Author: WorkCompAcademy

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.

Celgene Corp., a manufacturer of pharmaceuticals, has agreed to pay $280 million to settle fraud allegations related to the promotion of two cancer treatment drugs for uses not approved by the Food and Drug Administration The settlement with Celgene Corp. was announced by federal prosecutors in Los Angeles.

Celgene agreed to pay the settlement to resolve a “whistleblower” lawsuit that alleged it had violated the federal False Claims Act by submitting false claims to Medicare. The lawsuit also alleged that Celgene violated the laws of 28 states and the District of Columbia by submitting fraudulent claims to state health care programs, including California’s Medi-Cal program.

The lawsuit also said the company ran afoul of anti-kickback statutes by coordinating with charities. They claim that the company donated hundreds of millions of dollars to charities like the Patient Access Network (PAN) Foundation and the Chronic Disease Fund (CDF) “as part of a core business scheme to gain billions” from government health programs. The charities assist patients with accessing expensive blood cancer medications like Celgene’s Revlimid by helping them afford their drug co-pays. Companies aren’t supposed to know exactly how their donated money is being spent and are barred from giving money directly to patients covered by Medicare prescription drug plans.

A Celgene spokesperson told Fortune in an emailed statement. “[The government] has issued guidance related to donations by medical innovators to charitable patient assistance programs. Celgene complies with that guidance with respect to its donations to patient assistance programs.” The two charities mentioned in the case are not named as co-defendants.

And Celgene is not the first to be scrutinized over similar practices. Amid a maelstrom of criticism against biopharmaceutical companies for high drug costs and price hikes, major industry players have pointed to patient assistance programs, arguing that people who need the treatments would never have to pay the full list price. Valeant Pharmaceuticals is also being investigated for its drug pricing and patient assistance programs, and biotechs Gilead and Biogen have received similar federal subpoenas regarding patient assistance charities.

Pursuant to the settlement, which was finalized in July, Celgene will pay $259.3 million to the United States and $20.7 million to the 28 states and the District of Columbia. California will receive $4.7 million, more than any other state.

The whistleblower lawsuit was filed in United States District Court by Beverly Brown, who was employed as a sales manager by Celgene, under the qui tam provisions of the False Claims Act and similar laws of the District of Columbia and the 28 states included in the lawsuit. Under the False Claims Act, private citizens can bring suit on behalf of the United States and share in any recovery. The United States may intervene in the lawsuit, or, as in this case, the whistleblower may pursue the action.

The case, United States ex rel. Brown v. Celgene Corp., CV10-3165, was monitored by the United States Attorney’s Office, the Civil Division’s Commercial Litigation Branch, and HHS-OIG.

The company denied wrongdoing and said it settled to avoid uncertainty, distraction and expensive litigation.

Citing a market capitalization of $67 billion, and stock appreciation of 107%, Celgene was Forbes Magazine’s number 2 ranked drug company of 2013. Based on these numbers one could argue that this settlement is a minor cost of doing business.

In a federal lawsuit initially brought by thirteen plaintiffs in May 2015, lead plaintiff Etopia Evans, widow of the late Minnesota Vikings and Baltimore Ravens player Charles “Chuck” Evans, filed a federal class action against 32 NFL teams. The case was transferred from Maryland to Northern California in March 2016.

The players claimed NFL teams conspired since at least 1964 to have trainers and team doctors dole out unprescribed pills and injections, sometimes mixing them in “dangerous cocktails,” to get players back into games without warning them of the long-term side effects.

U.S. District Judge William Alsup previously dismissed most claims, including conspiracy claims, against all 32 NFL teams, leaving only claims of intentional misconduct against the Green Bay Packers, Denver Broncos and Los Angeles Chargers, three of the original 32 teams named in the case.

The two remaining of the thirteen original plaintiffs, Alphonso Carreker and Reggie Walker, argued their claims fell within a narrow “intentional harm” exception to workers compensation exclusivity laws in California, Colorado and Wisconsin.

In a final blow to the case, the federal judge in the Northern District of California rejected their arguments and struck down what remained of the case.

In a summary judgment ruling Judge Alsup found retired football players could only seek relief through workers’ compensation, because their claims against three NFL teams did not fall within narrow exceptions to the well recognized exclusive remedy limits to employer civil liability and that the plaintiffs failed to present facts showing the NFL teams intended to harm players in an egregious manner.

With respect to the California team, the court found that the “fraudulent-concealment exception is an extremely limited one. E.g., Jensen v. Amgen, Inc., 105 Cal. App. 4th 1322, 1326-27 (2003). To recover under the exception, Walker must prove that (1) the Chargers knew of his work-related injury, (2) the Chargers concealed that knowledge from him, and (3) the injury was aggravated as a result of such concealment. The exception does not apply if Walker was aware of the injury at all times.”

“In short, it is not enough, as plaintiffs suggest, to insist that the Chargers engaged in some type of fraudulent concealment. Counsel’s muddling of plaintiffs’ own theories concerning the specific alleged misconduct at issue does not substitute for actually satisfying each and every element of the fraudulent-concealment exception to exclusivity. To lose the protection of workers’ compensation exclusivity, the Chargers must have concealed knowledge of Walker’s underlying work-related injury from him and aggravated said injury as a result. On this point, plaintiffs have not shown any genuine dispute of material fact in their favor.”

“This order recognizes, as have California courts, that workers’ compensation exclusivity may bar claims that reveal egregious employer misconduct,” Alsup wrote. “But the mere culpability of such misconduct, without more, is not a basis for keeping in court a claim properly subject to the exclusive remedy provisions of workers’ compensation laws.”

Similar findings were made with respect to the Colorado and Wisconsin exclusive remedy law that governs the Denver Broncos and Green Bay Packers.

The Los Angeles County District Attorney’s Office announced that a Redondo Beach woman accused of participating in a $150 million workers’ compensation insurance fraud scheme pleaded guilty,

Deputy District Attorney Kennes Ma said forty-year-old Marissa Nelson pleaded to one felony count of conspiracy to commit insurance fraud and admitted a special allegation of taking property of a value exceeding $3.2 million in case BA455469.

The sentencing hearing for Nelson is scheduled for July 27, 2018, one year from now. This will provide prosecutors one year to see how cooperative she might be with the continuing investigation before they recommend a sentence or argue what sentence might be appropriate.

Nelson is one of more than a dozen people associated with Frontline Medical Associates who were accused in 2015 of taking part in a $150-million scam that involved unnecessary surgeries by non-surgeons, doling out kickbacks for illegal patient referrals and fraudulently billing insurance companies.

But the Los Angeles Times reports that over the 18 months that followed, a judge dismissed most of the 132 counts laid out in two indictments. The most serious charges – for aggravated mayhem, carrying a potential life sentence – were dropped for a lack of evidence.

Recently prosecutors are taking a second stab at the case after acknowledging flaws in how they presented it to a grand jury. At their request, Los Angeles County Superior Court Judge Kathleen Kennedy threw out pending charges in the two indictments against 13 defendants, except for two suspects who are fugitives.

Prosecutors immediately brought new charges against a dozen people, filing three separate criminal complaints listing 194 counts, including aggravated mayhem, money laundering, insurance fraud and unlawful patient referrals. An 82-year-old physician who was accused of overbilling insurance companies was not charged in the new complaint; prosecutors noted that he is suffering serious health issues.

Prosecutors allege that Dr. Munir Uwaydah, the orthopedic surgeon patients believed would conduct procedures, instead let a physician’s assistant perform surgeries. The scheme left nearly two dozen patients with lasting scars.

Uwaydah, the accused ringleader who prosecutors initially said had been captured in Germany, remains at large. They believe he is living in Lebanon.

Nelson was a personal assistant to orthopedic surgeon Dr. Munir Uwaydah. She is also the wife of co-defendant Peter Nelson, a physician’s assistant who never attended medical school and allegedly performed invasive and sometimes unnecessary surgeries. Her guilty plea may be a sign that prosecutors are now having some successful results, and her possible cooperation as a witness may prove to be the break they need to go forward with the remaining defendants.

Deputy District Attorneys Dayan Mathai, Catherine Chon, Karen Nishita and Kennes Ma are prosecuting the case.

The case remains under investigation by the Los Angeles County District Attorney’s Bureau of Investigation and the Organized Crime Division.