Author: WorkCompAcademy

The Department of Justice announced that Vibra Healthcare LLC, a national hospital chain headquartered in Pennsylvania, has agreed to $32.7 million settlement to resolve claims that Vibra violated the False Claims Act by billing Medicare for medically unnecessary services.

Vibra operates approximately 36 freestanding long term care hospitals (LTCHs) and inpatient rehabilitation facilities (IRFs) in 18 states. Its California facilities include Ballard Rehabilitation Hospital in San Bernardino, Kentfield Hospital in Marin County, Vibra Hospital of Sacramento, San Joaquin Valley Rehabilitation Hospital in Fresno, Vibra Hospital of Northern California in Redding, Vibra Hospital of San Diego and Kentfield Hospital of San Francisco.

LTCHs provide inpatient hospital services for patients whose medically complex conditions require long hospital stays and programs of care. IRFs are intended for patients needing rehabilitative services that require hospital-level care.

The government alleged that between 2006 and 2013, Vibra admitted numerous patients to five of its LTCHs and to one of its IRFs who did not demonstrate signs or symptoms that would qualify them for admission.

Moreover, Vibra allegedly extended the stays of its LTCH patients without regard to medical necessity, qualification and/or quality of care. In some instances, Vibra allegedly ignored the recommendations of its own clinicians, who deemed these patients ready for discharge.

As part of the settlement, Vibra also agreed to enter into a chain-wide corporate integrity agreement with the Inspector General of the U.S. Department of Health and Human Services.

Part of the allegations resolved by this settlement were originally filed under the qui tam or whistleblower provisions of the False Claims Act by Sylvia Daniel, a former health information coder at Vibra Hospital of Southeastern Michigan. Daniel filed her suit in the Southern District of Texas, where one of Vibra’s LTCHs was located. Under the False Claims Act, a private party, known as a relator, can file an action on behalf of the United States and receive a portion of the recovery. Daniel will receive at least $4 million.

This settlement illustrates the government’s emphasis on combating healthcare fraud and marks another achievement for the Health Care Fraud Prevention and Enforcement Action Team initiative, which was announced in May 2009 by the Attorney General and the Secretary of Health and Human Services. The partnership between the two departments has focused efforts to reduce and prevent Medicare and Medicaid financial fraud through enhanced cooperation. One of the most powerful tools in this effort is the False Claims Act. Since January 2009, the Justice Department has recovered a total of more than $30.7 billion through False Claims Act cases, with more than $18.5 billion of that amount recovered in cases involving fraud against federal healthcare programs.

This matter was handled by the Civil Division’s Commercial Litigation Branch; the U.S. Attorneys’ Offices for the Southern District of Texas in Houston and for the Western District of Kentucky; and the HHS-OIG. The qui tam case is captioned United States ex rel. Daniel v. Vibra Healthcare, LLC, Civil Action No. 10-5099 (S.D. Tex.).

In California, the Controlled Substance Utilization Review and Evaluation System (CURES) is an electronic tracking program that reports all pharmacy (and specified types of prescriber) dispensing of controlled drugs by drug name, quantity, prescriber, patient, and pharmacy.

The CURES database addresses only part of the problem. According to a 2013 federal survey, two-thirds of the people abusing pharmaceuticals had not been prescribed the drugs – so they wouldn’t have been listed in the database. Nevertheless, CURES can help physicians and pharmacies identify those who are pill-shopping from doctor to doctor, while helping states track down doctors who are overprescribing narcotics.

When California lawmakers created the CURES database to fight prescription drug abuse years ago, they left out an important piece. Although pharmacists were required to list in the database any customers who received potentially dangerous and addictive drugs, doctors weren’t required to check those records before prescribing more pills. State Sen. Ricardo Lara (D-Bell Gardens) introduced a bill that would finally require doctors to do what they should have been doing all along.

And Governor Brown signed SB 482 into law this week. After January 1, the law will require a health care practitioner authorized to prescribe, order, administer, or furnish a controlled substance to consult the CURES database to review a patient’s controlled substance history no earlier than 24 hours, or the previous business day, before prescribing a Schedule II, Schedule III, or Schedule IV controlled substance to the patient for the first time and at least once every 4 months thereafter if the substance remains part of the treatment of the patient.

Any health care practitioner who fails to consult the CURES database is required to be referred to the appropriate state professional licensing board solely for administrative sanctions, as deemed appropriate by that board.

Currently, the Los Angeles Times reports that only about 10% of those who can prescribe these drugs have even signed up to use CURES. The California Medical Assn., the main trade group for doctors, has resisted any mandate on its members to consult the database, arguing that the Legislature shouldn’t meddle in the practice of medicine. Besides, the group says, CURES isn’t ready yet for the avalanche of queries that such a mandate would cause.

The new law addresses the latter by delaying the requirement until the state certifies that CURES has been fully upgraded. As for the former concern, the bill imposes no restrictions on prescribing that state law doesn’t already impose. It simply holds doctors and other prescribers responsible for checking CURES when the potential for pill-shopping is at its highest – for example, when a patient is prescribed a dangerous drug for the first time. That’s not asking much.

Existing law (Health and Safety Code Section 11165.1) required all California licensed prescribers authorized to prescribe scheduled drugs to register for access to CURES 2.0 by July 1, 2016 or upon issuance of a Drug Enforcement Administration Controlled Substance Registration Certificate, whichever occurs later. California licensed pharmacists must have registered for access to CURES 2.0 by July 1, 2016, or upon issuance of a Board of Pharmacy Pharmacist License, whichever occurs later.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) and confidentiality and disclosure provisions of California law cover the information contained in CURES 2.0. Access to CURES 2.0 is limited to licensed prescribers and licensed pharmacists strictly for patients in their direct care; and regulatory board staff and law enforcement personnel for official oversight or investigatory purposes.

Thus, it seems fair to assume that in the near future, workers’ compensation claim administrators should expect to see confirmation from a claimant’s PTP that the CURES database has been reviewed as required by law.

Governor Brown signed SB 1241 by Senator Bob Wieckowski (D-Fremont) which limits employment contract restrictions on choice of law and forum.

As a general matter, arbitrations provide an alternative method of dispute resolution, outside of the courts, wherein a neutral third party, known as the arbitrator, renders a decision after a hearing to which both parties have had an opportunity to be heard.

On March 1, 2016, the Senate Judiciary Committee held an informational hearing on the topic of private or contractual arbitration agreements. In that hearing, many issues facing consumers and employees who are subject to arbitration clauses contained in standardized, take-it-or-leave-it, or “adhesive,” contracts were brought to light.

A package of arbitration bills, of which this bill is one, arose out of the hearing, seeking to address various fairness issues surrounding the rules that govern the conduct and operation of arbitrators and arbitrations in this state.

Of particular relevance to this bill are issues of fairness surrounding choice of law and choice of forum clauses as a condition of non-negotiable consumer and employment contracts, and, specifically, the ability of a seller or employer to require a California consumer or employee to litigate or arbitrate their claims arising out of California in another state, or pursuant to another state’s laws.

Generally speaking, California law does not currently prohibit companies or employers from requiring consumers or employees to agree to a non-California forum or to apply non-California law to resolve their disputes. As a matter of case law, such clauses are valid so long as the California consumer or employee “will not find their substantial legal rights significantly impaired by their enforcement.” (America Online, Inc. v. The Superior Court of Alameda County (2001) 90 Cal.App.4th 1, 21, 23.)

This new law seeks to ensure that California consumers and employees cannot be forced to litigate or arbitrate their California-based claims outside of California, under out-of-state laws, as a condition of a consumer or employment contract.

This new law applies to contracts entered into, modified, or extended on or after January 1, 2017. It prohibits an employer from requiring an employee who primarily resides and works in California, as a condition of employment, to agree to a provision that would require the employee to adjudicate outside of California a claim arising in California or deprive the employee of the substantive protection of California law with respect to a controversy arising in California.

The law also makes any provision of a contract that violates these prohibitions voidable, upon request of the employee, and would require a dispute over a voided provision to be adjudicated in California under California law. The law excepts from these provisions a contract with an employee who was individually represented by legal counsel. These provisions become newly added labor code section 925 on January 1.

SB 1201 may have some effect on the adjudication of workers’ compensation claims. Arbitration clauses and choice of law rules have been written into NFL player contracts, and have been used to defend workers’ compensation claims by these professional athletes. For example, Bruce Matthews played football in the National Football League from 1983 to 2002. On August 5, 2010, an arbitrator ruled that Bruce Matthews could pursue a workers’ compensation claim in California but that the claim must proceed under Tennessee law, if at all. A federal judge in the United States District Court, Southern District of California upheld the arbitrator in the case of National Football League Players’ Association v the NFL.

It is likely that this new law will be tested against the strong federal policy favoring such agreements.

The thorny issue of what defines an employee became a focus of a session on workers’ compensation at the California Hispanic Chambers of Commerce convention Friday in Riverside according to the report in the Press Enterprise.

The issue matters because there is a high percentage of small businesses owned by Latinos in the state and an increasing number of independent contractors.

The status of drivers for transportation provider Uber and some trucking companies has been questioned.

“I’ve done five or six trials this year alone, all trucking companies with the truck drivers as independent contractors, and in each case they turned out to be employees,” said Dora Padilla, workers’ compensation judge at the San Jose Workers’ Compensation Appeals Board and a panelist in the session.

A lot of business owners aren’t sure what their obligations are to their workers, she said.

“I find a lot of problems where employers come in, and I believe them when they say, ‘My attorney or my insurance person or my next door neighbor or my tio, they told me I can do this and have this person be an independent contractor and, no, I don’t have workers’ comp insurance.'” And a person has gotten hurt. “It never fails it’s some catastrophic injury.”

Employers are required to carry workers’ compensation insurance to pay for treatment for employees who sustain physical or psychological injuries on the job.

According to Padilla’s presentation, a hirer is working with an independent contractor when the hirer:

1) Lacks control over detail.

2) Has no right to terminate the relationship.

3) Makes payments by contract price.

4) Does not furnish tools or materials.

5) Does not have control over working hours.

Calling employees independent contractors can have consequences, said Yvonne E. Lang, a partner with Pearlman, Borska & Wax.

“Payroll fraud ” don’t do it! … And if it is an independent contractor, you’d better have a contract.”

The California Attorney General Kamala D. Harris announced that California, along with 34 other states and the District of Columbia, has filed a lawsuit against Indivior, a British pharmaceutical company, and MonoSol, an Indiana film technology company, for antitrust violations.

The complaint, filed in U.S. District Court for the Eastern District of Pennsylvania, alleges that Indivior and MonoSol engaged in a multi-pronged “product-hopping” scheme to block competition to Suboxone, an opioid addiction treatment, ultimately generating almost one billion dollars in undeserved profits. In this kind of scheme, pharmaceutical companies try to maintain profits generated via a monopoly by slightly reformulating their product in a way that blocks generic competitors without offering any significant medical or therapeutic advantages to patients.

“When prescription drug companies unlawfully manipulate the marketplace to maximize profits, they put lives at risk and drive up the cost of healthcare for everyone. Indivior and Monosol flagrantly violated the law, deceiving doctors and patients and shutting down generic competition in order to rake in profits,” said Attorney General Harris. “These companies must be held accountable for this unlawful scheme that cost the public nearly a billion dollars and hampered fair competition in the marketplace.”

Indivior, then known as Reckitt Benckiser, was granted FDA approval in 2002 for Suboxone tablets, along with exclusive rights to sell the drug for seven years based on representations that it was unlikely to recover its investment in the drug. During this time, Indivior generated over a billion dollars in sales of the Suboxone tablets.

When its exclusive rights expired in 2009, the company was faced with potential competition expected to eliminate 80% of its profits from Suboxone tablets within a year. Indivior, with MonoSol’s assistance, thwarted that competition by switching the form of Suboxone from tablet to film. It falsely claimed the tablets presented pediatric safety issues, made unfounded claims to physicians that tablets were dangerous, and raised the price of its tablet while lowering the price of the film. Through these actions, Individior was able to maintain artificially high prices for Suboxone, depriving the state and consumers of the benefits of lower prices that come with competition.

The complaint alleges that the conduct and agreement between Indivior and Monosol constitutes monopolization, conspiracy to monopolize, and illegal restraint of trade in violation of federal antitrust laws as well as of California’s Cartwright Act and Unfair Competition Law. The complaint seeks to require Indivior to pay back any profits that resulted from the illegal conduct – disgorgement – and includes injunctive relief to ensure the conduct is not continued or repeated.

Indivior said in a statement that it would continue to “vigorously defend” its position.