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Judge Issues AB-5 Injunction Against Instacart

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A county judge in San Diego has ruled that Instacart misclassified the overwhelming majority of its California workforce.

While it will not have any immediate effect, the injunction represents a critical first step in enforcing the new state law known as “AB5.”

The statute, which took effect earlier this year, attempts to ensure that so-called “gig economy” and other workers are considered employees, rather than unilaterally being declared independent contractors. Under state law, employees are eligible for consideration benefits, including workers’ compensation, unemployment, unionization rights and more. Companies save millions annually by avoiding such financial costs.

“We disagree with the judge’s decision to grant a preliminary injunction against Instacart in San Diego,” the company said Monday night in a statement provided by Instacart spokeswoman Natalia Montalvo.

“We’re in compliance with the law and will continue to defend ourselves in this litigation. We are appealing this decision in an effort to protect shoppers, customers and retail partners. The court has temporarily stayed the enforcement of the injunction, and we will be taking steps to keep that stay in place during the appeals process so that Instacart’s service will not be disrupted in San Diego.”

The labor law case, People of California v. Maplebear – Instacart’s official corporate name – was initially brought by the San Diego city attorney in September.

Instacart “avoids paying its ‘shoppers’ a lawful wage,” San Diego City Attorney Mara W. Elliott said late Monday.

The “landmark ruling makes clear that Instacart employees have been misclassified as independent contractors, resulting in their being denied worker protections to which they are entitled by state law,” Elliott said in a statement to NBC News. “We invite Instacart to work with us to craft a meaningful and fair solution.”

Even though the judge’s order was issued Feb. 18, it was not formally served on the parties until Monday. The order will not take effect until Friday, the same day as a hearing related to arbitration, another central issue in this case.

“The ruling on the motion for preliminary injunction is not an adjudication of the ultimate rights in controversy,” San Diego Superior Court Judge Timothy Taylor wrote. “It simply represents the court’s discretionary decision whether defendant should be restrained from exercising a claimed right pending trial.”

The judge’s ruling practically invited Instacart to appeal.

“Frankly, the sooner the Court of Appeal can hold forth on these issues, the sooner the parties will have a clear and definite signal of what is expected of them,” Taylor wrote.

Similar companies including Uber have resisted the law and have a multi-pronged approach, including arguing that its drivers are not “core” to its business and should be treated as contractors. Uber has also lead the charge for a new ballot measure that supporters say would “protect flexibility,” while critics say would gut the heart of AB5 and the state Supreme Court ruling that underpins it.

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FDA to Use Claims Data to Confirm Drug Clinical Trials

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The Institute for Clinical and Economic Review (ICER), a small but influential Boston-based research group, has signed a deal with private technology company Aetion to help it use patient health data in its reports on whether individual drugs are priced properly.

Large national regulators, including the U.S. Food and Drug Administration and United Kingdom’s National Institute for Health and Care Excellence (NICE), are considering increasing the use of data gathered outside of clinical trials on the effectiveness of treatments, often referred to as real-world data.

The FDA is running a pilot project using Aetion’s technology to analyze insurance claims to try to replicate clinical trial results, as part of a requirement to comply with healthcare legislation called the 21st Century Cures Act. It is seeking to determine under what circumstances such data could replace clinical trials, which have long been the foundation of medicine regulation.

Former FDA Commissioner Scott Gottlieb is a board member at Aetion.

The agreement with Aetion, which licenses the required claims data, will allow ICER to better inform its cost-effectiveness reports beyond clinical trial data and other information provided by patients, pharmaceutical companies and research papers.

ICER will pilot the use of real world analysis in follow-up reports on how patients are being prescribed and how they react to treatments that have reached the market through one of the FDA’s accelerated approval pathways.

ICER President Steve Pearson said it can use data collected by Aetion to analyze the standard of care for a disease, or to see if larger numbers of patients in medical practice react similarly to drugs as those in tightly controlled clinical trials.

For instance, he said, patients may be taking different dosages than given in trials, which could impact the cost effectiveness of a drug.

ICER is not a government agency and has no authority to set prices. But many large health insurers take their reports into account when they negotiate prices with drug manufacturers and determine patient access. Drugmakers also take into account ICER estimates when they set prices for new medicines.

New York-based Aetion has funding from venture capitalists including from units of Amgen and McKesson, as well as from drugmakers Sanofi and Ucb and health insurer Horizon Health Services.

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24 Companies Join Blockchain Group to Limit Counterfeit Meds

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Some of the industry’s largest pharmaceutical companies, including Pfizer and Eli Lilly have developed a blockchain-based system to track prescription drugs across the supply chain to better halt the flow of counterfeit medicines.

Some two dozen companies in the industry including drugmakers, distributors, retailers and delivery firms created the blockchain-based MediLedger Network, which it has been testing in the verification of drug returns. They said they intend to further expand the system this year.

Blockchain, which first emerged as the technology underlying virtual currency bitcoin, is a shared database maintained by a network of computers.

The MediLedger group submitted a report to the U.S. Food and Drug Administration laying out the benefits of blockchain for this specific issue, Susanne Somerville, chief executive officer at technology company Chronicled, told Reuters.

The company claims that Blockchain has the capacity to break apart the silos dividing pharmaceutical suppliers and customers, while also building bridges for secure record keeping of each transaction that protects every party and ensuring fidelity across supply chains.

“Even though the drug supply in the United States is safe, there are small percentages – of potential counterfeit drugs. Certainly, there’s a lot of evidence of diverted drugs,” Somerville told Reuters in an interview.

She said counterfeit drugs are a big problem in third world countries, where it is estimated that half of their drugs are counterfeit. “This is a plan intended that this never happens in this country.”

Among the 24 participating companies are Amgen, FedEx, GlaxoSmithKline, Novartis, AmerisourceBergen, Sanofi, Walgreens Boots Alliance and Walmart.

The World Health Organization estimates that counterfeit medicines worth $79.26 billion are traded annually.

“The current point-to-point systems infrastructure lacks the ability to keep data in sync across the healthcare supply chain, which ultimately increases the risk of counterfeit, diverted or otherwise illegitimate products,” David Vershure, head of channel and contract management for Roche’s Genentech unit, said in a statement.

The core function of the MediLedger Network is to validate the authenticity of drug identifiers throughout the supply chain, the MediLedger report said. This can all be done without any proprietary data being shared openly on the blockchain or ever leaving a company’s control.

The MediLedger project was created in response to the FDA’s call early last year for pilot projects testing an electronic inter-operable system as outlined in the Drug Supply Chain Security Act (DSCSA).

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CMS Implements Penalty Provisions of Rule 111 Reporting

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Medicare Secondary Payer (MSP) is the term generally used when the Medicare program does not have primary payment responsibility (that is, when another entity has the responsibility for paying for medical care before Medicare). These entities with primary payment responsibility include GHPs and NGHP entities, such as liability insurers (including self-insured entities), no-fault insurers, and workers’ compensation arrangements.

Section 111 of the Medicare/Medicaid SCHIP Extension Act (MMSEA) of 2007, at its most basic level, requires insurers and self-insureds to both identify Medicare beneficiaries with whom they pay benefits or settlements associated with workers’ comp, no fault or liability claims and – once identified – report data to Medicare as directed by the Secretary of Health & Human Services.

The reporting act originally mandated that failure to comply with the reporting requirements “shall be subject to a civil money penalty of $1,000 for each day of noncompliance” for each individual for which the information should have been submitted.

Enter the SMART Act. On January 10, 2013, President Obama signed into law the Medicare IVIG Access and Strengthening Medicare and Repaying Taxpayers Act of 2012. The SMART Act, among other things, softened the language relative provide CMS with discretion not only to the imposition of the penalty but also into the amount of the penalty.

Now, civil money penalties “may be (rather than shall be) subject to a civil money penalty of up to $1,000 for each day of noncompliance with respect to each claimant.” The SMART Act also required the Secretary to quickly solicit proposals determining “specified practices for which such sanctions will and will not be imposed” via the regulatory process.

About a year after the SMART Act was signed into law, CMS kicked off the rulemaking process with an advance notice of proposed rulemaking (ANPRM).  Now, nearly a decade later, CMS has proposed the penalty rules for non-reporting or improper reporting.

This proposed rule will ensure that the appropriate insurers are compliant with their reporting requirements and primary payment responsibilities for healthcare services covered by their healthcare coverage programs. A 60-day public comment period seeks feedback on the proposals.

Here are some highlights of the proposed rule.

— Under the proposed new rule, should a GHP fail to perform the required Section 111 reporting within one year of the coverage effective date, it would be subject to a CMP of $1,000 for each day of noncompliance for each individual whose coverage information should have been reported. A maximum penalty of $365,000 per individual per year would apply.
— Should it fail to perform the required Section 111 reporting at all within one year of the date a settlement or other payment obligation was established, an NGHP would be subject to a CMP of up to $1,000 for each day of noncompliance for each individual whose information should have been reported. A maximum penalty of $365,000 per individual per year applies.
— Entities that have performed Section 111 reporting as required, but subsequently provide information that contradicts reported information in response to MSP recovery efforts, would be subject to a CMP based on the number of days that the entity failed to appropriately report updates to beneficiary records. For GHP entities, penalties would be $1,000 per day of noncompliance per individual. For NGHP entities, the penalty would be up to $1000 per day of noncompliance, for a maximum penalty of $365,000 (365 days) per individual.
— CMS has proposed an error tolerance that would not exceed a 20% threshold. In the public comment period it is seeking feedback on the threshold value for entities that have submitted their Section 111 reporting and Medicare identifies data errors. Reported information that exceeds any of the established error tolerance(s) threshold(s), and exceeds those tolerances for any four out of eight consecutive reporting periods, would be subject to a CMP with the fourth occurrence above the tolerance submission.

The proposed rule can be found online.

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NAIC Lists Top Ten Comp Carriers by Market Share

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Improving employment conditions and equity markets have driven the workers’ compensation insurance industry’s performance in recent years. IBISWorld reported that the industry saw 2.1% annual growth from 2013 to 2018. Meanwhile, the National Association of Insurance Commissioners (NAIC) reported that the industry amassed $58 billion in direct written premiums in 2018. The cumulative market share of the 10 largest insurance groups stood at 45.2%.

Here are the top 10 workers’ comp insurance providers, according to NAIC, ranked by countrywide premium and market share:

1. Travelers Direct Written Premiums: $4.3 billion Market Share: 7.4%

2. Hartford Direct Written Premiums: $3.4 billion Market Share: 5.9%

3. Berkshire Hathaway Direct Written Premiums: $2.8 billion Market Share: 4.7%

4. Zurich Insurance Direct Written Premiums: $2.7 billion Market Share: 4.7%

5. AmTrust Financial Services Direct Written Premiums: $2.6 billion Market Share: 4.5%

6. Chubb Ltd Direct Written Premiums: $2.5 billion Market Share: 4.3%

7. Liberty Mutual Direct Written Premiums: $2.5 billion Market Share: 4.3%

8. New York State Insurance Fund Direct Written Premiums: $2.3 billion Market Share: 3.9%

9. AIG Direct Written Premiums: $1.7 billion Market Share: 2.9%

10. Blue Cross Blue Shield of Michigan Direct Written Premiums: $1.6 billion Market Share: 2.7%

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Coventry Reports Better Claim Outcomes with Nurse Triage

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When an on-the-job injury occurs, the initial response can be critical in aiding an employee in making the right decisions about what type of care they need. Injured workers need to trust that their employer will support them with the resources needed to make the best choices.

Coventry had the opportunity to work with a national client who wanted to evaluate its processes and create a solution to help improve the injured worker experience. They turned to Coventry to enhance their program and decrease lag times from the date an injury occurred to the date it was reported.

To do this, Coventry embarked on a mission to make its nurse resources available to their injured workers immediately to help navigate the most appropriate course of action for a sustained injury. They also had a goal to implement nurse triage into their claims administration and reporting process to achieve the following:

— Improve the injured worker experience by eliminating confusion and frustration
— Triage injured workers on a timely basis to the right level of care for the sustained injury
— Convey that they cared for their employees
— Reduce the use of the emergency room as a first level provider for non-emergent injuries
— Offer telemedicine services as a convenient and cost-effective solution for injuries warranting remote assessment — Reduce litigation due to a lack of understanding the system and benefits available

When injuries occur at work, many employees aren’t sure what to do. They may go to their family health care provider, who may not be in-network, or go to an urgent care clinic or the emergency room. This can result in unnecessary costs and aggravated conditions for employees. In addition, without access to a nurse resource, an injured employee often has to rely on a front-line supervisor to know what to do (i.e., whether to call 911 or tell the employee to go to the emergency room or an urgent care clinic). The consequences of such scenarios can be over- or under-treatment, employees who don’t follow a treatment plan, or an employer/employee relationship that may be on shaky ground. To assist in addressing these concerns,

Coventry developed a nurse triage solution to fit the client’s specific needs, and in 2017 they launched their program with key clients. Here are the results they recently published for this program.

— Average reporting lag for non-traumatic cases from injury to time of reporting declined from 7.4 days to 1 day
— Injured employees are put in immediate contact with a nurse and receive the most appropriate course of action
— Litigation rates dropped 3% and NT24 is considered to be the main attributing factor
— The experience modification of the program is expected to improve due to fewer medical-only claims being reported — Average 31% decline annually in medical-only claims resulted in savings in both administrative and medical costs

The program has been a complete success. Not only did it achieve the initial goals of improving the injured worker experience by providing a timely, trusted resource, it also delivered amazing results in the form of reduced reporting lag time, reduced litigation, more appropriate utilization, and financial savings.

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Researchers Improve Design of Robotic Surgery Controller

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Robotics has weaved its way into many different fields, and medicine is no exception; robot-assisted surgery has advanced dramatically over the past decade in almost every surgical subspecialty.

Robot-assisted surgery is usually performed using surgical robot systems that involve a master-slave configuration, in which the “master” is a controller device that the surgeon manipulates to control a robotic arm. Such systems improve the dexterity and precision of surgeons by filtering out hand tremors and scaling their hand motions into smaller movements. They also reduce the risk of common surgical complications such as surgical site infection.

However, robot-assisted surgery comes with its own disadvantages, especially for the person performing the surgery. Robotic surgeons sometimes feel physical discomfort during surgery, with finger fatigue being common.

This discomfort is associated with the way in which they grip the master controller. Two types of grips are usually used to control surgical robots: the “pinch grip” and “power grip.” The pinch grip has been used in conventional surgeries for centuries; it involves using the thumb, middle, and index fingers to achieve high-precision movements.

On the other hand, the power grip involves grabbing a handle with the entire hand and is more suitable for forceful work and large movements.

Because the pinch grip puts tension on certain muscles of the hand and fingers, it is more likely to cause fatigue. And although the power grip does not seem to cause such discomfort, it offers less precise control. Therefore, there is a trade-off between the discomfort caused by the pinch grip and the lack of fine control of the power grip.

Fortunately, Mr. Solmon Jeong and Dr. Kotaro Tadano, a pair of researchers from Tokyo Institute of Technology found a clever solution to this problem. In a study published in The International Journal of Medical Robotics and Computer Assisted Surgery , the researchers speculated that a master controller that combines both types of gripping can be designed.

Dr. Tadano explains, “In robotic surgery, the limitations of the two conventional gripping methods are strongly related to the advantages and disadvantages of each gripping type. Thus, we wanted to investigate whether a combined gripping method can improve the manipulation performance during robotic surgery, as this can leverage the advantages of both gripping types while compensating for their disadvantages.”

After a proof-of-concept experiment that yielded promising results, the researchers designed a robotic surgery system with a modular master controller that could be adjusted to employ either pinch, power, or combined gripping. The system was tested through a pointing experiment, in which 15 participants had to control a robotic arm to bring the tip of a needle into target holes in the least amount of time without touching obstacles.

The findings showed that the combined grip yielded better performance in the pointing experiment on various fronts, including number of failures (touching an obstacle), time required, and overall length of the movements performed to reach the targets. Many participants also reported to prefer the combined gripping method over the other two, owing to the ease and comfort in using this method.

This new master controller design could be a step in the right direction in robot-assisted surgery. “The manipulating method of master controllers for robotic surgery has a significant influence in terms of intuitiveness, comfort, precision, and stability.

In addition to enabling precise operation, a comfortable manipulating method could potentially benefit both the patient and the surgeon,” remarks Dr. Tadano. Although future work is needed to analyze other variables involved in robotic arm manipulation, this work surely paves the way for advanced surgical robot systems.

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February 17, 2020 News Podcast

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Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: AG Suit Claims OptumRX Illegally Gouged Comp Claims, Another California “New-Law-Fail” in Federal Courts, Lawsuits Claim AARP Cheats Policyholders, More AB-5 Unintended Consequences, San Diego Musicians Play Blues Tunes Over AB-5, DWC Announces Online Doctors First Report Pilot Program, Single Point of Failure – Pharmaceutical Roads Lead to China, CWCI Study Shows Decline in Medical Treatment Counts, Disability Discrimination 2nd Highest EEOC Claim, Mike Hessling New Gallagher Basset CEO.

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Sandoz Executive Pleads Guilty in Drug Price Fixing Case

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Amid an industrywide price-fixing probe that has roped in some of the largest generics players, three executives have faced federal charges for their alleged roles. Now, the wide-ranging probe has snared another former exec – this time a big fish at Novartis’ generics unit.

Hector Armando Kellum, a former senior executive at Sandoz, pleaded guilty to federal conspiracy charges for his role in a scheme to fix prices for a range of the drugmaker’s products, including topical steroid clobetasol and antifungal nystatin triamcinolone cream.

Kellum faces 10 years in prison and a $1 million fine, prosecutors said in a release. In exchange for his plea, Kellum agreed to cooperate with the ongoing federal investigation.

Kellum’s plea has now confirmed Sandoz’s role in the scheme – easily the biggest company so far – but more generics giants could be in the firing line as the lineup of cooperating witnesses expands.

Kellum’s deal comes just two weeks after prosecutors charged Ara Aprahamian, a former sales executive at Taro Pharma. Aprahamian was charged Feb. 4 to three counts of conspiring to fix prices for the company’s generic drugs and lying to investigators.

Aprahamian was targeted for his stints as vice president of marketing and VP of sales and marketing between 2013 and 2016, during which he spearheaded two separate price-fixing campaigns with unnamed drugmakers in New Jersey and Pennsylvania then later lied about his role in the schemes, prosecutors said.

Federal prosecutors called Kellum and Aprahamian “co-conspirators” in the price-fixing scheme, with Kellum’s role falling between March 2013 and at least June 2015.

The report in FiercePharma also notes that in addition to Aprahamian, Jeffrey Glazer and Jason Malek, the former CEO and president of Heritage Pharmaceuticals, respectively, inked deals in 2017 to settle charges leveled the month before.

Prosecutors have also brought cases against two New Jersey-based drugmakers – including Heritage – for their roles in price-fixing schemes. In those cases, Rising Pharmaceuticals agreed in December to pay $3 million in exchange for a guilty plea in a scheme to set prices for hypertension med Benazepril HCTZ. Heritage reached a deal in March to pay $7 million to cooperate with the feds in their probe.

Kellum’s plea has now confirmed Sandoz’s role in the scheme – but more generics giants could be in the firing line.

In May, 44 states launched a mammoth case against 20 generic drug makers that Connecticut Attorney General William Tong called “the largest cartel case in the history of the United States.”

The suit directly named Maureen Cavanaugh, Teva’s former SVP and chief commercial officer in North America, and three lower-level executives who no longer work at the company. Aside from Teva, the lawsuit implicated Sandoz, Mylan, Pfizer and several other leading generic drug makers. It names current and former executives from Lupin, Glenmark and other companies.

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National Safety Council Launches ” Work to Zero” Safety Report

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Since 1913, the National Safety Council has used data, expertise and innovation to solve some of the toughest workplace safety problems. Yet over the past decade, as workplace injuries have declined, the number of fatalities has remained relatively flat, even increased in some years.

The Council’s Work to Zero initiative, supported by a grant from the McElhattan Foundation, aims to make workplace deaths a thing of the past.

Using decades of insight, data and an unparalleled network of safety leaders, it will identify the most promising technological innovations for eliminating workplace fatalities in our lifetime. In short, Work to Zero will serve as a hub of digital transformation in safety.

Work to Zero launched its first research report, Safety Technology 2020: Mapping Technology Solutions for Reducing Serious Injuries and Fatalities in the Workplace, at its inaugural Summit. The paper reviews the current state of safety technology, provides insight from interviews with more than 40 EHS professionals, and maps major sources and causal factors of workplace deaths to promising safety technologies.

The report looks at 18 different non-roadway hazardous situations in which workers are most likely to die and provides anywhere from five to eight potential technology solutions for each situation.

The Work to Zero Advisory Council is a volunteer group of EHS and technology experts composed of industry, academic, government and other thought leaders who strategically advise the Council on efforts to eliminate workplace deaths. Its primary responsibilities are to inform Work to Zero research projects by providing expertise, insight and access to networks that enrich the initiative, shape outreach and event projects, and engage external parties to broaden the initiative’s reach and knowledge.

The Advisory Council meets via bi-monthly teleconference meetings and bi-annual face-to-face meetings, such as at the NSC Congress & Expo, Campbell Institute Symposium and/or Annual Work to Zero Summit. If you are interested in learning more, email worktozero@nsc.org.

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