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Author: WorkCompAcademy

January 20, 2020 News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: En Banc WCAB Struggles with AD Over SJDB Jurisdiction, Second Restraining Order Against AB5 Remains in Place, No “Work-Spawned Risk” for Auto Accident After RTW, So. Cal. DME Maker Pays $37.5M to Resolve Kickback Claims, U.S. Attorneys Recover $105M Last Year, Reactions to AB5 Differ in Gig Worker Industry, SCIF Rejects OC Register Suggestion to “Privatize”, Sedgwick Outlines Claim “Conversation Threads for 2020”, Doctors Average 16 Minutes on Record Keeping for Each Patient, Common Myths Make Back Pain Worse.

Substantial Evidence Standard Applies to OSHA Appeals

Nolte Sheet Metal, Inc., owned in part by Ernie Nolte, fabricates air conditioning ducts.

In 2014, Cal/OSHA inspected the Company’s shop and issued citations for various violations of California Code of Regulations, title 8.

The Company filed an appeal with the Occupational Safety and Health Appeals Board (Appeals Board). In a January 29, 2016 decision, the administrative law judge (ALJ) appointed by the Appeals Board concluded the evidence supported the violations underlying the challenged citations. The ALJ also found the violations underlying four of these citations were properly classified as “serious.”

The Company filed a petition for reconsideration, which was granted. In an October 7, 2016 decision after reconsideration, the Appeals Board upheld the ALJ’s determinations.

The Company then filed a petition for a writ of administrative mandamus. In a September 8, 2017 order, the Fresno County Superior Court denied writ relief.

On appeal from the superior court’s order, the Company advances several arguments. First, the court should have exercised its independent judgment when it reviewed the Appeals Board’s decision. Second, the Company did not freely and voluntarily consent to Cal/OSHA’s inspection. Third, Cal/OSHA lost the original inspection file, which deprived the Company of due process of law. Finally, the violations underlying four of the citations were misclassified as “serious.”

The Court of Appeal affirmed the Order and rejected these arguments in the partially published decision of Nolte Sheet Metal Inc. v Occupational Safety and Health Appeals Board.

In Tex-Cal Land Management, Inc. v. Agricultural Labor Relations Bd. (1979) 24 Cal.3d 335, 346, which involved the Agricultural Labor Relations Act, our Supreme Court held “the Legislature may accord finality to the findings of a statewide agency that are supported by substantial evidence on the record considered as a whole and are made under safeguards equivalent to those provided by the [Agricultural Labor Relations Act] for unfair labor practice proceedings, whether or not the California Constitution provides for that agency’s exercising ‘judicial power.’ ”

These safeguards include “the separation of prosecutorial from adjudicatory functions [citations], notice, written pleadings, evidentiary hearings [citations], and a requirement that orders be accompanied by findings based on the preponderance of the reported evidence [citations].” (Tex-Cal, supra, at p. 345.)

In view of Tex-Cal, the Court of Appeal concluded that the superior court properly applied the substantial evidence standard of review.

TRISTAR Acquires Aspen Risk Management Group

TRISTAR, the largest privately owned, independent third party claims administrator in the United States, has agreed to acquire Aspen Risk Management Group.

Aspen delivers workplace safety stand-alone, or as part of loss control, or ergonomics. Whether conducting loss control surveys, delivering safety training, or performing remote ergonomic assessments, the Group works to identify risk and opportunities using a combination of technology and human insight. Its solutions can significantly reduce both the frequency and severity of losses.

This acquisition is a significant step forward in establishing a strategic TRISTAR presence in the loss control and workplace safety market. In addition to its risk control services, Aspen provides remote ergonomics, online service platforms, and specialty services for both commercial and government clients.

Commenting on the acquisition, Steve Thompson CEO of Aspen stated: “For the past 15 years our team has worked hard to become exceptional at risk control and workplace safety. Joining TRISTAR gives us the chance to carry our primary purpose of saving lives, preventing injuries & illnesses, and protecting our clients from harm all across America!”

Tom Veale, President of TRISTAR stated: “Aspen’s reputation and extensive experience in both the insurance and self-insurance space are a natural addition to the TRISTAR family. They are differentiators in the industry and we look forward to introducing them to our clients and partner network.”

All Aspen employees will continue operating out of the existing locations under the name Aspen Risk Management Group, a TRISTAR Company.

Terms of the transaction were not disclosed.

C&R Resignation Resolves Wrongful Termination Claim

Denise Kennedy, filed a civil action against MUFG Union Bank which alleged various claims arising out of her former employment with the Bank.

She alleged that for a period of about three months, she was subject to racial discrimination and harassment because she was African-American, causing her to ultimately take disability leave due to mental stress.

While on disability leave, her position was eliminated as part of a regionwide restructuring by Union Bank. Plaintiff was informed she remained an employee while on leave and would be eligible for consideration to fill alternative positions through Union Bank’s job posting leave program once she was released back to work without restrictions or with permanent restrictions.

Plaintiff alleged that the failure to pay her severance or allow her to return to her previous position on a modified schedule constituted disability discrimination and an effective termination.

Plaintiff admitted in her deposition that in December 2015, she was determined “totally disabled” and initiated a workers’ compensation claim on that basis. She admitted that she settled her workers’ compensation claim in July 2016 and agreed to submit a voluntary resignation from employment as part of that settlement. She stated that it was her understanding that she remained an employee of Union Bank until the time of her resignation. Excerpts from her deposition including this admission were successfully used by the employer in a motion for summary judgment, which the trial court granted.

The court of appeal agreed in the unpublished case of Kennedy v. MUFG Union Bank

Defendants produced a copy of the application for compromise and release submitted to the Workers’ Compensation Appeals Board and a copy of the executed voluntary resignation dated July 2016. Clearly, this evidence was sufficient to negate any claims premised upon the existence of a termination, as it showed that plaintiff was not terminated and instead voluntarily resigned her employment with Union Bank. Absent a threshold factual showing of a termination, there can be no claim for wrongful termination and no claim that plaintiff was “terminated” due to discriminatory motives or impermissible retaliation. This showing was sufficient to shift the burden on summary judgment and required plaintiff to produce evidence to show a triable issue of material fact.

Study Shows Early PT Reduces Opiate Use and Lost Time

The Workers’ Compensation Insurance Rating Bureau of California has released its Physical Medicine Treatments and Their Impact on Opioid Use and Lost Time in California Workers’ Compensation study. The study reveals insights into the overall trends and patterns of physical medicine treatment cost and utilization. It quantifies the potential substitution between physical medicine and opioid use early in the life of a claim and their effects on lost time on the job.

Starting in 2014, the four-year transition to the Resource-Based Relative Value Scale (RBRVS) physician fee schedule in California’s workers’ compensation system increased reimbursements for most types of primary care treatment.

Since then, physical medicine (including physical therapy [PT], chiropractic care and acupuncture), as a leading primary care treatment for injured workers, has experienced a continuous increase in the paid per claim at 8% annually in the workers’ compensation system without a proportional increase in the level of utilization.

Recent legislation has also encouraged medical providers to treat injured workers in the California workers’ compensation system with non-opioid drugs and physician services. For example, some provisions in Senate Bill No. 1160 (SB 1160), effective in January 2018, remove the requirement of prospective utilization review (UR) for certain medical services, such as physical medicine, that are provided within the first 30 days of the injury.

Meanwhile, the number of opioid prescriptions as well as the payments for opioids per claim has plummeted since 2012.

Key findings in the study include:

— The average medical payment for physical medicine continued to rise from 2013 through 2018, contributing to a growing proportion of the total medical paid per claim as well as of the medical paid for physician services per claim.
— Overall, soft tissue injury claims involving physical therapy (PT) during the first 30 days of the initial medical visit were less likely to involve opioid use within one year of the injury, compared to similar claims without early PT.
— The impact of early PT on initiation of opioid use varies over time; particularly, between 2015 and 2017, soft tissue claims involving early PT were significantly less likely to involve opioid use.
— Among soft tissue claims involving opioid use, those with early PT had significantly lower doses of opioids prescribed within one year of the injury than similar claims without early PT.
— Comparing claims with similar characteristics but different timing of utilizing PT, those with early PT were significantly less likely to have a lost time component.

The full study is available in the Research section of the WCIRB website.

Convicted Long Beach Hospital Owner to Serve 15 Months

A doctor and the former owner of a Long Beach hospital was sentenced to 15 months in federal prison for taking part in a long-running health care fraud scheme where he authorized sham contracts that concealed over $30 million in illegal kickback payments to physicians who steered spinal surgeries to his hospital. The overall scheme resulted in more than $900 million in fraudulent bills being submitted, primarily to California’s worker compensation system.

Dr. Faustino Bernadett, 65, of Rolling Hills, was sentenced and also ordered him to pay a $60,000 fine on top of $1 million he has already forfeited to the United States.

Bernadett, a board-certified anesthesiologist and pain management physician who retired his license last year, pleaded guilty in August to a one-count criminal information charging him with misprision of a felony.

The kickback scheme centered on Pacific Hospital in Long Beach, which specialized in surgeries, especially spinal and orthopedic procedures.

Pacific Hospital’s owner, Michael D. Drobot, conspired with doctors, chiropractors and marketers to pay kickbacks in return for the referral of thousands of patients to Pacific Hospital for spinal surgeries and other medical services paid for primarily through the California workers’ compensation system.

In 2005, Bernadett purchased Pacific Hospital from Drobot. Under the terms of the sale, Drobot guaranteed to Bernadett that 75 spinal surgeries per month would be performed at Pacific Hospital or else Drobot’s payout would be reduced by $25,000 for each surgery below that requirement.

Bernadett, who became directly involved with the hospital’s day-to-day operations by late 2007, later learned that Drobot was making illegal kickback payments to physicians in order to cause those physicians to steer spinal surgeries to Pacific Hospital. By January 2008, Bernadett had learned that Drobot concealed the illegal kickback payments by entering into various types of sham contracts – such as management agreements, collection agreements and option agreements.

Instead of putting a halt to Drobot’s kickback scheme, Bernadett authorized the continued use of Drobot’s sham contracts to incentivize surgical referrals to his hospital. Between January 2008 and October 2010 (when Bernadett sold his interest in Pacific Hospital back to Drobot), Pacific Hospital and related entities made more than $30 million in illicit payments to kickback recipients and performed approximately 1,400 kickback-induced spinal fusion surgeries.

Twenty-four defendants have been charged in connection with the scheme, and 15 of them have been convicted, including Drobot and his son.

Drobot is serving a five-year prison sentence for conspiracy and paying illegal kickbacks, and has admitted that he orchestrated a wide-ranging fraudulent kickback scheme where paid more than $50 million in bribes to doctors to steer hundreds of millions of dollars in spinal surgeries to his hospital. Drobot currently awaits sentencing after pleading guilty to breaking additional federal laws by violating a court forfeiture order by illegally selling his luxury cars.

L.A. Sheriff Faces Fraud Charges After Fake Sniper Claim

Former Los Angeles County Sheriff’s Deputy Angel Reinosa has been charged with falsely reporting that he had been shot by a sniper while in the parking lot of the Lancaster Sheriff’s Station on August 21, 2019, the Los Angeles County District Attorney’s Office announced Thursday.

At the time it was reported Reinosa’s life was saved because he’d been wearing a bullet-proof vest, and the deflected bullet just grazed his shoulder.

As a result of Reinosa’s report and the alleged gunshot wound, Lancaster Station personnel deployed massive resources to search the surrounding neighborhood for a suspect.

Within a few days, however, investigators learned that Reinosa had completely fabricated the entire incident and there was no sniper, no shots fired and no injury sustained by Reinosa. Immediately following, the Sheriff’s Homicide Bureau launched a criminal investigation.

After detectives determined Reinosa’s account of the incident was a complete lie, the criminal investigation focused on his criminal actions. A short time later, Reinosa was fired by the Sheriff’s Department.

The investigation was subsequently presented to the District Attorney’s Office for consideration of filing criminal charges. On January 16, the DA’s Office filed three counts against Angel Raul Reinosa and a warrant was issued for his arrest. All charges are pertaining to the Workman’s Compensation claim.

He was arrested, transported and booked at the County Jail Inmate Reception Center, where his bail was set at $40,000. If convicted as charged, Reinosa faces a possible maximum sentence of five years and six months in county jail.

Los Angeles County Sheriff Alex Villanueva issued a statement after learning that Reinosa’s charge was bogus: “During the investigation, we had suspicions concerning the validity of the claimed assault but had to exercise care before accusing an employee of making false statements.”

“After investigators were able to establish the facts, we were compelled to share the disappointing truth in our wish to be transparent with the public.”

“I will not tolerate anyone who willfully violates their oath of office, makes a false police report, wastes valuable public safety resources, and causes fear in the community. Those who choose to violate the public’s trust will face at minimum termination and potential criminal prosecution.”

Common Myths Make Back Pain Worse

Researchers say common myths about low back pain could lead to more pain, ineffective care and unwarranted anxiety.

Low back pain is the world’s leading cause of disability, and it’s often associated with costly care that can sometimes be harmful, Peter O’Sullivan and colleagues write in an editorial in the British Journal of Sports Medicine.

Myths about back pain are common and can be reinforced by the media and well-meaning clinicians, the authors note.

This misinformation “can lead people to fear back pain, respond to it in unhelpful ways and drive poor healthcare,” O’Sullivan said in an email. “Myths often cause negative emotional responses such as fear, distress and loss of hope,” he added, as well as behaviors like over-protecting the back and avoiding movement, activity and work.

O’Sullivan, a specialist physiotherapist with the School of Physiotherapy and Exercise Science at Curtin University in Perth, Australia, told Reuters Health that almost daily, he comes across patients who hold unhelpful beliefs.

In their editorial, O’Sullivan and his colleagues identify 10 common myths about low back pain, and counter each of them with back pain facts that are supported by evidence.

Among the myths are the idea that low back pain will become persistent and will worsen with age, that pain is always a sign of tissue damage and requires rest, and that scans and invasive procedures are always needed to diagnose and treat low back pain.

In fact, the authors write, the evidence says persistent back pain can be scary, but it’s rarely dangerous or life-threatening and it’s unlikely to leave you in a wheelchair.

Getting older is not a cause of back pain, they add, and evidence-based treatments can help at any age. Persistent low back pain is rarely related to tissue damage and scans rarely show the cause of back pain.

Low back pain is not caused by poor posture while sitting, standing and bending, and it’s also not caused by weak core muscles. Injections, surgery and strong drugs usually aren’t effective for persistent back pain in the long term. Finding low-risk ways to control pain is key.

Dr. Houman Danesh, director of Integrative Pain Management at the Icahn School of Medicine at Mount Sinai in New York City, said it’s common in his experience, too, to find patients holding beliefs like those in the list of myths.

“I usually have to spend a portion of my office visit untangling them, the most common being patients who say they have a herniated disc from 20 years ago and have chronic back pain. That is a rare occurrence,” Danesh, who was not involved in the editorial, told Reuters Health in an email.

“It is sad and frustrating when patients take on a false identity based on a myth and lose a large part of their quality of life.”

Danesh disagreed, however, with some of the authors’ advice. For instance, there are cases when strong medications, injections or surgery can be used to treat low back pain, so that “is not entirely a myth,” he said.

U.S. Attorneys Recover $104M Last Year

The U.S. Attorney’s Office collected $104,469,755 in criminal and civil actions during the fiscal year ending Sept. 30, 2019. Of this amount, $78,774,806 was in civil actions and $25,694,949 was in criminal actions.

Most civil recoveries were from enforcement actions seeking compensation and penalties for frauds on federal programs or federally insured financial institutions, negligent destruction of National Forest land by fire, and violations of federal health, safety, civil rights, or environmental laws. Recoveries in civil enforcement actions are used primarily to return taxpayer funds to defrauded programs and for restoration of damaged public resources.

Major recoveries during this period include: $50.5 million from Health Net Federal Services for false claims submitted to the Department of Veterans Affairs under a contract to provide veterans with health care, $13.4 million in fraud proceeds forfeited from NBA executive Jeff David and restored to the Sacramento Kings, $9 million from Kernen Construction Co. and Bundy & Sons Logging for damages caused by a fire that burned more than 1,600 acres of the Shasta-Trinity National Forest, and $10 million from BMO Harris Bank N.A. to resolve allegations that the bank violated the Financial Institutions Reform, Recovery and Enforcement Act by engaging in a fraud.

This office worked with other U.S. Attorney’s Offices and components of the Department of Justice to collect an additional $1,947,052 in cases pursued jointly by these offices. Of this amount, $1,928,713 was collected in civil actions and $18,339 was collected in criminal actions. Working with other partner agencies and divisions, the office collected $23,712,892 in asset forfeiture actions. These figures represent funds actually received during the year, not judgments or settlements that have not yet been paid.

Financial recoveries are a critical part of our mission to protect the public treasury and hold those who violate the law accountable for the injury they cause,” said U.S. Attorney Scott. “Each year, our recoveries for victims and taxpayers dwarf the total cost of operating our office. We will continue to aggressively pursue compensation from those who commit crimes and other wrongs in our district, to take the profit out of crime and to ensure that wrongdoers – not the public – bear the costs of unlawful conduct. I am enormously proud of these recoveries and other great accomplishments this year by all the dedicated public servants who work in this office.”

January 13, 2020 News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Court Rules Truckers are Exempt from AB-5 ABC Test, Employer’s Delay in Interactive Process Supports FEHA Claim, Rehab-Recovery Mogul Pleads Guilty in $175M Fraud Case, Palmdale Internist Sentenced to Two Years in Kickback Case, Gov. Newsom Announces Plans to Enter Drug Business, New York Considers Passing AB-5 Gig Employment Law, SCIF Salaries – Including $732k Annual CEO Pay – Under Scrutiny, O.C. Register Calls for Privatizing the SCIF, Santa Monica Reports 23% Increase in Comp Claim Costs, Study Claims 1/3 of Healthcare Costs are Insurance Co. Overhead.