Author: WorkCompAcademy

Liberty Mutual Fire Insurance issued workers’ compensation and general liability insurance policies to Shea Homes (Shea) since 2010.

Shea, a residential real estate developer, maintains an owner-controlled insurance program called the Shea Homes Partnership Insurance Program (SHPIP). Under the SHPIP, Shea purchases workers’ compensation insurance coverage for contractors enrolled in the program. Enrollment in the SHPIP is mandatory for all contractors working at Shea projects.

Falcon Framing Company, Inc. was an approved Shea trade partner and had been continuously enrolled in the SHPIP since at least 2009. On March 1, 2012, Falcon and Shea entered into a construction contract for the Shea Seaside project in Encinitas, California.

On April 5, 2012, Falcon formed a new corporate entity named FFC, Inc. (FFC). It conducted the same business, at the same office, with the same customers, suppliers, and equipment as Falcon. FFC acquired Falcon’s assets for no consideration and Falcon was dissolved on August 13, 2012.

Falcon did not notify Shea, Orion, or Liberty that they had dissolved Falcon and were continuing their business operations through FFC until August 20, 2012, when Marc Corbitt, an FFC employee suffered catastrophic injuries while working at the Shea Seaside project. At the time of the accident, Falcon had been paid in full for the Seaside project and had paid all of the premiums for the Liberty policy issued to Falcon.

FFC tendered the claim to Liberty and to Zenith, who had issued a worker’s compensation policy to Falcon for work on projects other than Shea jobsites. Liberty denied coverage for the claim. Zenith paid $3,239,003.86, subject to a reservation of rights, to resolve the claim. It then filed an action against Liberty and was awarded the full amount from Liberty. In a prior appeal, the judgment was reversed and remanded.

After remand, the trial court ruled that the Liberty policy did not provide coverage to FFC for Corbett’s injuries and that Liberty had no obligation to indemnify or reimburse Zenith for sums paid on FFC’s worker’s compensation claim. The Court of Appeal affirmed in the unpublished case of Zenith v. Liberty Mutual Fire Insurance.

FFC is not an insured under the Liberty policy terms. Zenith provides no legal support for its contention that the successor corporation of a named insured employer in a worker’s compensation policy acquires the named insured’s rights under the policy.

Falcon’s failure to notify Liberty of its dissolution and the formation of FFC after the date of the policy’s inception did not extend coverage to FFC. The plain language of the Liberty policy does not provide coverage to FFC.

Sedgwick, has added a solution to its technology suite of services that streamlines the submission process for California employers who are required under new legislation to report and determine COVID-19 workplace outbreaks.

On Sept. 17, 2020, California Gov. Gavin Newsom signed into law CA SB 1159, which expands workers’ compensation injury claims to include illness or death from COVID-19 within specific dates of infection. The law also establishes a rebuttable presumption of injury within certain limitations, shortens the period to accept or deny claims to either 30 or 45 days from the filing, and requires exhaustion of COVID-related paid sick leave prior to compensation.  SB1159 requires employers to calculate outbreaks using specific criteria and report all positive tests to their administrator.

This action codified Newsom’s executive order from March 19, 2020, and expanded rebuttable presumptions to more professions and employees if and when an “outbreak” is determined for injuries from July 6, 2020, through Jan. 1, 2023. The law took effect immediately and includes added responsibility for employers and administrators.

Employers are now required to report to their claims administrator within 30 business days of the effective date of CA SB 1159 when and how many employees in California tested positive for COVID-19 between July 6 and Sept. 17, 2020. From Sept. 18 onward, employers must report positive tests within three business days, as well as the largest number of employees who have worked at the infected location in the 45 days preceding the last day the positive employee was in the place of employment.

To ease the process for California employers, Sedgwick has launched a COVID-19 intake portal for reporting positive test results. Sedgwick’s award-winning global intake platform provides an innovative, easy-to-use and secure cloud-based system to initiate the process of recording positive tests and exposure events tied to COVID-19 in the workplace.

“With any new legislation, Sedgwick’s objective is to provide an appropriate, effective and efficient means to help our clients meet their compliance requirements,” said Max Koonce, Sedgwick’s chief claims officer. “Our global intake platform simplifies the COVID-19 reporting process for California employers so they can follow the state’s guidelines, protect their employees and customers, and keep their workplaces operating safely during the pandemic.”

“Sedgwick’s quick response with this advanced intake and reporting solution will help clients easily report information under CA SB 1159, giving them more time to focus on their day-to-day operations,” said Leah Cooper, Sedgwick managing director of global consumer technology.

Several cervical artificial disc technologies have been developed to replace degenerated intervertebral discs in the cervical spine. While no artificial disc can perfectly replace a natural disc’s ability to cushion and transfer loads in the neck, an artificial disc may maintain more of the cervical spine’s natural range of motion compared to fusion surgery.

Artificial discs are available in various sizes, shapes, and heights in order to achieve these goals and provide good surgical outcomes. Several types of discs have been fabricated using different materials, designs, and techniques.

And now a California company has just obtained FDA approval for another promising product.

Simplify® Disc is a motion-preserving cervical artificial disc designed to allow for advanced imaging capability of MRI, to better match patients’ anatomies, and for physiologic movement. The three-piece disc, with a semi-constrained mobile core, is designed to mimic/replicate the natural biomechanical motion of a healthy disc. Implantation of the Simplify Disc is accomplished in a straightforward, three-step procedure.

Simplify Medical, a privately-held company, headquartered in Sunnyvale California, focused on cervical spinal disc arthroplasty and developer of the Simplify® cervical artificial disc, announced U.S. Food and Drug Administration (FDA) Approval for the Simplify Disc Pre-Market Application (PMA) for 1-level indications. Simplify Disc achieved superiority to the fusion control on the composite primary endpoint.

The prospective trial enrolled 166 Simplify Disc patients at 16 clinical sites across the United States, and results were compared with a historical fusion control. Simplify Disc was used for 1-level cervical implantation between the C3 to C7 vertebrae.

The study results demonstrated that Simplify Disc achieved superiority in overall success compared to anterior cervical discectomy and fusion (ACDF). At 24 months:

— The Simplify Disc overall success rate of 93.0% was statistically superior to the ACDF overall success rate of 73.6% (p<.001).
— 97.9% of Simplify Disc patients achieved a significantly higher rate of meaningful (15 point) improvement in Neck Disability Index (NDI) compared to ACDF at 88.0% (p=.009).
— Simplify Disc mean NDI improved from 63.3 at baseline to 13.6 at 24 months, and was superior to ACDF at all follow-up timepoints.
— Simplify Disc patients had a higher rate of improvement in neurological function at 79.9% compared to ACDF at 54.7%.
— Simplify Disc mean VAS (Neck/Arm Pain) of 15.6 was superior to ACDF at 23.3 (p<.001).
— Significantly fewer Simplify Disc patients, 10.8%, were taking narcotic pain medication compared to ACDF patients at 36.8% (p<.001).
— Time to recovery (defined as 15 points of NDI improvement) was faster for Simplify Disc patients compared to ACDF patients. At 6 weeks, 87.0% of Simplify Disc patients and 76.8% of ACDF patients had achieved this threshold. At 3 months, 95.9% of Simplify Disc patients and 81.1% of ACDF patients had achieved recovery.
— Simplify Disc patients had less adjacent level degeneration compared to ACDF patients. At the disc level above the treatment level, 82% of Simplify Disc patients and 52% of ACDF patients had no progression in degeneration. At the disc level below the treatment level, 72% of Simplify Disc patients and 34% of ACDF patients had no progression in degeneration.

The Simplify Disc is also being evaluated in a separate IDE study in the U.S. for 2-level indications. The enrollment for the 2-level trial was completed in November 2018. Simplify Disc is limited to investigational use for this indication.

San Diego-based Phamatech, Inc. and its CEO and founder, Tuan Pham, have agreed to pay $3,043,484 to resolve allegations that they violated the False Claims Act by submitting false claims to Medicare for laboratory drug-testing services.

Phamatech is a medical technology company that manufactures diagnostic devices and provides laboratory testing including for drugs and alcohol.

The United States alleged that Phamatech improperly paid a medical clinic to induce it to refer orders for laboratory drug-testing to Phamatech and consequently received government reimbursement for those tests in violation of the federal Anti-Kickback Statute and the False Claims Act.

Specifically, the United States alleged that Phamatech paid kickbacks to Imperial Valley Wellness (“IVW”), a medical practice group, to induce IVW to order laboratory testing for its patients enrolled in Medicare. Phamatech allegedly paid IVW a per-specimen fee in exchange for IVW’s referral of urine samples from Medicare beneficiaries.

The government further alleged that many of the samples that IVW referred to Phamatech for testing under this arrangement were not medically necessary and therefore not lawfully eligible for Medicare reimbursement.

The False Claims Act allegations being resolved were originally brought in a lawsuit filed by a former employee of Phamatech, John Polanco, under the qui tam, or whistleblower, provisions of the False Claims Act, which allow private citizens with knowledge of fraud against the government to bring suit on behalf of the government and to share in any recovery.

Mr. Polanco will receive $517,392 from the settlement proceeds.

The investigation was conducted by the U.S. Attorney’s Office for the Southern District of California, the Department of Health and Human Services Office of Inspector General, and the Federal Bureau of Investigation.

This case is captioned United States, et al., ex rel. John Polanco v. Phamatech, Inc. and Tuan Pham, 16CV1835-L-NLS, and the matter was handled by Assistant U.S. Attorney Paul Starita of the Affirmative Civil Enforcement Unit of the U.S. Attorney’s Office.

Last Wednesday was the deadline for Gov. Newsom to act on bills lawmakers passed this year. It capped a tumultuous legislative session that was delayed three times because of the pandemic.

In a normal year, more than 1,000 bills would have made it to Newsom’s desk for his consideration. This year, it was just a few hundred.

Labor unions were disappointed to see him veto two of their biggest issues: A bill that would that sought to guarantee laid-off hospitality workers would be first in line to get their jobs back once those industries start rehiring and another that would have extended health and safety protections to domestic workers.

In a victory for business groups, Newsom vetoed Assembly Bill 3216, a proposed law that would have required that employers in certain industries – hotels, private clubs, airports or who provide building services to commercial buildings – would have rehire laid-off workers when they decided it was time to increase their workforces once again.

Newsom said in his veto message “I recognize the real problem this bill is trying to fix-to ensure that workers who have been laid off due to the COVID 19 pandemic have certainty about their rehiring and job security.”

“But, as drafted, its prescriptive provisions would take effect during any state of emergency for all layoffs, including those that may be unrelated to such emergency. Tying the bill’s provisions to a state of emergency will create a confusing patchwork of requirements in different counties at different times.The bill also risks the sharing of too much personal information of hired employees.”

Nonetheless, many of California’s largest cities – including Los Angeles, Long Beach, San Francisco and Oakland – have enacted their own rehiring ordinances in response to the pandemic. And California law already had worker retention laws for the janitorial industry and the grocery industry.

Newsom also vetoed SB 1257, a bill that would have included about 11 million California homes and apartments under Cal/OSHA’s jurisdiction.

His veto message proclaimed that “New laws in this area must recognize that the places where people live cannot be treated in the exact same manner as a traditional workplace or worksite from a regulatory perspective.“

He went on to say that “SB 1257 would extend many employer obligations to private homeowners and renters, including the duty to create an injury prevention plan and requirement to conduct outdoor heat trainings. Many individuals to whom this law would apply to lack the expertise to comply with these regulations. The bill would also put into statute a potentially onerous and protracted “investigation by letter” procedure between Cal-OSHA and private tenants and homeowners. In short, a blanket extension of all employer obligations to private homeowners and renters is unworkable and raises significant policy concerns.“