AMN Services, LLC is a healthcare services and staffing company that recruits nurses for temporary contract assignments.
Kennedy Donohue worked as a nurse recruiter at AMN’s San Diego offices. In that role, Donohue did not have predetermined shifts but was expected to work eight hours per day.
Under California law, employers must generally provide employees with one 30-minute meal period that begins no later than the end of the fifth hour of work and another 30-minute meal period that begins no later than the end of the tenth hour of work. If an employer does not provide an employee with a compliant meal period, then "the employer shall pay the employee one additional hour of pay at the employee’s regular rate of compensation for each workday that the meal . . . period is not provided."
Per AMN’s company policy, nurse recruiters were provided with 30 minute meal periods beginning no later than the end of the fifth hour of work.
AMN used an electronic timekeeping system called TeamTime to track its employees’ compensable time. Employees used their work desktop computers to punch in and out of Team Time, including at the beginning of the day, at the beginning of lunch, at the end of lunch, and at the end of the day.
Team Time rounded the time punches to the nearest 10-minute increment. For example, if an employee clocked out for lunch at 11:02 a.m. and clocked in after lunch at 11:25 a.m., Team Time would have recorded the time punches as 11:00 a.m. and 11:30 a.m. Although the actual meal period was 23 minutes, Team Time would have recorded the meal period as 30 minutes.
AMN relied on the rounded time punches generated by Team Time to determine whether a meal period was short or delayed.
In April 2014, Donohue filed a class action lawsuit against AMN. Donohue alleged various wage and hour violations, including the meal period claim at issue here.
The trial court granted AMN’s motion for summary judgment, and the Court of Appeal affirmed the dismissal, reasoning that AMN’s rounding policy fairly compensated employees over time, and there was insufficient evidence that supervisors at AMN prevented employees from taking compliant meal periods. .
The California Supreme Court reversed in the case of Donohue v AMN Services, LLC.
The Supreme Court concluded that "employers cannot engage in the practice of rounding time punches - that is, adjusting the hours that an employee has actually worked to the nearest preset time increment - in the meal period context. The meal period provisions are designed to prevent even minor infringements on meal period requirements, and rounding is incompatible with that objective."
It also held that "that time records showing noncompliant meal periods raise a rebuttable presumption of meal period violations, including at the summary judgment stage."
Two California residents were sentenced for defrauding Affordable Care Act programs in at least 12 states of more than $27 million.
63 year old Jeffrey White was sentenced to 36 months of imprisonment and three years of supervised release, and 35 year old Nicholas White was sentenced to 13 months of imprisonment and three years of supervised release. Both defendants reside in Twin Peaks, California.
Jeffrey White and his son, Nicholas White, conspired to defraud health care plans operating under the Affordable Care Act (commonly referred to as "Obamacare") by fraudulently enrolling individuals in ACA plans in states where the individuals did not live.
The Whites created phony residential leases using fictitious landlords in various states.The Whites also used an online application to obtain false cell phone numbers for the individuals with area codes that made it appear that the individuals lived at the fictitious addresses, and provided the false cell phone numbers to the ACA plans. If anyone at the ACA plan called the false local number, the call would ring through to a phone controlled by the Whites.
In order to enroll the individuals in an ACA plan, the Whites paid the insurance premiums for the individuals, and also paid to have the individuals transported to California where the individuals were placed in expensive residential substance abuse treatment programs. The treatment programs then billed the ACA plans for thousands of dollars of treatment each week, including claims for expensive laboratory tests such as blood or urine toxicology screenings.
The treatment programs paid the Whites thousands of dollars in kickbacks for each referral, and some programs arranged for the Whites to receive a percentage of the money the treatment programs received from the ACA health insurance plans.
In order to maximize their proceeds from the fraud scheme, the Whites enrolled the individuals in ACA plans in states that paid the highest amount for substance abuse treatment, even though the individuals did not live in those states.
The Whites have admitted that their scheme resulted in more than $27 million in losses to ACA plans across the country, including plans in Connecticut, Arizona, California, Delaware, Indiana, Kentucky, New Jersey, Ohio, Oregon, Pennsylvania, Tennessee, and Texas.
The Division of Workers’ Compensation (DWC) has posted on its website final rulemaking documents filed with the Office of Administrative Law (OAL) for approval of the new Medical-Legal Fee Schedule (MLFS). The documents include the final text of amendments to the Medical-Legal Fee Schedule (MLFS) regulations, as well as forum comments and the DWC response, and action to the comments.
OAL will review the filing and advise the Division as to whether the new fee schedule will be approved. DWC has requested an effective date of April 1, 2021.
There were non-substantial amendments made to the regulations as posted on October 28, 2020. The non-substantial changes include:
- - Clarification of the Physician’s obligation when records are received without an attestation.
- - Clarification on billing for records previously reviewed under ML202.
- - Deletion of the billing code ML206 related to the unreimbursed supplemental report.
- - Addition of the ability of physicians who are certified as Qualified Medical Evaluators in the specialty of Internal Medicine or who are board certified in Internal Medicine to use modifiers 97 & 98 for toxicology and oncology evaluations.
The DWC has posted the 2019 Ethics Advisory Committee's annual report on its website. The Committee is independent from the DWC, and is charged with reviewing and monitoring complaints of misconduct filed against workers' compensation administrative law judges.
The EAC is required to make a public report each year summarizing activities in the previous calendar year. Anyone may file a complaint with the EAC. Complaints may be submitted anonymously but must be in writing.
In 2019, the EAC considered and resolved 5 complaints from 2018. Of 27 new complaints received in 2019, it considered 24 and resolved 21. Of those considered, 9 resulted in investigations, 6 of which were concluded.
Two resulted in findings of judicial misconduct.
In one of those cases, a defense attorney, wrote that complainant was reluctant to file a complaint for fear of possible retaliation against the law firm and its clients. Complainant complained that, for some time now, the attorneys at the firm have been under the impression that the judge acts with bias, often prejudging claims, and has exhibited behavior that they would classify as "bullying" of defendants.
In the specific case reported by this attorney, the judge was unprofessional toward complainant. The judge was belligerent and threatening and would not allow complainant to speak, rebut, refute, or explain anything, in violation of Labor Code section 5311.
Based on its review of the investigation, the EAC found that the investigation supported a finding of ethical violations, including ex-parte communications, prejudging the case, and a violation of Canon 3B(4) for failing to be patient, dignified, and courteous. Based upon that conclusion, the EAC recommended further appropriate action by the CJ.
In another case, a lien representative, complained that over 43 lien hearings have been held without a final order on the doctor’s lien. Complainant claimed that since 2011, 30 hearings have been held before the judge, who has deliberately delayed final adjudication of the lien.
Among other claims, the lien claimant reported that rude and punitive approach to hearings is representative of the judge’s treatment of complainant in all hearings. The judge forced the parties to stay until the lunch hour or the end of the day to receive a disposition unless the disposition was settlement, an unopposed continuance, or an order taken off the calendar (OTOC).
The EAC found that the investigation supported a violation of Canon 3B(4) for failing to be patient, dignified, and courteous. Based on that conclusion, the EAC recommended further appropriate action by the CJ.
Felipe Saurez Barocio, 63, of Atwater, owner of Agriculture Services, Inc., and his daughter, Angelita Barocio-Negrete, 34, of Merced, were sentenced to 10 years after pleading no contest to six felony counts of insurance fraud each.
Pursuant to Penal Code 1170(h), they will both serve six years in custody and four years on mandatory supervision.
They have also been ordered to pay $2,582,142 in restitution - the amount of workers’ compensation insurance premium they avoided paying over five years.
Barocio and his daughter underreported employee payroll by $11 million in order to fraudulently reduce the business’s premium for workers’ compensation insurance. The fraud potentially left employed farm workers without insurance coverage and at financial risk.
On October 14, 2019, State Compensation Insurance Fund (SCIF) filed a suspected fraudulent claim with the California Department of Insurance alleging potential insurance fraud.
SCIF reported that Barocio, as owner of a farm labor contracting business, underreported employee payroll in order to reduce the proper rate of insurance premium owed to SCIF.
An investigation by the California Department of Insurance revealed that between 2015 and 2019, Barocio and his daughter, who worked as the office manager, provided SCIF with fabricated quarterly employee payroll reports.
The Department discovered $11 million in missing payroll when they compared the quarterly reports submitted to SCIF to the quarterly reports submitted to the Employment Development Department. This underreporting of employee payroll resulted in a total loss of $2,582,142 in insurance premium.
Barocio and his daughter, Barocio-Negrete, were sentenced on January 12, 2021, in the Merced Courthouse and ordered to pay restitution on February 22, 2021.
The Merced County District Attorney’s Office prosecuted this case.
Courthouse News reports that an attorney for the California Grocers Association told a federal judge Tuesday a city of Long Beach ordinance providing a $4 an hour boost in hazard pay for grocery workers interferes with ongoing labor negotiations and should be blocked.
The Southern California city’s "Premium Pay for Grocery Workers Ordinance" provides the $4 per hour in premium pay for essential grocery workers who face higher risk during the Covid-19 pandemic.
CGA, which represents 6,000 grocery stores across California, filed a federal lawsuit against Long Beach on Jan. 21, claiming companies operate on thin profit margins and that some have already given their workers hazard pay bonuses.
In court papers, attorneys for CGA said the ordinance would result in grocery stores being more crowded and food prices more expensive for customers.
Upon filing its lawsuit in the Central District of California, CGA moved on an ex parte basis for a temporary restraining order blocking enforcement of the ordinance.
The next day, U.S. District Judge Dolly M. Gee, who had been initially assigned to the case, denied CGA’s bid, ruling that the association failed to show how it would be irreparably harmed without emergency action by the court.
Gee also called the threat of city-sanctioned lawsuits against noncomplying grocery stores "speculative," which the ruling said cannot be the basis for granting a TRO.
The case had since been transferred to U.S. District Judge Otis D. Wright II.
In court papers opposing an injunction, attorneys for Long Beach cited reports of grocery store corporations such as Kroger earning "eye-popping" profits during the pandemic while their frontline workers continue to face potential daily exposure to the novel coronavirus.
In a virtual federal court hearing Tuesday, CGA attorney William F. Tarantino told Wright a preliminary injunction should be granted because the ordinance’s alleged effect on collective bargaining is preempted by the National Labor Relations Act.
To support CGA’s preemption claims, Tarantino cited the U.S. Supreme Court’s 1976 ruling in Machinists v. Wisconsin Employment Relations Comm, which held local governments should not interfere in business that would otherwise be determined by "the free play of economic forces."
Wright took the matter under submission and indicated a final ruling on the preliminary injunction would be issued soon.
Tuesday’s hearing came on the same day the Los Angeles County Board of Supervisors voted 4-1 to approve an urgency ordinance requiring national grocery and drug stores chains in unincorporated LA County to pay workers an extra $5 an hour in "hero pay."
The ordinance - which takes effect immediately and is enforceable for the next 120 days - cited frontline workers’ higher risk of contracting Covid-19 and their ongoing labor contributions as justification for the wage increase.
Stephanie Medrano, 33, of West Covina, was arraigned on multiple counts of grand theft and insurance fraud after allegedly making misrepresentations following a COVID-19 diagnosis in an attempt to collect over $33,000 in undeserved workers’ compensation insurance benefits.
The California Department of Insurance launched an investigation after receiving a claim of suspected fraud from Medrano’s employer, the Baldwin Park Unified School District, on August 21, 2020.
The investigation revealed Medrano made multiple misrepresentations in order to extend a workers’ compensation insurance claim submitted to her employer after she was diagnosed with COVID-19.
Medrano was reportedly exposed to COVID-19 while in the workplace and subsequently filed a workers’ compensation claim. She told her employer that she self-quarantined from July 6, 2020 to August 3, 2020, and reported she only left her house twice to buy medicine for her mother and sister, who were also diagnosed with COVID-19. Medrano reported her symptoms related to the COVID-19 diagnosis were so severe she was unable to work.
The investigation found that during the time Medrano claimed she was self-quarantining, she was seen shopping at multiple stores for several hours a day and interacting with people from outside her immediate household without face masks.
Further, investigators uncovered that Medrano traveled to Lake Havasu with people who live outside her household just two days after she reported she was still experiencing symptoms to the doctor overseeing her claim.
The Department’s investigation into Medrano’s false statements regarding her symptoms and need for extended self-quarantine prevented a potential loss of $33,516 to the school district.
The Los Angeles County District Attorney’s Office is prosecuting this case.
A California woman, 65 year old Corby Kuciemba, sued her husband’s employer because she believes he caught the novel coronavirus at work and brought it home with him - ultimately infecting her also.
The couple then tested positive for the virus on July 16, 2020, and both were hospitalized as a result, with Corby Kuciemba being held for treatment until the beginning of August.
She and her husband, Robert Kuciemba, alleged in their Oct. 23, 2020 lawsuit that his employer, Nevada-based Victory Woodworks, violated local and federal virus-safety guidelines when it moved workers from one site to another in the San Francisco region.
The company’s failure to take basic precautions allegedly caused Robert Kuciemba to contract the virus and unknowingly bring it home and infect his wife, and both required extended hospital stays and suffer from after-effects.
The closely watched case was removed by the employer to the Federal District Court in Northern California on December 28. The removal was soon followed by a Motion to Dismiss filed on January 4, and then a hearing on that motion set for February 12.
On February 22, the federal judge ruled that the First, Second, Third, and Fifth Causes of Action, titled, respectively, "Negligence," "Negligence Per Se," "Negligence - Premises Liability," and "Loss of Consortium," are barred by the exclusive remedy provisions of California’s workers’ compensation statutes.
Judge Chesney also ruled that the couple’s Fourth Cause of Action doesn’t meet the required threshold, or standing, to hold Robert Kuciemba’s employer, Victory Woodworks Inc., liable for creating a public nuisance.
However, the plaintiffs were given leave to file, no later than March 19, 2021, a First Amended Complaint.
The case is Kuciemba v. Victory Woodworks, 20-cv-09355, U.S. District Court, Northern District of California (San Francisco).
In approximately 2002, Ruben Martinez, and his son, Alex Martinez, opened a medical clinic in Calexico.
In 2009, a chiropractor, Dr. Steven Rigler, moved his practice into the clinic and examined patients who were referred to him by Ruben and Alex and were receiving workers’ compensation benefits.
Dr. Rigler did not pay rent or utilities or contribute to the salaries of clinic staff. In exchange, Rigler permitted Ruben and Alex to determine the providers to whom Dr. Rigler’s patients would be referred for ancillary medical services. These ancillary service providers compensated Ruben and Alex for the referrals, and Ruben and Alex split the referral fees evenly.
In 2010, Gonzalo Ernesto Paredes was the office administrator for an entity called Advanced Radiology, owned by Dr. Ronald Grusd. Ruben Martinez entered into an agreement with Paredes, on behalf of Dr. Grusd, through which Advanced Radiology would pay Ruben a referral fee for patients referred to Advanced Radiology for magnetic resonance imaging (MRI) scans.
Thereafter, Paredes implemented the agreement with Ruben by, among other activities, receiving invoices from Ruben for patient referral fees and arranging payment of those fees to Ruben.
Paredes and Grusd were tried in federal court in 2017. Grusd was found guilty on all 42 counts that went to the jury. The jury hung on the counts against Paredes. The federal case against Paredes was subsequently dismissed by the government, without prejudice, pending his trial on state charges.
A jury in the state court trial found Paredes guilty of 35 counts of offering or delivering compensation for workers’ compensation patient referrals and 16 counts of concealing an event affecting an insurance claim.
The trial court sentenced Paredes to an aggregate term of five years in prison.
On appeal, Paredes claims that the prosecutor committed misconduct during his examination of one of the witnesses and during closing argument by suggesting the existence of facts not in evidence. Paredes also maintains that the trial court erred in excluding, as hearsay, an unavailable witness’s testimony from a prior federal trial. Finally, Paredes contends that there is insufficient evidence to support the verdicts.
The Court of Appeal affirmed the conviction in the unpublished case of People v. Gonzalo Ernesto Paredes.
The appellate court rejected his arguments one by one, and concluded that there was substantial evidence supporting his conviction.
While it obviously presented challenges, 2020 is looking like it may not have been such a bad year for workers’ compensation insurers and insureds after all.
Insurers took in less premium but paid fewer claims. They managed to achieve one of the lowest combined ratios in history. An increasing number of workers were able to be treated via telemedicine, meaning they did not have to travel. Injured workers, including COVID-claimants, appear to have received their medical care without much delay. And the vast majority of COVID-19 claimants needed only limited treatment.
On the down side, 2020 may have seen a return of opioid over-prescribing.
Experts from the industry’s data and rating organization, the National Council on Compensation Insurance (NCCI), recently shared their preliminary analysis of 2020 claims data. In a virtual roundtable, COVID-19 and Workers Compensation, summarized by the Insurance Journal.
NCCI looked at results through the third quarter of 2020 and extended those through the end of the year. NCCI uses data from private carriers and state funds in 41 jurisdictions but its data does not include many public entities such as first responders or health care entities including hospitals and nursing homes that are largely self-insured.
Some highlights of the year include:
- - The pandemic has "put gas on a fire that was already burning," that is, workers’ compensation loss costs have been on a downward trend for years and expense ratios have been climbing.
- - The percentage of COVID-19 claims among all workers’ compensation paid claims has varied greatly among states and occupations, as has the decrease in non-COVID claims, according to research from the Workers Compensation Research Institute (WCRI).
- - While at least 17 states have passed laws or issued orders that expanded access to workers’ compensation benefits for employees who contract COVID-19, many of those directives are creating new exposure for only a sliver of the workforce, new research by the WCRI shows.
- - Although the nation’s focus may have shifted to the coronavirus pandemic, the opioid crisis not only remains a challenge, but also may have worsened due to COVID-19, according to speakers at a forum sponsored by the American Property Casualty Insurance Association and the U.S. Chamber of Commerce.
- - Written premium for the full calendar year of 2020 is expected to be the lowest since 2012.
The NCCI figures are calendar year and do not reflect the full costs of treating COVID-19 or other health conditions with long-term effects.
Overall for 2020, NCCI projects an 8% decline in premium to $38.6 billion, the lowest since 2014. That is accompanied by a 7.6% decline in losses and a favorable 86% calendar year combined ratio.
Worker claims due to COVID-19 have ranged from no symptoms to critical care, hospitalizations and, unfortunately, fatalities in some cases.
The overall COVID-19 claims picture is by no means dire. The larger majority of the cases are small and have only required the injured worker to miss work and quarantine or recover at home.