Author: WorkCompAcademy

Central California medical provider Clinica Sierra Vista (CSV), which serves customers in Kern, Fresno, and Inyo Counties, has agreed to resolved its violations of the California False Claims Act and the federal False Claims Act. for nearly $26 million settlement.  CSV is a non-profit Federally Qualified Health Center (“FQHC”) that provides primary and preventive care serves to primarily low-income individuals and families.

CSV is designated as an FQHC by virtue of its receipt of a federal “health center” grant authorized under Section 330 of the Public Health Services Act.

The conditions of Section 330 grants include requirements that the health center be located in a medically- underserved area, it serves anyone regardless of the ability to pay for those services and that it participate in its state Medicaid program which, in California, is the California Medical Assistance Program (“Medi-Cal”)

At the end of each FQHC’s fiscal year, FQHCs must file a “Federally Qualified Health Center (FQHC)/Rural Health Clinic (RHC) Prospective Payment System (PPS) Reconciliation Request.” The total amount of Medi-Cal interim payments and third party payments received by the FQHC, e.g. Medicare, Managed Care Organization (MCO), and other party third party payments, if applicable, is reviewed against the number of visits for which the FQHC was reimbursed by the Medi-Cal Program at its Prospective Payment System (PPS) rate.

In 2019, CSV informed the Government that, as part of an internal investigation commissioned by its new Chief Executive Officer and approved by CSV’s Board of Directors, CSV had identified potential violations of the False Claims Act, 31 U.S.C. §§ 3729-3733, and the California False Claims Act, Government Code section 12650, et seq., and expressed its intent to voluntarily self-disclose information known by CSV about the potential violations.

CSV’s voluntary self-disclosure revealed certain CSV executives, including its founder and former CEO, and former Chief Financial Officer, (i) submitted false information in its annual reconciliation reports by omitting Medi-Cal Managed Care and third-party capitated payments it had received, and (ii) knowingly failed to correct this information after it later knew or should have known that the information was false and resulted in uncorrected, significantly higher wrap around payments from DHCS than CSV would have been entitled to had it submitted accurate reconciliation requests.

According to reports by the news outlet Bakersfield.com. recently appointed CEO Dr. Olga Meave said in a statement Thursday the settlement will not impact CSV “operations, patients or team members” because Clinica set aside money and planned for its financial future during the three years the case took to resolve. She added the nonprofit takes pride in its values of responsibility, transparency and integrity and looks to move forward focused on providing high-quality care.

“New leadership is in place at CSV and the organization has taken many steps since 2018 to ensure a reporting error like this does not happen again, including instituting a new compliance program and hiring an external accounting firm to perform annual audits under the rigorous Single Audit Act,” Meave stated.

CSV founder Steve Schilling, who served as CEO during the period investigators referred to in the settlement agreement, said Thursday he had heard nothing about the settlement or the investigation. He said reconciliation was for years a back-and-forth conversation between CSV and the Medi-Cal program, such that the nonprofit always kept millions of dollars in reserve in case the government ever concluded afterward that Clinica had been overpaid and money needed to be returned.

“I don’t think anybody’s intending to defraud anybody,” he added. “Nobody was personally benefiting from that.”

The $1.7 trillion spending package Congress passed in December included a two-year extension of key telehealth provisions, such as coverage for Medicare beneficiaries to have phone or video medical appointments at home. But according to a report by Kaiser Health News, it also signaled political reluctance to make the payment changes permanent, requiring federal regulators to study how Medicare enrollees use telehealth.

The federal extension “basically just kicked the can down the road for two years,” said Julia Harris, associate director for the health program at the D.C.-based Bipartisan Policy Center think tank. At issue are questions about the value and cost of telehealth, who will benefit from its use, and whether audio and video appointments should continue to be reimbursed at the same rate as face-to-face care.

Before the pandemic, Medicare paid for only narrow uses of remote medicine, such as emergency stroke care provided at hospitals. Medicare also covered telehealth for patients in rural areas but not in their homes — patients were required to travel to a designated site such as a hospital or doctor’s office.

But the pandemic brought a “seismic change in perception” and telehealth “became a household term,” said Kyle Zebley, senior vice president of public policy at the American Telemedicine Association.

The omnibus bill’s provisions include: paying for audio-only and home care; allowing for a variety of doctors and others, such as occupational therapists, to use telehealth; delaying in-person requirements for mental health patients; and continuing existing telehealth services for federally qualified health clinics and rural health clinics.

Telehealth use among Medicare beneficiaries grew from less than 1% before the pandemic to more than 32% in April 2020. By July 2021, the use of remote appointments retreated somewhat, settling at 13% to 17% of claims submitted, according to a fee-for-service claims analysis by McKinsey & Co.

Fears over potential fraud and the cost of expanding telehealth have made politicians hesitant, said Josh LaRosa, vice president at the Wynne Health Group, which focuses on payment and care delivery reform. The report required in the omnibus package “is really going to help to provide more clarity,” LaRosa said.

In a 2021 report, the Government Accountability Office warned that using telehealth could increase spending in Medicare and Medicaid, and historically the Congressional Budget Office has said telehealth could make it easier for people to use more health care, which would lead to more spending.

During the pandemic, licensing requirements in states were often relaxed to enable doctors to practice in other states and many of those requirements are set to expire at the end of the public health emergency.

Licensing requirements were not addressed in the omnibus, and to ensure telehealth access, states need to allow physicians to treat patients across state lines, said Dr. Jeremy Cauwels, Sanford Health’s chief physician. This has been particularly important in providing mental health care, he said; virtual visits now account for about 20% of Sanford’s appointments.

Allstates Refractory Contractors, LLC filed suit against the Secretary of Labor and the Occupational Safety and Health Administration, asking the Court to declare OSHA’s statutory power to promulgate permanent “safety standards” unconstitutional, and to issue a permanent injunction preventing OSHA from enforcing those standards.

The parties filed dueling Motions for Summary Judgment, which is appropriate only where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Federal Civil Rule 56(a).

In ruling on the motions, Federal District Judge Jack Zouhary wrote that Congress passed the Occupational Safety and Health Act in 1970, declaring the Act’s “purpose and policy” was “to assure so far as possible every working man and woman in the Nation safe and healthful working conditions. Under the Act, Congress gave the Secretary of Labor the power “to set mandatory occupational safety and health standards and vested the Secretary with “broad authority . . . to promulgate different kinds of standards” for health and safety in the workplace.

Allstates is a general contractor that provides furnace services to various glass, metal, and petrochemical facilities. The company has four full-time employees, but also hires “up to 100” part-time employees, depending on the job.

OSHA cited the company for standards violations, including a “serious violation after a catwalk brace fell and injured a worker below.” Allstates did not contest the citation or seek judicial review. Instead, it settled the violation for $5,967 in December 2019.

Allstates’ argument in support of an injunction is straightforward – it claims Congress violated the Constitution by delegating to OSHA the authority to write permanent safety standards. Article I of the Constitution states that “[a]ll legislative Powers herein granted shall be vested in a Congress of the United States.” This principle, known as the “nondelegation doctrine,” prevents Congress from “transfer[ing] to another branch powers which are strictly and exclusively legislative.”

In National Maritime Safety Association v. OSHA, plaintiff claimed that Congress did not provide an intelligible principal to guide OSHA’s promulgation of health and safety standards. 649 F. 743 (D.C. Cir. 2011). The D.C. Circuit flatly rejected the argument:

Thus, Judge Judge Zouhary concluded his opinion by saying that with “no binding or persuasive authority supporting its argument, Plaintiff falls short of demonstrating actual success on the merits. OSHA’s discretion is sufficiently limited. Plaintiff’s Motion is denied; Defendants’ Motion is granted.”

Allstates appealed the dismissal of their case to the United States Court of Appeals for the Sixth Circuit. In doing so, this employer has attracted the attention of the California Attorney General, who just announced that he has joined a coalition of 19 attorneys general in filing an amicus brief arguing against the employer.

His announcement characterizes the employers case as “a cynical attempt to drastically undermine the U.S. Occupational Safety and Health Administration’s (OSHA) ability to establish and enforce federal workplace safety protections.” And an “attempt to unwind more than half a century of legal precedent.”

In addition to the 19 states attorney’s general, the docket for the case in United States Court of Appeals for the Sixth Circuit shows 28 additional entities who have been granted the privilege to file briefs in the case as amicus. Notable amicus includes the American College of Occupational and Environmental Medicine (ACOEM), the Sierra Club, National Safety Council, Buckeye Institute, National Federation of Independent Business, National Association of Home Builders, Pacific Legal Foundation among a growing list of many others.

National Association of Home Builders and the National Federation of Independent Business filed an amicus brief “to help explain the importance of applying a strong nondelegation doctrine.”

They go on to argue that the “nondelegation doctrine has seemingly evolved to a point where it is a virtual dead letter, as then-Professor Kagan wrote. Elena Kagan, Presidential Administration, 114 Harvard L. Rev. 2245, 2364 (2001) (“It is …. a commonplace that the nondelegation doctrine is no doctrine at all”). But serious application of the nondelegation doctrine is necessary to safeguard multiple aspects of the Framers’ constitutional design.”

Nicholas Casson was a firefighter for the City of Santa Ana for 27 years. He took a service retirement in 2012 and immediately began receiving pension payments through California Public Employees Retirement System (CalPERS) of approximately $7,200 per month.

He immediately started a second career with the Orange County Fire Authority (OCFA) where he was eligible for a pension under respondent Orange County Employees Retirement System (OCERS). Importantly, he did not elect reciprocity between the two pensions, which would have allowed him to import his years of service under CalPERS to the OCERS pension. He started as a first-year firefighter for purposes of the OCERS pension and immediately began collecting pension payments from CalPERS.

Five years into the new job, he suffered an on-the-job injury that permanently disabled him. He applied for and received a disability pension from OCERS, which, normally, would have paid out 50 percent of his salary for the remainder of his life.

However, because he was receiving a CalPERS retirement, OCERS imposed a “disability offset” pursuant to Government Code section 31838.5, which is the statute at the center of this appeal. This resulted in a monthly benefit reduction from $4,222.81 to $1,123.87.

After exhausting his administrative remedies, Casson filed a petition for a writ of mandate in the trial court. The court denied the petition, finding that the plain language of section 31838.5 required a disability offset. Casson appealed. The Court of Appeal reversed in the published case of Casson v. Orange County Employees Retirement System – G060950 (January 2023).

This appeal arises from a claim for a service-connected disability retirement (i.e., retirement arising from an on-the-job injury) under a pension governed by the County Employees Retirement Law of 1937, Government Code section 31450 et seq. (CERL).

The parties have presented a single issue on appeal: Does the term “disability allowance” in section 31838.5 include payments under a prior service pension in the absence of reciprocity? This is a pure statutory interpretation issue.

The opinion first answered the question “what is reciprocity?” At the time of retiring from a qualifying job, the employee may elect to defer pension benefits and leave his or her contributions on deposit with the pension plan. (§ 31700.) If, within the applicable timeframes, the employee is employed in another government position with a qualifying pension plan, the employee may elect to link the two pensions in a system of reciprocity. (§ 31831.) The effect of that election is the employee does not receive pension benefits under the first plan until he or he or she retires from the second plan. The advantage to the employee is that he or she enters the second pension plan with the same amount of service credit as the first plan.

Reciprocity is not automatic. An employee must affirmatively elect reciprocity. (§ 31831.) In this case Casson did not.

Government Code section 31838.5 places certain limits on the amount of disability pay a person may receive if he or she has been the beneficiary of multiple CERL retirement plans. OCERS’ argument, which the trial court adopted, is relatively straightforward: section 31838.5, on its face, does not limit its application to reciprocal pensions. Indeed, the word reciprocal is nowhere mentioned in the statute.

Casson takes the view that section 31838.5 only applies to reciprocal pensions.

The court of appeal agreed with Casson and said “Casson did not elect reciprocity. He chose to treat the two pensions as separate. He forwent valuable benefits to do so. The compelling logic of treating the two pensions as one for disability purposes, therefore, simply does not apply. On the contrary, it would be fundamentally unfair to Casson to limit his disability allowance to the equivalent of a single pension when he did not elect the benefits of treating the two pensions as one.”

The current Wheeler v Safeway Stores case has a lengthy history involving the settlement of two related wage and hour lawsuits following years of litigation, which began in 2001 and includes two prior appeals.

Safeway has managed the operations of a distribution center in Tracy California. Prior to 2003, the distribution center was operated by a third party, Summit Logistics, Inc, for Safeway’s benefit. The plaintiffs in this and related cases are truck drivers who worked out of that distribution center, delivering goods to Safeway stores in Northern California and Nevada.

The terms of the drivers’ employment were governed by successive collective bargaining agreements, which provided for meal periods and rest breaks and specified the manner in which wages were calculated.

Safeway provided its drivers with a “driver trip summary – report of earnings” (ROE) and an “earnings statement” with each paycheck. Safeway instructed the drivers to compare their earning statement and ROE with their trip sheets to ensure that they were paid the correct amount, and to speak with the transportation manager or a payroll clerk if they believed their pay was incorrect.

In two related cases, the plaintiffs in Cicairos v. Summit Logistics, Inc. (2005) 133 Cal.App.4th 949 and the plaintiff in Bluford v. Safeway Inc. (2013) 216 Cal.App.4th 864, brought suit against their former/current employer (Summit/Safeway), alleging violations of statutory and regulatory laws related to meal and rest periods and itemized wage statements. In Cicairos the court of appeal reversed the trial court’s grant of summary judgment in favor of Summit. In May 2013, the court of appeal reversed the trial court’s order denying plaintiff’s motion for class certification in Bluford.

In December 2014, the parties agreed to settle all of the claims alleged in both Cicairos and Bluford. In February 2015, the parties executed a written settlement agreement memorializing the terms of the settlement.

Beginning on June 14, 2015, Safeway implemented certain changes to its rest break practices and wage statements.

Nonetheless, in January 2016, Wheeler and others filed this current wage and hour class action complaint against Safeway, alleging violations of statutory and regulatory laws related to rest periods and itemized wage statements as well as a derivative claim under the unfair competition law. The allegations supporting these claims were similar to the allegations supporting the claims alleged in Cicairos and Bluford.

In this action, the rest period claim is limited to Safeway’s conduct from March 10, 2015, to June 13, 2015–the three-month period from the preliminary approval of the Cicairos/Bluford settlement to the day before Safeway implemented changes to its rest break practices. The wage statement claim is limited to Safeway’s conduct after the preliminary approval of the settlement- – March 10, 2015, to the present. According to plaintiffs, Safeway’s wage statements continued to be inadequate after the settlement was approved. Specifically, plaintiffs allege that the wage statements were deficient because they failed to indicate the rate of pay associated with each task performed.

In December 2018, the trial court granted plaintiffs’ motion for class certification, which, as relevant here, included certification of a subclass of “all current and former Safeway drivers not provided accurate itemized wage statements from March 10, 2015 to the present.”

In October 2020, the trial court granted summary adjudication in favor of Safeway on plaintiffs’ rest period claim. The court explained that, in December 2018, the Federal Motor Carrier Safety Administration determined that California’s meal and rest break rules were preempted under federal law and could not be applied to truck drivers.

In mid-April 2021, in anticipation of trial in early May 2021, Safeway filed two motions in limine. Motion in Limine No. 1 sought to prevent plaintiffs from presenting any evidence or argument regarding wage statements issued to members of the Cicairos/Bluford settlement class on or before October 8, 2015 – the date the judgment incorporating the settlement agreement became final.

Motion in Limine No. 2 sought to prevent plaintiffs from presenting any evidence or argument regarding wage statements issued on or after June 14, 2015. In support of this motion, Safeway argued that such evidence was irrelevant because the wage statements issued during this time period did not violate Labor Code section 226 as a matter of law, and that, in any event, plaintiffs could not establish injury as a matter of law.

Rulings on these motions rulings effectively limited relief on the wage statement claim to current class members who were not members of the Cicairos/Bluford settlement class and were employed by Safeway during the three-month period from March 10, 2015, to June 14, 2015.

Following the trial court’s in limine rulings, the parties agreed to settle the remaining claims. Thereafter, the matter was dismissed pursuant to stipulation. Judgment was entered in December 2021.

Plaintiffs timely appealed challenging the in limine rulings. The court of appeal concluded that the trial court erred and therefore reversed in the unpublished case of Wheeler v Safeway Stores -C095601 (January 2023).

Safeway argued, and the trial court apparently agreed, that section 226, subdivision (a) does not require an employer to explain the basis for how each piece-rate was determined. Rather, it only requires that wage statements include the applicable piece-rate and the number of piece-rate units earned. The court of appeal disagreed with this construction of the statute.

It concluded “that when, as here, an employee is subject to a piece-rate compensation system, the employer must provide the employee a wage statement that clearly explains how their compensation was calculated, including the applicable piece-rate formula for each specific task performed and any other information necessary to calculate the employee’s compensation for that task. Without such information, the core purpose of section 226 – to assist an employee in determining whether he or she has been properly compensated – would not be served.”