Author: WorkCompAcademy

What is InsurTech?

In an over-simplified world, many see InsurTech as being the technology behind insurance. In the real world, however, InsurTech is a term applied to the many segments of new technology that are disrupting the insurance space: smartphone apps, consumer activity wearables, claim acceleration tools, individual consumer risk development systems, online policy handling, automated compliance processing, and more.

InsurTech is not just an increase in the way that technology is disrupting the insurance industry, but is also changing consumer expectations and demands. Take for example the way that Uber has changed consumer travel preferences and demands, while uprooting a well established and once thriving industry.

Last February, InsurTech startup ChronWell raised $4.5 million in a Series A funding round which the company said “will be used to fund the first phase of the company’s platform which covers triage, on-site care, care coordination and personalized assistance service.”

The Fort Lauderdale based company has now launched a pilot program in California which is aimed to disrupt the state’s workers’ compensation system with technology-enabled triage and care coordination services.

The mobile platform for workers’ compensation will be used by California Farm Management (CFM) to help injured farm workers in the state.

CFM started in August of 2005 to serve the farming community throughout California. It is a collective of farmers who have pooled their resources to successfully self-insure. The CFM collective provides workers’ compensation coverage to approximately 90,000 employees.

ChronWell’s application is being deployed with one of CFM’s largest employers, Cream of the Crop Companies, which employs 5,000 to 7,000 workers, depending on the season. The pilot program will use ChronWell’s Recovry solution, which  addresses on-site injuries and direct care for the best results.

“Our mission is to bring empathy back into healthcare and help injured workers recover faster by providing transparent, patient-centric services,” said ChronWell CEO Joe Rubinsztain. “Partnering with SIS for our pilot program is a perfect fit. Self-insured groups can truly benefit from innovative solutions that optimize recovery for injured workers.”

ChronWell’s AI-powered platform covers triage, on-site care, care coordination and personalized assistance service. If an employee gets injured on the job, they can go to the ChronWell platform and consult with a healthcare professional who, backed by AI, will determine the best course of action by recommending self-care, on-site care or a healthcare facility. The service also provides follow-ups with the worker and manages the claim.

“The workers’ compensation system is broken,” according to Rubinsztain, who said a complex healthcare system, overloaded claims adjusters, legacy technology systems, stringent bureaucratic requirements and mountains of paperwork are just some of the issues compounding to slow claimant service, which triggers poor customer satisfaction and a high litigation rate.

An experimental osteoarthritis drug developed by Pfizer Inc and Eli Lilly and Co achieved its main goal of lowering pain in a late stage trial, the companies said on Wednesday, potentially offering a safer alternative to opioids.

The experimental drug tanezumab is undergoing clinical trials for the treatment of various pain entities, including chronic low back pain, bone cancer pain, and interstitial cystitis. Tanezumab is part of an investigational class of pain medications known as nerve growth factor (NGF) inhibitors.

Tanezumab works by selectively targeting, binding to and inhibiting NGF. NGF levels increase in the body as a result of injury, inflammation or in chronic pain states.

By inhibiting NGF, tanezumab may help to keep pain signals produced by muscles, skin and organs from reaching the spinal cord and brain.

Tanezumab has a novel mechanism that acts in a different manner than opioids and other analgesics, including nonsteroidal anti-inflammatory drugs (NSAIDs), and in studies to date tanezumab has not demonstrated a risk of addiction, misuse or dependence.

The study demonstrated that patients who received two doses of tanezumab separated by eight weeks experienced a statistically significant improvement in pain, physical function and the patients’ overall assessment of their OA, compared to those receiving placebo.

“There is a substantial need for innovative new treatment options for osteoarthritis, as many patients are unable to find relief with currently available medicines and continue to suffer,” said Ken Verburg, tanezumab development team leader, Pfizer Global Product Development.

“We are encouraged by these results, which speak to the potential of tanezumab as a non-opioid treatment option for pain reduction and improvement in physical function in people living with osteoarthritis pain.”

Preliminary safety data showed that tanezumab was generally well tolerated, with approximately 1% of patients discontinuing treatment due to adverse events. Rapidly progressive osteoarthritis was observed in tanezumab-treated patients at a frequency of less than 1.5%, and was not observed in the placebo arm. There were no events of osteonecrosis observed in the trial. No new safety signals were identified.

In June 2017, Pfizer and Lilly announced that the U.S. Food and Drug Administration (FDA) granted Fast Track designation for tanezumab for the treatment of OA pain and CLBP.

Tanezumab is the first NGF inhibitor to receive Fast Track designation, a process designed to facilitate the development and expedite the review of new therapies that treat serious conditions and fill unmet medical needs.

Cynthia Ann Smith owned and operated a flower shop in Menlo Park.

In 2015, a multi-agency task force investigated Smith’s business, which revealed she failed to pay correct workers’ compensation insurance premiums and related payroll taxes over the course of several years.

Pursuant to a negotiated disposition, Smith pled no contest to count 1 workers’ compensation fraud (Ins. Code, § 11760, subd. (a) and count 14. failure to collect, account, or pay over required tax amounts.

Under the terms of the plea agreement it was agreed she would not be sentenced to state prison; she would be granted probation with a maximum of 90 days to be served in county jail; all other counts and allegations would be dismissed; the amount of restitution would be reserved and determined by the court subject to a Harvey waiver; and the court would consider reducing felony counts 1 and 14 to misdemeanors (Pen. Code, § 17) and terminating probation upon full payment of restitution.

At sentencing, the trial court suspended imposition of sentence, placed Smith on formal probation for five years, with terms and conditions including 90 days in county jail and imposition of statutory fines and fees. Smith objected to the restitution report and requested a restitution hearing.

At the hearing, Smith stipulated to restitution amounts awarded to the California Employment Development Department ($41,187 plus interest); to FTD Company ($61,783 plus interest); and to State Farm Insurance Company ($12,998 plus interest) Smith contested amounts claimed by James Waldschmidt. Waldschmidt asserted a restitution claim for over $100,000.

Waldschmidt testified at the restitution hearing that he met Smith in a bar in San Carlos in 2014. She offered him a place to live at her home in Menlo Park, a full-time job as a driver, and a rate of pay starting at $10 per hour. Waldschmidt totaled his work hours weekly and gave Smith a copy of the wage statement. He was never paid and claimed $45,000 for unpaid work and overtime.

The court ordered Smith to pay Waldschmidt $15,000 in restitution for unpaid wages including overtime hours, less an offset of $800 in unpaid rent, for a total of $14,200 plus interest. Smith appealed the restitution order. The Court of Appeal affirmed in the unpublished case of People v Cynthia Ann Smith.

A court may use any rational method of fixing the amount of restitution which is reasonably calculated to make the victim whole and which is consistent with the purpose of rehabilitation. (In re Brian S. (1982) 130 Cal.App.3d 523, 527.) Even though the amount was contested, the record does not indicate the court awarded anything in excess of the victim’s actual economic losses. (People v. Smith (2011) 198 Cal.App.4th 415, 431 [except under Pen. Code, § 1202.4, subd. (f)(3)(F), “restitution orders are limited to the victim’s economic damages”].) Smith fails to raise an arguable issue.

John Thomas Terrence, 75, of Marina del Rey, pleaded guilty to health care fraud involving a scheme to defraud the California workers’ compensation insurance system.

According to court documents, Terrence, a clinical psychologist, saw patients in Bakersfield by “Skype,” generated reports for each patient that were virtually word-for-word identical, and then submitted identical bills to the insurance companies.

Co-defendants Bhahar Gharib-Danesh, 41, of Woodland Hills, and Na Young Eoh, 44, of Bakersfield, were chiropractors working at the same company. They previously pleaded guilty to health care fraud charges in this case.

According to a federal indictment Gharib-Danesh was a chiropractor and the manager of Pain Relief Health Centers (PRHC). PRHC was headquartered in Los Angeles, and had clinics in Bakersfield, Visalia and Fresno, as well as in Los Angeles County.

Na Young Eoh was also a chiropractor, and was the treating physician for PRHC’s Kern County workers’ compensation claims..

PRHC recruited patients who were workers claiming to have an injury. In treating the patients, Gharib instructed her staff to add as many injured body parts for treatment as possible to generate higher billings. The treatment plan generally included shock wave therapy, electro stimulation therapy, myo-facial release/massage, physical therapy, chiropractic manipulation, compound creams, and psychological evaluation.

Nearly every patient was scheduled for the same treatments, and the maximum amount of treatments allowed by law was generally billed to the insurance company.

Eoh operated out of the Bakersfield Clinic, the Visalia Clinic, and the Fresno Clinic and would sign the treatment plans and referral forms. The indictment further alleges that Gharib directed Eoh to refer all patients who came into the clinic to Terrence for a psychological evaluation, regardless of the injury the patient reported. Terrence submitted bills and reports for each patient that were virtually identical. He also allegedly fraudulently billed for patients at a rate higher than legally allowed. According to the indictment,

Terrence provided each patient with approximately 20.8 hours of psychological evaluations in a single day. On one day, Terrence billed a total of 291.2 hours for treating 14 patients. In one period of two weeks, Terrence billed over a thousand hours treating patients and writing reports. Between 2005 and 2012, Terrence submitted claims for psychological services in workers’ compensation cases totaling in excess of $5.6 million.

Pain Free Diagnostics Inc. (dba Pain Free Management) pleaded guilty on July 9, 2018, to conspiracy to commit health care fraud and agreed to pay restitution to the defrauded worker’s compensation insurers in the amount of $1.2 million.

A stunning investigative report published by the Los Angeles Times provides several examples of Los Angeles police officers and fire fighters filing and recovering what it claims are exaggerated or outright fake “skin and contents” workers compensation claims costing taxpayers billions of dollars.

In one example, the Times reports that former LAPD Officer Jonathan Hall ended his career the way many veteran officers do these days, claiming job-related injuries across most of his body. Hall filed claims saying he’d injured his knees, hips, heart (high blood pressure), back, right shoulder – even his right middle finger.

The ailments had existed for months, in some cases years, and had not previously prevented him from working, Hall said in a recent interview. But he was burned out, the target of an internal affairs investigation and desperate to avoid going back to the station. Hall’s timing raised suspicion, and he was soon videotaped leading scuba dives and lifting heavy equipment despite the alleged injuries.

But, according to the Los Angeles Times, he is far from alone in asserting that so many parts of his body had been injured on the job.

In fact, claims involving at least five injured body parts have become by far the most common in California, according to a Times data analysis of millions of workers’ compensation cases spanning nearly three decades. In the past, injuries to a single body part – a knee, a shoulder, the lower back – were the most prevalent, the data show.

The strategy is common among veteran cops and firefighters who get up to a year off at their full salary, tax free, for each job-related injury their doctor diagnoses. Their employers also pay the associated medical bills and often a hefty cash settlement based on the extent and severity of the injuries.

Multiple lawyers and patients involved with the workers’ compensation system described a similar process: An officer nearing the end of his career goes to an attorney’s office complaining about a sore shoulder and is asked how his knees feel, if his back aches or if he is under a lot of stress. He is then referred to a doctor with whom the attorney has a long-standing relationship.

After a few decades on the job, it’s not hard for a client to fill out what industry insiders call a “skin and contents” case, attorney Paul Young said. Young is an attorney who was a partner at two high-profile Los Angeles-area law firms that represent cops and firefighters.

Thousands of such claims have been filed by participants in Los Angeles’ controversial Deferred Retirement Option Plan – or DROP, as it’s known – which allows veteran cops and firefighters to collect their salaries and pensions simultaneously for the last five years of their careers.

A Times investigation in February found that nearly half of the people who have joined the program since its inception in 2002 subsequently went out on injury leave – at nearly twice their normal pay – typically for bad backs, sore knees and other injuries that afflict aging bodies regardless of profession.

As an example, the Times reports that  former Los Angeles Fire Capt. John Kitchens was paid more than $1.5 million while in DROP – $645,000 of that in extra pension payments – despite missing more than a year and a half on injury and sick leave, city payroll records show.

Despite his health issues, Kitchens was able to travel to the Galapagos Islands in January 2013 to dive with hammerhead sharks, according to his Facebook page. In the comments beneath a photo of him in scuba gear on a boat at Gordon Rocks – a bucket-list destination for many divers – his only complaint was that the photos he took of the massive sharks underwater turned out blurry.

There’s nothing unusual about what he did, Hall said, and he knows many other officers who have engaged in more strenuous physical activity while out with injuries.

He’s willing to speak out about the workers’ compensation abuse because he has nothing left to lose, Hall said. Other cops and firefighters who have been through the system won’t talk, he said, because doing so would “screw over a lot of their friends. It’s corrupt, and a lot of people do it.”