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DWC Issues Second 30-Day Comment Period for HOPD/ASC Fee Schedule

WorkCompAcademy

The DWC has issued a second 30-day notice of modification to the proposed hospital outpatient departments and ambulatory surgical centers (HOPD/ASC) fee schedule regulation text. Members of the public are invited to present written comments regarding the proposed modifications to dwcrules@dir.ca.gov until 5 p.m. on July 6.

DWC held a public hearing on June 17, 2015 regarding a proposed amendment to Title 8 CCR section 9789.32 of the HOPD/ASC fee schedule. The proposed amendment was intended to provide guidance regarding which HCPCS code to use when Medicare changes its coding practices, resulting in different HCPCS codes to describe comparable “Other Services” under Medicare’s Hospital Outpatient Prospective Payment System (HOPPS) and the Resource Based Relative Value Scale (RBRVS) physician fee schedule.

The notable proposed modifications include:

1) Clarification that for services rendered on or after September 1, 2014 but before the effective date of this amendment, “Other Services” means Hospital Outpatient Department Services payable under the Medicare HOPPS that are not surgical, emergency department (ED) visits, or Facility Only Services, or services that are an integral part thereof. For services rendered after the effective date of this amendment, the definition of “Other Services” will not exclude “Facility Only Services.”
2) Discontinuation of the current payment model which determines maximum allowance for “Other Services” on the RBRVS physician fee schedule relative values.
3) Institution of a payment model where the maximum allowances for all hospital outpatient department services that are payable under the Medicare HOPPS, including “Other Services,” be determined based on the Medicare HOPPS. Payment of all services based on the Medicare HOPPS would reduce payment system complexities, but would also increase maximum allowable fees for hospital outpatient services unless the 120% multiplier for surgery services and ED visits is adjusted so that there would be no change in estimated aggregate allowances. Based on a RAND impact analysis, if “Other Services” are paid at 100% of Medicare’s HOPPS, a budget neutral adjustment would need to be made for surgery services and ED visits, lowering the multiplier from 120% to 117.8% of HOPPS.

Expansion of the definition of surgical procedure HCPCS codes to conform to Medicare’s HOPPS definition of surgical procedures for services rendered on or after the effective date of this amendment.

Adjustment of the fee schedule regulations to conform to relevant changes in the Medicare HOPPS for calendar years 2015 and 2016, in accordance with Labor Code section 5307.1 (g), which are normally adopted by Administrative Director Order.

This notice and text of the regulations can be found on the proposed regulations page.

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State Opioid Monitoring Programs Reduce Prescriptions by One-Third

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A new study summarized in Reuters Health says that doctors in states that track painkiller prescriptions were nearly one-third less likely to offer patients dangerously addicting opioids. The launch of drug-monitoring programs in 24 states led to an immediate 30 percent drop in prescriptions for Schedule II opioids, the most addictive, in patients with pain complaints, the study showed.

California is among the states that have such a monitoring program. CURES 2.0 (Controlled Substance Utilization Review and Evaluation System) is a database of Schedule II, III and IV controlled substance prescriptions dispensed in California serving the public health, regulatory oversight agencies, and law enforcement. California law (Health and Safety Code Section 11165.1) requires 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 register for access to CURES 2.0 by July 1, 2016, or upon issuance of a Board of Pharmacy Pharmacist License, whichever occurs later.

Lead author Yuhua Bao, a health economist at Weill Cornell Medical College in New York, and colleagues analyzed 26,275 office visits for pain in 24 states that implemented prescription drug-monitoring programs from 2001 to 2010. As reported in Health Affairs, in these states the probability of a doctor prescribing a Schedule II opioid dropped from 5.5 percent to 3.7 percent – a more than 30 percent reduction. The results were immediate and held for three years.

The study confirmed Bao’s hypothesis that physician drug-monitoring programs, which have been implemented in a wide variety of forms in every state except Missouri, are an effective tool to combat the opioid drug epidemic. But she stressed the need for other means as well.

“There are no magic bullets here,” said Dr. Caleb Alexander, who directs the Johns Hopkins Center for Drug Safety and Effectiveness in Baltimore, in a phone interview. “The interventions are needed along the continuum here – from manufacturers to end-users. This is important to keep in mind given the magnitude of addiction, injuries and deaths,” said Alexander, who was not involved in the current study.

Overdose deaths, along with sales of prescription opioids, have quadrupled since 1999, the CDC estimates. More than 165,000 Americans died from overdoses related to prescription opioids from 1999 to 2014. Some of these deaths might have been avoided if doctors had been able to check a prescription drug-monitoring database, Alexander said.

A database could show when patients are obtaining opioids under their own name from multiple doctors, which might assist in identifying potential abuse and dependency, he noted.

Drug-monitoring databases may make doctors think twice before prescribing pain medications for a variety of reasons in addition to uncovering “doctor shopping” by patients, the study authors write. Knowing that they’re being watched may serve as a deterrent, and the programs may generally increase awareness of the dangers of prescribing opioids, they say.

Primary-care doctors treating adults for chronic pain write nearly half of opioid prescriptions, the CDC said. The new guidelines recommend non-opioids like acetaminophen and ibuprofen as the first line of pain treatment.

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Study Finds “Noticeable Decreases” in Workers’ Compensation Opioid Prescriptions

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A new study by the Workers Compensation Research Institute (WCRI) found “noticeable decreases” in the amount of opioids prescribed per workers’ compensation claim in a majority of 25 states studied.

The WCRI study, Interstate Variations in Use of Opioids, 3rd Edition, examines interstate variations and trends in the use of opioids and prescribing patterns of pain medications across 25 states. The study compares the amount of opioids prescribed per claim over two roughly 24-month periods of time ending March 2012 and March 2014.

This study uses data comprising over 337,000 nonsurgical workers’ compensation claims and nearly 1.9 million prescriptions associated with those claims from 25 states. The claims represent injuries arising from October 1, 2009, to September 30, 2012, with prescriptions filled through March 31, 2014. The underlying data reflect an average 24 months of experience for each claim. The data included in this study represent 40 – 75 percent of workers’ compensation claims in each state.

The study saw substantial interstate variation in both frequency and amount of opioid use. Combining these two measures, it observed that among the 25 study states, Louisiana, New York, Pennsylvania and California were higher (in that order) and Illinois, Missouri, and New Jersey were lower than the median state. Many factors may be associated with the interstate variations observed, including workers’ compensation policies for pharmaceuticals (e.g., pharmacy fee schedule, physician dispensing, provider choice, and treatment guidelines for pain management), policies outside workers’ compensation (e.g., state prescription drug monitoring programs and state pain policies), and industry practices.

The 25 states in the study are Arkansas, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, and Wisconsin.

There was substantial interstate variation in the mix of opioid drugs that were prescribed in the 25 study states. Physicians in some states were more likely to prescribe stronger opioids, such as oxycodone, over other opioids, like hydrocodone and tramadol, compared with their counterparts in other states. Pain medication prescriptions that were written for oxycodone (Percocet® and OxyContin®) varied from 1 to 2 percent in California, Illinois, and Texas to 29 percent in Massachusetts. Over 1 in 10 pain medication prescriptions were for oxycodone in several other states, including Connecticut, Maryland, Minnesota, New Jersey, New York, North Carolina, Pennsylvania, Virginia, and Wisconsin.

The authors say the decrease coincides with various state reforms directed at curbing opioid abuse including strengthening of prescription drug monitoring programs and adoption of treatment guidelines and drug formularies.

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Jury Convicts County of Ventura Employee

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The Ventura County District Attorney announced that 49 year old Linda Boggess of Ventura was convicted by a jury of four felony counts of workers compensation insurance fraud. Boggess was employed by the Ventura County Human Services Agency.

In March, 2007 she filed a workers compensation claim alleging she experienced “paralyzing pain.”

She received medical treatment and temporary disability payments until November 2011, when she was cleared to return to work without restrictions. Shortly thereafter, Boggess provided new work restrictions from a separate doctor which limited her to lifting no more than five pounds.

In January, 2012, Ventura County, which is self-insured for workers compensation claims, opened an investigation of the claim.

Video surveillance taken of Boggess in a parking lot revealed she was able to lift car tires mounted on wheels, each weighing 45 pounds, and carry them for a distance of approximately 50 feet.

In March, 2012, Boggess testified at her deposition that she was unable to lift and move anything heavier than a gallon of milk.

Boggess will be sentenced on July 26, 2016, at 8:30 a.m. in Ventura Superior Court Department 26. She faces a maximum possible sentence of 8 years in local custody and a $150,000 fine.

The District Attorneys’ office said that workers compensation insurance fraud is not a victimless crime. It affects every law abiding insured employers in California. In the United States, workers compensation insurance fraud costs insured employers $2 billion annually. The District Attorney’s Office is committed to vigorous prosecution of all those who choose to victimize the public in this manner.

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FSK Appoints Oakland Office Assistant Managing Attorney

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Floyd Skeren & Kelly is pleased to announce that Heidi Hengel has been appointed Assistant Managing Attorney of the firms’ Oakland office located at 1333 Broadway, Suite 1015, Oakland, CA 94612. She will assist John M. Langevin who is the Partner who oversees this office.

Ms. Hengel graduated from the University of Wisconsin, Madison in 2005 with a major in Political Science and minor in Women’s Studies. She attended Golden Gate University School of Law in San Francisco, graduating with honors in May 2008 and receiving the Outstanding Student Award for her graduating honors program class.

Ms. Hengel’s experience also includes civil litigation in San Jose and criminal defense in San Francisco. Ms. Hengel is certified to practice before all Federal and State courts in California.

Floyd, Skeren & Kelly, LLP is a multi-service law firm with twelve offices throughout California.

The Firm offers a broad range of legal expertise pertaining to workers’ compensation claims, criminal cases, employment and labor issues, litigation defense, business matters, and family issues. Although having the resources of a statewide entity, the Firm’s boutique offices offer personalized services with large firm professionalism.

The Partners wish Heidi success in her new position and efforts to continue to grow the Oakland Office.

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Court of Appeal Allows Comp Offset Against Tort Recovery

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Jack Tuttle slipped and fell down 22 steps at an office complex where his employer, Lincare, leased space. He and his wife, Megan Tuttle, sued a number of entities connected with the complex, but not his employer Lincare. The Tuttles settled with many of them: Ceramic Tile World, Inc. paid $35,000; Selberg Associates paid $500,000 ($430,000 allocated to Jack Tuttle); and in a “global settlement,” other defendants paid a total of $2.2 million ($1.9 million allocated to Jack Tuttle).

The Tuttles went to trial against the lone remaining defendant, Medical Center, on the issue of damages. The parties entered into a stipulation on liability that was read to the jury and provided in pertinent part: Medical Center “was negligent in its use and maintenance” of the office complex and “caused . . . Jack Tuttle’s fall;” “neither Jack Tuttle [n]or any other individual or entity bears any comparative fault for Mr. Tuttle’s fall;” and Medical Center was “only contesting the full extent of Mr. Tuttle’s claimed injuries and damages.”

When discussing the stipulation with the trial court, Medical Center’s counsel alerted the court and plaintiffs that Medical Center would likely be seeking “setoffs” or “credits” for the settlements once the jury put a number on damages. Counsel also repeatedly sought assurance the language of the stipulation would not be understood as foreclosing Medical Center from seeking such setoffs or credits. The trial court sympathized, telling the Tuttles’s counsel “I’m not going to allow you to have your so-called cake and eat it, too.” The Tuttles’s counsel then responded he was willing to “go along with it.”

The jury found Jack Tuttle sustained total damages of $2,476,378.86 and Megan Tuttle sustained $150,000 in damages for lack of consortium. Following the verdict, the trial court instructed the clerk to record it and asked counsel if there was “anything further at the moment,” to which all replied there was not. The court then entered judgment in accordance with the verdict.

Shortly thereafter, Medical Center filed a motion under section 663 to vacate the judgment and enter a new judgment reflecting setoffs and credits for the pretrial settlements and workers’ compensation benefits paid by the insurance carrier for Jack Tuttle’s employer. Medical Center had purchased the carrier’s workers’ compensation lien. The trial court ordered setoff and reduced the judgment by the portion of the settlements attributable to economic damages ($1,074,843.40) and by the workers’ compensation benefits minus attorney fees ($375,312.41). Tuttle appealed. The Court of Appeal sustained the judgment in the unpublished case of Tuttle v Ukiah Adventist Hospital.

CCP section 877 provides that a judgment in favor of a tort plaintiff shall be offset by the amount of pretrial settlements the plaintiff obtains from other defendants allegedly liable for the tort.The purpose of the statute is to assure equitable sharing of damages and to assure a plaintiff will not be enriched unjustly by a double recovery, collecting part of his total claim from one joint tortfeasor and all of his claim from another.

“The obvious purpose of the parties’ stipulation concerning liability was to frame the issue to be tried for the jury (i.e., damages only), to prevent the jury from engaging in any speculation about the liability of other parties, and to foreclose the jury from making any apportionment of damages based on such speculation. The stipulation, in short, had nothing to do with setoff and did not constitute a knowing relinquishment by Medical Center of its right to setoff under section 877.”

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FDA to Shut Down 4,402 Illegal Prescription Drug Websites

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The U.S. Food and Drug Administration, in partnership with international regulatory and law enforcement agencies, announced that it took action this week against 4,402 websites that illegally sell potentially dangerous, unapproved prescription drugs to U.S. consumers. This effort was part of Operation Pangea IX, the Ninth Annual International Internet Week of Action (IIWA), a global cooperative effort, led by INTERPOL, to combat the unlawful sale and distribution of illegal and potentially counterfeit medical products on the internet.

“Preventing illegal internet sales of dangerous unapproved drugs is critical to protecting consumers’ health,” said George Karavetsos, director of the FDA’s Office of Criminal Investigations. “Operation Pangea IX demonstrates the FDA’s continuing commitment to stand united with our international partners to protect consumers in the United States and throughout the world from criminals who put profit above the health and safety of consumers.”

The goal of Operation Pangea IX was to identify the makers and distributors of illegal prescription drug products and to remove these products from the supply chain.

The FDA’s Office of Criminal Investigations, Office of Regulatory Affairs, and Center for Drug Evaluation and Research participated in the enforcement action, which ran from May 31 to June 7, 2016. The FDA conducted extensive inspections at International Mail Facilities (IMFs) in coordination with U.S. Customs and Border Protection, and sent formal complaints to domain registrars requesting the suspension of the 4,402 websites. Included are 110 websites that sell the chemical 2,4-Dinitrophenol (DNP) as a weight-loss product. DNP is most often used as a dye, wood preserver, and herbicide and has never been approved by the FDA for use as a drug.

A recent FDA task force investigation into the distribution of DNP resulted in a May 9, 2016 guilty plea from Adam Alden of Bakersfield, California, for introducing an unapproved drug into interstate commerce. A Rhode Island customer who purchased DNP via the internet from Alden, among other sources, died in October 2013 as a result of DNP ingestion.

During the IIWA, the FDA, in addition to requesting the suspension of 4,402 websites, issued warning letters to the operators of 53 websites illegally offering unapproved and misbranded prescription drug products for sale to U.S. consumers. FDA inspectors, in collaboration with other federal agencies, screened and seized illegal drug products received through IMFs in San Francisco, Chicago, and New York. These screenings resulted in the detention of 797 parcels which, if found in violation of the Federal Food, Drug, and Cosmetic Act, will be refused entry into the country and destroyed.

Preliminary findings from drug products screened at the IMFs show that U.S. consumers had purchased certain unapproved drug products from abroad to treat depression, narcolepsy, high cholesterol, glaucoma, and asthma, among other diseases. Consumers should be cautious when buying prescription drugs online. For tips on how to identify an illegal pharmacy website and advice on how to find a safe online pharmacy go to BeSafeRx: Know Your Online Pharmacy.

In addition to health risks, illegal online pharmacies pose other risks to consumers, including credit card fraud, identity theft and computer viruses. The FDA encourages consumers to report suspected criminal activity at www.fda.gov/oci.

The IIWA is a collaborative effort between the FDA, the U.S. Department of Homeland Security, National Intellectual Property Rights Coordination Center, INTERPOL, the World Customs Organization, the Permanent Forum of International Pharmaceutical Crime, Heads of Medicines Agencies Working Group of Enforcement Officers, the pharmaceutical industry and national health and law enforcement agencies from 115 participating countries.

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Fraud Charges Filed Against Santa Barbara Cop

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A Santa Barbara police officer was charged with four felonies related to worker’s compensation insurance fraud, allegedly committed while employed at the department, theSanta Barbara County District Attorney’s Office said Monday.

The Santa Barbara Noozhawk reports that Jacob Finerty, 28, was hired by the SBPD in September 2011 and a worker’s compensation fraud investigation began in 2014, interim Police Chief John Crombach said. “This came to our attention I think in 2014 and we initiated an investigation, and it then began to take a criminal turn when there appeared there was some fraud involved here,” he said.

Finerty has been out on leave, related to his worker’s compensation claim, on and off since 2014 and was placed on unpaid leave several weeks ago, pending the trial, The claim was for an alleged work-related injury, Crombach said.

The District Attorney’s Office filed four felony of insurance fraud counts against Finerty and Deputy District Attorney Gary Gemberling, who is prosecuting the case, said the two insurance code sections both apply to worker’s compensation fraud; One section applies to a fraudulent oral statement and the other applies to fraudulent written statements.

Finerty, identified by the District Attorney’s Office as a resident of Hesperia in San Bernardino County, had not been booked into the Santa Barbara County Jail as of Monday afternoon, according to the Santa Barbara County Sheriff’s Department. He is not in custody and is scheduled to be arraigned in Superior Court June 24.

SBPD detectives conducted the investigation after the California Department of Insurance declined to take the case, Crombach said. “We investigate all allegations of misconduct, and during the investigation if it appears that it’s criminal in nature, then that’s the way the investigation goes and then we present the results to the DA,” he said.

District Attorney Joyce Dudley said the fact Finerty was a police officer wasn’t a consideration in the charges. Worker’s compensation fraud charges have been filed against other local government employees in the past, she said. In presentations to other government agencies and companies, “we make it clear that we’re in the business of investigating fraud on every level, including worker’s comp,” she said.

This is the second high-profile SBPD employee criminal case in recent years, with former business office manager Karen Flores sentenced to state prison after pleading no contest to embezzlement, stealing public funds and destroying parking citations.

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LA Teacher Faces Fraud Charges After Altercation

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Eric Johnson, 61, of Valencia, was arrested by Department of Insurance detectives, at his place of employment in Lancaster, on two felony counts of insurance fraud and one felony count of child abuse after an incident with a student.

Johnson, a teacher for the Los Angeles County Office of Education, filed a workers’ compensation claim after an altercation with a 17-year-old minor at the Camp Mendenhall juvenile facility.

Johnson claimed the student initiated the altercation striking him in the jaw and lip. Johnson stated the minor then shoved him into a wall, but video evidence revealed Johnson actually instigated the physical altercation and assaulted the minor. Victim and witness statements corroborated the video evidence. According to the evidence, Johnson did not sustain any physical injuries.

The Los Angeles County Office of Education paid approximately $1,000 in losses because of Johnson’s allegedly fraudulent claim. Early discovery of Johnson’s claim likely prevented larger losses for the county.

Johnson was booked into the Los Angeles County Sheriff’s detention facility. This case is being prosecuted by the Los Angeles District Attorney’s office.

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Seven Indicted by Riverside Grand Jury for Fraudulent Medical Claims

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Seven defendants have been indicted by a Riverside County grand jury in a case involving workers’ compensation insurance fraud. The two separate, but related grand jury indictments are the result of a joint investigation by the Riverside County District Attorney’s Office and the California Department of Insurance. The indictments were issued after evidence was presented to the Riverside County grand jury over a six-week period ending in mid-May.

The two indictments allege that 18 insurance companies were defrauded in this scheme in which $98 million was fraudulently billed, resulting in $12.4 million being paid by the insurance companies.

The first indictment, (case RIF1670175), charges 45 year old chiropractor Peyman Heidary, of Riverside; 59 year old attorney Cary David Abramowitz, of Los Angeles; and also 34 year old Ana Solis of Rancho Cucamonga; and 53 year old Gladys Ross of Simi Valley, with 69 felony counts which include conspiracy to commit insurance fraud, making a false insurance claim, making a false statement for the purpose of obtaining workers’ compensation benefits, money laundering, practicing medicine without a license, and capping. There also is one misdemeanor count of unlicensed practice of law.

Heidary, is described in court records as a chiropractor and suspected architect of a “massive, fully integrated criminal enterprise” designed to commit workers’ compensation insurance fraud. According to the indictment, Heidary went by the aliases Brian Heidary, Number One and The Godfather. Heidary owned or ran numerous businesses, including law firms and health clinics, and relied on other people to disguise his involvement and create a complex and illegal ownership structure, according to court records. The criminal activity dates back to at least 2009, according to investigators. Heidary was originally charged in July 2014, but an indictment filed last month in Riverside County Superior Court expands the case and named new co-conspirators.

The second indictment, (case RIF1670176), charges 37 year old chiropractor Touba Pakdel-Nabati, of Costa Mesa; and doctors 57 year old Quynam Nguyen, of Orange; and and 50 year old Jason Yang, of Pasadena, with 38 felony counts which include conspiracy to commit insurance fraud, making a false insurance claim, making a false statement for the purpose of obtaining workers’ compensation benefits, and capping. Both indictments also allege multiple excessive takings enhancements and an aggravated white collar crime enhancement.

The charges stem from the operation of a workers’ compensation medical mill, spearheaded by chiropractor Peyman Heidary, and involving other medical providers, which allegedly corrupted the workers’ compensation system to defraud insurance companies out of millions of dollars.

Investigators found 63 bank accounts controlled by Heidary or jointly with Abramowitz that were linked to 48 businesses. Investigators believe nearly $30.3 million moved through Heidiary’s businesses from October 2013 to August 2015.

Solis worked as an office manager who directed untrained paralegals to fill bogus claims and who also recruited new clients. Ross is the owner and CEO of several medical billing companies who contracted with Heidary and his clinics.

If convicted as currently charged, Heidary faces a potential maximum sentence of 97 years and 4 months in state prison; and Pakdel-Nabati, Nguyen, Yang, Abramowitz, Solis, and Ross each face a potential maximum sentence of 63 years and 4 months in state prison.

The case is being prosecuted by Deputy District Attorneys Erika Mulhere, Matthew Murray, and Raymond Ramirez of the DA’s Financial Crimes Unit.

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