Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: No Jurisdiction Over NFL Player’s Injuries – Affirmed, Illicit Opioid Sales Skyrocket on “Dark Net”, Uninsured Contractor Pleads Guilty, WCIRB Says 2017 Combined Loss Ratio Drops to 91%, WCIRB Considering Use of Blockchain Technology, Janitorial Companies Face July 1 PSWPA Registration Deadline, 2019 TTD Rates to Increase Nearly 3%, Robotic Doctor Passes Medical License Exam, Silicon Valley High Burn Out Rate Health Risks, FDA Approves First Cannabis Based Drug.
Federal officials are charging 601 people in the largest bust of health care fraud in U.S. history. Southern California criminal cases named a total of 33 defendants. Nine new defendants being charged as part of Operation “Spinal Cap.” The scheme was spearheaded by Michael Drobot, the former owner of Pacific Hospital in Long Beach.
In the cases announced in Operation Spinal Cap Daniel Capen, 68, of Manhattan Beach, an orthopedic surgeon, has agreed to plead guilty to conspiracy and illegal kickback charges. Capen accounted for approximately $142 million of Pacific Hospital’s claims to insurers, on which the hospital was paid approximately $56 million.
Timothy Hunt, 53, of Palos Verdes Estates, another orthopedic surgeon who referred spinal surgery patients to Capen and other doctors, has agreed to plead guilty to a conspiracy charge involving his receipt of illegal kickbacks stemming from various financial relationships with Pacific Hospital and related entities.
George William Hammer, 65, of Palm Desert, the former chief financial officer of the physician management arm of Pacific Hospital, has agreed to plead guilty to tax charges based on the fraudulent classification of illegal kickbacks in hospital-related corporate tax filings.
Lauren Papa, 52, of Tarzana, a chiropractor, has agreed to plead guilty to a conspiracy charge involving her receipt of illegal kickbacks to refer patients to a neurosurgeon with the understanding that the neurosurgeon would perform the surgeries at Pacific Hospital.
Tiffany Rogers, 53, of Palos Verdes Estates, an orthopedic surgeon, was named in an indictment unsealed Wednesday in connection with receiving illegal kickbacks to refer patients for spinal surgeries at Pacific Hospital.
Brian Carrico, 64, of Redondo Beach, a chiropractor – along with Performance Medical & Rehab Center, Inc., which was partially owned by Carrico; and One Accord Management, Inc., which Carrico wholly owned – were charged in connection with the receipt of illegal kickbacks to influence the referral of patients to Pacific Hospital. An indictment unsealed Wednesday alleges that these defendants and other co-conspirators were responsible for approximately $80 million in claims submitted to the federal workers’ compensation program and were paid approximately $56 million in connection with patients that Performance Medical referred to Pacific Hospital.
William Parker, 64, of Redondo Beach, was charged in a separate indictment unsealed on Wednesday in connection with the same kickback scheme involving Carrico and his companies.
In San Diego, the cases include Marco Antonio Chavez, a licensed medical doctor specializing in psychiatry, was charged with 30 counts of health care fraud in connection with over $928,000 in bills he submitted to TRICARE for services he never provided. He was also charged with five counts of aggravated identity theft and one count of obstruction of a federal audit..
Four defendants, including two chiropractors, a physical therapist and an acupuncturist, were charged with conspiracy to commit health care fraud and honest services fraud and to pay unlawful kickbacks stemming from their operation of R.I.S.E. Medical Center. According to the indictment, R.I.S.E. operated several “Wellness Centers” in San Diego County, including Bonita and Oceanside, and offering a range of services including physical therapy, diagnostic tests, massages, chiropractic treatments, and acupuncture..
Joserodel Zavala Candelario, a chiropractor and owner of R.I.S.E., imposed quotas for non-reimbursable services and treatments, allegedly telling staff that they were expected to provide a certain number of diagnostic tests, “no matter what”; to “grab patients in lobbies to put into provider schedules”; and to ply patients with complimentary treatments so R.I.S.E. could continue to fraudulently bill TRICARE and Medicare.
In addition, Candelario was also charged with paying a patient recruiter over $18,000 to refer TRICARE patients to the R.I.S.E. clinic. The recruiter, Mariam Reyes, was charged separately with conspiring to solicit and receive kickbacks.
In a separate indictment, Candelario was charged with participating in a scheme to defraud California Workers’ Compensation insurers and R.I.S.E. patients by receiving illegal kickbacks and bribes to refer patients to certain providers. According to the indictment, Candelario paid kickbacks to his co-schemers through a front company in exchange for referrals of Workers’ Compensation patients, and then concealed these kickbacks through sham “marketing” agreements.
One of Candelario’s co-schemers, Boris Dadiomov, was charged separately for his role in the fraudulent conspiracy. As a result of their unlawful cross-referral kickback scheme, Candelario and the other schemers received over 500 illegal patient referrals and submitted over $6.6 million in false billings to insurance companies.
Juan Pedro Gaffney, 80, of Sebastopol, has been appointed to the California Workers’ Compensation Appeals Board by Governor Brown.
Gaffney has been a member of the California Alcoholic Beverage Control Appeals Board since 2017 and director at Coro Hispano de San Francisco since 1975.
He was director of Hispanic liturgy at Mission Dolores from 1993 to 2008 and was the first artist-in-residence at the Yerba Buena Center for the Arts.
Gaffney was an associate professor of philosophy at St. Joseph’s College and a lecturer at Saint Mary’s College from 1972 to 1996.
Gaffney is a vice president of the Instituto Pro Música de California.
He has been researching, editing, teaching and performing the choral music of Latin America, Spain and Portugal for the past 35 years.
He received early choral training from local maestros Herbert Bergman, Leonard Fitzpatrick, Richard Irven Purvis, Sergei Konstantinov and Waldemar Jacobsen, later earning advanced degrees in music from the University of California at Berkeley and Stanford University.
His discovery of the classical and folk repertories of Latin America while working in Venezuela in the mid-60’s proved key in determining the path of his career.
In 1975 he founded the Coro Hispano de San Francisco and Conjunto Nuevo Mundo, and conjointly, the Instituto Pro Música’s Musicological Research Program, through which he has transcribed and/or edited more than 100 works by New World Renaissance and Baroque masters.
Maestro Gaffney also serves as Director of Hispanic Liturgy at the Basilica of Mission San Francisco de Asís.
He does not have any background in workers’ compensation. This position requires Senate confirmation and the compensation is $147,778. Gaffney is a Democrat.
Larry Tripplett was a professional football player who played defensive tackle for the Indianapolis Colts from 2002 to 2006, then played for the Buffalo Bills from 2006 to 2008, and played briefly for the Seattle Seahawks in 2008. In his six-year career, Triplett played approximately 110 games of professional football, but only played two games in California.
In 2009, Tripplett filed a claim for workers’ compensation benefits, alleging injury to multiple body parts throughout the course of his National Football League (NFL) career. Each of the defendant football teams and insurers denied his claim. Both Buffalo and Seattle disputed California jurisdiction. Trial proceeded on the jurisdiction issue.
At that trial, Tripplett testified about his hiring by Indianapolis, explaining that his agent David Dunn, who was located in Newport Beach, negotiated all of his contracts. Tripplett asserted he was living in Los Angeles when he signed his Indianapolis contract in his agent’s Newport Beach office. At the end of Tripplett’s cross-examination, he moved to “‘elect against the Indianapolis Colts. Since jurisdiction was not contested by the Colts even prior to this trial, over the objection of the Indianapolis Colts, the Court allowed the election.’”
The matter proceeded to a further trial against Indianapolis. However, after Tripplett was provided with a copy of that agreement, showing he and his agent, Joby Branion, had signed separate copies of the signature page, he acknowledged “I honestly don’t remember” where he signed the agreement. Tripplett also testified that although he “put a lot of trust in [his] agent” to negotiate his employment agreements, and “whatever he advised me to do, that’s what I signed,” it was Tripplett himself who “had the final say.”
The WCJ found that the WCAB had jurisdiction over the claim. The WCAB granted the petition for reconsideration and reversed the WCJ’s finding of jurisdiction based on Tripplett’s hiring in California. The Court of Appeal affirmed the dismissal in the unpublished case of Tripplett v. WCAB.
Tripplett relies on Labor Code section 3600.5(a), which specifies that “[i]f an employee who has been hired or is regularly [employed] in the state receives personal injury . . . arising out of . . . [such] employment outside of this state, he . . . shall be entitled to compensation according to the law of this state,” and 5305, which specifies the WCAB has “jurisdiction over all controversies arising out of injuries suffered outside the territorial limits of the state in those cases where . . . the contract of hire was made in this state.”
But when courts have grappled with the issue of determining the location at which an injured employee was hired for purposes of workers compensation law, they have done so by applying traditional principles of contract formation.
Here, Tripplett’s agent’s negotiation of terms to be included in a written employment contract was not sufficient to bind Tripplett to anything. And because those negotiations were the only contract-related activity that took place in California, there is no basis to conclude the contract was formed in this state.
In the eastern Chinese city of Hangzhou, an ambulance speeds through traffic on a wave of green lights, helped along by an artificial intelligence (AI) system and big data. The system, which involves sending information to a centralized computer linked to the city’s transport networks, is part of a trial by Alibaba Group Holding Ltd. The Chinese tech giant is hoping to use its cloud and data systems to tackle issues hobbling China’s healthcare system like snarled city traffic, long patient queues and a lack of doctors.
According to the report published by Channel News Asia, Alibaba ‘s push into healthcare reflects a wider trend in China, where technology firms are racing to shake up a creaking state-run health sector and take a slice of spending that will hit US$1 trillion by 2020.
Tencent-backed WeDoctor, which offers online consultations and doctor appointments, raised US$500 million in May at a valuation of US $5.5 billion. Ping An Good Doctor, a similar platform backed by Ping An Insurance, raised US $1.1 billion in an IPO this year. “The opportunity is growing very fast,” said Min Wanli, the Hangzhou-based chief machine intelligence scientist at Alibaba’s cloud division.
Alibaba is working with a hospital in Shanghai using data to predict patient demand and allocate doctors. In Zhejiang province, the company is working on AI-assisted diagnosis tools to help analyze medical images such as CT scans and MRIs.
Chinese hospitals are increasingly using technology to bridge the gap between urban centers and remote parts of the country where doctors are in short supply. Using document-sharing systems and livestreaming video, specialists can direct more junior medical staff on-site doing patient diagnoses.
DXY, one of China’s biggest online networks of doctors, offers consultations on the WeChat social media platform for patients with chronic diseases such as diabetes, with a team of nurses and doctors providing medical advice.
China is pressing to reduce healthcare costs that are soaring as the population ages, putting huge strains on the state insurance system. China’s healthcare system has long grappled with a shortage of doctors, exacerbated by low wages and a dearth of local clinics and general practitioners. That means patients often crowd into large, specialist hospitals for even minor ailments.
Beijing has enacted legislation over the last two years that has included strong support for internet-based basic healthcare services. Now, Beijing may be about approve the sale of some prescription drugs online, creating a major opportunity for local and global firms, according to companies in the sector.
Janssens of Merck KGaA said the company had “good indications” that policymakers were addressing the issue of pharmaceutical e-commerce “as we speak”.
In the United States, technology firms like Amazon, Google and Apple have made pushes into healthcare, with mixed results, often finding sprawling medical markets tougher to crack than entertainment or media. Technology firms in China also face major obstacles.
One is convincing patients to see doctors online or getting hospitals to spend extra money on high-tech tools that promise efficiency boosts or improvements for patients. And regulators still have concerns about drug sales online.
Wang Aihu, a cardiologist at Beijing Chaoyang Hospital, said medical centers were increasingly using online appointment and payment systems, and that he conducted internet consultations for patients in remote regions. He added that his hospital may eventually have “AI-powered medical imaging systems or robot doctors”, but these could not replace medical staff.
That hasn’t stopped one hospital in Beijing doing a “man vs machine” standoff this month to detect neurological disorders including brain tumors. A robot developed by the prestigious Tsinghua University and iFlytek, a local firm, has also taken and passed China’s medical exam for doctors.
The Workers’ Compensation Insurance Rating Bureau (WCIRB) has prepared a new report containing estimated California workers’ compensation costs for 2017 based on insured employer experience. The report also reflects payments made by the California Insurance Guarantee Association (CIGA)
Key findings in the report include:
Total insurer combined losses and expenses incurred in 2017 were $16.2 billion, or 91% of calendar year premium, compared to $16.9 billion (or 94% of calendar year premium) in 2016.
Calendar year 2017 earned premium totaled $17.7 billion (as compared to the $18.0 billion of premium earned in 2016).
Medical losses paid in 2017 were $4.7 billion, or 56% of total loss payments. Of these payments, $1.3 billion were paid for physician services, $1.3 billion were payments made directly to injured workers, $0.7 billion were paid for inpatient or outpatient services, $0.2 billion were paid for pharmaceuticals, and $0.3 billion were paid for medical-legal evaluations.
Beginning with claims incurred on policies incepting on or after July 1, 2010, the cost of medical cost containment programs is required to be reported to the WCIRB as allocated loss adjustment expense rather than as medical loss.The total cost of medical cost containment programs in 2017 was $443 million compared to $468 million in 2016.
Indemnity benefits paid in 2017 were $3.7 billion, or 44% of total loss payments. Of this amount, temporary disability benefits paid totaled $1.8 billion and permanent partial disability benefits paid totaled $1.5 billion.
Medical-legal cost data for 2017 shows that orthopedic evaluations accounted for about 55% of the cost of all medical-legal evaluations. The exhibits also show that the average cost of a medical-legal evaluation was $1,496. Psychiatric evaluations were the most expensive, averaging $3,268.
Incurred loss adjustment expenses (allocated and unallocated) in 2017 were $3.3 billion, or 19% of earned premium. (This includes the full cost to insurers of administering, adjudicating and settling claims.) Incurred loss adjustment expenses include $894 million in defense attorney expenses incurred in 2017. (For comparison purposes, in 2016, incurred loss adjustment expenses were 16% of earned premium, including $827 million in defense expenses.)
In total, California insurers have incurred about $6.7 billion in expenses in 2017, or 38% of 2017 earned premium. (For comparison purposes, in 2016, total incurred expenses were 34% of earned premium.)
Although generally part of incurred indemnity losses rather than expenses, the amount paid in 2017 to applicant attorneys was derived from the WCIRB’s Annual Expense Call. In 2017, applicant attorneys were paid $413 million. (In 2016, applicant attorneys were paid $408 million.)
California-based janitorial workers are entitled to certain unique rights under California law. Specifically, there are two important Acts designed to protect these workers: The Displaced Janitors Opportunity Act (“DJOA”) and the Property Service Workers Protection Act (“PSWPA”).
In 2016, the Property Service Workers Protection Act (PSWPA) was adopted. It was modified in 2017. Other than record retention, PSWPA’s next compliance date is July 1, 2018.
Commencing January 1, 2017, janitorial employers are required under PSWPA to keep accurate records for three (3) years consisting of: (A) names and addresses of all employees engaged in rendering actual services for any business of the employer, (B) daily hours worked, including the times the employee begins and ends each work day, (C) wages paid each payroll period, (D) ages of any minor employees, and (E) any other conditions of employment (job descriptions, workplace injuries, and similar type of records).
Covered janitorial employers must register with the California Labor Commissioner. The registration fee is $500. Additional information is required in the application. Registration must occur no later than July 1, 2018 (which is a Sunday). The Labor Commissioner’s Office has launched an online registration system for janitorial service providers and contractors operating in California to register annually as required by law.
The Labor Commissioner’s Office urges janitorial employers to quickly register. Those who fail to register by October 1, 2018 may be subject to a civil fine, as will any person or entity who contracts with a janitorial employer lacking valid registration.
“The online registration tool will make it easy for janitorial employers to comply with the law, and will help us to hold accountable businesses in the underground economy that underpay their workers and evade labor laws,” said Labor Commissioner Julie A. Su. “The registration requirement is another tool for property owners to distinguish law-abiding contractors from wage thieves and to protect honest businesses from unfair competition.”
The Labor Commissioner’s Office has posted a registration search tool that shows whether employers and contractors are properly registered, as well as FAQs.
For more information, call the Licensing and Registration Unit at (510) 879-8333 Monday through Friday from 8 a.m. to 5 p.m. or email dlsejanitorial@dir.ca.gov
The Division of Labor Standards Enforcement, or the Labor Commissioner’s Office, is the division within the Department of Industrial Relations (DIR) with wide-ranging enforcement responsibilities including adjudicating wage claims, inspecting workplaces for wage and hour violations, investigating retaliation complaints and educating the public on labor laws.
A survey conducted among the tech workers, including many employees of Silicon Valley’s elite tech companies, has revealed that over 57% of respondents are suffering from job burnout.
The survey was carried out by the team at Blind, an anonymous IM and work conditions review app used by the employees of many top tech firms, such as Microsoft (40K+ users), Amazon (25K+ users), Google (10K+ users), Uber (7K+ users), LinkedIn (5K+ users), and Facebook (5K+ users). Over 11,000 employees at top tech companies responded
From May 12 through May 21, the Blind team asked the app’s users an anonymous question – if they currently suffered from workplace burnout. According to Blind, 11,487 users answered the question, and 57.16% said “Yes” – that they are currently suffering from occupational burnout.
The company with the highest employee burnout rate was Credit Karma, with a whopping 70.73%, followed by Twitch (68.75%), Nvidia (65.38%), Expedia (65.00%), and Oath (63.03% —Oath being the former Yahoo company Verizon bought in July 2017).
On the other end of the spectrum, Netflix ranked with the lowest burnout rate of only 38.89%, followed by PayPal (41.82%), Twitter (43.90%), Facebook (48.97%), and Uber (49.52%).
“The results for Netflix and Credit Karma seem to reflect what users are saying about these companies on Blind,” the Blind team said.
“Netflix is mostly described as a desirable place to work with high compensation, balanced hours, and supportive coworkers – conditions that reduce the risk of burnout. The most negative comment you’ll likely find is that Netflix has a defined culture that can be “cultish” but you’ll rarely find a post that says the company is toxic.
“Credit Karma has more mixed and polarized reviews: Some employees say that Credit Karma is one of the best companies they’ve worked for, with tight-knit teams and a higher than average number of women in leadership roles. Then there are others who accuse the company of discrimination, harassment, and workplace politics – a recipe for a toxic work environment, which can increase the risk of experiencing dissatisfaction and burnout.”
The Blind team warns that if these companies ignored this survey, the presence of work burnout could lead to health issues among its employees, such as insomnia, depression, substance abuse, and coronary heart disease, which could incur additional healthcare-related expenses and diminish the workforce’s productivity.
Furthermore, burnout cannot be ignored by HR departments and is often a first sign that employees might soon decide on another career path and leave the company.
A Kronos study from January 2017 revealed that 46% of HR departments blamed work burnout as responsible for up to half of their annual workforce turnover.
The Division of Workers’ Compensation (DWC) announces that the 2019 minimum and maximum temporary total disability (TTD) rates will increase on January 1, 2019.
The minimum TTD rate will increase from $182.29 to $187.71 and the maximum TTD rate will increase from $1,215.27 to $1,251.38 per week.
Labor Code section 4453(a) (10) requires the rate for TTD be increased by an amount equal to percentage increase in the State Average Weekly Wage (SAWW) as compared to the prior year.
The SAWW is defined as the average weekly wage paid to employees covered by unemployment insurance as reported by the U.S. Department of Labor for California for the 12 months ending March 31 in the year preceding the injury.
In the 12 months ending March 31, 2018, the SAWW increased from $1,206.92 to $1,242.78 – an increase of 2.971 percent.
Under Labor Code section 4659(c), workers with a date of injury on or after January 1, 2003 who are receiving life pension (LP) or permanent total disability (PTD) benefits are also entitled to have their weekly LP or PTD rate adjusted based on the SAWW.
The first quarter 2017 SAWW figures may be verified at the U.S. Department of Labor website, as can the first quarter 2018 SAWW figures.
The U.S. health regulator approved GW Pharmaceuticals Plc’s epilepsy treatment on Monday, making it the first cannabis-based drug to win approval in the country and opening floodgates for more research into the medicinal properties of cannabis.
The drug’s approval permits its use in patients aged two years and older with Dravet Syndrome (DS) and Lennox-Gastaut Syndrome (LGS), rare childhood-onset forms of epilepsy that are among the most resistant to treatment.
“This approval serves as a reminder that advancing sound development programs that properly evaluate active ingredients contained in marijuana can lead to important medical therapies,” said Food and Drug Administration Commissioner Scott Gottlieb.
According to the report in Reuters Health, the drug, Epidiolex, is made up of cannabidiol (CBD), one of the hundreds of molecules found in the marijuana plant, and contains less than 0.1 percent of tetrahydrocannabinol (THC), the psychoactive component that makes people high.
GW Pharma grows its own supply of cannabis in specialized glass houses in the United Kingdom to ensure uniformity in the genetic composition of the plants, which are then processed into a liquid solution of CBD.
Although THC can induce paranoia, anxiety and hallucinations, CBD has the opposite effect and has been cited by scientists as a potential treatment for mental health issues.
While supporters of legalizing marijuana say the decision is a step in the right direction, businesses reliant on the plant must contend with the federal government’s ban on its use.
Based on the potential for abuse, the Drug Enforcement Administration (DEA) categorizes chemicals into five schedules, with Schedule 1 substances – like marijuana and heroin – considered the most deadly and deemed to have no medical benefits.
As a result, Epidiolex’s launch remains at the discretion of the DEA, which must now evaluate the drug and consider reclassifying it as a substance that has medical properties, so as to allow GW to begin selling it.
GW said it expects the reclassification to occur within 90 days. The company has not yet set a price for the drug and said it would work with insurance providers to ensure the medicine would be covered under health plans.
Most patients with LGS and DS require multiple seizure medications and the majority are resistant to currently approved anti-epileptic drugs.
The two epilepsy forms are severe and associated with high rates of mortality. Some LGS patients have to wear helmets to avoid brain injuries from “drop seizures”, where muscles suddenly become limp and cause standing patients to collapse.
Epidiolex would also be the first approved therapy for DS, treatments for which are currently limited to a combination of seizure medication and drugs to prevent emergencies.
Treatments available for both disorders are far from perfect and some patients resort to buying “self-prescribed” CBD online or from unregulated vendor sites, Dr. Pavel Klein, founder of the Mid-Atlantic Epilepsy and Sleep Center, said.