Author: WorkCompAcademy

The Department of Industrial Relations’ Division of Workers’ Compensation has issued a notice of public hearing which will take place on September 6, 2017 for proposed evidence-based updates to the Medical Treatment Utilization Schedule (MTUS) regulations by Administrative Director order.

There have been many new scientific and medical developments since the MTUS was initially adopted in 2007. Because most of the treatment guidelines have not been updated since 2007, these new scientific and medical developments have not been incorporated into the MTUS. The MTUS must be able to keep up with the evolving nature of scientific evidence to ensure that its recommendations accurately represent current standards of care. Thus, the primary policy objective of this action is to update the MTUS’ medical treatment guidelines so that its recommendations accurately represent current evidence-based standards of care.

These proposed evidence-based updates to the MTUS incorporate by reference the American College of Occupational and Environmental Medicine’s (ACOEM’s) most recent treatment guidelines to the General Approaches, Clinical Topics, and Special Topics sections of the MTUS.Below is a list of the most recent ACOEM guidelines that will be incorporated by reference into the MTUS:

– Initial Approaches to Treatment Guideline (ACOEM June 30, 2017)
– Cervical and Thoracic Spine Disorders Guideline (ACOEM May 27, 2016)
– Shoulder Disorders Guideline (ACOEM August 1, 2016)
– Elbow Disorders Guideline (ACOEM 2013)
– Hand, Wrist, and Forearm Disorders Guideline (ACOEM June 30, 2016)
– Low Back Disorders Guideline (ACOEM February 24, 2016)
– Knee Disorders Guideline (ACOEM October 28, 2015)
– Ankle and Foot Disorders Guideline (ACOEM September 2015)
– Eye Disorders Guideline (ACOEM April 1, 2017)
– Hip and Groin Guideline (ACOEM May 1, 2011)
– Occupational/Work-Related Asthma Medical Treatment Guideline (ACOEM January 4, 2016)
– Occupational Interstitial Lung Disease Guideline (ACOEM January 4, 2016)
– Chronic Pain Guideline (ACOEM May 15, 2017)
– Opioids Guideline (ACOEM April 20, 2017)

The public hearing is scheduled for September 6, 2017 at 10:00 a.m. in the auditorium of the Elihu Harris Building, 1515 Clay Street, Oakland, California. Members of the public may review and comment on the proposed evidence-based updates to the MTUS until 5 p.m. on September 6, 2017.

These proposed evidence-based updates to the MTUS regulations are exempt from Labor Code sections 5307.3 and 5307.4 and the rulemaking provisions of the Administrative Procedure Act. However, DWC is required to have a 30-day public comment period, hold a public hearing, respond to all the comments received during the public comment period, and publish the order online.

Senate Bill (SB) 1160 and Assembly Bill (AB) 1244 introduced new changes to the workers’ compensation system for adjudicating liens.

Following a criminal conviction that provides a disposition order that the liens will be dismissed, those liens in which the convicted medical provider has an ownership interest will be automatically dismissed in the Workers’ Compensation system by operation of law.

Where the criminal case disposition is silent regarding the outstanding liens, the DWC Administrative Director will identify all liens owned, in whole or in part, by the convicted medical provider and will schedule a consolidated proceeding at a venue designated by the Chief Judge.

According to Labor Code Section 139.21(g), it will be presumed that the liens of the convicted medical provider were based on services connected to the fraud which resulted in the criminal conviction. The statute specifically requires that the medical provider affirmatively prove by a preponderance of the evidence that the services were not connected to the fraud.

Even assuming that the medical provider is able to overcome this hurdle, the employer will retain its ability to defeat the lien on all existing grounds, such as that the services were not reasonably designed to effectuate cure or relief of an industrial injury, that the services were not reasonably calculated to offer proof in connection with a contested issue or that the charges exceeded the Official Medical Fee Schedule or the Medical-Legal Fee Schedule.

The industry will now be given an opportunity to see how this new law works. Pending lien consolidation hearings for suspended physicians, practitioners or providers are posted on the DWC Website. The DWC has scheduled lien consolidation status conferences in August for suspended providers Philip A. Sobol, Michael R. Drobot and Michael D. Drobot on August 16, 17 and 23 respectively. All three will be heard in Van Nuys before WCJ William Gunn.

Combined, the three have roughly 13,000 liens, which have been consolidated pursuant to the chief judge’s order, in the workers’ compensation system pending further determination, according to the DWC.  The list of lien claims for Philip A. Sobol, is 322 pages, Michael R. Drobot is 183 pages, and Michael D. Drobot is 74 pages long.  The documents reflect the case number, injured worker, employer and claims administrator.  

Although LC 139.21(h) provides that “The special lien proceedings shall be governed by the same laws, regulations, and procedures that govern all other matters before the appeals board,” it is not yet clear if any of the employers will have due process rights to call witnesses and present evidence at the consolidated lien hearings, rights to discovery, or more importantly, if employers do not participate if they will be limited in presenting defenses at hearings on each individual case.

Michael D. Drobot, former CEO and owner of Pacific Hospital of Long Beach, pled guilty for his role in a scheme to illegally refer patients for spinal surgeries. DWC suspended him from participating in the California workers’ compensation system on April 28.

Michael R. Drobot operated California Pharmacy Management and Industrial Pharmacy Management, companies that also participated in the kickback scheme. The son of Michael D. Drobot, he pled guilty in U.S. District Court last year to conspiracy and illegal kickback charges and was suspended May 15.

Philip Sobol, an orthopedic surgeon in Los Angeles, was suspended in May based on a criminal conviction involving fraud and abuse of the workers’ compensation system. Sobol pled guilty for participating in the kickback scheme at Pacific Hospital of Long Beach, illegally referring thousands of his patients for spinal surgeries.

The operators of seven sham Southern California “pop-up” medical clinics were among 12 defendants taken into custody this week on federal drug trafficking charges that allege they diverted at least 2 million prescription pills – including oxycodone and other addictive and dangerous narcotics – to the black market.

Two indictments returned by a federal grand jury alleges that members of the conspiracy profited from illicit prescriptions that were issued without any legitimate medical purpose through a series of clinics that periodically opened and closed in a “nomadic” style.

Those arrested include Minas Matosyan, an Encino man also known as “Maserati Mike,” who is charged with leading the scheme. He owned six of the seven sham clinics, which were, at times, located in the Westlake District, North Hollywood and the city of Orange.

The indictments and search warrants describe how Matosyan would “rent out recruited doctors to sham clinics.” Matosyan allegedly supplied corrupt doctors in exchange for kickbacks derived from proceeds generated when the other sham clinics created fraudulent prescriptions or submitted fraudulent bills to health care programs.

In one example described in the court documents, Matosyan provided a corrupt doctor to a clinic owner in exchange for $120,000. When the clinic failed to pay the money and suggested instead that Matosyan “take back” the corrupt doctor, Matosyan demanded his money and said, “Doctors are like underwear to me. I don’t take back used things.”

The conspirators also allegedly stole the identities of doctors who refused to participate in the scheme. In an intercepted telephone conversation described in court documents, Matosyan offered a doctor a deal to “sit home making $20,000 a month doing nothing.” When the doctor refused the offer, the conspirators nevertheless created prescription pads in the doctor’s name and allegedly began selling fraudulent prescriptions for oxycodone without the doctor’s knowledge or consent.

The indictment also charges Matosyan and others – including Glendale-based criminal defense attorney Fred Minassian – with obstruction of justice for allegedly creating fraudulent medical records in an effort to deter the investigation. After a load of Vicodin was seized from one of the conspiracy’s major customers, Matosyan allegedly oversaw the creation of fake medical paperwork in an effort to make it appear the drugs had been legitimately prescribed. The indictment describes intercepted conversations in which Minassian strategized on how to deceive law enforcement, which included a plan to bribe a doctor to lie to authorities.

The 12 defendants arrested are:

– Minas Matosyan, 36, of Encino, who is accused of leading the scheme by recruiting corrupt doctors, overseeing the theft of other doctors’ identities, and negotiating the sale of fraudulent prescriptions and narcotic pills;
– Armen Simonyan, 52, of Burbank, who allegedly managed the operations at some of the fraudulent clinics;
– Grisha Sayadyan, 66, of Burbank, who allegedly managed the operations at various clinics and sold oxycodone and Vicodin pills directly to black market customers;
– Sabrina Guberman, 45, of Encino, who, while working at the sham clinics, allegedly lied to pharmacies seeking to verify the fraudulent narcotic prescriptions, which included creating and sending fake medical paperwork;
– Frederick Manning Jr., 47, of Santa Ana, allegedly one of the major drug customers of the clinics, who is charged with agreeing to purchase as many as 1,000 pills per week of narcotics from Matosyan;
– Fred Minassian, 50, of Glendale, the criminal defense attorney who allegedly spearheaded the scheme to lie to law enforcement by making it falsely appear that Vicodin seized from Freddie Manning Jr. had been legitimately prescribed by a doctor;
– Ralph Manning, 49, of North Hills (no relation to Frederick Manning Jr.), who is charged with being one of the principal couriers Matosyan used to deliver fraudulent prescriptions and “bulk quantities” of narcotic pills;
– Hayk Matosyan, 30, of Granada Hills, Matosyan’s brother, who allegedly filled fraudulent narcotic prescriptions at pharmacies and sold the resulting narcotics pills to black-market customers.
– Marisa Montenegro, 54, of West Hills, who allegedly filled fraudulent prescriptions;
– Elizabeth Gurumdzhyan, 25, of Hollywood, who allegedly filled fraudulent prescriptions;
– Anait Guyumzhyan, 27, of Hollywood, who allegedly filled prescriptions for oxycodone and returned the drugs to Matosyan-operated clinics in exchange for cash payment; and
– James Wilson, 54, of Venice, who alone is charged in the second indictment with illegally selling oxycodone prescriptions out of a Long Beach clinic that he controlled.

Authorities are continuing to seek two defendants named in the main indictment. Those fugitives are: Gary Henderson, 62, of Lancaster, who allegedly purchased fraudulent oxycodone prescriptions from Matosyan; and an unidentified conspirator known only by the name “Cindy.”

The Centers for Medicare & Medicaid Services (CMS) issued an updated Workers’ Compensation Medicare Set-Aside (WCMSA) Reference Guide on July 31st. There are several important changes.

This guide was written to help readers understand the process used by the Centers for Medicare & Medicaid Services (CMS) for approving proposed Workers’ Compensation Medicare Set-Aside Arrangement (WCMSA) amounts and to serve as a reference for those choosing to submit such amounts to CMS for approval. Submitters may include injured workers themselves, their attorneys, Workers’ Compensation Medicare Set-Aside Arrangement (MSA) agents or consultants, or claimants’ other appointed representatives.

Under the provisions of the new Guide, CMS has expanded the criteria for submission of a WCMSA re-review, which is the closest thing it has to an “appeal” of a prior CMS MSA valuation.

Effective 07/31/2017, submitters can submit a re-review request where CMS has provided an approved amount, but settlement has not occurred and the medical care that supported the approved amount has changed substantially. The clarifications also address situations where certain states rely on Utilization Review processes to justify proposed WCMSA amounts.

Re-review functions as the only “appeal” type process to the amount CMS requires to approve a submitted WCMCA with a settlement.

Previously there were two Re-Review options (1 and 2 noted below). Now, CMS adds a third option referred to as the “Amended Review”.

– Option 1: You believe CMS’ determination contains obvious mistakes
– Option 2: You believe you have additional evidence, not previously considered by CMS, which was available prior to the submission date of the original proposal which warrants a change in the CMS’ determination.
– Amended Review: You believe projected care has changed so much the new proposed amount would result in a 10% or $10,000 change (whichever is greater) in CMS’ previously approved amount.

CMS specifies only one Amended Review is permitted per case and another re-review cannot be requested if a request for an Amended Review is denied. The following criteria have to be met for a case to be eligible for an Amended Review:

– The case must have been originally submitted between one and four years from the current date and cannot have a previous request for an Amended Review
– Must result in a 10% or $10,000 change (whichever is greater) in CMS’ previously approved amount

CMS has also noted as part of the re-review request, you may change from brand-named medications to generic medications and drug types. However, this change cannot be the sole reason for your re-review request. You must include additional changes (such as changes in dosage and/or frequency, additional medications, or medications no longer taken) to qualify for a re-review request.

Carriers and Third Party Administrators now have an opportunity to evaluate open cases to verify if any would fit the criteria for an Amended Review if medical circumstances have changed since CMS submission. The new criteria may provide a chance to settle the case where previously it was not possible.

According to a new California Workers’ Compensation Institute (CWCI) study, more than 30 percent of the prescription drugs currently dispensed to injured workers in California will be classified as “Exempt Drugs” and will no longer require authorization prior to dispensing under conditions outlined in the Workers’ Compensation Prescription Drug Formulary regulations proposed by the state.

The California Division of Workers’ Compensation is putting the final touches on the regulations governing the new formulary mandated by 2015 legislation (AB 1124), which is now scheduled to take effect January 1.

The intent of the formulary is twofold: 1) to improve the quality of care by assuring that the drugs provided to injured workers meet evidence-based medicine standards; and 2) to reduce delays and frictional costs associated with disputes over requests for pharmaceuticals. The regulations proposed by the state and recently modified following public hearings, include a Formulary Drug List based on the American College of Occupational and Environmental Medicine’s (ACOEM) pharmaceutical formulary.

To analyze the impact of the Formulary on current prescribing patterns and the workers’ comp medical dispute resolution process, CWCI researchers modeled 650,000 prescriptions and other proprietary databases against the terms of the proposed regulations and found:

– Nearly 1/3 (31 percent) of the prescription drugs dispensed to California injured workers in 2016 are on the proposed Exempt Drug list and could be dispensed without pre-authorization;
– The Formulary should reduce pharmaceutical disputes and the associated costs and delays as 22.5 percent of the drug requests that now go through utilization review and 21.4 percent of those that go through independent medical review involve drugs that are on the proposed Exempt drug list;
– The Formulary exempts 15 “Special-Fill” drugs (allowing a 4-day supply following an injury if prescribed or dispensed at the first medical visit within 7 days) and 14 “Perioperative” drugs that can be dispensed 4 days prior to surgery and up to 4 days after surgery. Together these drugs account for 2.6 percent of all workers’ compensation prescriptions.

According to the authors, the findings that the proposed Formulary will help assure that drugs provided to injured workers meet evidence-based medicine standards while reducing disputes over prescription drug requests show that the current regulations represent a major step toward achieving the legislative intent of AB 1124.

At the same time, the Formulary opens the door for additional controls that could be used to address the high cost of workers’ compensation pharmaceuticals.

CWCI has issued its analysis in a Spotlight Report, “California’s Workers’ Compensation Formulary Part 2: A Review of the July 2017 Proposed Formulary Drug List of Exempt and Non-Exempt Drugs,” which is available to CWCI members and subscribers in the Research section of the Institute’s website (www.cwci.org). Others may purchase the report from the CWCI Store.