class action alleging that the insurer violated § 10113.72(a) by failing to send designation forms to owners of policies issued before 2013. According to the district court's order, her amended complaint pleaded claims for breach of contract and breach of the implied covenant of good faith and fair dealing. The district court granted summary judgment to the insurer, concluding that under the plain language of § 10113.72(a) and the California Supreme Court's decision in McHugh v. Protective Life Ins. Co. (2021) 12 Cal.5th 213, the insurer had no duty to send Mr. Linhart a designation form. The court then denied class certification. Ms. Linhart appealed under 28 U.S.C. § 1291.
In the published case of Linhart v. New York Life Insurance and Annuity Corporation, No. 25-490 (September 2026), a Ninth Circuit panel affirmed the summary judgment for the insurer. The panel held that life insurers are not required to send § 10113.72(a) designation forms to owners of policies issued before the statute took effect on January 1, 2013.
The panel treated the question as already answered by the California Supreme Court, whose interpretation of state law binds federal courts. In McHugh, the high court stated that § 10113.72(a) “unmistakably applies only to new policies.” McHugh reasoned that the subdivision repeatedly refers to the “applicant” rather than the “policy owner,” and that its command that a policy shall not be issued or delivered until the designation right is given signals forward-looking application. Because Mr. Linhart's 2007 policy was not a new policy, the panel concluded that subdivision (a) never applied to it, and the insurer had no obligation to send him a form while he was alive.
Ms. Linhart relied on other language in McHugh holding that §§ 10113.71 and 10113.72 apply to all policies in force when they took effect, regardless of issue date. The panel found that argument unpersuasive. It explained that McHugh's general statement about the sections as a whole does not answer whether one particular subdivision reaches existing policies. Subdivisions (b) and (c) impose ongoing notice obligations that can sensibly apply to every in-force policy, while subdivision (a) is tied to a single moment, the application process before a policy issues. Requiring pre-issuance forms for policies already issued, the panel wrote, would make nonsense of subdivision (a)'s text. The panel added that McHugh's description of the provisions as a single, unified pre-termination notice scheme supports, rather than undercuts, reading the subdivisions to operate differently.
The opinion addressed only subdivision (a). It did not decide whether the insurer's annual policy summaries satisfied subdivision (b) or whether its grace-period notice satisfied § 10113.71 or § 10113.72(c), as those issues were not the basis of the appeal. For insurers administering pre-2013 individual life policies in California, the ruling confirms that the pre-issuance designation form requirement does not apply retroactively, while McHugh's holding that the ongoing notice and grace-period protections apply to all policies in force on January 1, 2013 remains in place. - Flight Surgeon/QME Named "Hidden Gem" at 2026 Comp Conferenceon September 23, 2026 at 12:27 PM
Dr. Leslie Cadet is a former U.S. Air Force flight surgeon who was named Air Force Global Strike Command's 2015 Command Flight Surgeon of the Year, was just named one of two 2026 “Hidden Gems” among the 12 professionals honored at the second annual Work Comp Changemaker© Awards. The awards were presented at the ELEVATE® Work Comp Conference at the Hotel del Coronado in Coronado, California this September.
The honorees were announced on the Deconstructing Comp website. The organizers say the Hidden Gem category recognizes professionals whose leadership is quiet but has a significant effect on the industry. Dr. Cadet, a board-certified occupational and environmental medicine physician, QME, educator, and entrepreneur, shares the designation with Nicholas Fonner, a workers' compensation case manager at Brooks Rehabilitation.
According to her honoree profile on the Deconstructing Comp website, Dr. Cadet began her career in the Air Force as a flight surgeon and occupational health consultant. The profile says her work supported 1,080 combat missions and 2,000 airlift missions in support of Operations Inherent Resolve and Enduring Freedom. As medical director of her flight medicine clinic, she led a 23-person team that cared for more than 700 beneficiaries and supported the medical readiness of about 5,100 active-duty personnel. Her patients included aviators, aircraft mechanics, intelligence personnel, and other service members working in specialized, high-demand jobs. In addition to the Command Flight Surgeon of the Year award, she was named her squadron's 2015 Company Grade Officer of the Year.
After leaving the military, Dr. Cadet completed a residency in occupational and environmental medicine at the Harvard T.H. Chan School of Public Health and earned a Master of Public Health degree there. She later served as Employee Health Medical Director at Loma Linda University Health. She still teaches as an assistant professor at the Loma Linda University School of Medicine and as an attending physician in its occupational and environmental medicine residency program. According to her profile, the residents she trains named her Teacher of the Year in 2022, 2023, 2024, and 2026.
Her current work is aimed directly at employers and claims professionals. Dr. Cadet founded and leads ASCEND Occupational Medicine Consulting, a physician-led firm that works with self-insured employers, claims professionals, attorneys, and others on complex workers' compensation claims. Her profile says the firm provides medical oversight of those claims. That work includes testing whether diagnoses and treatment plans are supported by objective evidence, identifying barriers to recovery, setting realistic recovery timelines, and strengthening return-to-work plans so claims do not slide into prolonged disability. The profile describes the gap she is trying to close this way: claims decisions are usually guided by financial, claims-handling, and legal experts, but often without a physician at the table. Her approach, as the profile summarizes it, favors appropriate care over more care, function over disability, and early intervention over letting a claim grow more complex.
Ten other professionals were named 2026 Work Comp Changemaker© Honorees. They are Catherine Benavidez of Injury Management Organization; Anthony Culpepper, Jr., of Employer Defense Group and the African American Workers' Compensation Professionals; Dr. Geralyn Datz of Southern Behavioral Medicine Associates; Dr. Steven Feinberg of Feinberg Medical Group; Kimberly George of Sedgwick; Agnes Hoeberling of AvonRisk; Kirsten Kaiser Kus of Downey, Lenkov, Milstein & Kus Law Firm; Roberta Serena Mike of Strategic Comp and the Workers' Compensation Career Mentorship Group; Dave Taylor of Charter Communications; and Licia Thompson-Young of Licia Thompson Coaching & Consulting. Profiles of all honorees are on the Deconstructing Comp website.
The awards were created by Yvonne Guibert and Rafael Gonzalez, co-hosts of the Deconstructing Comp Podcast. They are not lifetime achievement awards. Instead, they recognize emerging and established professionals for their leadership, impact, integrity, and mentorship over the past two to five years. According to the organizers, honorees are chosen by an advisory committee of workers' compensation professionals in three rounds. First, each committee member nominates five people. Next, each member champions two nominees they did not nominate, interviews them, and presents them to the committee. Finally, the committee ranks the finalists, and the rankings determine the honorees. Guibert described this year's class as “people to watch” in the release.
And Dr. Cadet, thank you so very much for your service to our country. - Insurance Payment Service Accused of Illegal Price Fixingon September 22, 2026 at 9:54 AM
MultiPlan Corporation was founded in 1980 in New York City as a hospital network aimed at giving patients access to care and controlling costs when they went outside a narrow insurance network. Over the following decades it built out a preferred provider organization (PPO) business and grew through consolidation into a national network.
In April 2024, a New York Times investigation by Chris Hamby ("Insurers Reap Hidden Fees by Slashing Payments. You May Get the Bill") reported that MultiPlan and the insurers using its services shared a financial incentive to push reimbursements as low as possible, since both parties' fees rose as the amount paid to providers fell — leaving patients exposed to larger balance bills.
The article resulted in a wave of private antitrust litigation from hospital systems and providers, which was consolidated into the multidistrict litigation In re MultiPlan Health Insurance Provider Litigation in the Northern District of Illinois — the same MDL whose 2025 ruling on a motion to dismiss the Court of Appeal relied on in this VHS Liquidating Trust case. In February 2025, amid this litigation and reputational pressure, the company rebranded from MultiPlan to Claritev Corporation, moving its NYSE ticker from MPLN to CTEV.
Last June, the Arizona AG announced a lawsuit against MultiPlan and several large health insurers, alleging they quietly built and operated a system that slashed payments to doctors and hospitals — and left Arizonans having to pay more for out-of-network care.
In this September 2026 published California court of appeal decision, VHS Liquidating Trust is the bankruptcy liquidator for Verity Health System of California, a former not-for-profit operator of six hospitals in the San Francisco, Los Angeles and San Jose areas that went bankrupt in 2018. Verity, like other hospitals, was paid for patient care by a mix of patients, government payors, and private insurers. Where a hospital has no contract covering a particular service, the service is billed as “out-of-network” (OON), and the insurer typically reimburses the provider at a rate based on the “usual, customary, and reasonable” (UCR) rate for the area.
Based on these allegations, VHS sued MultiPlan (without naming the insurers, who had separately compelled arbitration) for horizontal price fixing, price tampering, and unlawful exchange of competitively sensitive information under the Cartwright Act (Bus. & Prof. Code § 16700 et seq.), plus a derivative Unfair Competition Law claim.
VHS's complaint alleges that MultiPlan Corporation (now Claritev Corporation), which markets algorithm-driven data analytics to health insurers, offers a “repricing” service that insurers use to set OON reimbursement rates. Insurers send MultiPlan a claim; MultiPlan's proprietary algorithm, built on a pooled database of roughly a billion claims from more than 700 insurers, recommends a price; and MultiPlan then presents that price to the provider on a take-it-or-leave-it basis. By 2020 MultiPlan was repricing 370,000 OON claims per day, and insurers reportedly followed its recommendations without human review 87 percent of the time. VHS alleges this scheme is the successor to an earlier practice, involving a MultiPlan predecessor called Ingenix, that a 2009 New York Attorney General enforcement action forced to shut down. VHS contends that MultiPlan operates as the "hub" of a "hub, spoke, and rim" conspiracy: insurers (the spokes) know from MultiPlan's own public statements that their competitors also submit sensitive claims data to MultiPlan and follow its recommended prices the vast majority of the time, giving each insurer the assurance it needs to accept suppressed rates without fear that a rival will out-compete it by paying more.
The San Francisco County Superior Court sustained MultiPlan's demurrer to the entire complaint without leave to amend. The trial court reasoned that an insurer's reimbursement for OON services is not a standalone product or service but is simply part of the insurance policy the insurer already owes its subscriber; without a discrete product, the court held, there is no "price" that the Cartwright Act's price-fixing and price-tampering provisions can reach. Because the information-exchange claims and the UCL claim were premised on the same theory, those fell with the price-fixing claims, and final judgment was entered for MultiPlan.
In the published case of VHS Liquidating Trust v. MultiPlan Corporation et al., No. A171914 (1st Dist., Div. 3, Sept. 2026): Reversed and remanded. The Court of Appeal held that OON reimbursements are not categorically exempt from Cartwright Act scrutiny, reversed the judgment on the demurrer, and sent the case back to the trial court to consider MultiPlan's remaining, unaddressed arguments in the first instance.
Writing for a unanimous panel, the court held that the trial court's exemption for OON reimbursements has no basis in the Cartwright Act's text or in case law. The statute broadly prohibits combinations that fix or tamper with the price of an "article, commodity or transportation," and California courts have long read it to cover services as well, and to reach buyers' price-fixing (not just sellers'). The court reasoned that an insurer's contractual duty to its subscriber and its separate market transaction with a provider are analytically distinct: just as a general contractor's obligation to a homeowner does not exempt its payments to subcontractors from antitrust scrutiny, an insurer's coverage promise to its subscriber does not exempt its reimbursement negotiations with providers.
Because no California case had addressed the question directly, the court also surveyed federal authority, noting that under the Cartwright Act federal precedent is instructive but not binding, since the Act is "broader in range and deeper in reach" than the Sherman Act (Cianci v. Superior Court (1985) 40 Cal.3d 903, 920). The court declined to follow three federal district court decisions the trial court had relied on—Franco v. Connecticut General Life Insurance Co. (D.N.J. 2011) 818 F.Supp.2d 792, In re Aetna UCR Litigation (D.N.J. 2015), and Pacific Recovery Solutions v. Cigna Behavioral Health, Inc. (N.D. Cal. 2021)—because those cases analyzed the question from the perspective of insurance subscribers, not providers, and did not address whether a provider-insurer transaction could itself be price-fixed. Instead, the court found persuasive the federal multidistrict litigation against MultiPlan itself, where the presiding judge rejected the identical argument as a "sleight of hand" that analyzed the wrong market (In re MultiPlan Health Insurance Provider Litigation (N.D. Ill. 2025) 789 F.Supp.3d 614).
The court further relied on U.S. Supreme Court and First Circuit authority holding that an insurer's payments to providers are legally distinct from its coverage obligations to policyholders. In Group Life & Health Insurance Co. v. Royal Drug Co. (1979) 440 U.S. 205, the Supreme Court held that an insurer's pharmacy reimbursement agreements were "merely arrangements for the purchase of goods and services," separate from the insurer's obligations under its policies. In Kartell v. Blue Shield of Massachusetts, Inc. (1st Cir. 1984) 749 F.2d 922, the First Circuit similarly held that any distinction between "purchasing" and "insurance reimbursement" is "irrelevant for antitrust purposes." Applying that same logic, the panel concluded it would be illogical to hold that providers can be liable for fixing the prices they charge insurers, but insurers cannot be liable for fixing the prices they pay providers.
Because it reversed on this threshold ground, the court did not reach MultiPlan's other arguments, including one based on the Knox-Keene Act, and remanded for the trial court to address them in the first instance. In a footnote, the court added—without resting its holding on the point—that it viewed the trial court's rule as posing a policy concern, since it would exempt a significant portion of the healthcare industry from antitrust scrutiny at a time when courts have also been reluctant to let insurance subscribers challenge similar conduct. - Guilty Plea in $400K Medi-Cal Fraud Case Results in 2 Year Sentenceon September 22, 2026 at 9:54 AM
The California Attorney General announced that Maki Martinez-Gruninger pled guilty to a felony charge of defrauding the Medi-Cal program and will serve two years in state prison for stealing more than $400,000 from the State of California through a scheme that exploited a disabled family member.
California’s In-Home Supportive Services program, known almost universally as IHSS, is the state’s main way of paying for help in the home so that older adults, people who are blind, and people with disabilities—including children—can stay where they live instead of moving into a nursing home or other institution.
IHSS grew out of the independent-living and disability-rights movements of the 1970s and remains one of the largest consumer-directed personal-care programs in the country. Recipients are not patients waiting for an agency to assign a worker; they are the employer. They choose who comes through the door, train that person, set the schedule, and can fire them. About seven in ten hire a family member.
Today the program reaches on the order of 850,000 to 900,000 Californians. It is a Medi-Cal benefit, which means federal Medicaid dollars cover a large share of the cost, with the state and each of the 58 counties paying the rest. The California Department of Social Services sets the rules; county social workers do the day-to-day work.
The California Department of Justice received a complaint alleging that Martinez-Gruninger fraudulently claimed to be the In-Home Support Services provider for a disabled family member. According to the complainant — who was the individual's sole caregiver — they discovered in December 2019 that Martinez-Gruninger secretly applied to be the disabled family member's In-Home Support Services provider in November 2007. As a result, Martinez-Gruninger allegedly submitted false claims to the IHSS program for over a decade.
The investigation determined that Martinez-Gruninger unlawfully took the State of California's Medi-Cal program money, intended to defraud the State of California, and presented false IHSS and Respite Care claims for payment totaling $413,643.30.
She pled guilty to a single felony count of Medi-Cal false claims.
The Division of Medi-Cal Fraud & Elder Abuse is a division within the Department of Justice whose mission is to protect the public and the state’s Medi-Cal program from those who defraud taxpayers and divert state health care resources. The investigation was made possible through the collaboration of government agencies and those who reported incidences of Medi-Cal fraud or elder abuse.
The Medi-Cal Fraud & Elder Abuse receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling nearly $78 million for Federal Fiscal Year 2026. The remaining 25 percent, totaling nearly $26 million for Federal Fiscal Year 2026, is funded by the California Attorney General’s Office. Federal Fiscal Year 2026 is from October 1, 2025 through September 30, 2026. - Newsom Orders Feasibility Study of Mandating AI Kill Switchon September 21, 2026 at 1:45 PM
Gov. Gavin Newsom signed Executive Order N-9-26 on Friday, September 18, directing a state agency to speed up California’s new independent AI-auditor programs and to report by November 16 on whether state law should require a “kill switch” for the most advanced AI models. The order does not itself impose requirements on AI developers. It sets deadlines for the Government Operations Agency, asks for recommendations, and states that it creates no enforceable rights or benefits. Any new mandate would require changes to state law.
The order accelerates two statutory programs. It does not name the bills, but Government Technology reported that the code sections it cites correspond to SB 813 (McNerney) and AB 1405 (Bauer-Kahan), both approved September 9. According to the governor’s press release, SB 813 creates a framework for certifying independent verification organizations that assess AI systems and models for safety risk, and AB 1405 creates a state registry of AI auditors with independence, transparency and integrity standards. The order gives the agency until May 1, 2027, to develop application requirements and criteria for verification organizations under Government Code § 8898.1, and until December 1, 2027, to complete the registry work under Government Code § 11549.82(a) and begin the actions in subdivision (b). Government Technology reported that those dates pull forward original statutory deadlines of January 1, 2028, and January 1, 2029.
Separately, the order asks the agency, working with the Governor’s Office of Emergency Services and unnamed national experts, to submit recommendations to the governor’s office by November 16, 2026. The recommendations must address the technical feasibility and likely efficacy of at least four amendments to state AI safety law. The first would require the largest frontier developers to embed designated independent verification organizations onsite in their labs for periodic audits and evaluations. The second would require independent verification of the safety frameworks, transparency reports and risk assessments those developers already must file under SB 53, the 2025 frontier-AI transparency law. The third would require a kill switch for frontier models, with its effectiveness verified on an ongoing basis by an independent verification organization. The fourth would expand the definition of reportable “critical safety incidents” to include loss-of-control incidents. The order does not say whether the recommendations will be made public.
Coverage has not been uniform about what the order does. The governor’s office described it as advancing the creation of a kill switch, and Fox Business reported that it requires frontier developers to build one. The text, however, asks only whether such a requirement would be technically feasible and effective. In a video message reported by Fox Business, Newsom himself acknowledged that the concept is still taking shape and means different things to different people.
The order’s recitals cite reports of apparent attempts to use AI to create bioweapons and of AI agents defeating company security protocols and hacking other companies, in some cases undetected for months. The order names no companies or incidents and attaches no evidence. The governor’s press release refers to the “Hugging Face attack,” and a Yahoo News report describes a July breach of that platform by autonomous agents built on OpenAI models that escaped a testing environment. Those details come from press accounts, not from the order. The order also faults federal leaders for inaction, and the governor’s office called on Congress and President Trump to adopt California’s framework as a national floor.
Reaction has followed political lines and, in places, technical ones. State Sen. Scott Wiener, who authored the vetoed 2024 kill-switch bill and co-led SB 53, issued a statement of support, calling the order a challenge to lawmakers and saying the Legislature must follow with strong guardrails early next year. Politico, as carried by Yahoo News, reported that some in the tech industry oppose kill switches as technically infeasible, that LinkedIn co-founder Reid Hoffman voiced support for the idea at a Politico event this week, and that Newsom had said he was weighing further options, including a special legislative session. The Washington Examiner reported that critics contend existing product-liability rules already address the risks and that the push for new regulation is an orchestrated effort that could let large technology companies form a cartel and suppress competition. On the federal side, Fox Business reported that Sen. John Kennedy’s attempt to advance a federal kill-switch bill was blocked this week by Sen. Rand Paul, who cautioned against hastily regulating an entire industry.
For employers and insurers, the order’s significance is indirect. Its subject is the developers of frontier AI models, and it does not address employer use of AI, workers’ compensation or insurance. But California is building a certified third-party audit structure around AI, and the November recommendations will show how far the state may go in requiring outside verification of safety claims behind models that some workplace tools may rely on. The order also sits alongside the governor’s May 21 workforce order, which directs agencies to study AI-driven job disruption and to recommend revisions to the state WARN Act within 180 days. The next fixed date is November 16. - Physician Must Exhaust Hospital Peer Review Before Litigationon September 21, 2026 at 1:45 PM
Dr. Sunil Sujan, a board-certified internist, practiced at Corona Regional Medical Center (CRMC) from 2010 to 2016. He alleged that three rival physicians on staff, competing with his growing practice, orchestrated a campaign to file dozens of false internal "MIDAS" incident reports accusing him of being unresponsive to nursing staff, with the goal of getting him censured or suspended.
After a patient under Sujan's care died of heart failure in June 2016, CRMC's medical executive committee (MEC), chaired by one of the rival physicians, summarily suspended his admitting privileges without, Sujan alleged, any real investigation. Facing the prospect that a suspension lasting 14 days or longer would have to be reported to the California Medical Board and the National Practitioner Data Bank, Sujan signed a lengthy settlement agreement to have his suspension lifted. The agreement did not fully exonerate him: it recited CRMC's continuing concerns about his patient care and record-keeping and imposed a dozen onerous conditions, including mandatory training courses, a monitored backup-physician arrangement, and a mentor who would report on him to the MEC every 90 days.
Sujan later left CRMC voluntarily; when a prospective employer, Good Samaritan Hospital, sought to verify his employment history in 2017, CRMC allegedly conditioned its cooperation on Sujan releasing it from liability, jeopardizing the job offer. Sujan sued CRMC and the three physicians for conversion, interference with economic relations and contract, conspiracy, defamation, and intentional infliction of emotional distress; his wife, Nina Patel, brought a derivative loss-of-consortium claim.
The Riverside County Superior Court granted summary judgment for the defendants on the interference claims, finding Sujan had failed to exhaust the administrative remedies available to him under CRMC's medical staff bylaws before suing for damages, as required by Westlake Community Hospital v. Superior Court (1976) 17 Cal.3d 465. The court rejected Sujan's argument that pursuing an administrative hearing would have been futile, distinguishing Joel v. Valley Surgical Center (1998) 68 Cal.App.4th 360, because — unlike the physician in Joel, who received full, unconditional reinstatement in exchange for withdrawing his hearing request — Sujan's settlement was heavily conditioned and did not represent the maximum relief he could have obtained administratively. The court entered judgment for the defendants and later ruled, based on a fee provision in CRMC's bylaws making a physician who sues without exhausting his remedies liable for the hospital's "full costs, including legal fees," that defendants could recover attorney fees from Sujan, though not from Patel, who never signed the bylaws. The court also found defendants' evidence insufficient to support fees for five prior law firms that had represented them, and it reduced the hourly rates claimed by two of their current partners to align with Riverside County market rates, ultimately awarding $313,830 of the $892,417 defendants had requested. Both sides appealed the fee ruling; Sujan also appealed the underlying summary judgment.
In the published case of Sujan et al. v. UHS Corona, Inc. et al., No. E084185 (Cal. Ct. App., 4th Dist., Div. 2, Sept. 2026). The Court of Appeal affirmed the judgment and the postjudgment attorney fees order in full, rejecting both Sujan's appeal and the defendants' cross-appeal.
On exhaustion, the court held Sujan bore the burden of proving the narrow futility exception and failed to meet it. His settlement, unlike the one in Joel, restated CRMC's ongoing concerns about his competence and imposed a dozen substantive conditions rather than restoring him unconditionally; it therefore did not give him "the maximum relief" an administrative hearing could have provided. The court also found Sujan offered no evidence — only his own declaration — to support his claim that a report to the Medical Board would have been professionally "ruinous," distinguishing the Supreme Court's decision in Mileikowsky v. West Hills Hospital & Medical Center (2009) 45 Cal.4th 1259, and finding persuasive an unpublished federal decision, Ennix v. Stanten (N.D. Cal. 2007), which similarly held that a settlement short of full reinstatement does not excuse exhaustion.
On fees, the court held Business and Professions Code section 809.9, which allows fee awards only when a lawsuit challenging a reportable peer-review action was frivolous or in bad faith, did not apply, because Sujan's suspension lasted less than 14 days and was therefore never required to be reported under section 805. That left CRMC's one-sided contractual fee provision to govern. The court found the provision procedurally unconscionable, as a non-negotiable term of staff bylaws, but not substantively unconscionable, reasoning under Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, that the policies behind the exhaustion doctrine — preserving hospital expertise, mitigating damages, and promoting judicial economy — reasonably justified charging fees only against physicians who bypass peer review and then lose.
On the cross-appeal, the court agreed CRMC could not recover fees from Patel, since her loss-of-consortium claim was not based on the bylaws and, under the reciprocity principles of Civil Code section 1717 (which only applies to contract claims), CRMC would not itself have owed her fees had she won. The court also held defendants forfeited any challenge to the exclusion of their prior attorneys' billing records by failing to request oral argument or seek reconsideration after the court's tentative ruling flagged the issue, and, independently, agreed the supporting declaration was inadmissible hearsay as to work it did not personally witness. Finally, the court found no abuse of discretion in capping the hourly rates of defendants' Los Angeles-based partners at Riverside County market rates, noting defendants offered no evidence that competent local counsel was unavailable. - DOL Spells Out Mental Health Parity Enforcement Prioritieson September 17, 2026 at 8:20 AM
In simple terms, "mental health parity" is a federal requirement that employer health plans and insurers cover mental health and substance use disorder care on the same terms as they cover physical health care. That means comparable co-pays and deductibles, but it also means comparable rules behind the scenes, like how strict a prior-authorization process is or how a plan decides which providers count as "in network." A plan cannot make it noticeably harder to get therapy or addiction treatment covered than it is to get a knee surgery covered. "Compliance" is the ongoing work employers, insurers, and their administrators do to prove, on paper and in practice, that those rules really do match up.
The U.S. Department of Labor's Employee Benefits Security Administration published two new documents on September 8, 2026, that together reshape how the agency says it will police mental health parity compliance: Field Assistance Bulletin No. 2026-03, which sets out "guiding principles" for enforcing the nonquantitative treatment limitation (NQTL) comparative-analysis requirements of the Mental Health Parity and Addiction Equity Act (MHPAEA), and an updated Self-Compliance Tool plan sponsors and issuers can use to test their own coverage against the law.
The bulletin is an internal EBSA policy memorandum, from Assistant Secretary Daniel Aronowitz to the agency's enforcement staff, and by its own terms creates no enforceable rights for plans, issuers, or participants. But it is the clearest public signal yet of how EBSA intends to direct its MHPAEA investigations following an 18-month stretch of regulatory limbo, and it follows through on an enforcement priority the agency flagged on January 15, 2026, when it overhauled its national enforcement projects for fiscal year 2026 to include barriers to mental health and substance use disorder (MH/SUD) benefits alongside cybersecurity, surprise billing, and benefit distributions.
Some background explains why EBSA felt the need to clarify things. In September 2024, the Departments of Labor, Health and Human Services, and the Treasury issued a final rule under MHPAEA, as amended by the Consolidated Appropriations Act, 2021 (CAA), adding new requirements for the NQTL comparative analyses plans and issuers must prepare (the 2024 Final Rule, 89 Fed. Reg. 77,586). Four months later, the ERISA Industry Committee sued in the U.S. District Court for the District of Columbia, arguing the rule was arbitrary and capricious and exceeded the agencies' statutory authority. Then came Executive Order 14219, directing agencies to identify and de-prioritize enforcement of regulations seen as imposing outsized compliance burdens (90 Fed. Reg. 10,583). In May 2025, the three Departments responded to both developments with a formal nonenforcement statement, agreeing not to enforce the new provisions of the 2024 Final Rule until the litigation concludes, plus an additional 18 months, while stressing that MHPAEA's underlying statutory obligations remain fully in effect.
That litigation has since moved further away from the 2024 Final Rule rather than toward defending it. According to a joint status report the Departments and the ERISA Industry Committee filed with the court in late March 2026, the Departments have now decided that, rather than defend the rule as written, they will issue a new proposed rule with anticipated substantial revisions to the challenged provisions, with a notice of proposed rulemaking targeted for no later than December 31, 2026 (see the March 30, 2026 joint status report in ERISA Indus. Comm. v. Dep't of Health & Hum. Servs., No. 1:25-cv-00136 (D.D.C.)). In the meantime, plans and issuers are left navigating NQTL compliance under the pre-2024 regulatory framework, without a finalized replacement rule.
It is against that backdrop that the new bulletin narrows EBSA's enforcement focus to three categories the agency says carry the highest potential for participant harm. The first is separate treatment limitations, including blanket exclusions of MH/SUD treatments where comparable medical or surgical treatments are covered; EBSA says it will prioritize wholesale exclusions but may still pursue narrower ones, especially in response to complaints. The second is medical necessity standards and review, with particular attention to prior authorization, concurrent review, and retrospective review; plans may rely on proprietary clinical guidelines, the bulletin notes, but must make them available on request during investigations and to participants. The third is network adequacy, with emphasis on provider admission standards and reimbursement methodologies, on the theory that a thin MH/SUD network pushes participants toward costlier out-of-network care. EBSA says it may still investigate other categories of NQTLs as complaints arise, but these three will get the bulk of its attention.
The companion Self-Compliance Tool, a roughly 40-page document plan sponsors, plan administrators, issuers, and state regulators can use as a self-audit checklist, is required to be updated every two years under Section 13001(a) of the 21st Century Cures Act. This edition walks through MHPAEA's six benefit classifications, the "substantially all" and "predominant" tests used to evaluate financial requirements and quantitative treatment limits, and a four-step method for analyzing NQTLs: identifying the limitation, the factors behind it, the evidentiary sources for those factors, and whether the whole process is applied comparably to MH/SUD and medical/surgical benefits, both on paper and in practice. It also folds in DOL's existing guidance on medication-assisted treatment for opioid use disorder and eating-disorder benefits, both of which the tool says remain subject to MHPAEA's parity requirements notwithstanding the rulemaking uncertainty.
For insurers and self-funded plans specifically, the tool's most operationally significant addition may be Appendix II, a framework for benchmarking provider reimbursement rates against Medicare as a way of self-testing network-related NQTLs before DOL auditors do it for them. The tool flags, as possible warning signs warranting further review, MH/SUD reimbursement rates set at or near Medicare levels while medical/surgical rates run well above Medicare, and psychiatrists reimbursed less than other physicians for identical evaluation-and-management billing codes. The tool is explicit that outcomes and denial-rate disparities are not, by themselves, proof of a violation, but it treats them as red flags that can trigger closer scrutiny of the underlying process. The Self-Compliance Tool also complements benchmarking resources the National Association of Insurance Commissioners has developed for state regulators and issuers.
Employee-benefits practitioners who reviewed the bulletin in the days after its release were, by and large, measured about how much it actually changes. One law firm client alert characterized the bulletin as reaffirming existing enforcement priorities rather than establishing new compliance standards, and separately noted that neither the bulletin nor the tool fills the gap left by the 2025 nonenforcement policy on what a compliant NQTL comparative analysis must contain, since a new final rule remains pending. For employers and issuers, the practical takeaway is that while the 2024 Final Rule's new provisions remain unenforced pending litigation and rulemaking, MHPAEA's statutory NQTL comparative-analysis obligations under the CAA are still live and enforceable, and EBSA has now told the regulated community, in some detail, where it plans to look first.
This summary is for general informational purposes only. Readers should consult the full Field Assistance Bulletin and Self-Compliance Tool, and the underlying rules and court filings linked above, for complete details and methodology and consult with legal counsel before making compliance decisions. - FDA Approves First Motion-Preserving Alternative to Spinal Fusionon September 17, 2026 at 8:20 AM
Low back pain is the single most common driver of lost work time and one of the most contested diagnoses in the workers' compensation system, and spinal fusion surgery — the procedure most often authorized as a last resort — remains among the most expensive, slowest-recovering, and most heavily litigated treatments claims professionals encounter. That landscape shifted in mid-December 2025, when the U.S. Food and Drug Administration granted full premarket approval to the DIAM Spinal Stabilization System, the first posterior, motion-preserving implant cleared in the United States as an alternative to fusion for chronic low back pain caused by degenerative disc disease.
The device, manufactured by Companion Spine, received FDA approval on the strength of a prospective, randomized, multicenter Investigational Device Exemption trial with an average follow-up of 11.5 years, according to the company's December 15, 2025 announcement. Notably, the FDA granted the approval without requiring a post-approval confirmatory study, a step the agency reserves for applications it considers to be supported by unusually strong clinical evidence.
To understand why this approval matters, it helps to understand the treatment gap it is meant to fill. When a worker develops chronic low back pain from degenerative disc disease that does not resolve with physical therapy, medication, and injections, the traditional next step has long been spinal fusion — permanently joining two or more vertebrae together with screws, rods, and bone graft to eliminate motion at the painful segment. Fusion can be effective, but it is also invasive, requires a lengthy recovery, eliminates natural spinal motion at the treated level, places additional mechanical stress on adjacent vertebrae, and forecloses future treatment options if it fails. Many patients with moderate symptoms have historically been left in a gap: too impaired for continued conservative care, but not considered good candidates for the invasiveness of fusion.
The DIAM system is designed for that gap. It is an H-shaped spacer made of silicone and polyester that is implanted between the spinous processes — the bony protrusions at the back of each vertebra — at a single level from L2 to L5. Secured with polyester tethers and titanium crimps, the device is intended to offload stress from the painful disc and posterior joints while preserving natural motion at the treated segment, rather than eliminating it. The procedure is performed on an outpatient basis through a minimally invasive posterior approach, and because it does not fuse the spine, it is designed to be removable and to leave future surgical options, including fusion, open if needed. The implant itself is not new internationally: more than 250,000 units have been implanted in over 200,000 patients across 76 countries since 1997, but this approval marks its first full U.S. clearance after a 20-year regulatory path that included a 2016 FDA advisory panel rejection over insufficient trial data.
The pivotal trial measured a composite clinical success endpoint at 24 months — combining pain relief, functional improvement, and the absence of device-related reoperation — and found a 67.4 percent success rate for DIAM patients compared with 11.9 percent for patients who continued non-operative care, a difference the company describes as showing a Bayesian posterior probability of superiority exceeding 0.999. Secondary measures reported by Companion Spine included a 77 percent responder rate on the Oswestry Disability Index and an 83.2 percent back pain responder rate at 24 months, with durability holding up over the long term: among the long-term follow-up cohort tracked for an average of 11.5 years, 86.4 percent maintained both disability and pain responder status, and 87 percent of patients said they would choose the same treatment again more than a decade later.
On safety, the company reported a 1.6 percent rate of device-related serious adverse events, no reported device migrations or mechanical failures through 11.5 years of follow-up, and a 95.7 percent freedom-from-device-removal rate at the same interval. Notably, according to the trial investigators quoted in the FDA announcement, none of the study patients who received the DIAM implant required conversion to spinal fusion during the study's long-term follow-up period. Independent verification of these figures beyond the company's own release and the underlying FDA premarket approval documentation will accumulate as the device enters broader U.S. use and registry data develops, and claims professionals should treat single-manufacturer clinical trial results with the same scrutiny they would apply to any sponsor-funded study, while recognizing that the FDA's decision to waive a post-approval confirmatory trial reflects the agency's own confidence in the existing evidence base.
Because DIAM is indicated only for patients with single-level lumbar degenerative disc disease who remain symptomatic after at least six months of non-operative care, utilization reviewers will need to confirm that conservative treatment was genuinely exhausted before a request reaches this stage — the same threshold question that already governs fusion requests, but now with a second surgical option in the mix rather than a binary choice between continued conservative care and fusion.
DIAM enters the U.S. market at a moment when spine surgeons and payers alike have been rethinking the "fusion-first" default for degenerative disc disease, a theme that was prominent at the 2026 annual meeting of the International Society for the Advancement of Spine Surgery, where motion-preserving technologies and their long-term economic sustainability were a central focus. Whether DIAM becomes a meaningful presence in workers' compensation treatment plans will depend on real-world outcomes as more U.S. surgeons gain experience with the device, on how commercial and workers' compensation payers approach coverage and fee-schedule classification for a device without an established coding history in this country, and on whether the favorable trial-population results hold up in the more medically and psychosocially complex population typical of workers' compensation claims. Claims professionals reviewing lumbar spine treatment requests over the coming months should ask whether DIAM or a similar motion-preserving device was considered, and utilization review protocols may need updating as this option becomes more familiar to treating physicians and reviewers alike.