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CWCI Appoints New COO and CFO

Rena B. David has been named the Chief Operations and Chief Financial Officer of the California Workers’ Compensation Institute (CWCI), the Oakland-based nonprofit organization that serves as the research and educational arm of the California workers’ compensation industry.

Ms. David joins CWCI after having served as a consultant and manager with more than 25 years of experience in finance, data systems development, product development, workers’ compensation and group health pricing, health services research and hospital operations. The majority of her experience has been at Kaiser Permanente where she managed high-level consultants and programmers supporting a variety of data coordination/development, budgeting, pricing model development and medical risk assessment projects. In the mid-1990s, she was project lead for the implementation of Kaiser’s 24-hour care product combining group health and workers’ compensation medical care in Sacramento and San Diego. She also played a key role in developing and evaluating the performance of the Kaiser Permanente/State Fund Alliance Initiative. From 2006 to 2008, she managed the California Healthcare Foundation’s “In Search of Affordability Initiative,” which included consulting on the development of a 24-hour coverage carve-out model.

A graduate of Stanford University, where she earned a bachelor’s degree in human biology, Ms. David also holds master’s degrees in business administration and public health from U.C. Berkeley. In her new position, she will be responsible for CWCI’s accounting and budgeting functions, oversee the Institute’s general administration, human resources, facilities and systems, and provide support and expertise to the Research Department on designated research projects. Commenting on Ms. David’s appointment, CWCI president Alex Swedlow said “We’re very pleased to have Rena join the Institute staff. She is a great addition to our professional team, and her technical qualifications and familiarity with key industry issues will provide CWCI with thoughtful leadership and expertise.”

Researchers Review Medical Necessity for Air Ambulance Services

Air ambulance vendors have prevailed in workers’ compensation litigation allowing them to be exempt from state adopted maximum fee schedules. Courts have found that federal law regulating air carriers preempts state law. The cost of an air ambulance transport is therefore uncontrolled, and unfettered. However, their may remain legal challenges to these fees based upon medical necessity.

Researchers at the Stanford University School of Medicine have for the first time determined how often emergency medical helicopters need to help save the lives of seriously injured people to be considered cost-effective compared with ground ambulances. The researchers found that if an additional 1.6 percent of seriously injured patients survive after being transported by helicopter from the scene of injury to a level-1 or level-2 trauma center, then such transport should be considered cost-effective. In other words, if 90 percent of seriously injured trauma victims survive with the help of ground transport, 91.6 need to survive with the help of helicopter transport for it to be considered cost-effective. The study, published online in the Annals of Emergency Medicine, does not address whether most helicopter transport actually meets the additional 1.6 percent survivorship threshold.

The study summarized in an article in Science Daily, comes at a time when finding ways to cut medical costs has become a national priority, and the overuse of helicopter transport has come under scrutiny. Previous studies have shown that, on average, over half of patients transported by helicopter have only minor, non-life threatening injuries. For these patients, transport by helicopter instead of ground ambulance is not likely to make a difference in outcomes, and the additional risk and cost of helicopter transport outweighs the benefit, the study’s lead author, M. Kit Delgado, MD, MS,said.

In 2010, there were an estimated 44,700 U.S. helicopter transports from injury scenes to level-1 and level-2 trauma centers, with an average cost of about $6,500 per transport. The total annual cost is around $290 million. (Level-1 and -2 trauma centers are hospitals equipped and staffed to provide the highest levels of surgical care to trauma patients; level-1 centers offer a broader array of readily available specialty care, and also are committed to research and teaching efforts.)

Yet emergency helicopter transport sits in a cost-efficiency conundrum: It is most needed in remote, rural areas where transport by ground can take far longer than by air. These areas also tend to have sparser populations and therefore fewer calls for aid, making it difficult to recoup the overhead costs of maintaining helicopter services, Delgado said. In some areas of the country, however, helicopters are automatically launched based on the 911 call. “Once ground responders and the helicopter arrive, sometimes they may find patients who are awake, talking and have stable vital signs,” Delgado said. “The challenge is getting helicopters to patients who need them in a rapid fashion so the flight team can intervene and make a difference, but also know based on certain criteria who isn’t sick enough to require air transport.”

There is mixed evidence in the literature about the degree to which helicopter transport reduces mortality. It is therefore uncertain whether the routine use of helicopter transport is cost-effective for most patients in the United States when ground transport is also feasible. The study found that the cost-effectiveness also depends on regional variation in the costs of air and ground transport and the percentage of patients who are flown that have minor injuries.

DWC Posts Proposed Changes to QME Regulations

The Division of Workers’ Compensation (DWC) has modified the proposed Qualified Medical Evaluator (QME) regulations. DWC has electronically distributed the 15-day notice of modification to interested parties and has posted the modified regulation text and forms on the DWC website. Members of the public may comment on the modifications until 5 p.m., June 18. The proposed modifications include:

  • Section 13 is revised to require all QME applicant requests to add or remove a specialty to be in writing and include documentation that establishes the physician is board certified in the specialty
  • Section 26 is revised to clarify that QMEs may continue to request additional office locations up to the 10 office location limit
  • Section 30 is revised to state that an issued panel may be revoked by the medical unit if the panel was issued by mistake, misrepresentation of facts, or the parties have agreed to resolve their dispute by using an AME
  • Section 35 is revised to allow the claims administrator or injured worker to provide a letter to the QME or AME outlining the medical determination of the primary treating physician or the compensability issue that the evaluator is requested to address
  • Section 35.5 is revised to state that if the evaluator declares the injured worker permanent and stationary for the body part evaluated and the evaluator finds injury has caused permanent partial disability, the evaluator shall completer the Physician’s Report of Permanent and Stationary Status and Work Capacity and serve it on the claims administrator and the employee, together with the medical report
  • The application for appointment as QME (QME form 100) requires the applicant to indicate whether he or she is certified by a specialty board recognized by the Medical Board of California or the Osteopathic Medical Board of California or have qualifications deemed to be equivalent to board certification in a specialty by the Medical Board or Osteopathic Medical Board, and requires a copy of the board certificate and certificates completion of residency and fellowship training programs
  • The panel request form instructions are stricken. Instructions that explain how to fill out the form field by field will be posted with the final form.

The notice, text of the regulations, and forms can be found on the DWC website.

TTD Rates to Increase Slightly in 2014

California’s State Average Weekly Wage (SAWW) rose less than 1 percent from $1,059.38 to $1,067.25 in the 12 months ending March 31, 2013, which the California Workers’ Compensation Institute (CWCI) reports will boost temporary total disability (TTD) rates for 2014 work injury claims, as well as other workers’ compensation benefits that are tied to changes in the SAWW.

California’s TTD maximum rate for 2013 job injuries is $1066.72 per week, but with the marginal increase in the SAWW, CWCI calculates that the maximum TTD rate will rise to $1,074.64 per week for claims with injury dates on or after January 1, 2014. State law also links the minimum weekly TTD rate to SAWW increases, so the CWCI calculates that the minimum rate will edge up a fraction from the current $160 per week to $161.19 for claims with 2014 dates of injury. The Institute has confirmed both the minimum and maximum TTD rates for 2014 injury claims with the California Division of Workers’ Compensation.

Beginning next January, other workers’ compensation benefits also will be bumped up by the recent increase in the SAWW, including TTD paid 2 years or more after injury, life pension and Permanent Total Disability payments for injuries on or after January 1, 2003, and installment payments on death claims.

Underpayment of benefits results in penalties, so CWCI encourages claims administrators to review changes in benefit rates with legal counsel to assure that adjustments are appropriate and accurate.

OxyContin – Good News and Bad News

A new OxyContin formulation is providing relief for workers compensation payers strapped with paying for the illegal diversion of the prescription pain reliever. But unfortunately for society overall, heroin and other narcotics are replacing OxyContin as a drug of choice among addicts because the new formulation contains polymers that make it harder to crush for snorting or melt for injecting.

According to the story in Business Insurance, the abuse-deterrent OxyContin formulation was introduced in 2010. Then in 2012, a study in the New England Journal of Medicine found that abusers preferred to shift from the reformulated OxyContin to heroin and other high-potency opioids. The study relied on surveys completed by 2,566 people entering treatment programs because of opioid dependency. It revealed that before the release of the abuse-deterrent formula, 35.6% favored OxyContin as their primary drug. That dropped to 12.8% just 21 months later, after introduction of the new OxyContin formulation.

The survey also found that of all opioids used to get high at least once during the past 30 days, OxyContin fell from 47% to 30%. Heroin use nearly doubled during that time and was the most-used alternative, according to the survey relying on data collected from July 2009 through March 2012.

Meanwhile, pharmacy benefit managers said in their workers compensation drug-trend reports released in April that opioid prescribing dropped during 2012.Westerville, Ohio-based Progressive Medical Inc., for instance, said a drop in opioid prescriptions resulted from changing government prescribing guidelines, urine drug testing and the introduction of abuse-deterrent formulations.

That means the new formulations affecting pharmaceutical payer efforts to eliminate the diversion of addictive narcotic opioids also are helping. Diversion refers to using drugs outside their intended purpose, such as helping people with legitimate pain-management needs, to selling them on the street illegally.Payers have stepped up efforts to discourage diversion with measures such as urine testing to assure claimants are consuming prescribed opioids rather than diverting them.

This is good news for the workers comp industry. But the authors of the New England Journal of Medicine study, titled “Effect of Abuse-Deterrent Formulation of OxyContin,” wrote, the new formula reduced the abuse of one drug, but replaced it with a “drug that may pose a much greater overall risk to public health.”

And Barry Lipton, practice leader and senior actuary for Boca Raton, Fla.-based NCCI Holdings Inc. said during the rating and research organization’s recent 2013 Annual Issues Symposium, “It’s not good news for society, but it is a big pressure release for workers comp.”

Common Firbromyaligia Medication Does As Much Harm as Good

Among fibromyalgia patients taking either of two commonly prescribed drugs to reduce pain, 22 percent report substantial improvement while 21 percent had to quit the regimen due to unpleasant side effects, according to a new review in The Cochrane Library summarized by Science Daily. People with fibromyalgia suffer from chronic widespread pain, sleep problems and fatigue. The illness affects more than 5 million Americans, 80 percent of whom are women. The cause of fibromyalgia is unknown and currently there is no cure. Using a Quality of Life (QOL) scale for fibromyalgia, the studies reviewed reported QOL ratings lower than 15 on a scale of 0 to 100 even among patients on medications. The two medications often prescribed to treat fibromalgia are duloxetine, known by the brand name Cymbalta or milnacipran, commonly known as Savella.

“A frank discussion between the physician and patient about the potential benefits and harms of both drugs should occur,” noted the reviewers, led by Winfried Häuser, M.D. of Technische Universität München.

The authors reviewed 10 high-quality studies comprising more than 6,000 adults who received either duloxetine, milnacipran, or a placebo for up to six months. A substantial majority of study participants were middle-aged, white women.

“This is a very important study,” says Fred Wolfe, M.D. of the National Data Bank for Rheumatic Diseases. “There’s an enormous amount of advertising suggesting that these drugs really help, whereas the research data show that the improvement is really minimal.”

Treatment with drugs alone “should be discouraged,” the reviewers added. Instead, the review authors recommend a multi-faceted treatment approach including medications for those who find them helpful, exercises to improve mobility and psychological counseling to improve coping skills. “The medical field does poorly with the treatment of fibromyalgia in general,” says Brian Walitt, M.D., M.P.H., a co-author of the review and an expert in pain syndromes at Washington Hospital Center in Washington, D.C. “Chasing [a cure] with medicine doesn’t seem to work.The people who seem to me to do best sort of figure it out on their own by thinking about things, getting to know themselves, and making changes in their lives to accommodate who they’ve become,” concludes Walitt.

The only other medication approved for fibromyalgia treatment in the U.S. is the anti-convulsant pregabalin, known by the brand name Lyrica. The Cochrane Library plans to publish a review of its effectiveness later this year.

Intensive neuroscientific research is needed to reveal the underlying causes of fibromyalgia and other pain syndromes, say the researchers. In the meantime, combinations of various medications as well as combinations of drug and non-drug treatments may offer better symptom control for sufferers.

DWC Posts Revised Proposed Interpreter Services Regulations

The Division of Workers’ Compensation has again modified the proposed Interpreter Services regulations. DWC posted the modified regulation text and forms on the DWC website and electronically distributed the second 15 – day notice of modification to interested parties. Members of the public may comment on the modifications until 5 p.m. on June 14.

The proposed modifications include:

  • A new subdivision to allow certification by passing the National Board of Certification for Medical Interpreters (National Board) exam.
  • Requiring recertification as set forth by Certification Commission for Healthcare Interpreters (CCHI) or the National Board.
  • Revising section 9795.5 to state that certified interpreters for the purposes of medical treatment appointments and medical legal exams are listed in the CCHI and National Board website directories.
  • A new subdivision that requires a certified interpreter for the purposes of medical treatment appointments and medical legal exams who is not listed on the CCHI or National Board registry to provide proof of certification to the claims administrator upon request.

The notice, text of the regulations, and forms can be found here .

San Diego Psychologist Sentenced to Prison

United States Attorney Laura E. Duffy announced that Roberto J. Velasquez, a San Diego area clinical psychologist, was sentenced for perpetrating a multi-year fraud scheme where he falsified medical certifications to the federal government. Chief District Judge Barry Ted Moskowitz sentenced Velasquez to serve 21 months in federal prison, followed by two years of supervised release and ordered Velasquez to pay more than $1.5 million in restitution to the Social Security Administration.

According to court documents, Velasquez masterminded a scheme whereby he falsely certified that dozens of patients were disabled, when in fact they were not. To further the fraud, Velasquez made up patient histories, fabricated test results, suggested symptoms and complaints that did not exist, intentionally underestimated patient scores on standardized tests, and lied about the length of time he had been seeing the patients. In exchange for each false report, Velasquez charged his patients a $200 kickback.

In his plea agreement, Velasquez admitted that he falsified two different types of disability reports. First, Velasquez falsified Medical Certification for Disability Exception Forms (Forms N-648), which are used by the Department of Homeland Security during the naturalization process. Velasquez’s false certifications allowed certain immigrants to avoid taking the English language and Civics portions of the U.S. citizenship exam. Based on the fraudulent N-648 forms, the Department of Homeland Security granted disability exemptions to approximately 50 immigrants who were not actually disabled.

Velasquez also admitted that he submitted fraudulent medical reports to the Social Security Administration, falsely certifying that certain patients were eligible for disability benefits when he knew they were not. Beginning in 2006, and continuing up to the date of Velasquez’s arrest in April 2012, the Social Security Administration paid out at least $1.5 million in unwarranted disability benefits based on Velasquez’s false certifications. Velasquez also admitted that approximately 33% of his patient files contained fabrications, false statements, and false certifications of disability.

The fraud was uncovered through an undercover operation conducted jointly by the Department of Homeland Security, Immigration and Customs Enforcement/Homeland Security Investigations, and the Office of Inspector General, Social Security Administration. The investigation revealed Velasquez’s disregard for federal disability requirements. He coached his patients who were attempting to skirt the citizenship requirements, instructing them to use poor English during their interviews and not mention that they had a college education. Velasquez also lied about the length of time he had been treating his patients, in order to create a “track record” that would satisfy reviewers at the Social Security Administration, where he had previously worked as a consultant.

Sunnyvale Chiropractors Charged With Insurance Fraud

Dr. Wendy Lanser, 47, of Los Altos, and Dr. Lisa Shaw-O’Conner, 33 of Fremont, have been charged with multiple felonies involving medical billing insurance fraud, according to Denise Raabe, deputy district attorney. The pair, who were arrested last week, are scheduled to be arraigned at 1:30 p.m. on June 11, 2013. If convicted of all counts, Lanser faces a maximum of 19 years and 8 months in prison and Shaw-O’Conner, a maximum of 13 years. Both would be ordered to pay full restitution.

According to the story in the Freemont Patch, Lanser owns Lanser Chiropractic Inc., located at 990 W. Fremont Ave. in Sunnyvale. Shaw-O’Conner is a part-time independent contractor working out of the office. It is alleged that over several years, Lanser provided weekly chiropractic treatments for her husband and two children. She then submitted insurance claim forms for payment for the treatments she provided to her family using the name and billing identification number in the ‘servicing physician’ section of the claim form of an unwitting employee chiropractor. This would constitute medical billing fraud because the name of the servicing physician on the form is not the physician that provided the treatment.

In addition, the insurance policy that covers Lanser and her family, specifically excludes from coverage any medical treatment provided by a family member. This is a common exclusion found in the majority of medical insurance policies and reflects the cost controlling and ethical understanding that an insurance company should not pay for services that are provided gratuitously between family members.

In more recent cases, Shaw-O’Conner allegedly knowingly signed insurance claim forms as the ‘servicing physician’ for Lanser’s family members, when she did not provide the chiropractic services to the family members.

The scheme was uncovered by a joint investigation by the California Department of Insurance, Silicon Valley Regional Office, and the Santa Clara County District Attorney’s Office, Bureau of Investigations.

Applicant Must “Intend” to be Personally Liable For Medical Care

A WCAB panel in the case of Crispin Mendez-Correa v Vevoda Dairy elaborated on the elements necessary to hold an applicant personally liable for payment of his own self procured medical expenses for treatment outside of an MPN. The panel concluded that although the employer is not responsible for payment of the treatment, similarly the applicant is not personally liable for the treatment either unless he “intended” at the time to treat at his own expense.

This was an admitted injury claim that occurred in Humbolt County. Applicant obtained treatment within the MPN until he was MMI. Applicant then moved to Southern California where he obtained an attorney who designated Khalid Ahmed, M.D., as primary treating physician notwithstanding defendant’s objection that the doctor was not in defendant’s MPN. Numerous other non-MPN providers subsequently filed treatment, medical legal and other liens in the case. There was no evidence at trial that applicant chose to go outside of the MPN “at his own expense” instead of using the employer provided care. Indeed, the record did not reflect why he went outside the MPN except that his attorney sent him to a non MPN physician. He was ultimately awarded 7% permanent disability and future medical care.

With respect to the treatment liens, the WCJ stated that “the applicant, in designating Dr. Khalid Ahmed as his non-MPN PTP, obtained self-procured medical treatment outside defendant’s MPN at his own expense under Labor Code section 4605.” The WCAB panel agreed that the employer was not responsible, but reversed indicating “that the WCJ incorrectly concluded that any and all medical treatment obtained outside of a properly noticed MPN is necessarily self-procured by the injured worker at his own expense pursuant to section 4605. The WCAB panel concluded “that is not the law.”

When a provider treats an industrially injured worker and takes certain actions such as submitting reports and billing statements to the employers’ insurance carrier, accepting payment from that carrier and/or seeking to obtain payment by filing a lien claim, the WCAB obtains exclusive jurisdiction over the payment dispute. Regardless of whether a lien claim is filed, the injured worker is only liable for medical treatment of an industrial injury that he or she intended to self-procure at his or her own expense pursuant to section 4605. The Appeals Board is authorized by section 4903 to “hear and determine any issue growing out of a controversy as to whether or not the physician was supplied by the employer or chosen by the employee at his own expense.” However, the authority to determine if a bill is the injured worker’s obligation under section 4605 is not the same as exercising jurisdiction under section 4903 to allow and determine a lien against compensation.

“If applicant intentionally self-procured medical treatment pursuant to section 4605 he would be personally liable under that section for the cost of the treatment, and the Appeals Board would have no jurisdiction to determine its reasonable value or to hold defendant liable for it as part of the applicant’s workers’ compensation.” .. “However, in this case there is no evidence that applicant intended to self-procure medical treatment from any lien claimants at his own expense pursuant to section 4605 following his move to Southern California.”