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Cal/OSHA Cites Employer $108K for Fatal Injury

Cal/OSHA has cited Sierra Pacific Industries $108,300 for workplace safety and health violations after one of its employees was fatally injured when a pipeline on an air compressor exploded.

On September 17, an employee working for Sierra Pacific Industries in Lincoln was setting up a Quincy 300 Compressor when a pipeline on the air compressor exploded. Pieces of the pipeline hit two employees nearby, injuring one and killing another
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“Working on equipment attached to pressure vessels such as air compressors requires special precautions,” said Cal/OSHA Deputy Chief Debra Lee. “Employers must identify and evaluate potential hazards before assigning employees to perform work on this hazardous machinery and equipment.”

Cal/OSHA cited Sierra Pacific Industries $108,300 for nine violations, including three serious accident-related, three serious, and three general in nature. The serious accident-related violations were cited for the employer’s failure to:

– – Test the discharge piping prior to operating the Quincy 300 compressor and ensure proper connection
– – Ensure a pressure relieving safety device was installed in the line between the compressor and block valve
– – Ensure all pressure piping for the compressor was designed and fit in accordance with good engineering practice.

The serious violations were cited for the employer’s failure to ensure the energy within the pipeline system was controlled to prevent release during repair, and failure to ensure group lockout/tagout procedures were utilized and employees worked under supervision of a qualified person. The other citations were issued for violations related to uncertified employees welding, failure to establish hazardous energy control procedures and operating equipmentt under conditions of stress.

A serious violation is cited when there is a realistic possibility that death or serious harm could result from the actual hazard created by the violation. Violations are classified as accident-related when the injury, illness or fatality is caused by the violation. Cal/OSHA has extensive information on lock out / tag out requirements online.

Cal/OSHA’s Pressure Vessel Unit is responsible under Labor Code sections 7620-7771 for the permitting and inspection of boilers and tanks, including air compressors. All employers in California are required to have an effective written injury and illness prevention program, and a safety program to identify, assess and control hazards in the workplace. Cal/OSHA has online tools and publications to guide employers on how to establish an effective safety program.

New Mitchell Comp Survey Supports Telemedicine Adoption

Mitchell International, Inc., headquartered in San Diego, California, delivers smart technology solutions that simplify and accelerate claims handling and repair processes, driving more accurate, consistent and cost-effective resolutions.

The company announced the results of a survey of workers’ compensation professionals in the U.S., revealing how the COVID-19 pandemic has influenced technology usage in the industry.

The survey results show that the industry has rapidly increased its technology adoption in the last year, with more than 50% of respondents saying they adopted telemedicine during the pandemic. Forty percent of participants said changes and pressures related to the COVID-19 pandemic are the main driving factors for the increased pace of technology adoption in the industry today.

Looking ahead, the majority of respondents overwhelmingly believe that telemedicine (35%) and predictive analytics (35%) are the technologies that will have the biggest impact on the industry within the next 5-10 years, followed next by mobile coming in at a distant third place (8.5%). Respondents believe the most valuable applications of telemedicine – driven largely by a rising need for remote healthcare – will be for provider visits (54%). They also reported that they foresee predictive analytics being used best for claim triage, severity or reserving (35%).

In a similar survey conducted by Mitchell in 2020 before the COVID-19 pandemic began, respondents foresaw telemedicine as having the most significant influence on the industry (32%), but reported artificial intelligence (30%) as the second potential most impactful technology and ranked predictive analytics (20%) in third place.

The workers’ compensation industry has greatly benefitted from technology innovation in recent years, but the need to enable the continuity of care has brought explosive growth in new technology adoption as a result of COVID-19,” said Shahin Hatamian, senior vice president of product management at Mitchell. “The past year has only reinforced the trends our annual surveys have tracked in recent years, highlighting the rising importance of technologies that can automate manual processes and enable faster and smarter decision making.”

Mitchell’s survey also uncovered the biggest claims challenges experienced by workers’ compensation industry professionals. Almost one-quarter (22%) of participants ranked adapting to challenges from the COVID-19 pandemic as the top obstacle their organization is facing today, followed by workflow efficiency (19%) and cost pressures (18%). Other hurdles reported include return-to-work time, employee turnover, IT budget, keeping up with regulatory changes, and pharmaceutical management.

“As companies continue to focus on stabilizing and improving their businesses in the coming years, they will be seeking workflow efficiencies and determining ways to lower costs, to help injured employees return to the workforce even quicker,” said Hatamian. “We foresee a continued focus on automation, analytics and workflows to maximize care and improve outcomes.”

Mitchell surveyed nearly 100 workers’ compensation professionals at a range of companies, including insurance carriers, third-party administrators, public entities, brokers, and managed care and risk management organizations.

Merck Drug Shows “New Hope” for COVID Treatment

A new Covid-19 therapy has completed its phase two human trial and the results are promising.

Molnupiravir was developed at Emory University by the university’s drug innovation company, Drug Innovation Ventures at Emory (DRIVE). It was then acquired by Miami-based company Ridgeback Biotherapeutics, who later partnered with Merck & Co. to develop the drug further.

A review of the progress of further development of molnupiravir by Forbes concludes that the experimental phase of the development effort shows a “new hope for prevention and treatment of Covid-19 and other dangerous viruses.”

Merck and Ridgeback Biotherapeutics, LP announced preliminary results from Ridgeback’s Phase 2a randomized, double-blind, placebo-controlled trial to evaluate the safety, tolerability, and efficacy to eliminate SARS-CoV-2 viral RNA of molnupiravir, an investigational oral antiviral agent.

Of 202 treated participants, no safety signals have been identified and of the 4 serious adverse events reported, none were considered to be study drug related.

In addition to the ongoing clinical studies, Merck has conducted a comprehensive nonclinical program to characterize the safety profile of molnupiravir.

“We are very pleased to share our initial Phase 2 infectivity data at this important conference, which remains at the forefront for critical clinical scientific information in infectious diseases,” shared Dr. Wendy Painter, Chief Medical Officer of Ridgeback Biotherapeutics. “At a time where there is unmet need for antiviral treatments against SARS-CoV-2, we are encouraged by these preliminary data.

“The secondary objective findings in this study, of a quicker decrease in infectious virus among individuals with early COVID-19 treated with molnupiravir, are promising and if supported by additional studies, could have important public health implications, particularly as the SARS-CoV-2 virus continues to spread and evolve globally,” noted Dr. William Fischer, lead investigator of the study and Associate Professor of Medicine, Division of Pulmonary Diseases and Critical Care Medicine at the University of North Carolina School of Medicine.

“We continue to make progress in our Phase 2/3 clinical programs evaluating molnupiravir in both outpatient and hospital settings and plan to provide updates when appropriate,” said Dr. Roy Baynes, senior vice president and head of global clinical development, chief medical officer, Merck Research Laboratories.

Molnupiravir is an investigational, orally-bioavailable form of a potent ribonucleoside analog that inhibits the replication of multiple RNA viruses including SARS-CoV-2, the causative agent of COVID-19.

In addition to its reduction of Covid-19 transmission, Molnupiravir is likely to be useful against influenza, ebola, and a large swath of other viruses as well. Its development appears to be a major advancement in virus control and should be active against Covid-19 variants and variants of other viruses.

However, we caution Molnupiravir should be administered in conjunction with other therapies to avoid viruses rapidly developing resistance, which all these viruses are well-equipped to do.

H.R. 1996 Protects Carriers From Prosecution for Pot Industry Coverage

The American Property Casualty Insurance Association (APCIA) was formed on January 1, 2019, following the merger of the American Insurance Association (AIA) and the Property Casualty Insurers Association of America (PCI). Together these organizations trace their history back to the founding of the National Board of Fire Underwriters in 1866.

APCIA members represent all sizes, structures, and regions – protecting families, communities, and businesses in the U.S. and across the globe.

H.R. 1996, the SAFE Banking Act generally prohibits a federal banking regulator from penalizing a depository institution for providing banking services to a legitimate cannabis-related business. Prohibited penalties include terminating or limiting the deposit insurance or share insurance of a depository institution solely because the institution provides financial services to a legitimate cannabis-related business and prohibiting or otherwise discouraging a depository institution from offering financial services to such a business.

The Association released the following statement commending the House of Representatives for passing H.R. 1996, the SAFE Banking Act.

The legislation will prevent federal prosecution of and civil liability for insurance agents, brokers, and carriers, as well as their officers, directors, or employees when engaging in the business of insurance in states that have legalized cannabis in some form.

The following statement may be attributed to Nat Wienecke, APCIA’s senior vice president of federal government relations:

“APCIA commends the House for providing greater certainty surrounding the insurance marketplace for cannabis-related legal businesses and consumers adhering to state laws. This legislation addresses the legal uncertainty created by the dueling state and federal treatment of cannabis. While marijuana is illegal under the federal law, thirty-six states and the District of Columbia have legalized some form of marijuana.”

“We applaud Representatives Perlmutter, Stivers, Velazquez, and Davidson for their steadfast leadership. We encourage the Senate to take up and pass the SAFE Banking Act, as soon as possible.

The Bill passed the House of Representatives with bipartisan support. It now moves to the Senate for its consideration

RIMS LIVE 2012 to Discuss Virtual End-to-End Care

RIMS, the risk management society®, is a global not-for-profit committed to advancing the practice of risk management throughout the world.

David Lupinsky, Vice President of Digital Health and Innovation, CorVel, will be co-presenter of a session exploring the impact of AI and telehealth at RIMS LIVE 2021.

“Disruption: How Big Data, AI and Telehealth Are Transforming Claims Management,” led by Lupinsky and Stacey Caldwell, Corporate Claims Manager, BBSI, will chronicle the journey that is transforming care for injured workers, producing better outcomes at less cost and improving the patient’s experience.

The educational session is scheduled for Monday, April 26 at 4:30PM EDT but will remain available to all attendees for 60 days after the conference.

Although telehealth was already in use for workers’ compensation, the pandemic pushed its evolution forward to quickly and permanently make virtual end-to-end care possible – and even preferable – for rapid, safe recovery.

We started several years ago by connecting with the injured worker via telehealth so we could immediately determine the best course of care, saving time off work and getting the right level of care for the injury,” said Lupinsky.

Now, we can provide remote physician visits, home pharmacy delivery, in-home tele-rehab, instruction for DME equipment operation, and mental health therapy with the case manager, the medical team and the patient all connected digitally. Patients love this approach. They are more engaged, and we’ve found that it costs less and produces superior outcomes.”

Lupinsky will also address the use of digital monitoring in prevention, as well as applying artificial intelligence and machine learning to proactively identify potential or emerging problems for immediate intervention. Caldwell will present case studies showing the effectiveness of virtual end-to-end care.

Rapid Expansion Ahead for SmartPay Pay-As-You-Go Comp

What happens when the enhancement is in more demand than the original product? That was the quandary faced a few years ago by entrepreneurs operating an insurance agency. And, like all good entrepreneurs, they followed the money, right into a whole new business.

Dino Carbone, executive vice president for sales and marketing at SmartPay Solutions LLC, tells the story published by Hartford Business Journal, of the firm’s inception.

He and his partners had set out to make it easier for clients to pay their insurance bills. Their pay-as-you-go software was a hit. Soon, clients wanted to buy the software as well as the insurance. The partners hung a “for sale” sign on the agency and set up shop in the emerging field of insurtech.

In 2013, Connecticut Innovations became an investor. In 2014, a Series A round closed with $1.4 million, including investments from Tennant Capital Partners and Stonehenge Growth Capital. But in 2015, the partners changed course and took the firm private again. Robert Conerly, who had joined the firm as CFO, was named CEO. Dino Carbone

Today, SmartPay has more than 10,000 businesses on its platform. There, payroll information is massaged against the client’s workers’ compensation insurance needs. SmartPay shops more than 30 carriers, including many of the best-known firms, for the best rates and coverage matches.

But the element that sets SmartPay apart from competitors is that its software can make changes in 24 to 48 hours, as staffing levels change.

And during a pandemic, that ability is an asset. Keeping pace with ever-changing workers’ comp rates has been a selling point for SmartPay. But times change. Carbone leaves no doubt the pandemic has been a boon for SmartPay’s business.

Through furloughs and layoffs, Paycheck Protection Program-funded rehiring and false starts at reopening, clients always had their workers’ comp coverage right. No gaps in coverage. No over or under payments.

The underlying software logic makes it applicable to any insurance situation where coverage is based on variables like headcount or pay rate.

And Carbone says major expansion is ahead, as quickly as the staff of 24 can manage it. First up is a new website, to be launched within weeks. Then it’s on to new lines of coverage.

Carbone says SmartPay is on course to double its revenue. He’s cautious about dropping names and numbers but says about $14 billion in payroll data crosses the platform. He also said Liberty Mutual is one of the large firms offering workers’ comp insurance through SmartPay’s platform and his firm has done “a lot” of work with The Hartford.

Carbone says SmartPay works with “thousands” of independent insurance agents.

He sees the firm’s main competitors as large national payroll providers, which are moving into the bill payment space. And that’s part of SmartPay’s pitch to recruit smaller payroll providers to its team.

SmartPay lets payroll providers add workers’ comp pay-as-you-go as a service, improving their competitive position as well as SmartPay’s.

Former EDD Employee Pleads Guilty to $200K EDD Fraud

Former EDD employee, 44 year old Andrea M. Gervais, who lives in Roseville, pleaded guilty to theft of government money in a scheme involving 97 fraudulent Pandemic Unemployment Assistance (PUA) claims in the names of persons other than her own.

The investigation began when federal agents discovered that someone had filed a PUA claim using the identity of Sen. Dianne Feinstein, a sitting U.S. senator, for approximately $21,000. This fraudulent claim was processed for payment, and Gervais received an EDD debit card in the senator’s name.

Agents further discovered that Bank of America ATM cameras captured Gervais on multiple occasions withdrawing cash from at least seven of the EDD debit cards, and at least one captured transaction showed Gervais using the debit card issued to the senator.

According to court documents, at least 10 of 97 fraudulent PUA claims were processed for payment, and nearly $200,000 in unemployment insurance and PUA benefits were paid out to Gervais’s Roseville address in the form of Bank of America debit cards. The potential value of all fraudulent 97 claims associated with the scheme exceeded $2 million.

This case is the product of an investigation by the U.S. Department of Labor – Office of the Inspector General, the Federal Bureau of Investigation, and the California Employment Development Department – Investigation Division. Special Assistant U.S. Attorney Robert J. Artuz is prosecuting the case.

Gervais remains on pretrial release as she awaits sentencing. She is scheduled to be sentenced by U.S. District Judge Kimberly J. Mueller on Aug. 9.

She faces a maximum statutory penalty of 10 years in prison and a $250,000 fine.

Farm Labor Contractors Charged for $1.42M Premium Fraud

Farm labor company owners and siblings Elias Perez, 40, of Greenfield, and Alejandra Perez, 37, of Soledad, were arraigned on over 20 felony counts of insurance and tax fraud after allegedly underreporting payroll by over $17 million resulting in a loss of over $1.42 million to their insurance companies.

The Department of Insurance discovered the alleged fraud after learning that an injured employee was treated out of a garage by an unlicensed professional.

The Perezes are owners of farm labor contracting companies in Greenfield called PFL Contracting Inc., Future Ag Management, Inc. (FAM) and Future Harvesters and Packers, Inc., (FHP), which primarily hire farm labor employees to harvest crops.

An investigation found on June 28, 2016, an employee of one of the Perezes’ businesses, FAM, sustained a work-related injury to their back when they tripped and fell while harvesting crops. The Perezes along with a FAM supervisor allegedly did not provide the injured employee with the required professional medical treatment. For two weeks, the FAM supervisor took the injured worker to seek treatment from an unlicensed professional who operated a business out of their garage.

More than two weeks after the employee’s injury, Elias Perez filed a workers’ compensation claim with their insurance company and stated the employee’s injury occurred on July 7, 2016.

FAM and FHP obtained workers’ compensation policies from two different insurance companies. A comparison of records from the insurance companies and the California Employment Development Department (EDD) showed large discrepancies in the payroll reported by the Perezes. From July 2014 to August 2017, they reported to EDD that FAM and FHP paid $28,521,347 in wages while reporting only $23,246,922 to their insurance companies for the same time period.

Investigators served bank search warrants and conducted a thorough review and audit of the payroll checks, which determined that FAM and FHP from July 2014 to August 2017 actually paid over $41 million in wages. They allegedly underreported over $17 million in wages, which resulted in approximately $1.42 million in premium owed to their insurance companies.

In addition, the Perezes underreported PFL, FAM and FHP’s wages by approximately $12.8 million to EDD resulting in potentially $1.28 million in unpaid taxes.

FAM also maintained a workers’ compensation policy with another insurance company for the Perezes’ farm labor contracting operation in Arizona. Records obtained from that insurance company and the Arizona Department of Economic Security indicated additional discrepancies in their reporting and was included in this audit and investigation.

Elias Perez was charged with five felony counts and Alejandra Perez was charged with 21 felony counts. Both were arraigned in Monterey County Superior Court.

The Monterey County District Attorney’s Office is prosecuting this case.

Sacramento Welder Faces Two Felonies for Fake Head Injury

41 year old Ahmad Zaki Noori, who lives in Sacramento, was arraigned on two felony counts of workers’ compensation insurance fraud, after allegedly misrepresenting symptoms following a work-related injury, in order to receive $21,000 in undeserved benefits.

On July 16, 2019, Noori, while working as a welder, sustained a head injury and contusions on multiple parts of his body.

Following his injury, a workers’ compensation claim was filed with his employer’s insurance company and Noori began receiving workers’ compensation benefits. He presented himself as someone with severe amnesia and as someone who had difficulty performing daily functions of living, like speaking, walking or driving.

An investigation by the California Department of Insurance found Noori misrepresented his symptoms to medical professionals and those handling his claim.

Undercover surveillance showed Noori speaking, walking, and driving – all functions he claimed not to be able to do as a result of the injury. The surveillance also showed him performing duties at an automobile dismantling yard, like loading items onto a flatbed trailer and changing a spare tire.

In addition, two of his former co-workers reported they saw him out and about acting normally. One co-worker reported seeing Noori inside a retail store and that he was walking unassisted, laughing, and speaking on the phone. The second co-worker reported seeing Noori at another retail store and that he drove a vehicle into the parking lot, exited the vehicle and was able to walk with no walking aids.

After watching the video surveillance, his doctor reported the actions Noori was performing in the video were drastically different than the actions he was performing during his office visits. The doctor also reported that Noori showed no evidence of neurocognitive or orthopedic deficits during the entirety of this claim period.

Due to Noori’s misrepresentations, he received $21,000 in undeserved workers’ compensation payments and his employers’ insurance company lost an additional $80,679 in medical, legal and investigation costs.

Noori was arrested at his residence on April 13, 2021. He is scheduled to return to court on May 20, 2021.

This case is being prosecuted by the Sacramento County District Attorney’s Office.

April 19, 2021 – News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: San Jose Employer Faces 20 Premium Fraud Felonies. SoCal Chiropractor Sentenced for $6.6M Comp Kickback Scheme. Residential Care Facility Owner Indicted for $1M Premium Fraud. Simi Valley Contractor Pays SCIF $152K for Premium Fraud. DFEH Publishes Guidance on Employer Mandated Vaccinations. DWC Moves Eureka Office Permanently Online. NCCI Surveys Employer Post-Pandemic Workplace Plans. WCRI Study – California Claim Costs “Mostly Stable”. CMS Publishes Section 111 Reporting Guide Version 6.3. Industry Leaders Oppose Statewide MPN for WC Treatment.