Author: WorkCompAcademy

ResMed Corp., a manufacturer of durable medical equipment (DME) based in San Diego, California, has agreed to pay more than $37.5 million to resolve alleged False Claims Act violations for paying kickbacks to DME suppliers, sleep labs and other health care providers.  

The federal Anti-Kickback Statute prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program, such as Medicare, Medicaid or TRICARE. Claims submitted to these programs in violation of the Anti-Kickback Statute give rise to liability under the False Claims Act.

The settlement resolves allegations that ResMed (a) provided DME companies with free telephone call center services and other free patient outreach services that enabled these companies to order resupplies for their patients with sleep apnea, (b) provided sleep labs with free and below-cost positive airway pressure masks and diagnostic machines, as well as free installation of these machines, (c) arranged for, and fully guaranteed the payments due on, interest-free loans that DME supplies acquired from third-party financial institutions for the purchase of ResMed equipment, and (d) provided non-sleep specialist physicians free home sleep testing devices referred to as “ApneaLink.”

Contemporaneous with the civil settlement, ResMed entered into a Corporate Integrity Agreement (CIA) with the Department of Health and Human Services Office of Inspector General. The CIA requires, among other things, that ResMed implement additional controls around its product pricing and sales and that ResMed conduct internal and external monitoring of its arrangements with referral sources.

The agreement resolves five lawsuits originally brought by whistleblowers under the qui tam, or whistleblower, provisions of the False Claims. The False Claims Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in the recovery. The whistleblowers will collectively receive a roughly $6.2 million share of the settlement.

This settlement was the result of a coordinated effort by the Civil Division of the United States Department of Justice; the U.S. Attorney’s Offices for the District of South Carolina, the Southern District of California, the Northern District of Iowa, and the Eastern District of New York; the Department of Health and Human Services, Office of Counsel to the Inspector General and Office of Investigations; the Defense Criminal Investigative Service; the Defense Health Agency Office of General Counsel; the Federal Bureau of Investigation; and the National Association of Medicaid Fraud Control Units.

The lawsuits resolved by this settlement are captioned United States, et al., ex rel. Ameer v. ResMed, Inc., et al., Case No. 2:15-CV-04842-MBS (D.S.C.); United States, et al., ex rel. Baker v. ResMed, Inc., et al., Case No. 3:16-CV-00987-MBS (D.S.C.); United States, et al., ex rel. Ross v. ResMed, Inc., Case No. 16-CV-1988-W (JLB) (S.D. Cal.); United States ex rel. Meyer v. ResMed, Inc., et al., Case No. 17-CV-12-MWB (N.D. Iowa); and United States, et al., ex rel. Ottavio, et al. v. ResMed, Inc., Case No. CV 17-5734 (E.D.N.Y.).

Ushering in a new decade means new conversations, new complexities, new and exciting trends to weave into the existing ways of doing things. Sedgwick just published “Conversation threads for 2020,” which lists major global industry trends that employers, risk management and human resource professionals, and carriers should watch for in the coming year.

Sedgwick’s numerous experts and thought leaders believe the topics and trends outlined below will significantly impact our industry in 2020 and will continue to monitor them throughout the year.

Evolving experience: Pairing digital-first technology with human-centered solutions will continue to help improve the claims experience and simplify the process for consumers.

Caring culture: Across the claims spectrum, adjusters are evolving into partners and advocates for the consumer, offering claims expertise and assistance with a focus on empathy and compassion.

Breaking barriers: From the point of need, throughout a claim and through to resolution, our industry continues to shine a light on ways to reduce and break down barriers to care for injured individuals, as well as removing inefficiencies that can slow down resolution of property claims.

Compliance complexities: Business owners around the world may face different compliance challenges, but they all are concerned with how to stay on top of regulatory changes, streamline their processes, create stronger work environments, maintain safety and keep compliance simple.

Major mitigation: Major and complex losses are becoming an increasing concern for all lines of business. When facing extreme weather events, crisis management situations, the impact of “nuclear” verdicts and other precedent-changing forces, the question is, “How can we prepare for the unexpected?”

Digital development: Digital evolution forces us to rethink the claims process as we know it. With the next wave of technology, we will see big changes in the way adjusters work, reducing cost and delivering faster and smarter response.

Ready resilience: No matter the reason for a claim, whether property, casualty, benefits, marine or any other type, or where it happens around the world, developing the ability to recover quickly is a common theme.

Workforce watch:  We’ve talked about changing workforce demographics and ways to attract and retain talent for years – but that doesn’t change the fact that these are still key issues – for the insurance industry and beyond. What strategies are gaining viability in addressing ongoing productivity challenges?

Trending themes: During 2020, we expect several topics to increase in relevance, from geopolitical concerns – particularly with major elections taking place in the U.S. and elsewhere – to the impact of climate change and connected regulations in different parts of the world. Cyber threats will continue to intensify and the hardening insurance market may cause organizations to take a new look at their strategies.

Anthony Dennis sustained an injury in 2013 to his right wrist while working as an inmate for the California Department of Corrections and Rehabilitation. The parties stipulated to an award in 2017. This did not include his claim for a SJDB voucher.

Prior to the stipulation, defendant sent Dennis a Notice of Offer of Regular, Modified, or Alternative Work. The Notice also stated “SUBJECT TO APPLICANT VERIFYING THEY ARE LAWFULLYQUALIFIED TO ACCEPT EMPLOYMENT AS AN INMATE LABORER, YOU HAVEVOLUNTARILY TERMINATED YOUR EMPLOYMENT DUE TO YOUR RELEASE FROM PRISON AND ARE NO LONGER AVAILABLE FOR EMPLOYMENT [sic].”

Dennis filed a Request for Dispute Resolution Before Administrative Director, to resolve the issue of entitlement to a SJDB voucher. the AD did not issue a determination, and pursuant to the Rules, the request was therefore deemed denied.

Dennis then filed a DOR with the Sacramento District Office asking it to adjudicate his claim to this benefit. The WCAB rescinded the Award, and substituted a new Finding that applicant is entitled to a SJDB voucher.

It concluded that the WCAB maintains exclusive jurisdiction to adjudicate SJDB disputes irrespective of AD Rule 10133.54, which provides that the parties may request a dispute resolution with the Administrative Director before appealing the Administrative Director’s decision to the WCAB.

The Defendant, newly aggrieved, sought reconsideration of the new decision, which the WCAB granted. In the new En Banc decision of Dennis v Department of Corrections, it concluded that AD Rule 10133.54 exceeds the authority granted in sections 4658.5(c) and 4658.7(h), which authorizes the Administrative Director to adopt regulations for the administration of the supplemental job displacement benefits program. Neither statute authorizes the Administrative Director to adjudicate SJDB disputes.

It went on to note that it was “cognizant that employment in a prison setting is unique in that inmate workers cannot return to an inmate job once they are released from prison, making it impossible for a prison employer to make a bona fide job offer. Our review of statutes and case law, however, leads us to conclude that an employer’s inability to offer regular, modified, or alternative work does not release an employer from the statutory obligation to provide a SJDB voucher.”

In concluding, the WCAB issued its notice of intent to issue a decision holding that:

—  (1) AD Rule 10133.54 is invalid because it exceeds the statutory authority granted to the Administrative Director under sections 4658.5, subdivision (c), and 4658.7, subdivision (h)5, and restricts the exclusive adjudicatory power of the WCAB to adjudicate compensation claims, including disputes over supplemental job displacement benefits; and
—  (2) an employer must show that it made a bona fide offer of regular, modified, or alternative work in order to avoid liability for a supplemental job displacement benefit voucher.

The Administrative Director may file a response to this Notice of Intention within thirty (30) days.

Kim Rushton was employed as a chemist for the City of Los Angeles at the Hyperion Treatment Plant for over twenty years. In 2015 he struck and killed pedestrian Ralph Bingener while commuting to work in his own car and on his usual morning route and was not performing work for the City while driving to work.

As a chemist at the Hyperion Treatment Plant, he was at the time a self-described “lab rat” and his job did not require him to be in the field or use his personal automobile for his employment.

Bingener’s surviving brothers filed a complaint alleging that the City was vicariously liable for Rushton’s negligence in the collision. The City moved for summary judgment based on the going and coming rule, asserting that Rushton was not in the course of employment at the time of the accident.

The trial court agreed that the going and coming rule applied to Rushton, who was engaged in his regular commute at the time of the accident and entered judgment against the Bingeners who then appealed. The Court of Appeal sustained the trial court in the published case of Bingener v City of Los Angeles.

Plaintiffs argued an exception to the going and coming rule – the “work – spawned risk” exception. This exception applies when an employee endangers other with a risk arising from or related to work. For example, where an employee gets into a car accident on the way home after drinking alcohol at work with his supervisor’s permission, courts have carved out an exception to the going and coming rule.

Plaintiffs argued that the City knew about Rushton’s health conditions and how it might impair his ability to drive because certain medical expenses were being paid for Rushton’s back injury through the City’s worker compensation program. According to plaintiffs, Rushton’s then-present injuries and medications rendered him unfit to drive. Despite this knowledge, the City allowed Rushton to return to work prematurely without placing any restrictions on his driving. Given that Rushton was impaired and unfit to drive, his driving to work was a foreseeable risk of the City’s activities. The City, should, therefore, be held liable for “a negligently created work-spawned risk endangering the public.”

The Court of Appeal rejected this argument. Nothing about the enterprise for which the City employed Rushton made his hitting a pedestrian while commuting a foreseeable risk of this enterprise. The “going and coming rule” was created for precisely the situation presented here and its application in this case precludes plaintiffs’ claim of vicarious liability against the City.

“Plaintiffs contend that nevertheless, the City was obligated to review Rushton’s worker’s compensation file and reach a decision that Rushton could not return to work because he could not safely drive a vehicle. That argument ignores the undisputed fact that it was a physician, and not the City, who approved Rushton to return to work and did so without limitation on his driving.”

A Los Angeles judge ruled that California’s new “gig worker” law does not apply to independent truck drivers because they are subject to federal statute, handing a victory to one industry that is challenging a state effort to clamp down on labor abuses.

The law, known as AB5 and which took effect on Jan. 1, makes it tougher for companies to classify workers as contractors rather than employees, a classification that exempts them from paying for overtime, healthcare and workers’ compensation.

According to the report in Reuters, truckers have mounted the strongest defense against AB5, which is best known for striking at the heart of high-profile “gig economy” businesses like Uber Technologies and Postmates Inc, which depend on freelance workers to provide low-cost transportation and deliveries.

In a decision on Wednesday, Los Angeles Superior Court judge William Highberger said AB5 “prohibits motor carriers from using independent contractors to provide transportation services” and therefore is preempted by the Federal Aviation and Administration Authorization Act of 1994.

Highberger ruled in favor of NFI Industries’ Cal Cartage Transportation Express and other trucking companies that were sued by Los Angeles City Attorney Mike Feuer for allegedly misclassifying truck drivers as independent contractors rather than employees.

Feuer said his office would appeal.

“As the Court itself stated, ‘… there are substantial grounds for difference of opinion,’” Feuer said in a statement emailed to Reuters.

Highberger’s decision came eight days after the California Trucking Association won a temporary restraining order in a separate challenge to AB5. Another hearing in that federal case is scheduled for Jan. 13.

California is home to 450,000 contract workers. Roughly 70,000 of them are independent big-rig owner-operators who transport everything from ocean cargo containers to strawberries.

“California cannot simply eliminate that business model and force truck drivers to be employees,” said Gibson Dunn partner Joshua Lipshutz, who represented NFI.

Uber and Postmates on Wednesday asked a federal judge to issue a temporary injunction. They argue that AB5 is unconstitutional because it singles out their workers in violation of equal protection guaranteed under the constitutions of the United States and California.