Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Homeowner is Employer of Uninsured Licensed Contractor’s Worker. WCAB Panel Affirms WCJ Discretion to Deny PD Overpayment Credit. Judge Allows L.A. Ballot Initiative to Cap Hospital Executive Pay. Co-Employee Named in Tort Action Can Exercise Employer’s Arbitration Rights. Garden Grove Pharmacist Resolves Fraudulent Billing Claims for $4M. California Nurses Association Sponsors A.B. 1156 Presumed Injury Law. VA Delays Rollout of Troubled $16B Electronic Medical Records System. The Joint Commission Annual Review Shows 19% Sentinel Event Increase. Telehealth Utilization Increased Nationally in January 2023. Labor Department Survey Shows Reduction in Telework.
The expanded availability of opioid use disorder-related telehealth services and medications during the COVID-19 pandemic was associated with a lowered likelihood of fatal drug overdose among Medicare beneficiaries, according to a new study just published in JAMA Psychiatry,
This study is a collaborative research effort led by researchers at the National Center for Injury Prevention and Control, a part of the Centers for Disease Control and Prevention (CDC); the Office of the Administrator and the Center for Clinical Standards and Quality, both part of the Centers for Medicare & Medicaid Services (CMS); and the National Institute on Drug Abuse, a part of the National Institutes of Health (NIH).
In this national study, researchers analyzed data among two cohorts of Medicare beneficiaries to explore receipt of opioid use disorder-related telehealth services, receipt of medications for opioid use disorder, and fatal overdoses before and during the COVID-19 pandemic.
They compared data from two cohorts of Medicare beneficiaries across two time periods. The first cohort was constructed with data from September 2018-February 2020 and included 105,162 Medicare beneficiaries with opioid use disorder (the “pre-pandemic cohort”).
The second cohort was constructed with data from September 2019-February 2021 and included 70,479 Medicare beneficiaries with opioid use disorder, (the “pandemic” cohort).
In addition, the researchers conducted an analysis to examine the demographic and clinical characteristics associated with fatal overdose in the pandemic cohort.
Key findings of this study include:
– – Medicare beneficiaries that began a new episode of opioid use disorder-related care during the pandemic and received opioid use disorder-related telehealth services were found to have a 33% lower risk of a fatal drug overdose.
– – Medicare beneficiaries who received medications for opioid use disorder from opioid treatment programs (OTP) and those who received buprenorphine, one of the medications for opioid use disorder, in office-based settings also had reduced odds of a fatal drug overdose of 59% and 38%, respectively.
– – Mortality rates (classified as all-cause mortality and drug overdose mortality specifically) were higher in the pandemic cohort compared to the pre-pandemic cohort; however, the percentage of deaths due to drug overdose were similar between the two cohorts.
Although the results of this study were able to identify the positive impact opioid use disorder-related telehealth services had on lowering the risk for fatal drug overdose in the pandemic cohort, the authors note that only 1 in 5 Medicare beneficiaries in the pandemic cohort received OUD-related telehealth services.
Similarly, only 1 in 8 beneficiaries in the pandemic cohort received medications for opioid use disorder. These findings underscore the need for continued expansion of these potentially life-saving interventions across clinical settings.
“The results of this study add to the growing research documenting the benefits of expanding the use of telehealth services for people with opioid use disorder, as well as the need to improve retention and access to medication treatment for opioid use disorder,” said lead author Christopher M. Jones, PharmD, DrPH, Director of the National Center for Injury Prevention and Control, CDC. “The findings from this collaborative study also highlight the importance of working across agencies to identify successful strategies to address and get ahead of the constantly evolving overdose crisis.”
“At a time when more than 100,000 Americans are now dying annually from a drug overdose, the need to expand equitable access to lifesaving treatment, including medications for opioid use disorder, has never been greater,” said Wilson Compton, M.D., M.P.E, deputy director of the National Institute on Drug Abuse and senior author of the study. “Research continues to indicate that expanded access to telehealth is a safe, effective, and possibly even lifesaving tool for caring for people with opioid use disorder, which may have a longer-term positive impact if continued.”
“CMS is committed to ensuring that the beneficiaries we serve can access the high-quality behavioral health services they need,” said senior author Dr. Shari Ling, M.D., Deputy Chief Medical Officer at CMS. “This study shows that many beneficiaries were able to utilize opioid use disorder-related telehealth services during the pandemic, but we need to continue our efforts to broaden the use of telehealth, particularly in underserved communities.”
Private security company owner Luis Burgos, 50, and his former business partner, Sohan Singh, 57, have been charged for their alleged involvement in a workers’ compensation insurance fraud scheme. The company allegedly underreported employee payroll by over $1.6 million.
Burgos was arrested at the Fresno County Superior Court while appearing in court on an unrelated matter. He was previously charged with insurance fraud for his involvement in an organized auto insurance fraud ring.
Singh is currently at large and believed to be out of the country.
According to the report by the Sierra Sun Times, B&R Private Security LLC, based in Fresno, provided private armed and unarmed security guard services to the Central Valley.
Between May 2018 and May 2021, B&R Private Security LLC held a workers’ compensation insurance policy through State Compensation Insurance Fund.
While conducting a separate criminal investigation, the California Department of Insurance received information that B&R Private Security LLC was paying employees their salary in cash and only claiming a limited number of employees for payroll reporting purposes.
An investigation into B&R Private Security LLC, led by the Fresno County District Attorney’s Office, revealed the company reported approximately $192,419 in employee payroll to their workers’ compensation insurance carrier over the course of three years; however, a forensic audit revealed B&R Private Security LLC actually had over $1.8 million in employee payroll for the same time period.
The total amount of unreported payroll identified was $1,670,417. The hiding of employee payroll resulted in the illegal reduction of workers’ compensation insurance premiums paid and $128,978 in premium owed to State Compensation Insurance Fund.
Anyone with information related to the whereabouts of Singh are asked to contact Senior District Attorney Investigator Michael Ortiz at (559) 600-5072. The Fresno County District Attorney’s Office is prosecuting the case.
The Central Valley Workers’ Compensation Fraud Task Force is an inter-agency anti-fraud partnership with members from the California Department of Insurance, the California Employment Development Department, the California Franchise Tax Board, and the District Attorney’s Offices of Fresno County, Tulare County, Kings County, Kern County, Merced County, Madera County, and San Luis Obispo County.
Kelly Gola and members of the class she represents were adjunct faculty – part-time university professors engaged to teach on a semester-by-semester basis – at the University of San Francisco.
Adjunct faculty at the University, of whom there are more than 600, are represented by a labor organization: the USF Part Time Faculty Association which had a Collective Bargaining Agreement (CBA) with the employer.
The University’s practice with respect to adjunct faculty was to hire them to teach individual classes on a semester-by-semester basis. For each semester, the University would issue appointment letters offering employment to prospective adjunct professors during a specified assignment period that ran from the first day of that semester’s classes to the end of the semester.
Gola filed a lawsuit against the University. Among other theories of recovery, as a first cause of action, the operative complaint alleged a claim for unpaid wages on behalf of Gola and a class of similarly situated adjuncts. According to this claim, the assignment letters set out the terms of an employment contract only for the period specified in the letters, i.e., the teaching semester, and set a salary for that period only.
Yet adjunct faculty were required to work outside that period to prepare syllabi and course materials before classes started, and to grade exams and submit final grades after classes ended, and they were not paid for their time outside the assignment period.
As a second cause of action, the operative complaint alleged that the University failed to issue wage statements in compliance with Labor Code section 226(a) because adjuncts’ wage statements did not include the total hours worked during the pay period and the effective hourly rate.
Finally, Gola asserted a derivative claim under the Private Attorneys General Act (PAGA) (§ 2698 et seq.) seeking civil penalties for the Labor Code violations asserted in counts one through three.
As an affirmative defense, the University asserted that Gola’s claims were preempted by The federal Labor Management Relations Act (LMRA) (29 U.S.C. § 141 et seq.). which preempts all state-law claims that require interpretation of a CBA.
This affirmative defense was bifurcated and tried to the court. Following the bench trial, the trial court issued a statement of decision holding that Gola’s first and third causes of action were indeed preempted because these claims could not be resolved without interpreting the CBA.
With respect to Gola’s second cause of action, the wage statement claim, the trial court determined this claim was not preempted by federal law. The wage statement claim proceeded to a bench trial on the merits. The trial court found that the wage statements the University issued to adjunct faculty did not include the “total hours worked by the employee” or the employee’s effective hourly rate. The trial court calculated statutory damages of $1,621,600 and PAGA penalties of $545,235. The trial court later issued an order awarding Gola $1,307,225.95 in attorneys’ fees and $21,510.23 in costs.
The University timely appealed the judgment, and Gola cross-appealed. The Court of Appeal affirmed the judgment in the published case of Gola v University of San Francisco – SF-A161477 (April 2023).
After the trial court issued its statements of decision and judgment, however, the Legislature enacted Labor Code section 515.7, which provides that faculty at nonprofit higher education institutions “shall be exempt” from the provisions of Labor Code section 226, subdivision (a)(2) and (9), provided they are employed in a professional capacity as defined in the statute, and provided they are paid a salary that meets at least one of three tests for minimum compensation (salary tests).
Among the various issues raised on appeal, the University contends that newly enacted Labor Code section 515.7 should be applied retroactively to this case. If it is so applied, the University contends, Gola’s section 226 claims must fail because Gola and the subclass will be classified as exempt for the relevant period.
The Court of Appeal noted that Labor Code Section 515.7 is plainly intended to create a pathway to accord adjunct faculty exempt professional status and relieve nonprofit universities of hour and pay reporting requirements for adjuncts, provided adjuncts’ pay meets one of the three salary tests. But the statute does not directly speak to whether it reaches back to hour and pay reporting obligations incurred before September 9, 2020 when it was adopted as an urgency measure, and thus taking effect that day.
The Court concluded “This silence in itself strongly indicates prospective application. Moreover, we find in the text of the statute itself an additional indication of prospective application…”
According to a new audit released this week by California State Auditor Grant Park, the State Bar of California must act to protect the integrity of its attorney investigations and slow a spending deficit that could cripple its operations.
The State Bar’s Office of the Chief Trial Counsel is responsible for investigating and prosecuting complaints against attorneys. However, if a conflict of interest related to a complaint could raise concerns about the Office of the Chief Trial Counsel’s impartiality, the chief trial counsel must refer that complaint to a special deputy trial counsel administrator (administrator) – an independent contractor who has all the powers and duties of the chief trial counsel.
A team of about 20 special deputy trial counsels (external investigators), who are also independent contractors, support the administrator in investigating and prosecuting external disciplinary cases.
Although the State Bar tracks centralized data related to such cases through its case management system, the audit found multiple errors and omissions in these data, impeding its ability to effectively monitor external investigations. The audit also found that external investigators did not consistently conclude their investigations within six months.
Finally, the State Bar has not formalized its process to ensure that its external investigators are free from conflicts of interest.
With regard to budgetary issues, the Auditor said that in recent years, the State Bar has often spent more from its general fund than it has received in revenue.
The State Bar deposits the majority of its mandatory licensing fee revenue into its general fund, and it then uses this fund to pay for its administrative offices and nine of its 11 public protection programs. The State Bar’s personnel costs have recently increased and will continue to increase in the coming years.
Further, none of the State Bar’s administrative offices are fully meeting their performance measures, likely in part because some have high staff vacancy rates.
The State Bar operates 16 major programs. These programs address different aspects of its mission, such as investigating and prosecuting attorneys for rules violations, administering the California bar exam, and promoting diversity and inclusion in the legal system. In addition to its 16 major programs, the State Bar also has 10 administrative offices that provide support to all State Bar activities.
Although the State Bar will need a mandatory fee increase in 2024, it can minimize this increase and other future increases by raising other fees it charges for providing certain services to fully cover the associated costs and updating other out-of-date fees.
The State Bar is considering whether some programs serve a public protection function that supersedes the need for them to be self-sufficient, meaning that it may decide not to raise all of these fees. In particular, according to the chief financial officer (CFO), the State Bar believes that increasing fees for its Mandatory Fee Arbitration program and Lawyer Referral Service program (both service fees) could result in the public using these programs less.
State Bar staff recommended changes to the LLPs program’s fees that would generate from $500,000 to more than $700,000 annually and changes to the Law Corporations program’s fees that would generate more than $300,000 annually in addition to the current fee revenues generated by the programs. The State Bar is in the process of soliciting feedback from impacted parties on the appropriate fee level for LLPs.
The State Bar owns two buildings – one in San Francisco and the other in Los Angeles. Based on recent estimates, the State Bar occupies about 60 percent of its San Francisco space and about 80 percent of its Los Angeles space. It leases out the remaining space in both buildings.
The State Bar is in the process of trying to sell its San Francisco building. If it is able to do so, it could realize significant savings, particularly given that the ownership costs for the building have increased in recent years.
In 2021 the State Bar spent nearly $5.7 million on both capital improvements and building operations for its San Francisco building, and estimates its 2022 costs were nearly $5.6 million. The State Bar projects that it could save an average of more than $4 million annually in building operating expenses alone if it sells the building.
The State Bar intends to present all of its recommended fee increases to its board in May 2023. If it is able to raise these fees, it could make improvements to these programs and to other disciplinary or regulatory programs without needing to spend mandatory licensing fee revenue to do so.
The State Bar agreed with all of the Auditor’s recommendations, but included what it referred to as additional contextual information in its response. The State Bar also indicated its willingness to work with the Legislature to implement all of the recommendations.
The Institute for Clinical and Economic Review (ICER) is an independent non-profit research institute that produces reports analyzing the evidence on the effectiveness and value of drugs and other medical services. ICER’s reports include evidence-based calculations of prices for new drugs that accurately reflect the degree of improvement expected in long-term patient outcomes, while also highlighting price levels that might contribute to unaffordable short-term cost growth for the overall health care system.
The Institute just released a 113 page Draft Evidence Report assessing the comparative clinical effectiveness and value of exagamglogene autotemcel (“exa-cel”, Vertex Pharmaceuticals and CRISPR Therapeutics) and lovotibeglogene autotemcel (“lovo-cel”, bluebird bio) for sickle cell disease. This preliminary draft marks the midpoint of ICER’s eight-month process of assessing these treatments, and the findings within this document should not be interpreted to be ICER’s final conclusions.
The world’s first CRISPR-based gene-editing therapy appears to be nearing the market. And an influential drug cost watchdog has an early idea of how the treatment should be priced to be considered cost-effective in sickle cell disease (SCD).
Vertex and CRISPR Therapeutics’ gene editing-based exa-cel – and bluebird bio’s gene replacement therapy lovo-cel – can be priced up to $1.93 million to be cost-effective, the Institute for Clinical and Economic Review said in a draft report (PDF) published Wednesday. The figure accounts for the drugs’ net prices after discounts and rebates.
The report comes shortly after Vertex and CRISPR last week said they had completed their rolling FDA applications for exa-cel in SCD and beta thalassemia with a request for priority review. If approved, exa-cel would become the first therapy based on the Nobel-winning CRISPR technology.
“Sickle cell disease can affect nearly every organ system in the body, and severe sickle cell disease affects nearly every aspect of a person’s life,” said ICER’s Chief Medical Officer, David Rind, MD. “From the earliest days of gene therapy, patients, families, and clinicians have imagined that someday it might be possible to address the underlying genetics of sickle cell to achieve a cure. These first two genetic therapies, using different technologies and altering different genetic targets may mean that day has nearly arrived.”
The prevalence of sickle cell disease is unknown, but CDC estimates place it at about 100,000 cases in the U.S. It is a blood disease that can spur chronic complications among all organs, and annual healthcare costs rack up to $2.98 billion, the ICER said.
The model developed to generate cost-effectiveness findings in ICER’s draft report used cutting-edge evidence from academic researchers and was informed by what matters to patients.
Through collaborative input from patients, clinicians, health economists, payers, and manufacturers, ICER’s draft model not only includes the projected health benefits and cost offsets from reducing the acute events as measured in the clinical studies but also includes the projected benefits from eliminating the fear of future acute events, reductions in chronic events and mortality, health equity considerations, and reductions in lost productivity and caregiver burden.
Two proposed gene therapies for sickle cell disease (SCD) are each worth up to $1.9 million, according to an April 12 draft evidence report from the Institute for Clinical and Economic Review.Given that both gene therapies offer the promise of a potential cure, ICER compared them with standard of care over a lifetime.
The health economics reviewers figured the two therapies could cost between $1.58 million to $1.72 million under commonly used cost-effectiveness thresholds that only look at benefits within the healthcare system. The range goes up to between $1.79 million to $1.93 million when considering broader societal value.
Gene therapies typically cost multiple millions of dollars per treatment. Bluebird recently launched Zynteglo, a sister med to lovo-cel, at $2.8 million. Zynteglo is approved for beta thalassemia, a rare blood disorder that affects about 1 in 100,000 individuals.
It’s not immediately clear how bluebird or Vertex-CRISPR will price their therapies. A Vertex spokesperson said the company is still reviewing the report. In a separate statement, a bluebird spokesperson said the company hasn’t set a price for lovo-cel and is currently focused on completing its FDA application.
During an interview with Fierce Pharma, ICER’s chief medical officer, David Rind, M.D., stressed that the cost-effectiveness analyses are preliminary and may change. ICER is gathering public comments until May 9 and pushed back its final report publish date to July 13 in anticipation of more data on exa-cel.
Horizon Therapeutics says it now has 20 drugs under development, in its 15 years of existence it has yet to license a product it invented. Yet the company has managed to assemble a war chest of lucrative drugs, in the process writing a playbook for how to build a modern pharmaceutical colossus.
As the White House and both parties in Congress grapple with reining in prescription drug prices, a report in KFF News says that Horizon’s approach reveals just how difficult this may be.
Horizon’s strategy has paid off handsomely. Krystexxa was just one of the many shiny objects that attracted Amgen, a pharmaceutical giant. Amgen announced in December that it intends to buy Horizon for $27.8 billion, in the biggest pharmaceutical industry deal announced in 2022. Krystexxa brought in $716 million in 2022 and was expected to earn $1 billion annually in coming years.
According to the KFF report, Horizon’s CEO, Tim Walbert, who will reportedly get around $135 million when the deal closes, has mastered a particular kind of industry expertise: taking drugs invented and tested by other people, wrapping them expertly in hard-nosed marketing and warm-hued patient relations, raising their prices, and enjoying astounding revenues.
He’s done this with unusual finesse – courting patients with concierge-like attention and engaging specialist clinicians with lunches, conferences, and research projects, all while touting his own experience as a patient with a rare inflammatory disease. Walbert’s company has been particularly adept at ensuring that insurers, rather than patients, bear the costly burdens of his drugs.
KFF News reported that a federal prosecutor in 2015 began examining allegations that Horizon’s patient assistance program had worked with specialty pharmacies to evade insurers’ efforts to shun Horizon’s expensive drugs. A separate probe opened in 2019 over alleged kickbacks to pharmacy benefit managers, companies that negotiate to get Horizon’s drugs covered by insurers. Those investigations appear to be no longer active, Horizon spokesperson Catherine Riedel said.
The company this year disclosed a third probe, concerning methods the company allegedly used to get prior authorization of its drugs. Justice officials did not respond to requests for comment on the investigations.
To help sell its drugs, Horizon blankets specialist physicians with marketing and peer-to-peer appeals. Its payments to physicians for things like consulting, speeches, and meals totaled $8.7 million in 2021, compared with the $10 million it paid them for research, federal records show.
By contrast, Seagen, a biotech company of roughly the same size, paid doctors a total of $116 million, with nearly $112 million of that pegged for research. Riedel said Horizon’s marketing and educational approaches were “necessarily unique” because of the challenges of treating rare and neglected diseases.
While at Abbott, Walbert pioneered direct-to-consumer advertising for specialty drugs like Humira, a trend that aggravated insurers, who anticipated, correctly, that they would soon be shelling out billions for expensive drugs.
The company defends its marketing practices. “We learn what matters most to patient communities and act. This approach has been validated by independent third-party research,” said Riedel.
The Federal Trade Commission said in January it was seeking more information on the Amgen-Horizon merger. Sen. Elizabeth Warren (D-Mass.), citing high prices for Horizon and Amgen drugs, urged the agency to nix the deal.
Each year the California Chamber of Commerce releases a list of job killer bills to identify legislation that it says will decimate economic and job growth in California. Earlier this month, CalChamber released its 2023 Job Killer List which includes bills dealing with labor and employment issues, taxation, housing costs, and climate and energy policies, and it expects several additions to the list in the coming weeks.
The CalChamber has named the following as job killer bills for 2023 under the category of Labor and Employment, along with it’s summary of the impact on employers and jobs that they expect.
– – AB 524 (Wicks; D-Oakland) Expansion of Litigation Under FEHA. Exposes employers to costly litigation under the Fair Employment and Housing Act by asserting that any adverse employment action was in relation to the employee’s family caregiver status, which is broadly defined to include any employee who contributes to the care of any person of their choosing, and creates a de facto accommodation requirement that will burden small businesses.
– – AB 1156 (Bonta; D-Alameda) Expands Costly Presumption of Injury. Significantly increases workers’ compensation costs for public and private hospitals by presuming certain diseases and injuries are caused by the workplace and establishes an extremely concerning precedent for expanding presumptions into the private sector.
– – SB 525 (Durazo; D-Los Angeles) Costly Minimum Wage Increase. Imposes significant cost on health care facilities and any employer who works with health care facilities by mandating increase in minimum wage to $25.
– – SB 365 (Wiener: D-San Francisco) Undermines Arbitration. Discriminates against use of arbitration agreements by requiring trial courts to continue trial proceedings during any appeal regarding the denial of a motion to compel, undermining arbitration and divesting courts of their inherent right to stay proceedings.
– – SB 399 (Wahab; D-Hayward) Bans Employer Speech. Chills employer speech regarding religious and political matters, including unionization. Is likely unconstitutional under the First Amendment and preempted by the National Labor Relations Act.
– – SB 616 (Gonzalez; D-Long Beach) Costly Sick Leave Expansion on All Employers. Imposes new costs and leave requirements on employers of all sizes, by more than doubling existing sick leave mandate, which is in addition to all other enacted leave mandates that small employers throughout the state are already struggling with to implement and comply.
– – SB 627 (Smallwood-Cuevas) Onerous Return to Work Mandate. Imposes an onerous and stringent process to hire employees based on seniority alone for nearly every industry, including hospitals, retail, restaurants, movie theaters, and franchisees, which will delay hiring and eliminates contracts for at-will employment.
– – SB 723 (Durazo; D-Los Angeles) Onerous Return to Work Mandate. Imposes an onerous and stringent process for specific employers to return employees to the workforce for specified industries, including hotels and restaurants that have been disproportionally impacted by this pandemic, and removes guardrails on existing law by making mandate permanent and significantly broadening the applicability of the law.
– – SB 809 (Smallwood-Cuevas; D-Los Angeles) Prohibits Consideration of Conviction History in Employment. Prohibits nearly every employer from considering conviction history of an applicant or existing employee in employment decisions and imposes cumbersome process on employers that are legally not allowed to hire individuals with certain convictions.
“California’s robust private sector economy creates and maintains more than 17 million jobs, paying $1.6 trillion in annual wages and salaries,” said CalChamber President and CEO Jennifer Barrera. “Yet, cost pressures, workforce challenges, litigation threats, and California’s pernicious housing shortage are an ever-present threat to our continued success. Costly policies – like the ones on CalChamber’s job killer list – stifle job creation, reduce investment in our economy, and drive outward migration. Job killing policies make California unattractive both to current employers and entrepreneurs who, incidentally, generate the preponderance of the state’s tax revenue, and to those who might want to come here to invest in our future economy.”
The CalChamber tracks the bills throughout the rest of the legislative session and works to educate legislators about the serious consequences these bills will have on the state. Over the last five years, the outcome of bills on the past Job Killer Lists were as follows:
– – 2022: 19 Job Killers identified, 2 sent to Governor Gavin Newsom, 2 signed;
– – 2021: 25 Job Killers identified, 2 sent to Governor Newsom, 1 signed, 1 vetoed;
– – 2020: 19 Job Killers identified, 2 sent to Governor Newsom, 1 signed, 1 vetoed;
– – 2019: 31 Job Killers identified, 2 sent to Governor Newsom, 1 signed, 1 vetoed;
– – 2018: 29 Job Killers identified, 1 sent to Governor Edmund G. Brown Jr., 1 vetoed;
– – 2017: 27 Job Killers identified, 3 sent to Governor Brown, 2 signed, 1 vetoed;
Five defendants were recently arraigned on multiple felony counts of insurance fraud after a California Department of Insurance investigation found the landscaping company the defendants owned and/or supervised allegedly underreported employees’ wages to their insurance company in order to unlawfully save on workers’ compensation insurance premiums.
Three defendants include Antonio Martinez Resendiz of Murrieta, Ismael Martinez Resendiz of Fallbrook, and Jorge Martinez Resendiz of Temecula, owners of Green View Landscape & Tree Service Inc. in Escondido.
The two additional defendants are Ariana Martinez of Murrieta, and Silvia Reyna Martinez of Temecula, supervisors within the company.
Employers are required to maintain workers’ compensation insurance to cover their employees in the event of an on-the-job injury. To ensure proper coverage, employers are required to accurately report their employees’ job classifications and the amount of payroll expended. One of the common ways in which employers avoid paying insurance premiums is to underreport employee payroll by providing false payroll reports to their insurance company.
Businesses that fraudulently lower their premiums benefit from an unfair market advantage, giving them the ability to charge less in labor costs, and thereby underbid businesses who pay the appropriate premiums.
The San Diego County District Attorney’s Office is prosecuting this case.
48 year old Carlos Orlando Chacon M.D., was initially charged in late 2021 with involuntary manslaughter and other charges, along with Heather Vass, one of his nurses, in the death of Megan Espinoza, a 36-year-old mother of two who died more than a month after undergoing a breast augmentation operation at Divino Plastic Surgery in Bonita, California on Dec. 19, 2018.
San Diego County Prosecutors said Espinoza was provided anesthesia by Vass, a nurse who was not trained to do so. The patient went into cardiac arrest during the operation and Chacon allegedly delayed contacting emergency services for about three hours.
Chacon was previously released on his own recognizance under a number of conditions, but was arrested and jailed last week. Years after he was charged with involuntary manslaughter in the death of the 36-year-old mother of two, California authorities have now charged Dr. Chacon with second-degree murder for Megan’s death.
Deputy District Attorney Gina Darvas said Monday that further investigation into the case yielded additional information that led to the filing of the murder charge, including allegations that Chacon ordered his staff not to call 911 when Espinoza’s condition declined and that he instructed staff to lie to Espinoza’s husband regarding her condition.
The April 6, 2023 probable cause warrant outlines the results of the investigation the Medical Board of California provided the San Diego County District Attorney’s Office, and what further investigation disclosed about the death. A complaint was filed with the Medical Board by one of the paramedics who transporter Espinoza because of concerns that Dr. Chacon had waited almost 3 hours to call 911 to request emergency medical assistance, which is standard protocol when CPR is performed, as defined by the American Heart Association.
Court documents claim that Chacon did not contact 911 to request emergency assistance until approximately 3 hours after Espinoza’s cardiac arrest. Paramedics arrived and Espinoza was transported to Scripps Hospital, in Chula Vista.
Upon her arrival at the hospital, doctors intubated Espinoza to establish a secure airway and placed her on a ventilator. Doctors discovered she had a pressure induced pneumothorax as a result of prolonged and aggressive bagging. Espinoza had also sustained undue stress to her heart as a result of the prolonged bagging.
Espinoza was admitted to the Intensive Care Unit of Scripps Hospital. A chest tube was inserted and over the next five days Espinoza’s pulmonary function improved. However, her neurological function remained critical.
Espinoza was transferred to UCSD Medical Center’s Neurological Intensive Care Unit, where her condition continued to deteriorate. Physicians notified Espinoza’s husband and mother that she was not expected to regain neurological function. The family chose to place Espinoza on palliative/compassionate care.
Espinoza never regained consciousness, or the ability to breath on her own. Espinoza passed away on 01/28/19. An autopsy was performed. The autopsy determined the cause of death to be, “lschemic Encephalopathy due to resuscitated cardiac arrest following anesthesia for elective surgery.” lschemic Encephalopathy is defined as a brain dysfunction caused by a lack of blood flow and oxygen to the brain.
Two medical experts were consulted by the Medical Board. Both provided the opinion that Dr. Chacon’s handling of Espinoza’s surgical procedure was an extreme departure or deviation of the standard of care.
The District Attorney’s Office investigation continued after the original charges were brought. This lead prosecutors to claim that “Chacon began a pattern of conscious disregard for human life prior to beginning Megan Espinoza’s surgery.” and that as a result “probable cause exists to believe Chacon is allegedly guilty of PC 187(a) Second Degree Murder with Malice Aforethought.”
Mr. Espinoza stated in sworn testimony, in the related civil case, that he had been present when Mrs. Espinoza discussed anesthesia with Chacon. Chacon told Mrs. Espinoza that an anesthesiologist who had privileges with two different Sharp Hospital locations would be coming to Divino to provide the anesthesia, which was not what happened.
The transcript of Chacon’s sworn testimony during the civil deposition revealed that Chacon admitted Heather Vass administered the anesthesia, and that he did not specifically direct Nurse Vass what medications and dosages she should administer to Espinoza during the surgery. Instead, Chacon provided Vass with a two-page chart that listed drugs and dosage amounts that Vass could use during every surgery in which she provided anesthesia services for Chacon.
Vass confirmed in her deposition that Chacon did not give her any verbal or written instructions regarding any of the medication and dosages she charted on the Nursing Note. She independently made those decisions.
Dr. Michael Dinh and Dr. Jesus Lozano, were two anesthesiologists whom Chacon contacted by phone for advice after Espinoza’s cardiac arrest. When prosecutors interviewed Dr. Dinh, they were told that a registered nurse is not allowed to pick and choose the drugs and dosages and administer them to a patient. They can only act upon a physician’s orders that are tailored to the specific patient’s needs.
Investigators noted that videos taken by Chacon during Espinoza’s surgery showed that Chacon used a sterile drape, which blocked Chacon’s view of what Heather Vass was doing during the surgery. And witness Zenia De Los Santos, who was in the surgical room during Espinoza’s procedure, stated Chacon was playing loud music during the procedure that made it difficult for anyone in the room to hear what the others were saying, or to hear any auditory warnings from the surgical monitor.
Prosecutors say Chacon did not call 911 until 3 hours after Espinoza’s heart stopped. During that time, Vass was using the Ambu bag to assist Espinoza with her breathing. She never regained consciousness.
Coworker, Zenia De Los Santos, described ineffective efforts at resuscitation, and about feeling overwhelmed and abandoned by Chacon who left the operating room for prolonged periods of time during the three hour resuscitation effort. She claims she and her coworkers were told by Chacon not to call 911 until instructed to do so. De Los Santos also told investigators that finally at 5:00 the office was ready to close, and about 30 minutes later, after everyone was gone, the ambulance arrived. By then, it was much too late to save her.
Chacon allegedly saw at least four other patients in the hours after Espinoza’s cardiac arrest but before he called 911 at 5:24 p.m. and was described as acting “robotic” during that time-frame – “as if he wasn’t concerned,” as the warrant put it. Nor did he tell Megan Espinoza’s husband about her condition until 5:41 p.m., documents alleged.
The warrant concluded that Chacon had displayed the kind of deliberate inaction with conscious disregard for human life required for a charge of second-degree murder committed with implied malice.
His criminal defense attorney Marc Carlos told a local news station that the charges against Chacon are unsupportable.
In December 2022, KGTV reported that Megan’s family had reached a settlement in a lawsuit against Chacon.