Author: WorkCompAcademy

A Los Angeles Police Department officer assigned to the Van Nuys Station is facing allegations of workers’ compensation fraud. A felony arrest warrant had been issued for Officer John Bailey, 43, who was taken into custody on Tuesday.

The warrant stemmed from an investigation by the LAPD’s Special Operations Division, Worker’s Compensation Fraud Unit into a medical claim filed by Bailey in early 2018.

Bailey is accused of knowingly committing workers’ compensation fraud and receiving benefits under false pretenses, according to the LAPD. He lives in San Bernardino County, and was jailed in lieu of $60,000 bail, police said. An update on his custody status was not immediately available and it was unclear if he had retained an attorney.

There have been several arrests made within the LAPD for workers’ compensation fraud just this year.

In March, felony charges were filed against a retired LAPD officer in an alleged workers’ compensation fraud case. Former Officer Terry Johns, 56, was arrested by detectives with the Department’s internal affairs division, officials said. A criminal complaint accused Johns of eight counts, including workers compensations insurance fraud, insurance fraud, and attempted perjury under oath.

The arrest was made after an undercover surveillance investigation in which detectives were sent to see if the ex-officer was really injured, as he had claimed in official documents.

In January, a nine-year veteran of the Los Angeles Police Department, whose last assignment was with the Valley Traffic Division, was arrested on suspicion of workers’ compensation fraud. Jason Gordon, 48, of Los Angeles County was arrested on Jan. 17 on a felony arrest warrant related to workers’ compensation fraud and attempted perjury, the Los Angeles Police Department said.

Also in January, Gerald Pully, 51, an 18-year city employee, was last assigned to the LAPD’s Records and Identification Division was charged with one count of workers’ compensation fraud after exaggerating the extent of his injuries while receiving money from the department.

The National Council on Compensation Insurance published its first article on a series focused on Opioids.

This series is aimed at exploring three viewpoints on issues surrounding opioid use and workers compensation: those of doctors, insurers, and workers compensation regulators. NCCI conducted interviews with professionals from each of these areas and the articles in this series reflect their opinions on the topic.

In this first of a three-part series, it reported the views from several doctors in the workers compensation system.

Given the serious risks associated with opioids, including the potential for addiction and overdose, the physicians it interviewed agreed that it is the responsibility of the treating practitioner to prescribe opioids with care and to use evidence-based guidelines.

These guidelines outline when to prescribe opioids, as well as recommend the appropriate drug dosage. When prescribing an opioid, the treating physician must provide the patient with an accurate diagnosis, honest communication, and clinical expertise.

In recent years, however, prescribers have come under scrutiny for prescribing excessive amounts of opioid painkillers and, as a result, they are more careful in their practices.

The doctors that were interviewed also agreed that narcotics in general, and opioids specifically, became a first line of treatment for pain management. Only recently has there been careful evaluation of the potential for addiction and overdose.

Like most epidemics, the beginning is only clear in hindsight. According to the physicians we spoke with, significant marketing efforts to promote opioids and what may be characterized by some as controversial scientific research began a cultural shift for many physicians, starting with a study in the mid-1980s that addressed the use of opioids for pain relief.

The physicians said that seemingly, a new culture formed around the practice of pain management. That culture was further propelled in 2001, when the Joint Commission released new pain management standards, including the idea that pain is a vital sign, like body temperature and heart rate. These new standards perpetuated the notion that pain must be treated – it no longer needed to be endured, one doctor recalled. Pain itself was now viewed as a disease, and opioids became the supposed low-risk cure.

Within the workers compensation system, claimants in the coal industry became some of the first to feel the effects of these deemed “miracle drugs,” according to one doctor. Doctors and industries in West Virginia and Kentucky became the target of opioid marketing efforts. Those receiving the sales pitches were assured that new formulas for the extended-release opioid products were less likely to become habit-forming or result in addiction. Additionally, certain groups cashed in on not only dispensing huge quantities of opioids and other addictive drugs, but some doctors even scheduled visits with patients from out of state.

Within the workers compensation system, the doctors said they may have more influence with a patient who is veering toward opioid dependence or addiction – especially if the injured worker believes they may lose their benefits if they do not adhere to the agreed-upon treatment plan. Importantly, the doctors all noted that addressing psychosocial issues and fully understanding the patient’s sources of pain are crucial to getting the injured worker on a path to recovery.

The largest U.S. manager of prescription benefits is telling drugmakers that the current pricing model is broken, and it is taking aim at Amgen Inc and other makers of new migraine medicines to try and fix it.

Express Scripts told Reuters it is pressing them to forego the usual strategy of setting a high U.S. list price, then lowering the cost for health plans through hefty rebates. It is also seeking a refund if the drugs don’t work within a defined timeframe. The shift could help Express Scripts and other pharmacy benefits managers (PBMs) bring prices down, and deflect growing criticism of their role as “middlemen” in the drug supply chain.

Express Scripts is advising drugmakers to take that shift into account as they launch a new class of migraine drugs.

“If your expectation is that you are not going to actually get that high list price, then don’t do that to patients who have high co-pays,” Chief Medical Officer Steve Miller said in an interview, describing his message to Amgen and its rivals. “Let’s be more balanced. Let’s get back to where gross-to-net is not so different.” Amgen’s Aimovig is expected to be approved next month, followed by similar drugs from Teva Pharmaceutical Industries Ltd and Eli Lilly & Co that the companies say could benefit up to 4 million people in the United States.

Wall Street analysts expect Amgen to announce a list price of up to $10,000 per year for Aimovig once it is approved, setting the tone for competitors.

But Express Scripts and other PBMs restrict access to new drugs they deem too expensive, asking doctors to provide detailed evidence of why a specific patient may benefit, requiring the use of other drugs for a period of time or favoring cheaper rivals when available.

Express Scripts is also pushing Amgen and its peers to refund two-thirds of the cost of a migraine drug if a patient stops treatment within 90 days because it didn’t work or caused major side effects.

Such guarantees are becoming more prevalent for older drugs with competing products on the market, including diabetes and hepatitis C therapies. It would be unusual to introduce them for the first drug in an entirely new class of therapy. Amgen, which will market Aimovig in partnership with Novartis, declined to comment on talks with Express Scripts. Research chief Sean Harper said in a recent interview that payers share blame for the current pricing model.

Their demands for ever-larger rebates has forced manufacturers to use higher list prices as a benchmark, he said. “It is a ridiculous situation that we are in,” Harper said. “No one is paying the list price, but patients are exposed for a period of time” until they pay off their insurance deductible.

In interviews with Reuters, smaller PBM Abarca Health and insurer Highmark Health said they were adopting similar tactics to Express Scripts in negotiating coverage for the migraine drugs. CVS declined comment. Teva said it was evaluating the pricing environment for its migraine drug. Officials at Lilly did not respond to a request for comment.

Imbruvica, a compound that treats white blood cell cancers, has been a bargain at $148,000 per year. Until now, doctors have been able to optimize dosage for each patient by prescribing up to four small-dose pills of it per day.

But after results from a recent small pilot trial indicated that smaller doses would for most patients work as well as the large ones, its manufacturer, Janssen and Pharmacyclics, has decided on the basis of the doctors’ interest in smaller dosages to reprice all sizes of the drug to the price of the largest size.

This has the effect of tripling the price for patients, and doctors have now put off any plans for further testing of lower dosages.

According to the story in the Washington Post, a group of cancer doctors focused on bringing down the cost of treatments by testing whether lower – and cheaper – doses are effective thought they had found a prime candidate in a blood cancer drug called Imbruvica that typically costs $148,000 a year.

The science behind Imbruvica suggested that it could work at lower doses, and early clinical evidence indicated that patients with chronic lymphocytic leukemia might do just as well on one or two pills a day after completing an initial round of treatment at three pills per day.

The researchers at the Value in Cancer Care Consortium, a nonprofit focused on cutting treatment costs for some of the most expensive drugs, set out to test whether the lower dose was just as effective – and could save patients money.

Then they learned of a new pricing strategy by Janssen and Pharmacyclics, the companies that sell Imbruvica through a partnership. Within the next three months, the companies will stop making the original 140-milligram capsule, a spokeswoman confirmed. They will instead offer tablets in four strengths – each of which has the same flat price of about $400, or triple the original cost of the pill.

Just as scientific momentum was building to test the effectiveness of lower doses, the new pricing scheme ensures dose reductions won’t save patients money or erode companies’ revenue from selling the drug. In fact, patients who had been doing well on a low dose of the drug would now pay more for their treatment. Those who stay on the dose equivalent to three pills a day won’t see a change in price.

In a statement, Janssen and Pharmacyclics said the companies began to develop the new single-tablet dosing regimen in 2015 “as a new innovation to provide patients with a convenient one pill, once-a-day dosing regimen and improved packaging, with the intent to improve adherence to this important therapy.” They called the studies on lower dosing “highly exploratory in nature” and noted that patients who take a higher dose of the drug will save money.

Jennifer Brown, director of the Center for Chronic Lymphocytic Leukemia at the Dana-Farber Cancer Institute, said that the affordability of medication is a concern for her patients. Despite efforts to connect patients with resources to help them afford co-pays, some will request a drug that is cheaper but maybe less effective – or even push to discontinue the medicine.

Attorneys for injured workers continue to attempt to make a federal Racketeering case out of workers’ compensation claims administration, and so far have failed in the 6th and 9th Circuits. Yet they are unrelenting despite lack of success. They have just suffered another legal setback in the 6th Circuit.

The latest case involves Mark Marusza who suffered a serious work-related accident in fall 2011.

He filed a federal civil action claiming that defendant Accident Fund Insurance Company neglected to pay their share of Marusza’s medical bills, which resulted in Medicare paying for a portion of his bills. Accident Fund likewise refused to pay Nancy Gucwa – Marusza’s long-term, live-in girlfriend – for the attendant care she provided.

Marusza and Gucwa alleged in their federal court case that (1) Accident Fund and the defendant physicians defrauded Marusza, Gucwa, and others of benefits, in violation of the Racketeer Influenced and Corrupt Organizations Act; (2) Marusza is entitled to double damages under the Medicare Secondary Payer Act; (3) the defendant doctors tortiously interfered with Marusza’s contractual relationship and/or business expectancy by inducing Accident Fund to deny his benefits; and (4) Accident Fund falsely imprisoned Marusza by requiring him to attend an examination with a neuropsychologist.

The district court dismissed each claim under Federal Rule 12(b)(6) for failure to state a claim. Plaintiffs appealed and the United States Court of Appeals affirmed in the partially published case of Gucwa v. Lawley 2018 U.S. App. LEXIS 942.

The district court found that Marusza lacked standing because his personal injury does not qualify as an injury to “business or property” as contemplated by the RICO statute.

The Court affirmed the dismissal. In Jackson v. Sedgwick Claims Mgmt. Servs., Inc., an en banc panel of this court expressly held that “racketeering activity leading to a loss or diminution of benefits the plaintiff expects to receive under a workers’ compensation scheme does not constitute an injury to ‘business or property’ under RICO.” 731 F.3d 556, 566 (6th Cir. 2013) (en banc).

The district court also dismissed Marusza’s claim under the Medicare Secondary Payer Act because he had not alleged financial harm. The Court of Appeals again affirmed.

Because the Medicare Secondary Payer Act is not a qui tam statute, the financial injury suffered by the government does not confer standing upon other parties. Stalley v. Methodist Healthcare, 517 F.3d 911, 919 (6th Cir. 2008). Private plaintiffs must suffer their own individual harm; for instance, a private plaintiff may allege that they were paid less by Medicare than they would have been paid by the primary payer.