Author: WorkCompAcademy

The Workers Compensation Research Institute released an updated version of its study that helps compare prices paid for medical professional services across 36 states and monitor price changes from 2008 to 2020, which includes the beginning months of the COVID-19 pandemic.

“The study shows how prices paid for these services compare across states, how the prices have changed, and whether price growth is part of a broader phenomenon or unique to a state. The study also discusses the price comparison results and price trends in relation to the principal policy mechanism for regulating prices – fee schedules,” said Ramona Tanabe, WCRI’s executive vice president and counsel.

The study, WCRI Medical Price Index for Workers’ Compensation, 13th Edition (MPI-WC), focuses on professional services (evaluation and management, physical medicine, surgery, major and minor radiology, neurological testing, pain management injections, and emergency care) billed by physicians, physical therapists, and chiropractors. The following are among the study’s findings:

– – Prices paid for a similar set of professional services varied significantly across states, ranging from 29 percent below the 36-state median in Florida to 167 percent above the 36-state median in Wisconsin in 2020.
– – States with no fee schedules for professional services had higher prices paid compared with states with fee schedules – 44 to 179 percent higher than the median of the study states with fee schedules in 2020.
– – Most states with no fee schedules experienced faster growth in prices paid for professional services compared with states with fee schedules—the median growth rate among the non-fee schedule states was 37 percent from 2008 to 2020, compared with the median growth rate of 9 percent among the fee schedule states.
– – Eight study states (Arizona, Illinois, Kentucky, Massachusetts, New York, North Carolina, Texas, and Virginia) had substantial changes (i.e., an increase or a decrease of 10 percent or more) in overall prices paid following major fee schedule changes during the study period.

This edition covers 36 states that represent 88 percent of the workers’ compensation benefits paid in the United States. These states are Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

The authors of this study are Dr. Rebecca Yang and Dr. Olesya Fomenko. To download a FREE copy of this report, visit WCRI’s website.

A review of information by Business Insurance predicts that the new medical-legal fee Schedule changes could increase costs by as much as $270M.

The modifications to the medical-legal fee schedule are predicted to increase fees for such reviews by 22%, according to the WCIRB.

Modifications to E&M services reimbursements, which account for about 15.9% of overall medical costs in the California workers comp system, including self-insureds, could have an estimated system impact of $170 million, WCIRB analysts said. The change to medical-legal review reimbursements, which comprise about 6.5% of overall medical costs, could have an estimated $100 million system impact.

While the E&M system increases stem mainly from changes in procedure codes, about 11% of the potential price increase in medical-legal reviews comes from a record review reimbursement overhaul that has many defense attorneys concerned.

The prior schedule, which had been in place since 2006, had paid QMEs an hourly fee. The new schedule, introduced by the California Division of Workers Compensation in February, will pay QMEs a flat fee of $2,015 for a comprehensive case review plus an additional $3 per page for any records in excess of 200 pages.

Often medical records contain duplicative and irrelevant material which applicant and defense attorneys may not necessarily exclude from the materials sent to the evaluator, thus driving up the costs. Additionally, both sides may send the QME the same records which are included in the page count.

“Taking all of this together, this is not particularly good news for the California workers compensation system, and it’s coming just as the small businesses and the economy overall are trying to recover from COVID,” said Robert Hartwig, clinical associate professor and director of the Risk and Uncertainty Management Center at the University of South Carolina in Columbia.

29 year old Hakob Kojoyan, who lived in Northridge, was sentenced to 33 months in prison and ordered to forfeit his Palm Springs house for participating in a scheme involving the unlicensed wholesale distribution of prescription drugs.

Kojoyan admitted that he engaged in a scheme to distribute illegally obtained prescription drugs to unsuspecting purchasers. In his plea agreement, Kojoyan stated that he and his associates used a Pennsylvania company, Mainspring Distribution LLC, to pose as legitimate prescription drug wholesalers.

They then obtained prescription drugs from unlicensed, black market sources in California. They sold the drugs through Mainspring to unknowing wholesale customers, falsely representing that the drugs were legitimately sourced from licensed suppliers.

Kojoyan and his co-defendants avoided dealing in generic drugs and instead specialized in expensive name-brand prescription drugs used to treat HIV, such as Atripla. Kojoyan himself also supplied prescription drugs for such resale, though he had no license to do so.

Congress mandated prescription drug wholesalers provide their customers with detailed information about the drugs they sell, including a transaction history tracing the drugs back to their licensed manufacturer. The government asserted Kojoyan and his co-conspirators knew about these federal regulations designed to protect vulnerable patients, and they worked diligently to evade them.

They stole the identity of a licensed prescription drug company supplier in California and prepared paperwork falsely suggesting their drugs came from that supplier. The government described how they further mimicked the appearance of a legitimate supply chain by opening bank accounts in names misleadingly similar to the licensed supplier and routing the proceeds of their fraudulent sales through the accounts.

The government further asserted that bank accounts under the control of Kojoyan received approximately $2.2 million from Mainspring-associated accounts, much of which was laundered and distributed to co-conspirators. Kojoyan’s earnings were invested into a house in Palm Springs, which the Court ordered forfeited to the government.

This case is being prosecuted by the Corporate Fraud Strike Force of the United States Attorney’s Office. The prosecution is the result of an investigation by the Federal Bureau of Investigation.

Many California agricultural workers have been exposed to a pesticide known as Roundup, and some of them may develop cancers. These cancer cases can then become continuous trauma claims under workers’ compensation law.

Thousands of Roundup tort cases are pending in civil courts in several states. A favorable outcome will likely support subrogation in the decades ahead for these claims.

Monsanto Company manufactures Roundup, a pesticide with the active ingredient glyphosate. Since 2015, thousands of cancer victims have sued Monsanto in state and federal court, alleging that Roundup caused their non-Hodgkin’s lymphoma. This appeal arises out of the first bellwether trial for the federal cases consolidated in a multidistrict litigation.

The jury returned a verdict in favor of plaintiff Edwin Hardeman, awarding him $5,267,634.10 in compensatory damages and $75 million in punitive damages. The district court reduced the jury’s punitive damages award to $20 million.

Monsanto appealed, arguing the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”) preempts Hardeman’s failure-to-warn claims; the district court made a series of evidentiary and jury instruction errors; the district court erred in denying judgment as a matter of law; and the punitive damages award violates California law and the Due Process Clause.

Hardeman cross-appeals, arguing the jury’s $75 million punitive damages award was constitutional.

The Ninth Circuit Court of Appeals affirmed the district court in the published case of Edwin Hardeman v Monsanto Company.

The 74 page opinion held that:

(1) Hardeman’s state failure-to-warn claims are not preempted by FIFRA;
(2) the district court ultimately applied the correct standard from Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), and did not abuse its discretion in admitting Hardeman’s expert testimony;
(3) the district court did not abuse its discretion in admitting the International Agency for Research on Cancer’s classification of glyphosate as probably carcinogenic and three regulatory rejections of that classification but excluding evidence from other regulatory bodies;
(4) the district court’s jury instruction on causation, though erroneous, was harmless;
(5) Monsanto was properly denied judgment as a matter of law because evidence shows the carcinogenic risk of glyphosate was knowable at the time of Hardeman’s exposure; and
(6) evidence supports a punitive damages award, punitive damages were properly reduced, and the reduced award – while close to the outer limits – is constitutional.

This is the second loss on appeal for Bayer AG, which acquired the agrochemical company in a multibillion-dollar merger in 2018.

In July 2020, a California appellate court upheld a jury’s verdict that Roundup caused another Bay Area man’s cancer and awarding him $289 million.

A third jury verdict is still on appeal in California’s First Appellate District.

However, other trial courts disagreed, such as in the case of Carson v. Monsanto Co., which is pending in the 11th Circuit Court of Appeals. Unlike other cases alleging Roundup caused plaintiffs to develop non-Hodgkin’s lymphoma, Carson’s lawsuit alleges Roundup caused his malignant fibrous histiocytoma. FIFRA preemption was the pivotal issue in the case.

If the 11th Circuit affirms the preemption, it will create a circuit split, which opens the door for the Supreme Court to weigh in on the issue.

If the company wins preemption and wins at the Supreme Court, the victories could adversely effect the many thousands of cases still pending.