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CWCI Appoints New General Counsel

Ellen Sims Langille has been named to succeed Michael McClain as general counsel of the California Workers’ Compensation Institute according to Alex Swedlow, president of the Oakland-based research group.

Ms. Langille received her undergraduate degree from UC Santa Cruz and her law degree from the University of California, Hastings College of the Law. Certified as a specialist in workers’ compensation by the State Bar of California, Ms. Langille is currently a partner at the defense firm of Finnegan, Marks, Theofel & Desmond in San Francisco. She brings nearly 25 years of industry experience to the Institute, having specialized in appellate level workers’ compensation cases throughout her career, as well as having served as amicus counsel for the Institute and other organizations in a number of important cases, including Angelotti Chiropractic v. Baker; Dubon v. World Restoration; Brodie v. WCAB; Lockheed Martin v. WCAB; Stuart v. WCAB; and Avalon Bay Foods v. WCAB (Moore). In addition, she has extensive experience in client training, was the editor of “Workers’ Compensation” – California Labor Law Digest, 2014-2016, published by the California Chamber of Commerce, and has been a frequent speaker at industry seminars and conferences.

In her new capacity, Ms. Langille will manage the Institute’s internal and external legal affairs; serve as staff liaison to the Legal Committee, which directs CWCI’s amicus activities; analyze regulatory and legal issues affecting California workers’ compensation; and help develop and present research and legal programs for Institute members and other members of the workers’ compensation community.

In announcing her appointment, Mr. Swedlow said, “The Institute is fortunate to have found someone of Ellen’s caliber for this key position. Her knowledge and expertise, her reputation throughout the California workers’ compensation community, and her familiarity with CWCI’s goals, operations and staff made her an ideal choice. She will begin working at the Institute in early April which should make for a seamless transition as Mike McClain moves toward his retirement in late May.”

DWC Proposes Changes to WCIS Regulations and EDI Implementation Guides

The Division of Workers’ Compensation posted proposed regulations revising its Workers’ Compensation Information System (WCIS) regulations and Electronic Data Interchange (EDI) Implementation Guides. A public hearing has been scheduled for 10:00 a.m., Monday, March 28, 2016, in the Auditorium of the Elihu Harris State Office Building, 1515 Clay Street, Oakland, CA 94612. Members of the public may also submit written comments on the regulations until 5 p.m. that day.

The regulations contain proposed revisions to the WCIS Regulations and the two California EDI Implementation Guides published by the DWC:

1) The Guide for First and Subsequent Reports of Injury. This guide has not been updated since 2011. It is being revised to correct minor reporting inefficiencies, improve file transfer security through the use of secure file transfer protocol and a new file naming convention, as well as an enhanced claim validation process.
2) The EDI Implementation Guide for Medical Bill Payment Records, Version 2.0. This guide, though updated in 2015, requires additional revisions to comply with reporting standards set forth in the International Association of Industrial Accident Boards and Commissions (IAIABC) Workers’ Compensation Medical Bill Reporting Implementation Guide, Release 2.0, February 1, 2015 Publication. Compliance with this newer standard is essential in order for WCIS to be able to collect data regarding compound and repackaged drugs.

These materials can be found on the proposed regulations page.

DWC Prepares for Drug Formulary Public Meeting

The Division of Workers’ Compensation has posted the Agenda and background materials for the February 17th Drug Formulary Public Meeting. The meeting is being held to solicit public input on issues relating to implementation of Assembly Bill 1124, which requires the adoption of a workers’ compensation drug formulary by July 1, 2017.

The meeting is scheduled from 10 a.m. until noon on Wednesday, February 17, 2016 in the auditorium of the Elihu Harris State Office Building, 1515 Clay Street, Oakland, CA 94612.

The Agenda and background materials may be accessed on the DWC Forum. The Agenda includes a presentation by Barbara Wynn, Senior Health Policy Analyst with RAND and a public discussion of formulary issues identified by RAND.

The DWC contracted with RAND to provide assistance in the design and implementation of the formulary and related policies and in estimating the economic impact of the formulary. Key questions that RAND researchers will address include:

1) How should the drug formulary be structured? What are the advantages and disadvantages of existing formularies that might be considered by the California WC program?
2) What implementation policies should be considered to address the AB 1124 requirements and promote the provision of appropriate pharmaceuticals expeditiously while minimizing administrative burden?
3) What are the likely impacts of implementing the formulary on drug utilization patterns and spending? What are the costs and benefits of implementing an evidence-based formulary consistent with the AB 1124 requirements for injured workers, providers,employers, and society?
4) What are the key indicators and measures that should be used to monitor implementation of the formulary?

The DWC will also gather and analyze information on potential formularies that DWC might consider and the ancillary policies that other state WC programs have adopted in implementing drug formularies, including how the formulary is integrated with medical treatment guidelines. It will consider the feasibility of DWC constructing a formulary tailored to its medical treatment utilization guidelines and review the evidence-based formularies from American College of Occupational and Environmental Medicine (ACOEM), the Official Disability Guidelines (ODG), the Washington Department of Labor and Industries, and the California Department of Health Care Services (MediCal).

The review of the regulatory policies that other WC programs have adopted in implementing a WC formulary will include the states of Ohio, Oklahoma, Texas, Tennessee and Washington.

Former Workers’ Compensation Judge Frank Kleeman Dies at 82

Former Workers’ Compensation Judge Frank Lynn Kleeman passed away peacefully on February 5, 2016 at UCLA Ronald Reagan Medical Center of Cardiac Arrest with his wife, Charlotte, and daughter, Shari, by his side. He was 82.

Judge Kleeman led an incredibly diverse life, serving in the US Navy, Air Force Reserve, and as a Los Angeles County Sheriff’s Deputy. He went on to be an attorney in 1977, Workers Compensation Judge in the 1980s, and later an Arbitrator.

After moving to the Santa Clarita Valley, Judge Kleeman became actively involved in the community, supporting many organizations including the Boys and Girls Club of Santa Clarita Valley, the College of the Canyons Foundation, the SCV Repertory Theater, and the Newhall Redevelopment Committee. He was Board Emeritus of The Pasadena Playhouse. He was named Santa Clarita Valley Man of the Year in 2002, and he was also named Philanthropist of the Year for the Network of California Community Colleges in 2002..

Judge Kleeman leaves behind his wife Charlotte, son Jeff, daughters Shari, Robin, and Suzette, grandchildren Elijah, Maxwell and Destiny, brother Dr. Charles Kleeman and wife, Annette, many nieces and nephews and, his beloved dogs, Cookie and Oreo. Frank was preceded in death by his brother Stanley Kleeman, and sister Ruth Pelter.

“He was so very well-liked in this community,” said Cheryl Jones, vice president of the Child and Family Center Foundation. “He volunteered with us and his efforts were substantial,” she said. He served on the foundation’s Board of Directors for more than 20 years.

LA Physician Gets 30 Years to Life For Pain Pill Conviction

The second-degree murder convictions last October of a Los Angeles-area physician were the first against a U.S. doctor for prescribing massive quantities of addictive and dangerous drugs to patients with no legitimate need, three of whom died of overdoses. A jury of 10 women and two men found Hsiu Ying “Lisa” Tseng, 45, guilty of 23 counts, including 19 counts of unlawful controlled substance prescription and one count of obtaining a controlled substance by fraud. The guilty verdict marks the first time in the United States where a doctor was convicted of murder for overprescribing drugs.

Tseng was convicted of second-degree murder for the deaths of Vu Nguyen, 28, of Lake Forest; Steven Ogle, 24, of Palm Desert; and Joseph Rovero, 21, an Arizona State University student from San Ramon. Nguyen died March 2, 2009. Ogle died a month later on April 9, 2009. Rovero died Dec. 18, 2009. All were patients of Tseng, who prescribed a myriad of drugs for the three young men.

Tseng, licensed to practice in 1997, opened a storefront medical office in Rowland Heights in 2005. During the timeframe when nine of her patients died in less than three years, Tseng took in $5 million from her clinic and continued dispensing potent and addictive drugs unabated.

Tseng surrendered her license to practice medicine in February 2012 and has been behind bars in lieu of $3 million bail since her March 2012 arrest.

This month she was sentenced to 30 years to life in prison for the overdose deaths, in a case that could change how doctors prescribe medication.

The 46-year-old mother of two, wearing blue jail scrubs, apologized to the families of her victims, but the judge sentenced her based on Tseng refusing to take responsibility for her actions during the trial and blaming her patients or pharmacists or even other doctors instead. “[She’]) a person who seemingly did not care about the lives of her patients in this case but rather appeared more concerned about distributing dangerous controlled substances in an assembly line fashion so as to collect payments which amounted to her amassing several million dollars,” Los Angeles County Superior Court Judge George Lomeli said.

But April Rovero, the mother of one of the victims, was mostly unmoved by Tseng’s apologies. Her son, Joey, died after mixing Xanax and oxycodone — which he had both been prescribed by Tseng — with alcohol. “It feels too late,” Rovero said outside the courtroom. “But it was better to hear something than nothing. But Rovero, who, founded the National Coalition Against Prescription Drug Abuse after her son’s death, praised the sentence. “Justice has been served,” she said.

Outside the courtroom, Peter Osinoff, who represented Tseng before the state medical board said Tseng’s prosecution has had a negative impact on physicians and patients. “The doctors are scared out of their minds,” he said. “The pendulum has swung so far. The people who need [pain medication] can’t get it now.”

Other medical experts have echoed his concerns since Tseng was charged in 2012. “When you use the word ‘murder,'” said Dr. Peter Staats, president of the American Society of Interventional Pain Physicians, “of course it’s going to have a chilling effect.” Staats said he believes an aggressive medical board — not prosecutors — should go after reckless doctors. But, he added, any doctor who is prescribing pills knowing that they are being abused or diverted shouldn’t be called a doctor.

DWC Plans Target Audits in 2016 to Address UR Complaints

The Audit and Enforcement Unit of the Division of Workers’ Compensation will be noticing more target audits in 2016 to address utilization review (UR) complaints.

All claims administrators are required by law to have a utilization review program that is governed by written policies and procedures and used to decide whether or not a treatment recommended by an injured worker’s physician is medically necessary under evidence-based guidelines. All UR programs must have a medical director. Any medical decision that modifies or denies a medical treatment request must be made by a reviewing physician, and the services must be within that physician’s scope of practice.

As a reminder, the UR time limit for responding to a treatment request begins when the request for authorization (RFA) is first received, whether by the employer, claims administrator, or utilization review organization (URO).

The decision on an RFA submitted for prospective review must be made within five business days from first receipt of the request, unless additional reasonable medical information is needed to make the decision. In that case, the additional information must be requested by the fifth business day, then up to 14 calendar days from the date of receipt of the original RFA are allowed for making the decision on the RFA. If more than one treatment request is listed on an RFA, all of the treatment requests must be addressed within the applicable timeframe.

The penalties for failure to comply with the UR rules are set forth in California Code of Regulations, title 8, section 9792.12. For example, if an RFA is not answered, the mandatory penalty is $1,000 for each prospective review. There is also a $100 penalty for a late response to an RFA. If a non-physician delays, denies or modifies a treatment request, there is a $25,000 penalty. Claims administrators are advised to review the UR timeframes with their staff and UROs to ensure the crucial timeframes are being met.

County Hospital Providing Care to Injured Worker Can Sue to Enforce Lien Rights

Jose Tinoco, while employed by Fresh Express, injured Javier Escobar by negligently operating a vehicle. Escobar thereafter received treatment at Santa Clara Valley Medical Center, a hospital owned and operated by the County of Santa Clara. The reasonable value of the care provided by the County was alleged to be $1,249,545.38. Escobar sued Tinoco and Fresh Express in Monterey County Superior Court, where he eventually recovered a judgment for $5,689.624.87.

The County asserted a lien against the judgment pursuant to Government Code section 23004.1. Escobar’s attorney, who had stipulated at trial that County’s bill reflected reasonable and necessary charges, now contended that County was not entitled to the full amount of its bill but only to some lesser amount in accordance with schedules promulgated by the WCAB. Fresh Express did not pay the County, but instead delivered a check in the amount of $1,249,545.38 to Escobar’s attorney, Joseph Carcione, Jr., payable to both County and Carcione’s firm.

The County filed suit to recover the full amount, and the trial court sustained the Fresh Express demurer without leave to amend ruling that “the County can no longer pursue its own action against Fresh Express . . . , but must instead seek enforcement of the lien,” The court of appeal reversed in the published case of County of Santa Clara v Javier Escobar, and provided guidance on how lien rights are to be enforced.

The trial court concluded in essence that once a county’s lien has attached to a judgment, as it did here, the county’s independent right of action ceases to exist. The trial court took the language of Government Code section 23004.1 to mean in essence that a county’s right of action continues only as a lien. But the court of appeal disagreed noting that nothing in the language of the statute declares in definite language that the lien, once attached, is all that remains of the county’s original right of action. The manifest purpose of section 23004.1 is to provide counties with a source of recompense for the expenses incurred by them – and their taxpayers – in providing medical services necessitated by tortious conduct. “Obviously this purpose is ill served by permitting the tortfeasor to excuse itself from this obligation by turning control of the claimed funds over to the injured patient. The intent of the statute is best effectuated by providing counties with a straightforward remedy against the recalcitrant tortfeasor cum judgment creditor.”

The court agreed that Fresh Express should have been able to disentangle itself from any dispute between Escobar and County, and to obtain a satisfaction of judgment by paying the full amount of the judgment, but did not agree that it could accomplish these objectives by simply writing a check payable to both of the competing claimants. There were and are far more suitable remedies for one in Fresh Express’s situation. It has simply failed to avail itself of them. It could, for example, bring an action against the conflicting claimants to compel them to interplead and litigate their several claims.

“We conclude that County’s right of action under section 23004.1 survived the attachment of its lien and that County was entitled to revive it, as it sought to do here, when Fresh Express surrendered control of the liened funds to Escobar’s attorney. It follows that the trial court erred by sustaining Fresh Express’s demurrer and that the judgment predicated on that ruling must be reversed.”

Glendora Physician to be Sentenced for Illegal Painkiller Distribution

A medical doctor who served as the face of a sham Los Angeles clinic pleaded guilty to federal drug trafficking and money laundering charges connected to her illegal distribution of the powerful painkiller best known by the brand name OxyContin. Dr. Madhu Garg, 64, of Glendora, pleaded guilty to one count of illegally distributing oxycodone and one count of money laundering for transferring the proceeds of criminal activity to a Malaysian bank account. A sentencing hearing is set for May 26. Garg faces a statutory maximum sentence of 30 years in federal prison.

Garg was arrested in January 2015, along with the other operators of the now-defunct Southfork Medical Clinic in Los Angeles. A federal grand jury indictment charged seven defendants with conspiring to sell medically unnecessary prescriptions for drugs that included oxycodone, hydrocodone (commonly sold under the brand names Vicodin, Norco and Lortab), alprazolam (best known by the brand name Xanax), carisoprodol (a muscle relaxant sold under the brand name Soma) and promethazine with codeine (a cough syrup sold on the street as “purple drank” and “sizzurp”).

As part of her guilty plea, Garg admitted that she issued prescriptions for those drugs to Southfork “patients” at the instructions of the owner of the clinic, Jagehauel Gillespie, and that she knew the “patients” did not actually need the drugs. In a plea agreement filed in United States District Court, Garg “acknowledges that she intentionally prescribed the drugs outside the usual course of professional practice and without a legitimate medical purpose.”

Records maintained by the State of California show that Garg issued more than 10,000 prescriptions for controlled drugs – the vast majority of which were for hydrocodone or alprazolam – over the year-long period that she worked at Southfork. Financial records show that, over the same time period, Garg received more than $300,000 in cash and transferred more than $90,000 to bank accounts held in Thailand and Malaysia.

During the investigation, Garg issued prescriptions for oxycodone and promethazine with codeine to undercover agents on eight occasions. During one of the meetings, Garg gave a prescription to an undercover witness, and then Garg agreed to issue a new prescription to the witness the following week under a false name.

“The abuse of prescriptions drugs continue to take a horrific toll on public health and safety in our communities,” said Stephen G. Azzam, Acting Special Agent in Charge of DEA’s Los Angeles Field Division. “The DEA will continue to work with our partner agencies to identify and investigate doctors who are using their medical licenses to illegally deal drugs.”

The conspirators also used Los Angeles as a base of operations to acquire and deliver bulk shipments of prescription drugs to Texas, according to court documents. Furthermore, according to court records, Garg continued to assist Gillespie in acquiring oxycodone from international wholesalers even after the Medical Board of California revoked Garg’s license in December 2013.

Previously in this case, five of the other defendants have pleaded guilty, including Gillespie, who was sentenced in November to six years in federal prison. One other defendant is pending trial, which is scheduled for later this year.

The investigation into Garg was conducted by the Drug Enforcement Administration’s Los Angeles and Houston field divisions, IRS – Criminal Investigation, the Los Angeles Police Department, the Los Angeles County Sheriff’s Department, the California Department of Justice, and the Texas Department of Public Safety.

WCAB Clarifies MPN Access Standards for PTPs

Maria Soto sustained an injury to her right shoulder, neck and low back while employed as an assembler by Sambrailo Packaging in Santa Maria. She was referred for treatment to Zenith’s MPN in Santa Maria, Central Coast Industrial Care, where applicant lives and worked. Based upon her request for a referral from a primary treating physician to an orthopedic surgeon, Central Coast referred applicant to two orthopedic specialists in Solvang. Applicant states that the “MPN included 9 orthopedic doctors but only one would treat backs.” Applicant therefore notified Zenith that the MPN did not meet the applicable access standards and selected Dr. Scheinberg, a non-MPN physician located in Santa Barbara, approximately 70 miles away, to treat her shoulder and back. Defendant declined to authorize such treatment outside the MPN.

The parties stipulated that the defendant had a validly formed MPN. At issue was whether the MPN complied with the MPN physician access standards of having three orthopedists willing to treat the applicant. They stipulated there was only one. At a subsequent hearing applicant agreed to treat with an MPN neurosurgeon, Dr. Kissel, but Dr. Kissel declined to accept the applicant.

Zenith contends that that under rural access standards it has 46 physicians within 30 miles or 60 minutes who are fully qualified to act as a primary treating physician in this case (even though they were not orthopedists.)

The WCJ held that Soto was entitled to obtain medical treatment outside defendant’s MPN, finding defendant’s MPN was not in compliance with the applicable access standards by not having three orthopedic specialists willing to treat applicant within the applicable geographic area. On reconsideration, the WCAB reversed in the panel decision of Soto v Sambrailo Packaging; Zenith Insurance Co.

The MPN is required to have “an adequate number and type of physicians . . . to treat common injuries experienced by injured employees based on the type of occupation or industry in which the employee is engaged, and the geographic area where the employees are employed.” (Lab. Code, §4616(a)(l ).) The question is whether defendant’s MPN provides the requisite selection of physicians available to assume the role of a primary treating physician. The Legislature intended that an injured worker will be able to select a primary treating physician who has the necessary specialization or expertise in treating her injury. Labor Code section 4616.3(d)(2) provides that “[t]reatment by a specialist who is not a member of the medical provider network may be permitted on a case-by-case basis if the medical provider network does not contain a physician who can provide the approved treatment and the treatment is approved by the employer or insurer.”

A search of Zenith MPN physicians who were available within 60 miles of the employer’s zip code identified 79 providers, and there were 33 physicians within 30 miles. Of those, applicant’s condition could be treated by physicians who wished to practice as a primary treating physician who were familiar with treating the type of injury at issue. Thus, defendant has provided evidence that there are a sufficient number of available physicians within the rural geographic area with specialties capable of providing applicant’s primary care, even if a physician with the specific specialty selected by applicant is unavailable. If applicant requires specialty medical treatment, applicant can be referred to specialist by her primary treating physician selected from within the MPN. If an MPN specialist is not available within the applicable rural access standards, applicant may be referred to a non-MPN specialist. However, applicant has not establish that defendant has violated the applicable rural access standards for selecting her primary treating physician. Therefore, applicant is not entitled to select a physician as her primary treating physician, at defendant’s expense

DWC Announces Recipients of 2016 Carrie Nevans Community Service Award

The Division of Workers’ Compensation has announced the winners of the 2016 Carrie Nevans Community Service Award. Both recipients are commissioners on the Commission on Health and Safety and Workers’ Compensation (CHSWC). This year’s award recipient in Southern California is Martin Brady, the Schools Insurance Authority executive director. Christy Bouma, Capitol Connection president, is the Northern California recipient. The awards will be presented at the upcoming 23rd annual DWC educational conference luncheons.

Martin Brady is the executive director of the Schools Insurance Authority in Sacramento, where he has worked since 1998. He was appointed by the Governor to CHSWC in 2012 to represent employers. Over the course of his career, Mr. Brady has also served as a member of the California Joint Powers Authority, the California Coalition on Workers’ Compensation, the Public Agency Risk Managers Association, the Public School Risk Institute, the Association of Governmental Risk Pools, and the Public Risk Management Association. He has worked tirelessly to ensure that public employer needs and concerns are addressed in the workers’ compensation system, including in the SB 863 reforms, and he has been instrumental in supporting programs to prevent workers’ compensation injuries that have helped to reduce costs for employers and protect California employees.

Christy Bouma is the president of Capitol Connection in Sacramento. She was appointed by the Governor to CHSWC in 2012 to represent labor. Ms. Bouma has supported the California Professional Firefighters, the California School Employees Association government advocacy team, the State Building and Construction Trades Council, and the Service Employees International Union on special legislative projects. She is affiliated with the Institute of Government Advocates, the Leadership California Institute, and the CompScope Advisory Committee of the Workers’ Compensation Research Institute. She has been a critical partner in supporting the recent workers’ compensation reforms and preserving benefits for workers in the state, especially those involved in public safety.

The DWC’s 23rd annual educational conference is the largest workers’ compensation training in the state and allows claims administrators, attorneys, medical providers, return to work specialists, employers, and others to learn about the most recent developments in the system as well as ongoing DWC programs. The Los Angeles conference (February 25-26) at the LAX Marriott is almost sold out; registration is still open for the Oakland training (March 3-4) at the Oakland Marriott City Center Hotel.