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DWC to Dismiss 292,000 Liens

The Division of Workers’ Compensation announced it will dismiss more than 292,000 unresolved liens by operation of law. The liens belong to claimants who did not properly file the required Supplemental Lien form and 4903.05(c) Declaration form.

Senate Bill 1160, which became effective January 1, required all lien claimants who filed a lien between January 1, 2013 and December 31, 2016, and paid a filing fee, to file the forms by July 1. Lien claimants who failed to file the forms as required will have their liens dismissed.

Labor Code section 4903.05(c) was amended as part of the bill’s reform measures to combat fraud in the workers’ compensation system. To comply with SB 1160’s requirements, DWC made available an e-form declaration and the Workers’ Compensation Appeals Board promulgated regulations requiring the use of this form.

Lien claimants should be aware that DWC will not send notification to claimants whose liens have been dismissed. DWC has posted frequently asked questions on the supplemental lien form online.

The Division of Workers’ Compensation previously reported that 441,070 supplemental lien declaration forms were filed as required by Labor Code section 4903.05(c). This represents half of the 882,648 liens filed in California’s workers’ compensation system between January 1, 2013 and December 31, 2016 for which a filing fee was paid.

Lien claimants who failed to file the “Supplemental Lien Form and 4903.05(c) Declaration” will have their liens dismissed. This would have been approximately 441,578 liens.

The announcement of the dismissal of 292,000 liens is somewhat short of the original estimate, but is nonetheless a significant development.

So. Cal. Employer Faces $6.3M Wage Theft Claim

The Labor Commissioner’s Office has filed a lawsuit against Calcrete Construction, Inc. seeking $6,300,338 for multiple wage theft violations affecting a group of 249 construction workers and the willful misclassification of 175 workers as independent contractors.

An investigation launched in October 2016 uncovered the Glendale-based company’s failure to pay the workers for overtime hours, allocate pay for sick leave and provide proper wage statements. The lawsuit, filed in Los Angeles Superior Court, also seeks civil damages and penalties.

Beginning in August 2016, Calcrete forced its workers under threat of termination to sign contracts stating they were independent contractors. The company then used staffing agencies Dominion Staffing and Southeast Personnel Leasing to pay the workers. “It is illegal for employers to use subcontractors to distance themselves from the obligation to pay workers, and we will use every tool to dissuade employers from this scheme,” said Labor Commissioner Julie A. Su. “This lawsuit aims to recover the money these misclassified workers should have been paid after years of wage theft.”

The suit alleges that Calcrete employees typically worked 10-12 hours Monday through Friday and eight hours on Saturday. They were paid only their regular hourly rate and not for the 18-28 hours of overtime they regularly worked. This underpayment occurred for a nearly two- year period from 2014-16.

The lawsuit seeks wages and damages of approximately $2,596,438 payable to the workers and penalties of approximately $3,703,900 payable to the state.

The Carpenters / Contractors Cooperation Committee, a union-affiliated, non-profit organization that advocates for workplace compliance within the construction industry, referred the case to the Labor Commissioner’s Office.

When a worker is misclassified as an independent contractor, they are not protected by minimum wage, overtime and retaliation laws. The worker is not guaranteed workers’ compensation coverage if injured on the job and has no right to paid rest and meal breaks or sick leave.

Many factors go into determining if a worker is misclassified, including a review of who decides what tasks the worker does, who dictates how tasks should be done and who controls customer relations. Worker misclassification results in an estimated loss of $7 billion each year in payroll tax revenue to the state.

When workers are paid less than minimum wage, they are entitled to liquidated damages that equal the amount of underpaid wages plus interest. Waiting time penalties are imposed when the employer fails to provide workers their final paycheck after separation. This penalty is calculated by taking the employee’s daily rate of pay and multiplying it by the number of days the employee was not paid, up to a maximum of 30 days.

Film Industry Safety Problems Claim Tom Cruise

Actor Tom Cruise was injured after a stunt for his new “Mission Impossible 6” movie went awry. It’s not known how badly he was injured but footage of the accident shows him limping away and in evident pain. The stunt for the the latest installment of the long-running franchise was being filmed in London. It involved Cruise jumping between two buildings with the assistance of a safety harness.

The footage, published by TMZ, show the 55-year-old actor having problems with timing his leap and crashing into the side of the second building. The actor was able to pull himself up onto the roof of the building but was then seen limping heavily before collapsing next to members of the film’s crew.

Cruise is something of a rarity among Hollywood actors for insisting on performing many of his own stunts, the Guardian said. In 2011, the actor scaled the outside of Dubai’s Burj Khalifa, currently the world’s tallest building, for a scene from “Mission: Impossible – Ghost Protocol.” For 2015’s “Mission: Impossible – Rogue Nation,” he was attached to the exterior of an Airbus 400 as it took off. Cruise also performed inside a zero-gravity plane for the recent reboot of “The Mummy.”

And it seems that Tom Cruise has recently had more than his share of movie making safety problems.

American Made is an upcoming biographical crime film starring Tom Cruise. The film is based on the life of Barry Seal, a former TWA pilot who became a drug smuggler in the 1980s and was recruited later on by the DEA to provide intelligence. It is set to be released on September 29, 2017.

A twin-engine Piper Smith Aerostar 600, had been ferrying three pilots who were working on a film: Alan Purwin, 51, one of Hollywood’s most sought-after helicopter stunt operators; Carlos Berl, 58, a well-qualified airman who knew how to navigate the red tape of the plane import-export business; and Georgia native Jimmy Lee Garland, 55, who could fly and repair just about anything. The flight took off after a long day of filming underway for weeks in the hills in northeast Colombia, near the border with Panama. This early-evening flight  was supposed to be a short taxi ride home.

Instead it crashed in foggy and cloudy conditions in the Ciolombian mountains. The only person to survive the crash was Garland, who suffered injuries to his legs, arms, face and chest

Relatives of Purwin sued the movie’s production companies – including Imagine Entertainment and Cross Creek Pictures – as well as the estate of Berl. Their suit alleges that Berl was piloting the plane at the time of the crash even though he lacked the skills to do so.

Berl’s estate countersued, claiming Berl informed producers and other parties related to the film that he had insufficient experience to fly the aircraft. The estate also alleges that the flight wasn’t safely planned, prepared or supervised.

These accidents are the latest in a series of deadly tragedies that have occurred on film sets.

A Los Angeles Times report in March found a sharp rise in catastrophic injuries on film sets in recent years. There were 20 deaths in the U.S. related to motion picture and television production for the five years that ended in December 2014, double the number of fatalities during the previous five-year period.

Study Measures Fire Station Air Quality Cancer Risk

Firefighters have higher than average cancer rates, and while their exposure to carcinogens during fires is well known, a new study suggests exposures in fire stations contribute to their excess cancer risk, too.

“Firefighters spend large portions of their shift waiting for calls in a station, during which they can be exposed to diesel exhaust from idling trucks (which is a known carcinogen) and off-gassing from contaminated post-fire gear (which may be contaminated with a variety of known and/or possible carcinogens),” researchers point out in the Journal of Occupational and Environmental Medicine.

Several studies in recent years have found that firefighters have elevated risks for cancers of the lungs, skin, esophagus, brain, kidney and prostate.

“We know about the chemicals, heat and stress in the field, but what’s left out is the chronic low-level exposure at the fire station during day-to-day business,” lead study author Dr. Emily Sparer of Harvard’s Dana-Farber Cancer Institute in Boston told Reuters Health by phone.

The Reuters report says that the Boston Fire Department approached Sparer’s team with concerns about firefighters becoming sick at young ages. Although department staff knew that diesel exhaust, dust and ash caused sinus and breathing issues, they weren’t sure when and where the most exposure occurred.

Sparer and colleagues sampled air particles at four Boston fire stations in spring 2016, looking for particulate matter less than 2.5 millimeters in diameter. These small particles are considered dangerous to human health because they can be inhaled and become lodged in the lungs. They also looked for particle-bound polycyclic aromatic hydrocarbons, which are chemicals released from burning coal, oil, gas, trash and wood.

They took air samples from the kitchen, truck bay, and outside the station – and conducted interviews with officers at each station to understand health and safety-related policies and practices, such as engine idle-time and washing of contaminated clothing. Particulate matter was present in higher concentrations in the truck bay than in either the kitchen or the outdoors, but levels varied throughout the day.

Newer building materials and effective separation between the different building zones helped keep levels low in the firefighters’ living areas, the study authors found. Policies for ventilating truck exhaust outside and the washing of bunker gear after a fire also had large influences on air quality.

Sparer and colleagues hope to sample air in additional stations and at different times of the year. They’re also talking to officers at the Boston stations about simple steps they can take to reduce risks, such as removing gym equipment from the truck bay, installing commercial-grade washing machines for gear, and closing doors to living areas, when possible.

A limitation of the study is the small size, which makes it difficult to assess whether the exposure numbers are exceptional, said Eero Pukkala of the University of Tampere in Helsinki, Finland. Pukkala, who wasn’t involved with this study, has studied cancer among firefighters in Finland, Norway, Denmark, Iceland and Sweden. Comparison with other indoor locations, such as other workplaces, would be helpful as well to understand the numbers and the severity that firefighters face, he told Reuters Health by email.

Opioid Abuse Just Declared a “National Emergency”

President Trump says he is ready to declare the nation’s opioid crisis a national emergency. “It is a serious problem the likes of which we have never had. You know when I was growing up, they had the LSD and they had certain generations of drugs. There’s never been anything like what’s happened to this country over the last four or five years. And I have to say this in all fairness, this is a worldwide problem, not just a United States problem. This is happening worldwide. But this is a national emergency.”

A few hours after this announcement, the White House in a statement said Trump has “instructed his administration to use all appropriate emergency and other authorities to respond to the crisis caused by the opioid epidemic.”

The president’s Commission on Combating Drug Addiction and the Opioid Crisis had recommended in an interim report released July 31 that the president immediately declare a national emergency, citing an overdose death rate of 142 a day.

The chairman of the president’s opioid commission, New Jersey Gov. Chris Christie, thanked the president “for accepting the first recommendation” of the commission’s report. “It is a national emergency and the president has confirmed that through his words and actions today, and he deserves great credit for doing so,” Christie said.

The commission’s report to the president said a declaration “would empower your cabinet to take bold steps and would force Congress to focus on funding and empowering the Executive Branch even further to deal with this loss of life.”

The report also called on Washington to grant waiver approvals to all 50 states to eliminate barriers and allow treatment at Medicaid-funded residential facilities, a move it said would rapidly increase treatment capacity.

Trump’s statement was welcomed by members of Congress. Sen. Rob Portman, R-Ohio, said Washington “must continue to fully fund important programs on prevention, treatment, and recovery.” Portman also called for Congress to pass laws to “help stop overprescribing, increase the number of treatment beds covered by Medicaid at residential treatment facilities and help stop the flow of synthetic opioids that are shipped into this country through the postal service.”

Rep. Marcy Kaptur D-Ohio, called the president’s remarks “a good step,” adding, “I will remind the President’s team as they move forward, that Medicaid provides the bulk of addiction treatment and is a key partner in providing much-needed care to those in need.”

Health and Human Services Secretary Tom Price said such a declaration is usually reserved for “time-limited” problems such as the Zika outbreak and that the administration believed they already had the resources and focus needed to tackle the problem. But he did add that “all things are on the table for the president.”

So far, six states have declared statewide emergencies for the opioid epidemic and used the declaration to help increase access to the opioid overdose reversal medication, naloxone.

WCIRB Proposes .5% Rate Increase for Next Year

The WCIRB Governing Committee voted to authorize the WCIRB to submit a January 1, 2018 Advisory Pure Premium Rate Filing to the California Insurance Commissioner.

The Filing will propose advisory pure premium rates that average $2.01 per $100 of payroll, which is 14.3% less than the industry average filed pure premium rate of $2.34 as of July 1, 2017, and 0.5% more than the average approved July 1, 2017 advisory pure premium rate of $2.00. This modest proposed increase follows five consecutive advisory pure premium rate decreases since early 2015 that have totaled more than 27%.

In his presentation to the Governing Committee, WCIRB EVP and Chief Actuary Dave Bellusci noted that the indicated January 1, 2018 average advisory pure premium rate, while slightly above the average approved July 1, 2017 pure premium rate, is more than 7% below the average January 1, 2017 advisory pure premium rate. Mr. Bellusci identified some of the factors contributing to this reduction over the last year:

– Medical losses have continued to develop downward
– Claim settlement rates have continued to accelerate
– Increasing loss adjustment expense trends have moderated
– Increased wage growth is being forecast

Mr. Bellusci also noted that countering these favorable trends and contributing to this modest proposed increase from the average approved July 1, 2017 advisory pure premium rates are recently rising average claim severities and continued sharp growth in the volume of cumulative injuries.

The WCIRB will submit its January 1, 2018 Pure Premium Rate Filing to the California Department of Insurance (CDI) on or around August 18, 2017.

The CDI will schedule a public hearing to consider the Filing and once the Notice of Proposed Action and Notice of Public Hearing is issued, the WCIRB will post a copy in the Filings and Plans section of the WCIRB website.

Court Limits Exclusive Remedy Protection for Co-workers

Melony Light began working as a seasonal Park Aide at the California Department of Parks and Recreations’s Ocotillo Wells District in San Diego County in 2010. In 2011 she was promoted to a permanent position as an Office Assistant.

Kathy Dolinar was the Superintendent of the Ocotillo Wells District and Leda Seals’s supervisor. Seals and Dolinar were close friends.

In fall 2011, Seals recommended Light for an “out-of-class” assignment as an Office Technician. An “out-of-class” assignment is a temporary assignment to a position in a higher classification with an accompanying increase in pay. Before the end of that assignment, in approximately February 2012, Seals recommended Light for a second out-of-class assignment as a Management Services Technician.

Melony Light was friends with a coworker, Delane Hurley. Seals believed Hurley to be a lesbian. Seals repeatedly made comments to Light intended to make her uncomfortable about her friendship with Hurley, to enlist Light in Seals’s harassment of Hurley based on her sexual orientation, and to encourage Light to cease all contact with Hurley. Seals’s actions allegedly caused Light to suffer emotional distress.

Hurley eventually took medical leave for stress. While she was absent, Seals asked Light to go through Hurley’s workspace and remove any personal items. Light objected because she did not feel comfortable going through Hurley’s things, but Seals insisted. Seals also told Light to move into Hurley’s office because Hurley would not be coming back to the District. Light again objected, but Seals told her the move was nonnegotiable. This situation escalated ultimately involving Kathy Dolinar as Superintendent and a convoluted series of related events.

Ultimately Light filed civil litigation against the Department for retaliation, disability discrimination, and failure to prevent retaliation and discrimination, all in violation of the Fair Employment and Housing Act. The trial court ruled in favor of the Recreation Department, and her former supervisors, defendants Leda Seals and Kathy Dolinar, following orders granting defendants’ motions for summary judgment. The Court of Appeal reversed in the partially published case of Light v Calif. Dept. of Parks and Recreation.

As to Seals and Dolinar, the court concluded contrary to the trial court that workers’ compensation exclusivity does not bar Light’s claim for intentional infliction of emotional distress under the circumstances here. As to the Department, the court concluded that triable issues of material fact preclude summary adjudication of Light’s retaliation claim, but not her disability discrimination claim.

“[T]he exclusive remedy provisions are not applicable under various circumstances, sometimes various identified as ‘conduct where the employer or insurer stepped out of their proper roles’ [citations], or ‘conduct of an employer having a “questionable” relationship to the employment’ [citations], but which may be essentially defined as not stemming from a risk reasonably encompassed within the compensation bargain.”

“Because our discussion of the interplay between workers’ compensation exclusivity and intentional infliction of emotional distress addresses an important legal issue, and our interpretation differs from a recent opinion by our colleagues in Division Three of this court (Yau v. Santa Margarita Ford, Inc. (2014) 229 Cal.App.4th 144) , we will publish that discussion, as well as our discussion of the FEHA retaliation claim on which it relies.”

Yau interpreted the California Supreme Court’s 2008 opinion in Miklosy v. Regents of the University of Cal. (2008) 44 Cal.4th 876, 902 to allow only a single exception to the workers’ compensation exclusivity rule and concluded,that the “exception does not, however, allow a ‘distinct cause of action, not dependent upon the violation of an express statute or violation of a fundamental public policy.’ ” (Ibid., quoting Miklosy, supra 44 Cal.4th at p. 902.).

“We believe Yau reads Miklosy too narrowly……..In sum, absent further guidance from our Supreme Court, we are unwilling to abandon the longstanding view that unlawful discrimination and retaliation in violation of FEHA falls outside the compensation bargain and therefore claims of intentional infliction of emotional distress based on such discrimination and retaliation are not subject to workers’ compensation exclusivity.”

CVS Faces “Fraudulent” Clawback Pricing Class Action

A California woman is suing CVS, the largest pharmacy chain in America, for allegedly charging more to customers who use insurance to pay for certain generic prescriptions. The lawsuit seeks class-action status.

NBC News reports that the lawsuit, filed on Monday, accuses CVS Health Corporation of participating in a “fraudulent scheme” and claims the plaintiff, Megan Schultz, paid $165.68 for a prescription in July that, had she bought without using insurance, would have only cost $92.

“CVS never told her that paying in cash would allow her to pay 45% less for the drug; instead, CVS remained silent and took her money – knowing full well that no reasonable consumer would make such a choice,” the complaint says.

The problem, it alleges, is with co-pays sent back to pharmacy benefit managers, or PBMs – the intermediary between insurance companies and pharmacies who negotiate the prices that insurance companies have to pay the pharmacies. PBMs control which pharmacies are in-network for the insurers, incentivizing CVS to offer them a portion of their sales so they can get more clients.

But consumers picking up prescriptions at their neighborhood CVS are blind to that. The agreements between CVS and the PBMs are based on confidential contracts, meaning the “consumer pays the amount negotiated between the PBM and CVS even if that amount exceeds the price of the drug without insurance,” the suit says.

As a result, it continues, CVS can overcharge unknowing costumers by collecting co-pays that exceed the pharmacists’ price and then remit the excess payment back to the PBMs in what’s known as “clawback” payments.

CVS denied the allegations, responding in a statement that they “are built on a false premise and are completely without merit.”

The pharmacy chain said.”Co-pays for prescription medications are determined by a patient’s prescription coverage plan, not by the pharmacy. Pharmacies collect the co-pays that are set by the coverage plans. Our pharmacists work hard to help patients obtain the lowest out-of-pocket cost available for their prescriptions. Also, our PBM CVS Caremark does not engage in the practice of co-pay clawbacks. CVS has not overcharged patients for prescription co-pays, and we will vigorously defend against these baseless allegations.”

David Balto, a former policy director of the Federal Trade Commission who is now an antitrust lawyer, called the alleged conduct by CVS “egregious” and told NBC News that PBMs are in dire need of federal regulation. “No market is as thinly regulated as PBMs, and they’re increasingly taking advantage of it,” he said. “I think it’s crystal clear: Letting tthese entities live in a Wild West regulatory environment just leads to higher costs for consumers.”

But the particular problem of clawbacks has only recently gotten attention, mostly at the state level. Last month, Connecticut Gov. Dan Malloy signed a bill to stop the practice.

The complaint says a least 16 other lawsuits have been filed against various drugstore chains accused of engaging in clawback practices.

FBI Probes Orange County Addiction Center Empire

Sovereign Health is a mental health and addiction provider with a footprint throughout Southern California, several states and India. Tonmoy Sharma is its chief executive.

Sharma started Sovereign the year after he lost his license in the UK. He was a psychiatrist in the UK, until his license was revoked for conduct deemed dishonest, unprofessional and misleading, according to documents from the General Medical Council of the UK, which licenses physicians there. There is no record that he holds a license as a physician in California.

One center with six beds grew to 17 centers with 743 beds. A giant map hanging on the conference room wall details another 851 beds in development across the nation, which would bring the total to 1,594 beds.

Last year, his company sued Health Net , one of the nation’s largest insurers, for failing to pay $55 million for medical services rendered by Sovereign-related companies. Sovereign Health’s claims were routinely denied, according to the Los Angeles Superior Court complaint. In 2015, only 36 percent of Sovereign Health’s claims were paid. In 2016 only 3 percent of its claims were paid.

In a counter-suit Health Net argued that Sharma and his companies are engaged in massive fraud that harms all consumers. Sovereign-related companies – and many other addiction-treatment providers – “have abused the Affordable Care Act in a manner that threatens the ongoing viability of health insurers,” Health Net’s suit said. “This scheme, which involves fraudulently obtaining insurance policies and the submission of thousands of false and fraudulent claims, also raises the costs of healthcare coverage to consumers, who ultimately will have to pay higher insurance premiums.”

Sovereign and its affiliates comprise one of the largest groups of fraudulent providers, Health Net charged. Within the span of a single year, Sovereign’s companies went from billing Health Net less than $50,000 a month to more than $13 million a month, Health Net’s counter-suit said. How can that happen? Many clinics – including Sovereign’s – “have been engaged in a sophisticated fraud involving paying kick-backs to ‘buy’ hundreds of patients from teams of brokers, or ‘cappers,’ who find the patients in 12-step programs, AA meetings, homeless shelters and jails, often from outside California, and then ‘sell’ them for cash to the highest-bidding clinic,” its suit said.

What Health Net describes echoes a recent investigation of the industry by the Southern California News Group. Though many legitimate centers remain, critics and long-time insiders say a darker version of the industry is emerging, built around an illicit world of patient recruiters, fraud-driven clinics and drug-testing mills. Southern California, where the implementation of Obamacare makes it easy for recent arrivals to sign on for insurance, is on the front line of the conflict.

This summer federal and state agents raided several locations of Sovereign Health as part of an ongoing probe. No arrests were made when officials executed search warrants at sites in Culver City, Palm Desert, San Clemente and San Juan Capistrano. The search warrants were filed under seal, and officials were barred from discussing the extent of the investigation.

Litigation and FBI probes are not the least of Sharma’s worries. The article in the Orange County Register also reports that “body brokers” from other providers are in his parking lots trying to steal away his patients – and their insurance coverage ‘ every day.

Hospital Pays $10M for Stem Cell Research Fraud

Medical care in workers’ compensation is based upon evidence based research. Sadly, some of this evidence is nothing more than the results of fraud.

Brigham and Women’s Hospital in Boston and its parent health care system, Partners HealthCare System, have agreed to pay $10 million in a bid to resolve the allegations that a stem cell research lab at BWH attracted and received federal grant money by fraudulent means.

Former lab scientist Piero Anversa and his colleagues Annarosa Leri and Jan Kajstura allegedly used manipulated and fabricated data to get approval for grant applications that were submitted to the U.S. National Institutes of Health.

The U.S. Attorney’s Office for the District of Massachusetts which revealed the settlement said that the controversial laboratory work involved a study concerning the potentials of the human heart in repairing itself. Unfortunately, other scientists were not able to replicate the results of the study, which was published in the journal Circulation in September 2012.

The American Heart Association, which publishes the journal Circulation, issued a retraction for the 2012 paper on the human heart’s regenerative powers prompted by reviews of BWH and the Harvard Medical School, which determined the data were compromised enough to warrant a retraction.

In a statement, the U.S. Attorney’s Office said that BWH itself shared to the government allegations against Anversa’s lab disclosing its concerns to the Office of the Inspector General, Office of Research Integrity, and the U.S. Department of Health and Human Services and worked with the Department of Justice. It also commended the effort of the hospital in disclosing the allegations.

“Medical research fraud not only wastes scarce government resources but also undermines the scientific process and the search for better treatments for serious diseases,” said acting U.S. Attorney William Weinreb. “We commend Brigham and Women’s for self-disclosing the allegations of fraudulent research at the Anversa laboratory, and for taking steps to prevent future recurrences of such conduct.”

The hospital has been conducting its own investigation since at least 2014 albeit no finding has yet been released.

“BWH is committed to ensuring that research conducted at the institution is done under the most rigorous scientific standards and has made significant enhancements to research integrity compliance protocols as a result of this event,” the hospital said.

The government alleges that among the problematic works in the laboratory included invalid and inaccurately characterized heart stem cells, improper protocols, misleading or reckless record-keeping and discrepancies of data and images that were submitted in applications to the NIH research grants and publications.

The government said that at the direction of Anversa and the two other researchers, the laboratory included scientific data in claims to NIH in a bid to get funds from NIH. The research into how and if it is possible for stem cells to be used for treating heart diseases has attracted millions of dollars in federal funding. Brigham said that the lab received a total of $42 million from NIH awards.

The three researchers are no longer affiliated with BWH and the laboratory closed in 2015.