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Author: WorkCompAcademy

No End in Sight to EDD Fraud Prosecutions.

A federal grand jury brought a six-count indictment against 34 Cecilia Aquino, of Fresno, charging her with mail fraud, wire fraud, and aggravated identity theft for submitting unemployment insurance claims and applications for Small Business Administration (SBA) Economic Injury and Disaster Loans using stolen identities.

According to court documents, from June through November 2020, Aquino submitted unemployment benefit claims in at least seven states and at least four loan applications that contained misrepresentations. She claimed that the named individuals last worked as self-employed dancers and owned interior design businesses, and that because of the COVID-19 pandemic, they lost their jobs and business revenue, respectively.

The state workforce agencies that administer the unemployment insurance system, the SBA, and the United States suffered an actual loss of at least $220,000 and were subject to a potential loss of more than $350,000 because of Aquino’s fraud. Aquino used the money for gambling, rent, shopping, and other personal expenditures.

If convicted, Aquino faces a maximum statutory penalty of 20 years in prison and a fine of up to $250,000 for each of the mail and wire fraud counts, and a mandatory two-year sentence consecutive to other counts and a fine of up to $250,000 for each of the aggravated identity theft counts.

And in an unrelated case, 44 year old Deborah Shannell Hollimon, of West Memphis, Arkansas, pleaded guilty to committing mail fraud in connection with California state unemployment insurance benefits.

This case was well before the current pandemic, and demonstrates that EDD fraud has existed for many years.

According to court documents, from September 2012 through September 2015, Hollimon and others filed over 100 fraudulent unemployment insurance claims with the California EDD seeking approximately $882,991 using fictitious businesses.

Hollimon created fictitious employers with EDD and then submitted information to EDD reporting fake employees for the businesses. Almost all, of the individuals reported as employees of the companies were actually victims of identity theft. Hollimon subsequently filed unemployment claims in her own name and in the names of the fake employees in order to collect the benefits. Approximately $569,168 in fraudulent benefits was paid out by EDD.

Hollimon is scheduled to be sentenced on Aug. 19. Hollimon faces a maximum statutory penalty of 20 years in prison and a $250,000 fine.

DOJ COVID – Health Care Fraud Coordinated Law Enforcement Actions

The Department of Justice announced criminal charges against 14 defendants in seven federal districts across the United States for their alleged participation in various health care fraud schemes, that exploited the COVID-19 pandemic and resulted in over $143 million in false billings.

Multiple defendants offered COVID-19 tests to Medicare beneficiaries at senior living facilities, drive-through COVID-19 testing sites, and medical offices to induce the beneficiaries to provide their personal identifying information and a saliva or blood sample.

The defendants are alleged to have then misused the information and samples to submit claims to Medicare for unrelated, medically unnecessary, and far more expensive laboratory tests, including cancer genetic testing, allergy testing, and respiratory pathogen panel tests.

In some cases, and as alleged, the COVID-19 test results were not provided to the beneficiaries in a timely fashion or were not reliable, risking the further spread of the disease, and the genetic, allergy, and respiratory pathogen testing was medically unnecessary, and, in many cases, the results were not provided to the patients or their actual primary care doctors.

The proceeds of the fraudulent schemes were allegedly laundered through shell corporations and used to purchase exotic automobiles and luxury real estate.

The Fraud Section is prosecuting the cases in the following districts: Western District of Arkansas, Northern District of California, Middle District of Louisiana, Central District of California, Southern District of Florida, District of New Jersey, and the Eastern District of New York.

Northern District of California

Mark Schena, 58, of Los Altos, California, the president of Arrayit Corporation, is charged along with two others, the Arrayit Vice President of Marketing and the President of an Arizona marketing organization, in connection with the submission of over $70 million in false and fraudulent claims for allergy and COVID-19 testing. The superseding indictment against Schena includes new counts of health care fraud, a conspiracy to pay kickbacks, and payment of kickbacks in connection with false and fraudulent statements about the existence, regulatory status, and accuracy of an Arrayit COVID-19 test. The conspiracy allegedly sought to induce the ordering of the Arrayit COVID-19 test and to bundle, i.e., require combination with, the COVID-19 test and Arrayit’s medically unnecessary allergy test. The COVID-19 test results were not provided in a timely fashion and were not reliable in detecting COVID-19.

Central District of California

Petros Hannesyan, 36, of Burbank, California, was charged with the theft of government property and wire fraud in connection with $229,454 that he obtained from COVID-19 relief programs. Hannesyan, the owner of Hollywood Home Health Services, Inc., a home health agency located in Los Angeles, allegedly misappropriated funds from the CARES Act Provider Relief Fund and submitted false loan applications and a false loan agreement to the Economic Injury Disaster Loan Program, rather than use the funds for COVID-19 patient care and to support small businesses experiencing disruption due to the COVID-19 pandemic.

Federal Judge Rejects $2B California Roundup Cancer Case Settlement

Many California agricultural workers have been exposed to a pesticide known as Roundup, and some of them may develop cancers. These cancer cases can then become continuous trauma claims under workers’ compensation law.

Thousands of Roundup tort cases are pending in civil courts in several states. A favorable outcome will likely support subrogation in the decades ahead for these claims.

Monsanto Company manufactures Roundup, a pesticide with the active ingredient glyphosate. Bayer AG acquired the agrochemical company in a multibillion-dollar merger in 2018.

Bayer to date has lost several U.S. jury trials in the Roundup litigation, with juries in California awarding multi-million dollar awards. In a recent California case, the jury returned a verdict in favor of plaintiff Edwin Hardeman, awarding him $5,267,634.10 in compensatory damages and $75 million in punitive damages. The district court reduced the jury’s punitive damages award to $20 million. This May, the Ninth Circuit Court of Appeals affirmed the a district court result in the published case of Edwin Hardeman v Monsanto Company.

These bellwether cases led up to attorneys for certain individual plaintiffs in the Multi District Litigation pending in Northern California, negotiating a class action settlement with Monsanto that would cover potential future lawsuits. Last February, Bayer announced it had reached a $2 billion settlement resolving outstanding and future legal issues). The proposed compensation would only have been considered for those who develop non-Hodgkins lymphoma within four years of settlement.

Attorneys representing cancer victims objected to the proposed settlement earlier this month and, ultimately, Judge Vince Chhabria agreed with them. In his newly issued opinion, Chhabria said Bayer’s proposed settlement was “clearly unreasonable” with “glaring flaws” that “vastly overstated” the potential benefits to future cancer victims from Roundup, particularly those who have not yet been diagnosed.

Judge Chhabria added “This is not a situation where the defendant is at risk of going bankrupt, such that only the first set of plaintiffs will be able to recover. Bayer (which recently acquired Monsanto) is a massive, wealthy company, and it continues to make money specifically from Roundup sales.”

“Nor is there any indication that the company will cease its efforts to settle cases. As recently as last week, Bayer stated publicly that it remains committed to settling Monsanto’s Roundup litigation. This is not surprising because the alternative to settling – continuing to lose trials left and right – is not attractive.”

In 2019, Chhabria oversaw the first federal trial on Edwin Hardeman’s claims that Monsanto sold Roundup without a warning label, after which a jury awarded Hardeman $75 million in punitive damages after finding years of Roundup use likely caused his non-Hodgkin lymphoma.

Injury by Unauthorized Homeless Person Conflict Compensable

Abraham Alex was employed as a security officer/guard by All Nation Security Services, Inc.

On August 24, 2017 a homeless person came inside the lobby of the Greyhound bus station where he was working. The homeless person was dancing and speaking badly in the lobby. An employee asked Applicant to escort the homeless person outside. Applicant asked whether the homeless person had a ticket and asked him to leave. The homeless person did not leave and cursed at Applicant and hit Applicant in the left temple with a fist. Applicant fell outside the lobby and the homeless person ran off.

He suffered a traumatic brain injury with evidence of intracranial hemorrhage for which he underwent surgery and continues to have symptoms associated with concussion. He filed a workers’ compensation claim for his injuries.

Company rules state that the security officer is expected to manage aggressive behavior or disturbed persons but refrain from chasing, restraining, and subduing individuals. The employee manual it provides that the security offices are “expected to challenge persons in a professional manner to enforce access to restricted areas” but are not to put themselves in danger. It further instructs officers to diffuse incidents verbally or call the proper authorities and refrain from touching, tackling, chasing, assaulting or grabbing anyone.

The employer denied the injury claiming it was outside the scope of his employment. However the WCJ concluded that “the record shows Applicant was performing his job as a security guard in furtherance of the Greyhound business when he was injured. This is true even if the injury was caused by an impact with the ground outside the station or if Applicant violated a policy in the process. Applicant is entitled to workers’ compensation benefits.”

Reconsideration was denied in the panel decision of Abraham Alex v All Nation Security Services Inc.

In Westbrooks v. Workers’ Comp. Appeals Bd. and Greyhound Lines (1988) 203 Cal.App.3d 249 [53 Cal.Comp.Cases 157], the Court of Appeals stated: Employee misconduct, whether negligent, willful, or even criminal, does not necessarily preclude recovery under workers’ compensation law. In the absence of an applicable statutory defense, such misconduct will bar recovery only when it constitutes a deviation from the scope of employment.

In determining whether particular misconduct takes an employee outside the scope of his employment, “A distinction must be made between an unauthorized departure from the course of employment and the performance of a duty in an unauthorized manner. Injury occurring during the course of the former conduct is not compensable. The latter conduct, while it may constitute serious and willful misconduct by the employee (Lab. Code, § 4551), does not take the employee outside the course of his employment.”

If the employment places an applicant in a location and he or she was doing an activity reasonably attributable to employment or incidental thereto, an applicant will be in the course of employment and the injury may be industrially related. (Western Greyhound Lines v. Ind. Acc. Com. (Brooks) (1964) 225 Cal.App.2d 517 [29 Cal.Comp.Cases 43].)

WCAB Declines Jurisdiction Over UR/IMR Dispute

Shauna Van Brunt sustained an admitted injury to the lumbar spine and left lower leg while working for VCA Antech Inc., a large network of veterinary hospitals and clinical laboratories.

Her PTP submitted multiple requests for authorization, each for a quantity of 450 Buprenorphine pills. The requests for authorization were submitted for utilization review, which certified progressively reduced quantities of the Buprenorphine between July 15, 2020 and October 22, 2020, eventually denying certification of Buprenorphine in UR determinations dated November 16, 2020 and November 24, 2020.

Independent Medical Review was requested for the UR decisions dated September 22, 2020 and October 22, 2020. The former certified 360 Buprenorphine pills, and the latter certified 325 pills. Both were upheld in IMR determinations dated November 16, 2020 and November 24, 2020. There was no appeal of the IMR determinations.

The parties appeared at an Expedited Hearing on December 18, 2020. The issues were whether it was appropriate for defendant, through UR, to wean the applicant off a medication on which she is dependent, and whether there was jurisdiction for the Appeals Board to address this dispute.

The WCJ found that the Appeals Board lacks jurisdiction to review the UR decisions and the IMR decisions. Applicant sought reconsideration or in the alternative removal of the Findings of Fact. The WCAB denied both in the panel decision of Shauna Van Brunt v. VCA Antech, Inc., 2021 Cal. Wrk. Comp. P.D. LEXIS 114.

The Appeals Board has jurisdiction to determine whether a UR decision is timely. (Dubon v. World Restoration, Inc. (2014) 79 Cal.Comp.Cases 1298, 1299 (Appeals Board en banc) (Dubon II).)

However, “where a UR decision is timely, IMR is the sole vehicle for reviewing the UR physician’s expert opinion regarding the medical necessity of a proposed treatment.” (Id. at pp. 1310-1311; see also Lab. Code, §§ 4062(b), 4610.5; King v. CompPartners, Inc. (2018) 5 Cal.5th 1039, 1048 [83 Cal.Comp.Cases 1523] [IMR “is the exclusive mechanism for review of a utilization review decision”].)

Additionally, applicant did not demonstrate in what way defendant’s actions constitute bad faith.

With respect to her arguments that more than one UR reviewer was not authorized by regulations, “the statute does not state that all utilization review pertaining to a single patient or extended course of treatment must be conducted by the same reviewer.”

With respect to applicant’s contention that she had been taking Buprenorphine for years and there was no change in circumstances when additional requests for this medication were made, the Appeals Board has previously found that recurring prescriptions are not the sort of ongoing care that cannot be unilaterally terminated. (See Mumm v. Workers’ Comp. Appeals Bd. (2020) 85 Cal.Comp.Cases 647 (writ den.)

Authorization of one prescription does not automatically mean that recurring prescriptions of that medication must be authorized indefinitely; the treating physician has an obligation to document the need for each recurring prescription, especially when the prescriptions are for heavily regulated opioid medications.

California Leads Nation in COVID Civil Litigation Claims

The Fisher Phillips COVID-19 Employment Litigation Tracker And Insights depicts a continued string of COVID related litigation being filed nationwide, and California leads the nation in cases filed.

This COVID-19 Employment Litigation Tracker includes cases that were a direct result of the COVID-19 pandemic and are traditional employee vs. employer cases – both individual plaintiff and class actions. This should be considered a comprehensive, but not exhaustive, dataset.

As of today, the firm reports 2,408 cases filed nationwide. California has 548 of them, with New Jersey (311), Florida (176), Ohio (165) and New York (158) in the list of the top five states by case count. Two new cases were filed in California in the last seven days.

The top five reasons for litigation shows 185 of the 548 California cases are for employment discrimination, 153 for retaliation/whistleblower, 121 for remote work/leave conflicts, 53 for wage our problems, 37 for unsafe workplace and 12 for wrongful discharge.

By industry, in California 19.7% of cases are in healthcare, 11% in retail, 9.2% in hospitality, 7% in manufacturing and in fifth place 6.7% in professional and technical services.

The analysis by the Firm claims “many employers across the country find themselves swimming in costly and prolonged litigation fallout arising from legal claims alleging they failed to accommodate workers impacted by the virus.”

The healthcare industry is distinctive target for such claims given the unique danger the work environment presents to employees; e.g., the heightened likelihood of even minimal exposure to infected patients and/or contaminated areas. As the numbers of infected patients decrease, we are seeing an increase in lawsuits alleging that healthcare employers failed to accommodate disabled employees more susceptible to fatal COVID-19 transmission.”

“This trend presents a somber reminder for healthcare employers: even when inundated in a global state of emergency, there remains the duty to dedicate time and prudent consideration to the interactive process when initiated by an employee with a medical disability.”

From the Golden State to the coastal city of New Haven, Connecticut, healthcare facilities are fighting disability discrimination claims for the alleged failure to accommodate employees with respiratory conditions, including asthma and cancer, which increase susceptibility to calamitous complications from COVID-19 transmission.”

“For example, at Yale New Haven Hospital, an “administrative associate” at the Hospital’s blood bank was allegedly denied continued work-from-home (WFH) status despite having successfully worked remotely during the national shutdown. When the Hospital required all employees to return to work sites in May 2020, it allegedly denied a reasonable accommodation request by an associate who has cancer (making virus infection much more dangerous).”

“In a very similar fact pattern on the other side of the country in California’s capitol, Western Health Advantage allegedly denied WFH status to a data analyst stricken with asthma, despite the claim that it allowed similarly situated employees (e.g. other data analysts) without disabilities to work remotely.

“And back on the east coast in New Jersey, a home healthcare company allegedly denied an occupational therapist also suffering from asthma an exemption from treating COVID-19 infected patients.

Physician Dispensed Pain Dermatologicals New Cost Driver

A new FlashReport from the Workers Compensation Research Institute (WCRI) finds that in most states, dermatological agents and nonsteroidal anti-inflammatory drugs (NSAIDs) have become more important than other drug groups as a share of total prescription payments. The 28 states in the study include California.

“This study finds that prescription payments are decreasing in a majority of state workers’ compensation systems, but prescription payments continue to vary widely,” said John Ruser, president and CEO of WCRI. “This study breaks prescription drugs into groups (dermatological agents, NSAIDs, opioids, compounds, etc.) so you can see where workers’ compensation prescribing dollars are being spent and whether spending for those groups of drugs is going up or down.”

The following is an abbreviated list of the study’s other findings:

– – Dermatological agents: Per-claim payments varied widely, from $7 per claim in Iowa to $181 per claim in Illinois and $190 per claim in Louisiana in 2020Q1. Physician dispensing accounted for the majority of payments for the drug group in 12 of the 28 study states. Between 2017Q1 and 2020Q1, payment shares increased by more than 10 percentage points in 5 states (Connecticut, Kansas, Louisiana, South Carolina, and Virginia) and physician dispensing contributed to the rapid growth.
– – NSAIDS: Payment shares for this drug group changed little in many states, but per-claim payments varied widely in 2020Q1, from $21-$22 per claim in Delaware and Massachusetts to $126 per claim in Louisiana.
– – Anticonvulsants: Both payment share and per-claim payment for this group decreased in many states over the study period. The decrease happened mostly between 2019Q2 and 2019Q3, when generic formulations of Lyrica® became available.
– – Opioids: The substantial decline for opioids during the study period continues the declines seen in previous periods. The per-claim payments for opioids decreased by 56 percent in the typical state, and the rate of reduction ranged from 40 percent in Louisiana to 81 percent in California.

In the dermatological category, prescriptions for diclofenac sodium gel accounted for the majority of the prescriptions in the median state, Vennela Thumula, policy analyst for WCRI said, and lidocaine was also commonly prescribed.

While about 56% of the workers prescribed topical diclofenac had documented diagnoses of soft tissue injuries of joints – for which the drug is approved – about 40% of workers were using it for treatment not recommended, often for shoulder and back pain, she said.

Another cost driver in dermatologicals is private-label topicals, which are independently manufactured and not recommended by evidence-based guidelines and also have a much higher price tag compared to comparable products” approved by the Official Disability Guidelines Workers’ Compensation Drug Formulary, also known as ODG, Ms. Thumula said.

Among claims with topicals, private-label topicals are rarely dispensed in half of the study states, but at least a third of the claims have private-label topicals in Louisiana, New Mexico, Maryland, Illinois and South Carolina, and it’s even higher in Delaware,” she said.

May 24, 2021 – News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: 9th Circuit Affirms $25M Roundup Pesticide Award in California Case. Worker’s Injury Suit Against Employer Dismissed. Flooring Co. Owners Face $3.8M Premium Fraud Charges. California Black Market Drugs Sold to Prescription Drug Customers. San Diego County Targets Employers for Labor Violations. New Medical-Legal Fee Schedule Predicted to Cost $270M. WCIRB Quarterly Report Mostly Good News Despite Pandemic. WCRI Releases 13th Edition of Medical Price Index. Alabama Becomes the 37th Medical Marijuana State. SCIF to Install 150 Solar EV Charging Stations at 7 Facilities.

Cal/OSHA Delays Changes to Emergency Temporary Standards (ETS)

On May 19, 2021, the eve of a vote by the Occupational Safety and Health Standards Board to adopt proposed substantial changes to the existing Cal/OSHA COVID-19 Emergency Temporary Standards (ETS), Eric Berg, Deputy Chief of Cal/OSHA, asked that the Standards Board not vote the next day, on May 20, 2021, to adopt Cal/OSHA’s proposed ETS revisions.

Berg asked that the Standards Board allow Cal/OSHA to present a new proposal at a future meeting with a targeted effective date of June 15, 2021, for its new proposal.

May 13, 2021, the U.S. Centers for Disease Control and Prevention (CDC) updated its guidance to allow fully-vaccinated individuals to forego masks in some situations.

Cal/OSHA also explained that four days after the CDC’s announcement, on May 17, 2021, the California Health & Human Services Agency secretary had expressed that California intended to implement the CDC’s masking guidance on June 15, 2021. This is the same date that Governor Newsom announced as the state’s goal for reopening California’s economy fully.

However, labor officials and worker advocates are pushing back against adoption of the loosened masking guidance for fully vaccinated individuals.

Cal/OSHA had published the draft ETS proposal on May 7, 2021. Labor law lawyers say that these new developments appear to be the reason that Cal/OSHA asked that the Standards Board not adopt the draft ETS proposal on May 20, 2021. Given the recent CDC guidance and California’s impending reopening, Cal/OSHA appears to be reconsidering the proposal it wishes to present to the Standards Board.

For now, the Society for Human Resource Management (SHRM) recommends that while we wait for new proposed revisions to Cal/OSHA’s ETS, it is important to remember that California employers are still under the current safety standard – which makes no accommodation for fully vaccinated employees when it comes to masking.

The only loosened restriction that California employers may currently follow is the updated guidance easing quarantine restrictions for fully vaccinated asymptomatic employees in non-healthcare workplaces.

Foster Farms and Staffing Agencies Cited for COVID Violations

Cal/OSHA has cited Foster Poultry Farms, Inc. in Livingston (Foster Farms) and four staffing agencies for not protecting workers from COVID-19.

Cal/OSHA opened its inspection after receiving notification that an employee had died from COVID-19 complications, and subsequently determined that Foster Farms and one of its staffing agencies did not timely report the COVID-19 fatality as required.

Cal/OSHA also opened a separate inspection at the facility’s distribution center. Foster Farms utilized employees from the following staffing agencies that were also cited for COVID-19 violations.

– – Foster Poultry Farms, Inc. – (Poultry Plant) – $103,100.
– – Foster Poultry Farms, Inc. – (Distribution Center) – $78,400.
– – Human Bees, Inc., DBA Human Bees – (Staffing) – $41,000.
– – Marcos Renteria Ag Services, Inc. – (Staffing) – $36,000.
– – Intermountain Employment Services, DBA Ascend – (Staffing) – $18,000.
– – Staffing Solutions Inc. DBA Balance – (Staffing) – $16,200.

Cal/OSHA cited Foster Farms $103,100, for five serious, one repeat regulatory, and two regulatory violations at its Livingston plant; and $78,400 for three serious, one repeat regulatory, and two regulatory violations at the distribution center.

Regulatory violations were issued in both Foster Farms inspections and to Human Bees, Inc. for their failure to timely report work-related fatalities. Additionally, Cal/OSHA issued serious violations related to their Injury and Illness Prevention Programs many of which stemmed from failing to properly communicate, assess, correct, and train on COVID-19 workplace hazards.

The third serious violation at the plant was cited for a blocked eyewash station.

A full list of employers cited for COVID-19 violations is posted on Cal/OSHA’s website.