Author: WorkCompAcademy

The Workers’ Compensation Insurance Rating Bureau of California has released its Quarterly Experience Report. This report is an update on California statewide insurer experience valued as of December 31, 2021.

California written premium for 2021 is $0.3 billion or 2% below that for 2020 and $2.2 billion or 14% below that for 2019. Written premium declined sharply beginning in the second quarter of 2020due to the economic downturn resulting from the pandemic. The modest decrease in written premium for 2021 is driven by continued insurer rate decreases offsetting growth in employer payroll.

The average charged rate for 2021 is 7% below the rate for 2020 and is the lowest in decades. Since 2015, the Insurance Commissioner has approved 11 consecutive advisory pure premium rate decreases totaling over 50%. The WCIRB has proposed a 7.6% increase in advisory pure premium rates to be effective September 1, 2022.

The projected combined ratio for 2021, including COVID-19 claims, is 7 points higher than in 2020 and 33 points higher than the low point in 2016. Excluding COVID-19 claims, the projected combined ratio for 2021 is 111% and the projected ratio for 2020 is 100%, which are still higher than recent prior years. Combined ratios have been growing in California due to insurer rate decreases and modest growth in average claim severities.

Indemnity claims had been settling quicker through 2019, primarily driven by the reforms of SB 863 and SB 1160. Average claim closing rates declined sharply beginning in the second quarter of 2020 due to the pandemic. Average claim closing rates have started to plateau in 2021 but remain lower than the immediate pre-pandemic period.

The sharp decrease in 2020 claim frequency, excluding COVID-19 claims, was driven by the sharp economic downturn caused by the pandemic and stay-at-home orders. Non-COVID-19 claim frequency increased sharply in 2021 during the economic recovery. The change in non-COVID-19 claim frequency from 2019 to 2021 is -5%, which is more comparable to the modest declines in frequency during the immediate pre-pandemic period.

The share of indemnity claims arising from a COVID-19 diagnosis spiked during the “winter surge” in 2020. COVID-19 claims dropped sharply as the vaccines became widely available in the spring of 2021 and remained relatively low during the Delta variant period in the summer of 2021. A significant surge in the share of COVID-19 claims occurred in December 2021 and January 2022, driven by the Omicron variant.

Cumulative trauma (CT) claim rates increased through 2016 to be 80% above the 2005 level. CT claim rates were relatively consistent from 2016 through 2019. Preliminary data shows a sharp increase in CT claim rates in 2020, likely driven by shifts in claim patterns during the pandemic period.

The full report  WCIRB Quarterly Experience Report – As of December 31, 2021, is available in the Research section of the WCIRB website.

Bay Area physician Roger Wang D.O. has agreed to pay $1,033,666.42 to resolve allegations that he violated the False Claims Act by charging Medicare for non-FDA-approved drugs and associated services.

Wang, reportedly a rheumatology specialist practicing in San Francisco, was affiliated with multiple hospitals in the area, including Chinese Hospital and St. Francis Memorial Hospital-San Francisco. He received his medical degree in 2003 from University of New England College of Osteopathic Medicine.

According to the settlement agreement, viscosupplements, such as Synvisc, Synvisc One, and Orthovisc, are FDA-approved drugs injected for the treatment of osteoarthritis pain.

But the United States alleged that Wang purchased and injected into his patients versions of Synvisc, Synvisc One, or Orthovisc that were not approved by the FDA for distribution in the United States and therefore were not covered by Medicare, and billed Medicare for the drugs and injections..

According to the settlement agreement, the United States alleged Wang knowingly submitted thousands of false claims for reimbursement for non-FDA-approved Synvisc and Orthovisc and related procedures.

The United States further alleged that Wang used non-FDA-approved drugs that were packaged and labeled for use in foreign markets. At least some of the labeling, according to the settlement, was for additional uses not approved in the United States.

In addition, the United States alleged that, from June 30, 2015, to December 1, 2019, Wang knowingly submitted claims to Medicare for reimbursement for non-FDA-approved Synvisc and Orthovisc, and for injection procedures, even though neither the non-FDA-approved drugs nor the injections of those drugs are covered by Medicare.

Pursuant to the settlement, the United States agreed to resolve the government’s claims resulting from Wang’s conduct, including the government’s claims under the False Claims Act, codified at 31 U.S.C. §§ 3729-3733, and certain other related claims, for more than $1 million.

The claims resolved by this settlement are allegations only and there has been no determination of liability.

Assistant U.S. Attorney Michael Pyle is handling the matter. The settlement is the result of an investigation by the U.S. Attorney’s Office for the Northern District of California, the U.S. Department of Health and Human Services Office of Inspector General, and the Food and Drug Administration, Office of Criminal Investigations.

The Israel-based, multinational Teva, one of the world’s largest generic drug producers, closed its pharmaceuticals manufacturing plant in Irvine, California, after receiving the latest in a string of warning letters from the US Food and Drug Administration (FDA) about observations of contamination, dirty changing rooms and scrubs, and a years-long lack of sterilization and testing of equipment.

In an October 2021 letter, the FDA detailed possible mold contamination of the company’s injectable drugs from unaddressed water leaks. In response, Teva recalled more than 2.5 million vials of injectables used for indications such as cancer, arthritis, schizophrenia, and muscle relaxation for intubation. It also halted production at the facility.

Teva’s violations appear related to a gradual relaxing of standards at the factory as opposed to deliberate wrongdoing, said John Gray, a professor of operations at the Ohio State University Fisher College of Business after reviewing the documents obtained by Bloomberg.

In its first analysis, the newly formed End Drug Shortages Alliance (EDSA) warns that the recent shuttering of a troubled Teva Pharmaceuticals manufacturing plant could affect the availability of 24 generic sterile injectable drugs, including 5 essential medications for which the company had an over 15% market share.

EDSA, is a collaboration of more than 70 health systems and supply chain and pharmaceutical industry experts formed in November 2021, and it aims to end drug shortages by boosting transparency, communication, quality, redundancy, and production.

The EDSA report, released last week, involved a market analysis of the potentially affected drugs, which include those used to treat cancer, adult and pediatric diabetes, and pancreatic neuroendocrine tumors.

The injectables produced at the closed plant most vulnerable to shortages were the vasodilator alprostadil; the antibiotic amikacin; the chemotherapy drugs bleomycin, dacarbazine, idarubicin, ifosfamide, mitoxantrone, streptozocin, and topotecan; and the hormone octreotide.

Those less likely to be affected are injectable adenosine, daunorubicin, desmopressin, epoprostenol, epoprostenol diluent, etoposide, haloperidol decanoate, leucovorin, medroxyprogesterone, methylprednisolone acetate, metoclopramide, norepinephrine, vecuronium, and vincristine.

The report lists suppliers that may step up production of the drugs to meet needs, estimates the potential impact for each drug, and details strategies to help surmount supply challenges.

Specifically, it advises drug manufacturers to assess their ability to boost production of the affected drugs and pivot or increase capacity, and it recommends that wholesalers keep enough supplies on hand to ensure the medications are available.

The FDA, the EDSA said, should expedite approval of any applications for drugs affected by the plant closure or mull their importation, particularly for those without alternatives (eg, streptozocin). Group purchasing organizations should formulate strategies to provide more redundancy for essential medications, and providers and clinicians should practice good stewardship when ordering, prescribing, and administering the affected drugs, EDSA added.

“Information shared in this report highlights the level of transparency that is required across the supply chain to successfully navigate drug shortages,” Terri Lyle Wilson RPh, EDSA vice-chair and director of pharmacy supply chain services at the Children’s Hospital Association, said in a news release.

While onshoring of drug production will shorten the supply chain and make it easier for the FDA to inspect facilities, onshoring is not always a failsafe solution. Many other US drug manufacturing plants have had serious FDA compliance issues in recent years, including Eli Lilly & Co.’s New Jersey facility, Pfizer’s Kansas operation, and Emergent BioSolutions in Baltimore, which led to the disposal of as many as 400 million doses of COVID-19 vaccine in the past 2 years.

“The proximity of making medications in America can be an important factor in strengthening the resilience of our drug supply chain,” he said. “However, where a drug is made is not a guarantee of its quality. Quality assurance is essential to a robust drug supply no matter where the drug is made.”

Jeanette Chamorro filed two applications for injury she claimed to have sustained while working for Saputo Cheese U.S.A.. One was a specific injury on October 10, 2010 (ADJ10793276) to her upper extremities and multiple other body parts as a result of the “repetitive nature of her job duties.” The second one was for a cumulative injury through March 1, 2017 to the same body parts (ADJ10870183).

In case The WCJ found that applicant sustained an injury in case ADJ10793276 from October 10, 2009 through October 10, 2010 to her arms, hand, fingers, upper extremities, and thumbs. And that applicant sustained an injury in case ADJ10870183 from August 31, 2016 through August 31, 2017 to her lumbar spine, right shoulder, bilateral wrists, cervical spine, and hands .

The WCJ found that her award of 41% permanent disability was caused by the injury in ADJ10870183. And awarded temporary disability indemnity as a result of the injury in ADJ10793276 and was entitled to future medical care for both injuries.

Stonington Insurance Company filed for reconsideration contending that the WCJ erred in finding that all permanent disability resulted from the second cumulative trauma injury. Reconsideration was granted in the panel decision of Chamorro v Saputo Cheese U.S.A., ADJ10793276-ADJ10870183 (May 2022).

In this case, the threshold issue was whether there were two cumulative trauma injuries or a single injury. If there were two injuries, the issue of apportionment of permanent disability between the two dates of injury must be addressed and requires medical evidence.

The date of injury for an industrial cumulative trauma injury is defined by Section 5412, as follows: “The date of injury in cases of occupational diseases or cumulative injuries is that date upon which the employee first suffered disability therefrom and either knew, or in the exercise of reasonable diligence should have known, that such disability was caused by his present or prior employment.”

As used in Labor Code Section 5412, “disability” means either compensable temporary disability or permanent disability. (Chavira v. Worker’s Comp. Appeals Bd. (1991) 235 Cal.App.3d 463 [56 Cal.Comp.Cases 631]; State Compensation Insurance Fund v. Workers’ Comp. Appeals Bd. (Rodarte) (2004) 119 Cal.App.4th 998 [69 Cal.Comp.Cases 579].)

Separate cumulative trauma injuries occur where “periods of disability and/or need for medical treatment [are] interspersed within the course of the repetitive activities.- (Aetna Casualty & Surety Co. v. Workmen’s Comp. Appeals Bd. (Coltharp) (1973) 35 Cal.App.3d 329 [38 Cal.Comp.Cases 720] and Ferguson v. City of Oxnard (1970) 35 Cal.Comp.Cases 452 (Appeals Board en banc).)

There is a single cumulative trauma with one date of injury (i.e., the first period of compensable temporary disability) where periods of temporary disability were linked by a continued need for medical treatment under Western Growers Ins. Co. v. Workers’ Comp. Appeals Bd. (Austin) (1993) 16 Cal.App.4th 227 [58 Cal.Comp.Cases 323].)

When Western Growers (Austin) is read in conjunction with the Labor Code section 3208.1 definition of “cumulative injury,” the anti-merger provisions of Labor Code sections 3208.2 and 5303, and the holding of Aetna Casualty (Coltharp), the following principles apply:

– –  (1) if, after returning to work from a period of temporary disability and a need for medical treatment, the employee’s repetitive work activities again result in injurious trauma (i.e., if the employee’s occupational activities after returning to work from a period of temporary disability cause or contribute to a new period of temporary disability, to a new or an increased level of permanent disability, or to a new or increased need for medical treatment), then there are two separate and distinct cumulative injuries that cannot be merged into a single injury (Lab. Code §§ 3208.1, 3208.2, 5303; Aetna Casualty (Coltharp), supra, 35 Cal.App.3d at p. 342); and

– –  (2) if, however, the employee’s occupational activities after returning to work from a period of industrial temporary disability are not injurious (i.e., if any new period of temporary disability, new or increased level of permanent disability, or new or increased need for medical treatment result solely from an exacerbation of the original injury), then there is only a single cumulative injury and no impermissible merger occurs. (Lab. Code, §§ 3208.1, 3208.2, 5303; Western Growers (Austin), supra, 16 Cal.App.4th at p. 235.)

If applicant sustained two injuries, it is settled law that when two industrial injuries combine to cause permanent disability, the permanent disability caused by each must be separately awarded, unless the evaluating physician cannot parcel out, with reasonable medical probability, the approximate percentages to which each distinct industrial injury causally contributed to the employee’s overall permanent disability. (Benson v. The Permanente Medical Group (2007) 72 Cal.Comp.Cases 1620 (Appeals Board en banc), affirmed sub nom. Benson v. Workers’ Comp. Appeals Bd. (2009) 170 Cal.App.4th 1535 [74 Cal.Comp.Cases 113].)

The panel concluded the review of the law on apportionment and ruled that “Given that the record requires further development on the number and nature of injuries and apportionment between injuries pursuant to Benson, supra, we must return this matter to the trial level.”

Cal/OSHA fined a San Francisco Bay Area refinery and three contractor companies more than $1.75 million for safety violations following the November 12, 2021 death of a 35 year old worker, Luis Gutierrez, who suffocated while trying to clean a well.

Three of the four employers were cited with willful and serious violations after determining that they failed to follow confined space guidelines, including the failure to determine acceptable entry conditions for the employee, which resulted in exposure to an oxygen-deficient atmosphere.

A willful violation is cited when evidence shows the employer either knowingly violated the law or took no reasonable steps to address a known hazard. A serious violation is cited where there is a realistic possibility that death or serious physical harm could result from the actual hazard created by the violation.

San Antonio-based Valero bought the refinery in 2000, which processes crude oil into gasoline, diesel fuel, jet fuel and asphalt.

Shortly before midnight on November 12, 2021, the worker lost consciousness after descending into a regenerator overflow well at the Valerio Benicia refinery to evaluate the condition of the well interior and perform cleaning operations in advance of a welding crew.

He was found inside the regenerator suspended by fall protection equipment. A refinery emergency rescue team retrieved him. Benicia Fire Department and Valero Fire Department performed medical treatment on-site but were unable to resuscitate him.

Valero spokesperson Paul Adler confirmed the death and described the victim as a worker for a contractor. Cal/OSHA later confirmed that the contractor was JT Thorpe, a Richmond-based company.

Inspectors determined that a welding torch was left in the well that was leaking argon, an odorless gas that displaced oxygen inside the confined space.

“Working in confined spaces is extremely dangerous, as is working with argon,” said Cal/OSHA Chief Jeff Killip. “The employers involved had a responsibility to keep their workers safe. The first step to preventing a completely avoidable fatality is to identify hazards before a worker enters a confined space.”

Confined space hazards exist in many workplaces. Employers must identify and label confined spaces, establish and maintain onsite emergency response plans, and provide training for workers and supervisors. Common types of confined spaces include tanks, silos, pipelines, sewers, storage bins, drain tunnels and vaults.

The fines given to the Valero Refinery totalled $528,750, Total Safety Specialty was fined $988,000, JT. Thorpe & Son, Inc. fine was $135,500 and finally T.R.S.C., Inc. was fined $101,125.

Among the violations were failure to: evaluate the workplace to determine if any spaces are permit-required confined spaces, ensure employees use equipment and safety precautions during the rescue of an employee, and monitor unauthorized entrants into workspaces.

Cal/OSHA has extensive informational materials on its website, including a confined space guide for general industry to help employers provide safe workplaces and ensure workers know these hazards.