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Katherine Zalewski to Chair WCAB

Governor Jerry Brown has designated Katherine Zalewski, of Richmond, as the Chair on the California Workers’ Compensation Appeals Board. Zalewski served on the board since her appointment by Governor Brown on April 30, 2014.

Prior to her appointment, she joined the Department of Industrial Relations (DIR) as a workers’ compensation administrative law judge and advisor to the Division of Workers’ Compensation from 2009 to 2011, and served as DIR chief counsel from 2012 to 2014.

Prior to state service, she was senior associate at Schmit Law Office from 2000 to 2009, manager and attorney at Pacific Coast Services from 1998 to 2000, and worked at Express Network and Direct Legal Support Services from 1993 to 1998.

She was an attorney at Kinder and Wuerfel from 1990 to 1993 at Finnegan and Marks from 1988 to 1990 and at Foreman and Brasso from 1986 to 1988.

Zalewski earned a Juris Doctor degree from the University of California Hastings College of the Law.

This position requires Senate confirmation and the compensation is $131,952.

She was selected from a list of current WCAB commissioners including Frank M. Brass, Deidra E. Lowe, José H. Razo and Marguerite Sweeney.

Court of Appeal Gives Applicant Second Chance

Ravinderjit Singh was employed as a physician with the California Department of Corrections and Rehabilitation (CDCR) at North Kern State Prison in Delano, California, when she claimed to have suffered a January 8, 2013, industrial injury to her psyche following a fire marshal order to close examination room doors while examining inmates.

Qualified Medical Evaluator (QME) John M. Stalberg, M.D., issued five medical reports regarding Dr. Sing. Following a workers’ compensation hearing a WCJ found, that the injury did not cause permanent disability and that based on Dr. Stalberg’s reporting, Singh “failed to meet the burden of showing entitlement to any period of temporary total disability.

Singh petitioned the WCAB for reconsideration, contending primarily that she was entitled to temporary disability. The WCAB issued its own decision finding Dr. Stalberg’s medical reporting lacking and that Singh “failed to follow-up with Dr. Stalberg and provide the requisite information for him to determine the period she was temporarily totally disabled.” The WCAB accordingly agreed with the WCJ and denied reconsideration.

Singh petitioned the court of appeal for a writ of review, and presented her case for entitlement to temporary disability payments. Singh notes that Dr. Stalberg opined she could return to work inside the prison with the reasonable accommodation of either leaving the examination room open or having a chaperone during examinations, but that the prison refused to accommodate her work restriction.

The WCAB filed a letter brief with the court of appeal stating that it “would admit error in this case and request that the Opinion and Order Denying Petition for Reconsideration issued on March 6, 2017, be annulled and that this matter be returned to the Board for further proceedings.”

The WCAB explains that while it focused its analysis on whether Singh proved temporary disability, she correctly pointed out in her petition for writ of review that “where an employer fails to provide modified work to an injured employee, temporary partial disability is deemed total. (Huston v. Workers’ Comp. Appeals Bd. (1979) 95 Cal.App.3d 856, 868.)” The WCAB explained that the record appeared incomplete, that it may have improperly analyzed Singh’s claim of temporary total disability, and expressed its desire to return the matter to the WCJ for further proceedings.

In response to this court’s inquiry as to whether this court should grant peremptory relief in light of the WCAB’s letter brief, the CDCR contends the matter should not be remanded because “[i]t is well established that an appellant cannot complain about an error that he or she created.” The CDCR asserts any lack of an adequate record is invited error of Singh’s own making by not further developing the record. (Mesecher v. County of San Diego (1992) 9 Cal.App.4th 1677, 1685.)

The court granted the WCAB request in the unpublished case of Sing v WCAB, and the California Department of Corrections and Rehabilitation, “Given the WCAB’s admission it did not consider all available legal theories that might have entitled Singh to benefits, we conclude the WCAB’s decision fails to “state the evidence relied upon and specify in detail the reasons for the decision” as required under section 5908.5. The WCAB’s failure to set forth its reasoning in adequate detail constitutes a sufficient basis to annul the decision and remand for a statement of reasons.”

RIMS Panel Discusses Comp “Medical” Marijuana

The growing trend of states working to legalize medical marijuana has created challenges in the workplace. However, there are opportunities to implement best practices to manage the use of medical marijuana in workers’ compensation, according to Kevin Glennon, RN, vice president of Clinical Education and Quality Assurance Programs at One Call Care Management.

The Claims Journal reported that Glennon spoke on the panel, “Legalized Marijuana: Its Impact on the Workplace,” for the 2015 Risk Management Society Conference held in New Orleans last week.

Among the challenges are the conflicts between state and federal laws, lack of evidence for the efficacy of medical marijuana, and risks posed to employee safety.medical marijuana

“In workers’ compensation, medical marijuana is predominantly requested to manage pain,” noted Glennon. “However, payers rely on evidence-based guidelines when making coverage decisions. Without FDA approval or a large-scale randomized, controlled human trial to demonstrate medical value, many payers are choosing to categorically deny coverage of medical marijuana. It’s a catch-22: lack of evidence continues to hamper adoption, and yet clinical trials are not permitted under current federal law.”

At the federal level, marijuana is categorized as an illegal substance, and it is not FDA approved to treat any medical condition. Despite these restrictions, in the 23 states and the District of Columbia where medical marijuana is now legal, it is recommended for many medical purposes.

In certain cases, court rulings could force carriers to cover medical marijuana for treatment. Glennon pointed to a New Mexico case, in which a court ruled that a workers’ compensation carrier must reimburse a 55-year-old former mechanic for medical marijuana used to alleviate pain from a work-related back injury. The ruling circumvented the carrier from directly paying for an illegal drug.

Glennon delivered an overview of state legalization trends and the issues related to the use of medical marijuana in the treatment of injured workers. Colorado state risk manager Markie Davis also participated, sharing Colorado’s experience with legalized marijuana for both medical and recreational use and insights into the potential impact to the workplace.

Glennon identified potential risks for payers that do cover the use of medical marijuana for workers’ compensation cases. Although effects differ by individual and are dependent on use and dosage, they may include mental health issues, delays in return to work, diminished levels of productivity, and safety hazards, especially if users operate heavy machinery or drive vehicles.

The conflict between state and federal law will eventually need to be resolved, particularly for drug-free workplace and employment policies. In the meantime, organizations should stay abreast of new cases, judgments, and verdicts that could forecast further impact on policies.

New Surgery Reconnects Sensory Neurons to Spinal Cord

Scientists in the UK and Sweden previously developed a new surgical technique to reconnect sensory neurons to the spinal cord after traumatic spinal injuries. Now, they have gained new insight into how the technique works at a cellular level by recreating it in rats with implications for designing new therapies for injuries where the spinal cord itself is severed.

The brain and the neurons (nerve cells) in the rest of our body are connected in the spine. Here, motor neurons, which control muscle movement, and sensory neurons, which relay sensory information such as pain, temperature and touch, connect with the spinal cord.

Where the neurons connect with the cord, motor neurons bundle together to form a structure called the motor root, while sensory neurons form a sensory root. In patients with traumatic injuries, these roots can be torn, causing areas of the body to lose neural control.

Surgeons can implant motor roots at the area from which they are torn, and they will usually successfully reconnect, as motor neurons can regrow out of the spinal cord and into the motor root. However, this does not apply to the more troublesome sensory root, which surgeons couldn’t reconnect properly until recently. “Doctors previously considered this type of spinal cord injury impossible to repair,” says Nicholas James, a researcher at King’s College London. “These torn root injuries can cause serious disability and excruciating pain.”

Happily, Thomas Carlstedt, also at King’s College London, recently helped to develop a new surgical technique to reconnect the sensory root. It involves cutting the original sensory nerve cells out of the root and implanting the remaining root directly into a deeper structure in the spinal cord. This area is called the dorsal horn, and it contains secondary sensory neurons that don’t normally directly connect to sensory roots. When the team tried the technique in patients, certain spinal reflexes returned, indicating that the implanted neuron had integrated with the spine to form a functional neural circuit.

In a new study recently published in Frontiers in Neurology, James, Carlstedt and other collaborators set out to understand how the implanted sensory root was connecting with the spinal cord in the dorsal horn. By understanding the mechanism, they hope to develop new treatments for patients with other types of spinal injuries.

The scientists used a rat model of spinal injury to study the process at a cellular level. During surgery, they produced a similar spinal injury in the rats and then reattached the sensory root using the new technique. At 12-16 weeks after surgery, the researchers assessed the spinal repair by passing electricity along the neurons to see if they formed a complete neural circuit. They then analyzed the neural tissue under a microscope.

The electrical tests showed that the neural circuit was complete, and that the root had successfully integrated with the spinal cord. When they examined the tissue, they found that small neural offshoots had grown from structures called dendrites (branched projections at the end of neurons) in the dorsal horn. These thin offshoots had extended all the way into the implanted sensory root to create a functional neural circuit.

So, what does this teach us about spinal cord repair? The researchers hope that this type of neural growth could also be used to repair other types of spinal cord injury. “The strategy of encouraging new growth from spinal neurons could potentially be of use in other injuries of the nervous system,” says Carlstedt. For example, scientists could capitalize on this mechanism when designing new therapies for injuries where the spinal cord itself is severed, by implanting grafts that encourage or facilitate this type of nerve growth.

Chula Vista Restaurant Fined $274,000 for Wage Theft

The Labor Commissioner’s Office cited a Chula Vista restaurant more than $274,000 in back wages and penalties for multiple wage theft and labor law violations.

Dorantes Inc., doing business as La Querencia, was ordered to pay $164,688 to six workers who worked an average of nine hours per day, five days a week without breaks, and were paid on average less than $6 per hour.

La Querencia was also fined $110,150 in civil penalties, workers’ compensation penalties and wage statement penalties.

The Labor Commissioner’s Office launched a complaint-based investigation at the Mexican restaurant in January and found that the owner was under-reporting the number of workers employed there. The owner claimed only five employees, but investigators found 14 workers employed. Investigators in February cited La Querencia $21,000 for failing to carry adequate workers’ compensation insurance coverage. An audit of the restaurant revealed that La Querencia management denied six workers meal or rest breaks, and paid them a straight rate of $50 per day regardless of hours worked, for a period spanning June 2014 through February 2017.

The Labor Commissioner’s Office last month cited La Querencia $72,290 for minimum wage violations and penalties, $83,131 for liquidated damages, $1,735 for unpaid overtime wages, $3,077 for meal period violations, $3,234 for rest period violations, and $1,221 for waiting time penalties, all payable to the six affected workers. Additionally, the Labor Commissioner’s Office fined La Querencia $54,500 for wage statement violations and $34,650 in civil penalties for minimum and overtime wage violations.

When workers are paid less than minimum wage, they are entitled to liquidated damages that equal the amount of underpaid wages plus interest. Waiting time penalties are imposed when the employer fails to provide workers their final paycheck after separation. This penalty is calculated by taking the employee’s daily rate of pay and multiplying it by the number of days the employee was not paid, up to a maximum of 30 days. The civil penalties collected will be transferred to the State’s General Fund as required by law.

In 2014, Commissioner Su launched the Wage Theft is a Crime multilingual public awareness campaign. The campaign defines wage theft and informs workers of their rights and the resources available to them to recover unpaid wages or report other labor law violations.

“Honest business owners in California should not have to compete with businesses that skirt the law and deprive their workers of their hard-earned pay,” said Labor Commissioner Julie A. Su.

Pharmacy Settles Kickback Claims

Reuters reports that specialty pharmacy firm US Bioservices Corp has agreed to pay $13.4 million to settle U.S. government claims that it pushed patients to refill prescriptions of Novartis AG’s iron overload drug Exjade in exchange for referrals from the Swiss drugmaker.

US Bioservices, a unit of drug wholesaler AmerisourceBergen, agreed to pay $10.6 million to the federal government and $2.8 million to states, according to a filing on Tuesday in Manhattan federal court by Acting U.S. Attorney Joon Kim.

The deal, which must be approved by the court, would resolve a civil lawsuit filed by Kim earlier on Tuesday claiming that U.S. federal and state insurance programs were illegally billed for Exjade prescriptions that stemmed from kickbacks.

AmerisourceBergen said in a previous filing with U.S. securities regulators that it was not admitting wrongdoing as part of the settlement.

According to the lawsuit, from August 2010 to March 2012, US Bioservices encouraged patients to refill Exjade prescriptions by having its nurses call them with “one-sided advice,” emphasizing the dangers of not treating iron overload and downplaying the drug’s side effects.

Exjade had been linked to severe side effects including kidney and liver failure and gastrointestinal bleeding, which have resulted in deaths, according to the lawsuit.

US Bioservices also assigned a group of employees known as patient care coordinators to call patients and urge them to refill their prescriptions, the lawsuit said.

US Bioservices competed with two other pharmacy companies that distributed the drug – BioScrip Inc and Express Scripts unit Accredo Health Group Inc – for patient referrals from Novartis. Novartis would dole out the referrals according to how many refills each pharmacy achieved, according to the lawsuit.

As a result of the scheme, the government-run Medicare and Medicaid programs were billed for prescriptions “tainted” by kickbacks, violating federal law, according to the lawsuit.

Novartispreviously settled claims that it paid kickbacks to promote Exjade and other drugs for $390 million in 2015. BioScrip and Accredo also previously settled claims, collectively paying $75 million.

The case is United States v. US Bioservices Corp, U.S. District Court, Southern District of New York, No. 17-cv-06353.

Hospitals Going Broke

Weak patient admissions that plagued U.S. hospital operators in the June quarter are likely to persist through 2018, as patients fret about soaring out-of-pocket costs and the future of Obamacare remains uncertain. Companies including HCA Healthcare Inc, the largest for-profit hospital operator, and Tenet Healthcare Corp have reported dismal quarterly results and cut their forecasts for the year.

According to the report in Reuters Health, high-deductible health plans – which shift initial medical costs to patients, but have lower monthly premiums – are becoming popular, resulting in patients pushing back non-emergency surgeries.

Tenet saw weakness in elective procedures including orthopedics, Eric Evans, the company’s president of hospital operations, said earlier this month. “That does play into the story of deductibles rising and changing behaviors.”

Also, HCA, Tenet, and rivals such as Community Health Systems Inc enjoyed a surge in admissions in 2014 and 2015, thanks to the Affordable Care Act, popularly known as Obamacare. But with big insurers reducing exposure to the program since last year, results for hospital operators are suffering in comparison, analysts said.

HCA is expected to grow at a compound annual rate (CAGR) of 4.8 percent through this year and the next, down from 6.7 percent growth over the last three years. Tenet’s CAGR is expected to plunge to 0.2 percent from 21 percent.

“I think the seasonality is changing, somewhat, where the fourth quarter is really shaping up to be the biggest quarter because of all the people deferring things until their co-pays are deductible,” said J.P. Morgan analyst Gary Taylor.

High-deductible plans have been around for over a decade but have become more popular as wage rises fail to keep up with rising medical costs, said Bret Schroeder, healthcare expert at PA Consulting Group. Participation in high-deductible plans in the five years through January 2016 has risen about 76 percent, according to lobby group America’s Health Insurance Plans.

While this has been a problem for all hospital operators, HCA, with its well-capitalized balance sheet and strong cash flow, is best positioned to weather the storm, analysts said. But for Tenet and Community Health, these problems add to piles of debt, which they have been trying to repay by selling assets.

AB-570 Anti-Apportionment Bill Alive- But Not Well

August is the final month of the California legislative session for the year. Over the last several years several bills passed during the final months, and some even arrived, sometimes by surprise, during this last month. Indeed, SB 863 and its sweeping changes was introduced, passed and signed by the Governor all in the last week of the 2012 legislative session.

This year, AB 570 seems to be the only substantial workers’ compensation related proposed law on the horizon, at least as known to the industry pundits at this time.

AB 570 in the broad analysis is an attempted rollback of permanent disability apportionment rules. The purpose of the bill is to eliminate elements of what the author believes is gender bias in the workers’ compensation system. According to the author, women can receive disproportionately low compensation amounts for work-related permanent disability because of the gender-specific conditions of pregnancy and childbirth. The author points to specific examples where the evaluating physician has pointed to pre-existing conditions that have involved pregnancy or childbirth in apportioning the causation of subsequent industrial injuries, and argues that this constitutes an inappropriate discrimination, since male injured workers can never have their disability apportioned in this manner.

This bill would prohibit apportionment in the case of a physical injury occurring on or after January 1, 2018, based on pregnancy, childbirth, or other medical conditions related to pregnancy or childbirth. It is similar to AB 1643 (Gonzalez) of 2016 which would have prohibited apportionment in cases of physical injury based on pregnancy, menopause, osteoporosis, and carpal tunnel syndrome. AB 1643 passed the legislature last year but was vetoed by the Governor.

According to the legislative analysis “This issue has been presented to, and debated in, the Legislature in one form or another for at least eight years, and there is a paucity of concrete evidence, either academic or anecdotal, to show that there is pervasive discrimination based on gender, or other protected classes. Proponents cite several examples of cases where women are alleged to have suffered unfair treatment by the system. In these examples it is claimed that the evaluating physician has pointed to the offending apportionment factor. Despite requests for any information indicating that workers’ compensation judges have accepted these apportionment factors, proponents have been unable to do so.”

Unlike previous bills on this subject, AB 570 expressly adds language that brings in other medical conditions that are related to the gender-based condition. Thus, the bill appears to expressly prohibit apportionment not merely to pregnancy or childbirth, but to any other medical condition that pre-dates the industrial injury if that prior condition can be shown to have been related to a pregnancy or child birth. For example, if a pregnancy causes back problems, and those back problems persist as a chronic problem, the bill appears to preclude using that pre-existing condition as a basis to apportion a subsequent industrial back injury. Opponents are concerned about the scope of this provision, and the amount of litigation it would create. They also note the underlying principle that employers should pay for what the job caused, but not pre-existing conditions.

It is likely that if this bill is passed by the legislature, it will be vetoed by the Governor as he has done in the past. Thus, the concept as a bill is alive in it’s eighth year, but certainly not well.

Santa Ana Pain Physician License Pulled

Thomas S. Powers M.D. – a physician at Open Care Medical Clinic in Santa Ana, who claimed to specialize in anti-aging and preventive medicine, cosmetic medicine, stress management, pain management, addiction recovery, weight management and regenerative medicine – was accused of poor record keeping by the medical board eight years ago.

In a newer case filed last October, the board accused Powers of prescribing himself pain medication and more sloppy record keeping that led to him overprescribing medications to four patients, including the one who passed away.

By April 5 2017, Powers and his attorney John D. Martin signed off on the medical board’s license probation order due to what they acknowledged was “gross negligence” and “repeated negligence” in the treatment of four patients, overprescribing them powerful medications, failing to keep adequate records of the prescriptions he wrote them and prescribing himself the muscle relaxer carisoprodol and suboxone, a highly addictive substance that is nonetheless used to treat substance abuse addiction. One of those patients died.

During the 2017 probation imposed for the new offense, the Medical Board records said that Powers “shall not order, prescribe, dispense, administer, furnish, or possess any controlled substances listed in Schedules II and III, except anabolic steroids; and is prohibited from supervising physician assistants and advanced practice nurses,” the Medical Board added that failure to adhere by those conditions could lead to license revocation proceedings.

Powers did not last long on his newly imposed  probation.

Kimberly Kirchmeyer, the Medical Board’s executive director, reported his probation violations in the new August 18, 2017 Cease Practice Order saying that “The Respondent has failed to comply with Condition No. 3, Controlled Substances – Abstain From Use, by testing positive for marijuana on July 30, 2017, and Aug. 6, 2017, and failing to check in daily for 10 days,  

Accordingly Powers is now prohibited from engaging in the practice of medicine. It will be up to the board to decide if and when Powers can resume a medical practice in California.

United States Attorney General Jeff Sessions announced in July that Powers was among 13 others in Southern California and more than 400 defendants nationwide charged in federal court in Los Angeles with being part of the largest health-care fraud operation ever undertaken, with false billings totaling about $1.3 billion.

Federal prosecutors specifically alleged that Powers authorized prescriptions for patients he never examined, receiving payments from another defendant, Newport Beach resident Anthony Paduano, who allegedly got about $1.2 million for referring the prescriptions to a local pharmacy that billed more than $4.8 million to TRICARE, the healthcare system for military personnel and other Department of Defense employees.

Exclusive Remedy Protects General and Special Employer

A Fresno County Superior Court judge has dismissed a wrongful death lawsuit filed by the family of a Fresno paramedic who was killed in an air ambulance helicopter crash in December 2015. The ruling was based upon the application of the exclusive remedy provisions of the workers’ compensation law.

Brooke Juarez, and her children sued Rogers Helicopters and American Airborne, claiming they were negligent in the maintenance and operation of the Bell 407 aircraft that crashed in a field nine miles east of McFarland in Kern County resulting in the death of her husband, paramedic Kyle Juarez. At the time, the SkyLife Air Ambulance Bell 407 helicopter was carrying a patient from Porterville to Bakersfield on a routine transportation mission.

Kyle Juarez was a flight and ground paramedic and nine-year veteran of American Ambulance. He spent the last three years on the Skylife team.

Defendants Rogers Helicopters, lnc. , ROAM, and American Airborne, EMS moved for summary judgment on the ground that workers compensation exclusivity precludes plaintiffs’ actions against them, as decedent Kyle Juarez’s joint employers.

The decision recited the history of the joint employers. In 1991 American Airborne entered into a general partnership with defendant Rogers to form ROAM dba SkyLife (“ROAM/SkyLife”). The helicopters used in this partnership were jointly owned by and registered to Rogers and American Airborne. Rogers provided aircraft operations, and American Airborne/Ambulance provided medical support services.

The ROAM/SkyLife Standard Operating Procedures manual includes many provisions indicating a level of control by the partnership over workers such as Mr. Juarez. This includes requirements relating to clothing/uniforms on the job, grooming, weight limits, where and when employees will work, scheduling, and required certification.

Juarez attended monthly safety meetings and mandatory quarterly staff meetings, along with pre-flight briefings and post-flight de-briefings. Juarez wore a ROAM/SkyLife uniform and participated in decisions whether to undertake each flight, and in the cleaning of the aircraft.

Juarez was not paid directly by ROAM/SkyLife, but ROAM/SkyLife indirectly paid his wages and benefits when invoiced by American Ambulance. He; was a skilled worker with substantial control over the details of his work, though he was supervised by American Ambulance personnel, effectively a ROAM/SkyLife partner, with regards to the provision of medical care.

An employee may have more than one employer for purposes of Workers compensation, and, in situations of dual employers, the second or “special” employer may enjoy the same immunity from a common law negligence action on account of an industrial injury as does the first or “general” employer. (Santa Cruz Poultry, Inc. v. Superior Court (1987) 194 Cal.App.3d 575, 578.)

Joint employment occurs when two or more persons engage the services of an employee in an enterprise In which the employee is subject to the control of both. (In-Home Supportive Services v. Workers’ Comp. Appeals Bd. (1984) i52 Cal. App. 3d 720, 732.) Once a special employment relationship is identified, the special employer’ is liable for workers compensation coverage, and that employer Is immune from a common law tort action.

The court found that the undisputed facts demonstrate that American Ambulance was the general employer of Juarez, and that ROAM/SkyLife Was his special employer. Because Juarez’s death occurred during the course and scope of his employment, the court ruled that his family’s legal remedy is through the workers’ compensation system, which, by law, precludes them from suing the defendants.

Also killed in the Dec. 10 2014 crash was pilot Thomas Hampl, 49, of Bend, Ore., an employee of Rogers Helicopters; critical care nurse Marco Lopez, 42, of Hanford, a three-year SkyLife veteran; and the patient, Kathryn Ann Brown, 40, of Springville, who was employed as a substitute school teacher.

The cause of the crash is being investigated by the National Transportation Safety Board.  The NTSB has not yet issue a report of its findings.