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Comp Attorney Suspended – Union Official Sentenced

WorkCompAcademy

Daniel Rush was sentenced to 37 months in prison for breaching his fiduciary duties to the United Food and Commercial Workers Union (UFCW) and participating in a money laundering scheme. The sentence was handed down by the Honorable Haywood S. Gilliam, Jr., U.S. District Judge, following Rush’s guilty pleas on June 22, 2017.

Rush pleaded guilty to one count of receiving an illegal payment as a union employee, in violation of 29 U.S.C. § 186(b)(1); one count of honest services wire fraud, in violation of 18 U.S.C. §§ 1343, 1346; and one count of conspiracy to commit structuring and money laundering, in violation of 18 U.S.C. § 371.

According to his plea agreement, between 2010 and 2015, Rush engaged in a series of schemes to enrich himself in violation of federal law and his fiduciary duties:

In 2010, he conspired with attorney Marc L. TerBeek and others to structure approximately $420,000 in illegal drug proceeds into the banking system. Although the money was a loan from someone in the cannabis industry, Rush deliberately mischaracterized monthly interest payments as consulting fees.

While serving as the Organizing Coordinator for the unofficial cannabis division at UFCW, Rush gave an employer a corrupted neutrality agreement in exchange for personal loan forgiveness. He also accepted kickbacks from TerBeek in exchange for referring cannabis businesses he encountered in his union role to TerBeek’s law practice.

Rush abused his position as Executive Treasurer and Board Member at the Instituto de la Raza Laboral (Instituto) in similar fashion by demanding and accepting remuneration from TerBeek in exchange for establishing TerBeek as an approved legal provider for workers’ compensation cases at the Insituto.

Finally, Rush engaged in corrupt conduct as a Commissioner on the Berkeley Medical Cannabis Commission when he attempted to extort a business that had applied for a dispensary permit. Using TerBeek as an intermediary, Rush communicated that if the applicant did not offer him a salaried job, with benefits, he would take adverse action against its application.

In addition to the prison term, the Court also sentenced the Rush to a three-year term of supervised release and ordered him to pay a fine of $7500.

Rush’s coconspirator, East Bay attorney Marc L. TerBeek pleaded guilty on February 16, 2017, to one count of making an illegal payment to a union employee, in violation of 29 U.S.C. § 186(a) and one count of willfully violating an anti-structuring regulation, in violation of 12 U.S.C. § 1956. Judge Gilliam scheduled TerBeek’s sentencing hearing for November 27, 2017.

Last August, the California State Bar issued the following Order regarding attorney Marc TerBeek. “Since respondent Marc Lawrence Terbeek, State Bar Number 166098, has been convicted of violating title 29 United States Code section 186(a) (making payment to an employee of union organization), a felony which may or may not involve moral turpitude, and title 12 United States Code section 1956 (willful Violation of anti-structuring regulation), a misdemeanor which may or may not involve moral turpitude, it is ordered pursuant to Business and Professions Code section 6102 that respondent be suspended from the practice of law effective September 5, 2017, pending final disposition of this proceeding.”

The prosecution is the result of an investigation by the FBI and the Internal Revenue Service-Criminal Investigation Division.

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Is Artificial Intelligence Better than a Radiologist?

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Add diagnosing dangerous lung diseases to the growing list of things artificial intelligence can do better than humans. A new arXiv paper by researchers from Stanford explains how CheXNet, the convolutional neural network they developed, achieved the feat.

CheXNet was trained on a publicly available data set of more than 100,000 chest x-rays that were annotated with information on 14 different diseases that turn up in the images.

The researchers had four radiologists go through a test set of x-rays and make diagnoses, which were compared with diagnoses performed by CheXNet.

Not only did CheXNet beat radiologists at spotting pneumonia, but once the algorithm was expanded, it proved better at identifying the other 13 diseases as well.

Early detection of pneumonia could help prevent some of the 50,000 deaths the disease causes in the U.S. each year. Pneumonia is also the single largest infectious cause of death for children worldwide, killing almost a million children under the age of five in 2015.

Andrew Ng, a coauthor of the paper and the former head of AI research at Baidu, thinks AI is going to be relied upon in medicine more and more. He previously worked on an algorithm that can, after being trained on electrocardiogram (ECG) data, identify heart arrhythmias better than a human expert.

Another deep-learning algorithm recently published in Nature was able to spot cancerous skin lesions just as well as a board-certified dermatologist.

Radiologists in particular have been on notice for a while. Previous research has shown that AI is as good as or better than doctors at spotting problems in CT scans.

Geoffrey Hinton, one of the pioneers of deep learning, told the New Yorker that because of the advances in AI, medical schools “should stop training radiologists now.” Analyzing image-based data sets like x-rays, CT scans, and medical photos is what deep-learning algorithms excel at. And they could very well save lives.

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Subrogation Includes “All Benefits” Paid by Employer

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In August 2012, Denise Michelle Duncan was acting within the course and scope of her employment with Acosta Inc. when she fell and injured herself on a Wal-Mart Stores, Inc. premises.

Hartford Accident & Indemnity Company was Acosta’s workers’ compensation insurer and paid Duncan more than $152,000 in benefits, including more than $115,000 in medical expenses and roughly $37,000 in temporary disability indemnity for Duncan’s lost wages.

Duncan sued Wal-Mart Stores, Inc. for personal injuries. The trial court entered judgment finding Wal-Mart liable for Duncan’s injuries.

Under Labor Code sections 3852 and 3856, appellant Hartford Accident & Indemnity Company applied for a lien on Duncan’s judgment to obtain reimbursement for the workers’ compensation benefits it paid Duncan, including medical expenses and temporary disability payments for lost wages.

Since the judgment she received did not include compensation for Duncan’s lost wages (because she did not seek those damages at trial), the trial court granted Hartford a lien on Duncan’s judgment, but reduced the lien amount to exclude the indemnity payments for lost wages.

Hartford appealed the trial court’s postjudgment order, arguing the court exceeded its authority by reducing the lien amount for any item other than reasonable attorney fees and costs. The court of appeal agreed in the unpublished case of Duncan v. Wal-Mart Stores.

The Labor Code permits an employer to recover workers’ compensation benefits it has become obligated to pay in three ways: (1) bringing an action directly against the tortfeasor (§ 3852), (2) joining as a party plaintiff or intervening in an action brought by the employee (§ 3853), or (3) allowing the employee to prosecute the action and then applying for a first lien against the resulting judgment or settlement. (§ 3856(b).)

“All benefits required to be paid by the employer, even though . . . in excess of those ordinarily enjoined by the Workmen’s Compensation Act, are deemed the ‘compensation’ and ‘special damages’ of section 3856[(b)] and are subject to the employer’s lien. Thus, continued salary paid the workman during disability as required by ordinance [citations], or municipal charter [citation], or statute [citations], is subject to the employer’s lien. Such salary, for which the employee renders no services, is deemed to be ‘compensation’ for which, under sections 3852 and 3856[(b)] the employer is given the right of reimbursement.” (Harvey v. Boysen (1975) 50 Cal.App.3d 756, 761 (Harvey).)”

The Labor Codes plain language and the case law applying it grant Hartford a first lien on the judgment in the amount it paid Duncan for worker’s compensation benefits. Duncan’s choice not to seek lost wages at trial does not diminish Hartford’s lien rights under the workers’ compensation statutory scheme.

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Francis Stevens Case Headed Back to Court of Appeal

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The Francis Stevens case is headed back to the Court of Appeal, after the WCAB ruled that a portion of the medical treatment guideline relied upon by the IMR process was “unlawful” and that the WCAB now has wide discretion to be involved in the IMR process.

In 2015 the Court of Appeal upheld the constitutionality of the IMR process in one of the most closely watched cases in California workers’ compensation. The published case of Stevens v WCAB involved Frances Stevens who tripped and broke her foot as she carried boxes of magazines. She was diagnosed with chronic or complex regional pain syndrome and claims to be mostly confined to a wheelchair and was awarded total permanent disability.

For several years she had the assistance of a home health aide. In late 2012, the aide was injured. This led the PTP to submit an RFA to SCIF for a replacement aide which was submitted to UR and denied. The request was also denied after the IMR process. Stevens appealed the IMR decision, but the WCJ found there was no provision for a reversal since the labor code provides only limited circumstances upon which IMR can be reversed.

Stevens challenged constitutionality of the IMR process. In response the WCJ said “section 3.5 of article III of the Constitution withholds from administrative agencies the power to determine the constitutional validity of any statute.” The WCAB denied reconsideration and agreed that it could not rule on the constitutional issue saying “In sum, for purposes of appeal to the WCAB it does not matter whether the reasons given for an IMR determination support the determination unless the appealing party proves one or more of five grounds for appeal listed by the Legislature in section 4610(h) by clear and convincing evidence. Applicant did not do that in this case.

The First District Court of appeal concluded “that her state constitutional challenges fail because the Legislature has plenary powers over the workers’ compensation system under article XIV, section 4 of the state Constitution (Section 4). And we conclude that her federal due process challenge fails because California’s scheme for evaluating workers’ treatment requests is fundamentally fair and affords workers sufficient opportunities to present evidence and be heard.”

Although Stevens may have lost the battle, she may not have lost the war since she was given a second chance to prove her case on the merits. The Court of Appeal stated “we also conclude that the Workers’ Compensation Appeals Board (the Board) misunderstood its statutory authority in one respect when it reviewed Stevens’s appeal. The Board concluded that it was unable to review the portion of the IMR determination that found, “Medical treatment does not include . . . personal care given by home health aides . . . when this is the only care needed.” Under the 2013 reforms, however, the Board is empowered to review an IMR decision to consider whether care was denied without authority because the care is authorized under the MTUS. (§ 4610.6, subd. (h)(1) & (5).) We therefore remand this matter to the Board to consider whether Stevens’s request for a home health aide was denied without authority.”

And indeed the WCAB recently ruled in its Opinion and Decision After Remittitur “that the 2009 Guideline is unlawful and invalid since it fails to address the medical treatment in the form of personal home care services sought by Ms. Stevens.”

In arriving at this conclusion the WCAB interpreted the language of the Court of Appeal in the published decision as authorizing the WCAB to have “considerable” authority over IMR. “Thus, the Court held that the Appeals Board has considerable authority to review both factual and legal questions in its determination of whether an IMR determination was adopted without authority or based on a plainly erroneous fact not subject to expert opinions. We conclude that the 2009 Guideline is contrary to California law and the IMR determination that relied on it was therefore adopted without authority.”

The State Fund responded by filing a petition for writ of review with the Court of Appeal in August. By September a number of stakeholders were involved as amicus parties. And on October 25 the Court of Appeal issued a writ of review, which means that the entire dispute will now be heard, again, in that tribunal. However the outcome is many months, if not years away.

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DWC Suspends 12 More Providers

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The Division of Workers’ Compensation (DWC) has suspended 12 more medical providers from participating in California’s workers’ compensation system, bringing the total number of providers suspended this year to 85. Nine providers were suspended for fraud or criminal actions and three for administrative reasons.

DWC Administrative Director George Parisotto issued suspension orders against the following providers:

– Paul Richard Randall of Orange, health care marketer and owner of Summit Medical Group, pled guilty in federal court on April 16, 2012 for his role in a spinal surgery kickback scheme. The scheme involved recruiting chiropractors and doctors to refer patients in exchange for illegal kickbacks involving nearly $600 million in fraudulent claims.

– Harold “Harry” Persaud, Westlake, Ohio physician, was found guilty on October 2, 2015 in federal court for health care fraud and money laundering. The charges stem from Persaud’s practice of performing unnecessary catheterizations, tests, and stent insertions and causing unnecessary coronary artery bypass surgeries as part of a scheme to overbill Medicare and private insurers approximately $7.2 million. Persaud was sentenced to 20 years in federal prison. His certificate was also revoked by the Medical Board of California on September 1.

– Jeremy Goodwin, Mt. Shasta physician, had his license revoked on September 8 following violation of the terms of his 2014 probation from a prior disciplinary action by the Medical Board of California. Goodwin was charged with gross negligence for his treatment of a patient who died one day after receiving an excessive dosage of the opiate drug fentanyl.

– Christopher Dean Owens, San Francisco physician, had his license revoked on July 21 on findings that include self-administering illicit drugs.

– Guven Uzun, Marina Del Rey physician, had his certificate revoked by the Medical Board of California on July 19 after violating the terms of his 2011 probation due to charges of negligence and falsifying medical records

– Farhad Hafezi, Covina physician, was found guilty of felony charges of sexual assault involving a minor. He is a registered sex offender. His medical license was revoked by the Medical Board of California in 2014.

– Troy Ericsen Palmer, Chino physician, surrendered his license to the Osteopathic Medical Board of California on April 4 after pleading guilty to possessing child pornography.

– Keith Robert Deorio, Santa Monica physician, had his license revoked by the Medical Board of California on July 21 after repeated violations of the Medical Practice Act.

– Christopher Allen Scott, Palm Springs vocational nurse, had his license revoked by the California Board of Vocational Nursing and Psychiatric Technicians in January following findings that include the alleged use of controlled substances.

– John Thomas Moranville, Lafayette physician, had his license revoked by the Medical Board of California on August 18 following an evaluation finding that he suffers from an illness that impairs his ability to practice medicine safely.

– Joseph Struzzo, Cathedral City physician, had his certificate revoked by the Medical Board of California on August 4 following an evaluation finding that he suffers from an illness that impairs his ability to practice medicine safely.

– Adly Ayad Azab, West Covina physician, had his license revoked by the Medical Board of California on August 23 following an evaluation finding that he suffers from an illness that impairs his ability to practice medicine safely.

AB 1244 (Gray and Daly), which went into effect January 1, introduced new changes to the workers’ compensation system and requires the division’s Administrative Director to suspend any medical provider, physician or practitioner from participating in the workers’ compensation system in cases such as noted above.

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Helping a New PTP Understand Workers’ Compensation

WorkCompAcademy

All to often a claims administrator may encounter a new PTP who has happened upon an injured worker for treatment, despite the fact that they may not know much if anything about workers’ compensation concepts, rating, or reporting. This imposes a burden upon the administrator to hand hold the PTP every step of the way, a tedious, and time consuming task.

Now there are online resources that can get the job of teaching the PTP claim fundamentals to help with the task of bringing a new PTP up to speed.

The Division of Workers’ Compensation launched its second free online physician education course. This course is highly recommended for California’s Qualified Medical Evaluators (QMEs). It is also available to the public and may be useful for attorneys, claims administrators and medical providers participating in the California workers’ compensation system.

“Evaluating California’s Injured Workers: Qualified Medical Evaluators (QME)” is the second in a planned series of educational modules developed for medical doctors, chiropractors and nurses. QMEs play a critical role in resolving disputes within the workers’ compensation system.

The online education will cover:

– How to prepare for an evaluation and outline the components of a quality report
– How to properly identify and apply the complexity factors in the medical-legal fee schedule to ensure accurate billing
– Administrative regulations to stay in compliance as a QME
This activity has been approved for AMA PRA Category 1 Credit – as well as 1 hour of QME continuing education credit.

Access to the physician education module can be found on the DWC website and will be available by mobile app soon. The first education module, “Caring for California’s Injured Workers: Using California’s Medical Treatment Utilization Schedule (MTUS),” is also available on the website.

This activity has been planned and implemented in accordance with the accreditation requirements and policies of the Institute for Medical Quality/California Medical Association (IMQ/CMA) through the joint providership of the Center for Occupational and Environmental Health (COEH) and State of California Department of Industrial Relations, Division of Workers’ Compensation.

The Center for Occupational and Environmental Health is accredited by the IMQ/CMA to provide continuing medical education for physicians.

The Center for Occupational and Environmental Health designates this enduring material for a maximum of 1 AMA PRA Category 1 Credit(s)™. Physicians should claim only the credit commensurate with the extent of their participation in the activity.

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Post Injury Accommodations Must Relate to a Disability

WorkCompAcademy

Anthony White worked as a custodian for Los Angeles World Airports, a department of the City of Los Angeles. In November 2005, while off duty, he sustained several gunshot wounds to his left leg. He was briefly hospitalized and took several medical leaves of absence to recover from his injury. He returned to work in May 2006 and was assigned to perform light duty tasks in a warehouse.

At the end of August 2006, White took another medical leave of absence which lasted for approximately two years. According to one of White’s physicians, White was suffering from “Post Traumatic Stress Disorder and Intractable Pain secondary to gunshot wound in 2005.”

In May 2008, during his leave, White was arrested in Arizona and was apparently charged with nine felony counts relating to identity theft and fraud. When White returned to work in 2008, his prior position (day shift custodial supervisor) was not available and the airport placed him in an available position at the same level on the graveyard shift.

White did not like working the night shift and requested a transfer to the day shift as a reasonable accommodation for disabilities related to his 2005 injury. However, because White failed to provide the airport with any viable explanation why working the day shift rather than the night shift would impact his disability, the airport denied his reasonable accommodation request.

White resigned from his position in 2010 on the same day he began serving a sentence on two felony charges in Arizona. He subsequently filed the present lawsuit against the airport, the City, and others, in which he alleges a variety of disability related employment claims under the Fair Employment and Housing Act (FEHA).

The case was tried to a jury. The court granted the airport’s nonsuit motion on several claims; the jury found in favor of the airport on White’s remaining claims. The outcome was affirmed in the unpublished case of White v City of Los Angeles.

White’s primary contention on appeal is that the trial court erred in denying his motion for new trial. He argues the evidence does not support either the jury’s verdict or the court’s nonsuit.

The court of appeal held that the “evidence – when properly viewed in the light most favorable to the judgment – does not support White’s assertion that the airport refused to consider any accommodation absent a showing of a “permanent restriction.” During the discussions with White about his request for an accommodation, the airport focused mainly on whether White had any limitations due to his disability and, if so, how working during the day rather than at night might impact those limitations. Given that White said he could perform his job without any accommodation and the City’s medical office cleared White to return to work without any restrictions, the airport’s request for some additional information regarding his request for accommodation was not unreasonable.”

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Experts Say “Amazon Effect” Threatens Drug Prices

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German drugmaker Bayer has hired the head of Nestle’s baby food business to help it reverse a drop in revenue from consumer health brands, which often fail to appeal to buyers on Amazon and other online platforms.  Bayer has appointed Nestle’s Heiko Schipper, 48, to run the Consumer Health division as a group board member from March 1 next year, replacing Erica Mann.

Bayer was caught off guard by the speed of U.S. consumers switching to online stores at the expense of established drugstores. Major over-the-counter (OTC) drug rival GlaxoSmithKline has also struggled with the transition.

The shake-up in the segment is a harbinger of what could be in store for the much larger prescription drug sector when Amazon moves into that market and uses its purchasing power to squeeze prices, as is widely anticipated.

Moves such as drug distributor McKesson’s purchase of a CVS Health Corp unit that provides services to pharma firms as well as CVS Health’s planned push into next-day delivery are seen as pre-empting Amazon’s potential entry into prescription drug sales.

Bernstein analysts said in a note earlier this month they expect Amazon to “cause long-term margin compression through the drug supply chain”.

In the market for non-prescription treatments, consumers are more easily comparing prices on the Internet, with Bayer’s premium brands such as sunscreen Coppertone or allergy remedy Claritin often falling by the wayside.

“The U.S. is the market that is facing tremendous structural changes,” outgoing executive Erica Mann said in an analyst call discussing third-quarter results this month. “We also noted in the U.S. market significant channel shifts, such as an acceleration towards e-commerce and, in particular, I can call it the Amazon effect… Consumer behaviors are shifting and they’re really moving towards e-commerce channels as well as searching for value.”

Both Pfizer and Germany’s Merck KGaA are making preparations to sell their respective OTC businesses.

Bayer’s OTC drugs unit, boosted by a $14 billion acquisition of brands from U.S. rival Merck & Co in 2014, reported a 7.4 percent fall in third-quarter sales, down 2.9 percent adjusted for currency fluctuations and portfolio changes.

U.S. drugstore chains have merged in response to the online threat, wielding increased purchasing power to squeeze procurement prices.

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Technology Tackles Medication Compliance Problems

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In medicine, compliance describes the degree to which a patient correctly follows medical advice. Most commonly, it refers to medication or drug compliance, but it can also apply to other situations such as medical device use, self care, self-directed exercises, or therapy sessions.

Poor compliance with drug regimens is a common problem in many disease areas, especially when patients suffer from chronic conditions. In particular, low rates of adherence to therapies for asthma, diabetes, and hypertension are thought to contribute substantially to the human and economic burden of those conditions. Estimates from the World Health Organization indicate that only about 50% of patients with chronic diseases living in developed countries follow treatment recommendations.

But new technology may help improve compliance statistics. The FDA has approved the first digital pill with an embedded sensor to track if patients are taking their medication properly, marking a significant step forward in the convergence of healthcare and technology.

The medicine is a version of Otsuka Pharmaceutical Co Ltd’s established drug Abilify for schizophrenia, bipolar disorder and depression, containing a tracking device developed by California based Proteus Digital Health.

The system offers doctors an objective way to measure if patients are swallowing their pills on schedule, opening up a new avenue for monitoring medicine compliance that could be applied in other therapeutic areas.

The system works by sending a message from the pill’s sensor to a wearable patch, which then transmits the information to a mobile application so that patients can track the ingestion of the medication on their smartphone. The underlying technology is Proteus Discover which is comprised of ingestible sensors, a small wearable sensor patch, an application on a mobile device and a provider portal.

About the size of a grain of salt, the sensor has no battery or antenna and is activated when it gets wet from stomach juices. That completes a circuit between coatings of copper and magnesium on either side, generating a tiny electric charge.

In the longer term, such digital pills could also be used to manage patients with other complicated medicine routines, such as those suffering from diabetes or heart conditions.

Proteus has been working on the pill tracking system for many years and the sensor used in Abilify MyCite was first cleared for use by the FDA in 2012.

The California company has attracted investments from several large healthcare companies, including Novartis AG, Medtronic Inc and St. Jude Medical Inc, as well as Otsuka.

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California Comp Medical Costs Continue to Decline

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Medical payments per workers’ compensation claim with more than seven days lost time in California have decreased steadily since the enactment of reform legislation in 2013, according to a recent study by the Workers Compensation Research Institute (WCRI).

The study, CompScope Medical Benchmarks for California, 18th Edition, examined medical payments, prices, and utilization in California and compared them with 17 other states over a period from 2010 through 2015.

“We continue to monitor the impact of California reform legislation on medical payments, prices, and utilization,” said Ramona Tanabe, WCRI’s executive vice president and counsel, referring to Senate Bill (SB) 863, a comprehensive reform bill that affected many aspects of the California system since Jan. 1, 2013. “The decrease in medical payments per claim in California likely reflects the impact of SB 863 provisions.”

The following are among the study’s other findings:

1) Prices paid for primary care services increased while prices for specialty care decreased following the transition to the resource-based relative value scale (RBRVS) based fee schedule beginning in 2014.

2) The average payment per claim for using ambulatory surgery center (ASC) facilities decreased after a decrease in fee schedule rates for ASCs.

3) Prescription payments per claim with prescriptions decreased after 2012, perhaps reflecting, in part, the impact of an independent medical review process implemented by SB 863.

3) The percentage of claims with hospital services decreased from 2010 to 2015, part of a general trend seen in many states. In California, hospital payments per claim remained fairly stable.

In all, medical payments per claim in California were close to the median of the 18 study states for post-reform 2013 claims with experience through 2016. Pre-reform, California had higher medical payments per claim among the study states.

WCRI studied medical payments, prices, and utilization in 18 states, including California, and looked at claim experience through 2016 on injuries that occurred mainly from 2010 to2015. WCRI’s CompScope Medical Benchmarks studies compare payments from state to state and across time.

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