Author: WorkCompAcademy

Health insurance companies are amplifying their warnings about the financial sustainability of the ObamaCare marketplaces as they seek approval for premium increases next year.  The Hill reports that , insurers are losing money on their ObamaCare plans at a rapid rate, and some have begun to talk about dropping out of the marketplaces altogether.

While analysts expect the market to stabilize once premiums rise and more young, healthy people sign up, some observers have not ruled out the possibility of a collapse of the market, known in insurance parlance as a “death spiral.”  In the short term, there is a growing likelihood that insurers will push for substantial premium increases.

Insurers have been pounding the drum about problems with ObamaCare pricing. The Blue Cross Blue Shield Association released a widely publicized report last month that said new enrollees under ObamaCare had 22 percent higher medical costs than people who received coverage from employers.

And a report from McKinsey & Company found that in the individual market, which includes the ObamaCare marketplaces, insurers lost money in 41 states in 2014, and were only profitable in 9 states.  

“We continue to have serious concerns about the sustainability of the public exchanges,” Mark Bertolini, the CEO of Aetna, said in February. The Aetna CEO noted concerns about the “risk pool,” which refers to the balance of healthy and sick enrollees in a plan. The makeup of the ObamaCare risk pools has been sicker and costlier than insurers hoped.

“The industry is clearly setting the stage for bigger premium increases in 2017,” said Levitt of the Kaiser Family Foundation.  Insurers will begin filing their proposed premium increases for 2017 soon. State regulators will review those proposals and then can either accept or reject them. “What we’re likely to see is more of a market correction than any kind of death spiral,” Levitt said. “There are enough people enrolled at this point that the market is sustainable. The premiums were just too low.”  

But Dr. Mandy Cohen, the chief operating officer of the Centers for Medicare and Medicaid Services (CMS), said in an interview that there is “absolutely not” a risk of a death spiral or collapse in the ObamaCare marketplaces.  While acknowledging that “companies are needing to adjust” to the new system, she pointed to the 12.7 million people who signed up this year, 5 million of whom were new customers, as a sign of success. “What brings us the most confidence about the long term stability and health of the marketplace is its growth,” Cohen said.

The most prominent insurer eyeing the exits is UnitedHealth, which made waves in November by saying it was considering whether to leave ObamaCare in 2017 because of financial losses. The company last week announced that it is dropping its ObamaCare plans in Arkansas and Georgia, and more states could follow.  

The Department of Health and Human Services argues that the attention on UnitedHealth is overblown, given that the insurer is actually a fairly small player in the marketplaces.  It’s more important to watch what happens with Blue Cross Blue Shield plans, which are the backbone of the ObamaCare marketplaces.

There have been some rumblings of discontent from Blue Cross plans. The plan in New Mexico already dropped off the marketplace there last year after it lost money and state regulators rejected a proposed 51.6 percent premium increase. Now, Blue Cross Blue Shield of North Carolina says that it might drop out of the marketplace because of its losses. Blue Cross of North Carolina CEO Brad Wilson said in an interview that the company had lost $400 million due to its ObamaCare business.  “We’re not alone, and I think that that also is evidence to suggest that there are systemic and fundamental challenges that we all need to have a civilized conversation about,” Wilson said.  He said a key factor in the decision on whether to stay in the market next year will be whether regulators approve whatever premium increase the company ends up proposing so as to try to make up for its losses.  Asked about the risk of a death spiral, Wilson said he is not worried about that happening “tomorrow,” but has concerns if the situation does not change over time.

Early this year the Court of Appeal opened the Pandora’s box of potential litigation against utilization review physicians in the published case of Kirk King v Comppartners, Inc. Now the California Supreme Court granted a Petition to Review the case, potentially leading to an end to this litigation expansion nightmare.

Kirk King suffered anxiety and depression due to chronic back pain resulting from the back injury at work in 2008. In 2011, he was prescribed an anti-anxiety medication known as Klonopin to be provided through Workers’ Compensation. The request for this medication was sent to UR.

Naresh Sharma, M.D, an anesthesiologist who conducted the utilization review determined the drug was unnecessary and decertified it. As a result, Kirk was required to immediately cease taking the Klonopin. Typically, a person withdraws from Klonopin gradually by slowly reducing the dosage. Due to the sudden cessation of Klonopin, King suffered four seizures, resulting in additional physical injuries.

In September 2013 another request for Klonopin was made by the PTP. Ali, a psychiatrist, conducted a second utilization review and also determined Klonopin was medically unnecessary. Neither Sharma nor Ali examined Kirk in-person, and neither warned Kirk of the dangers of an abrupt withdrawal from Klonopin. Sharma and Ali were employees of CompPartners a Workers’ Compensation utilization review company.

King then sued CompPartners, Inc. and Sharma for (1) professional negligence; (2) negligence; (3) intentional infliction of emotional distress; and (4) negligent infliction of emotional distress. Kirk’s wife, Sara King, sued for loss of consortium. The trial court sustained defendants’ demurrer without leave to amend. The Court of Appeal sustained the demurrer but reversed the denial of leave to amend.

CompPartners contended the Labor Code set forth a procedure for objecting to a utilization review decision, and that procedure preempted the Kings’ complaint. The Kings contend the trial court erred in sustaining the demurrer because their causes of action are not preempted by the Workers Compensation Act.

The Court of Appeal said that “To the extent the Kings are faulting Sharma for not communicating a warning to Kirk, their claims are not preempted by the WCA because that warning would be beyond the “medical necessity” determination made by Sharma. To the extent the Kings are faulting Sharma for incorrectly deciding the medical necessity decision because Klonopin was medically necessary until Kirk was weaned, and thus a particular number of pills, e.g., 10, 20, should have been authorized for weaning, the Kings’ claims are preempted by the WCA because the Kings are directly challenging Sharma’s medical necessity determination.”

The decision concluded that the trial court “should have granted the Kings leave to amend because it is possible… that, when more details are provided they could support a conclusion that, under the circumstances, the scope of Sharma’s duty included some form of warning Kirk of or protecting Kirk from the risk of seizures.”

The King case will be the workers’ compensation high profile case for the remainder of the year. The list of Amicus parties already includes many stakeholder organizations such as the California Workers’ Compensation Institute, the California Chamber of Commerce, the California Applicant’s Attorneys Association and more. Workers’ compensation UR and IMR seems to be constantly under attack. The King case provided another opportunity to open the floodgates of litigation against employers, and vendors in the compensation echosphere.

Five defendants were arraigned in Orange County for committing over $635,000 in tax and insurance fraud and failing to pay employees prevailing wage on public works contracts.

Babak Brian Abghari, 36, Newport Coast, Homayoun Harry Abghari, 57, Huntington Beach, Julio Roberto Alvarado, 47, San Pedro, Cody Lawson, 34, Long Beach, Phyllis Martinez, 51, Anaheim, are each charged with eight felony counts of taking and receiving a portion of a worker’s wage on a public work, 56 felony counts of recording a false or forged instrument, six felony counts of making a false statement to discourage an injured worker from claiming workers’ compensation benefits, and seven felony counts of willful failure to pay taxes, with sentencing enhancement allegations for property loss over $200,000.

Babak Aghari and Homayoun Aghari are also charged with three felony counts of misrepresenting facts to a workers’ compensation insurance company.

If convicted, the defendants face a maximum sentence of 49 years and six months in state prison. The defendants are scheduled for a pre-trial hearing on May 12, 2016, at 8:30 a.m. in Department C-55, Central Justice Center, Santa Ana.

Houmayoun Abghari and Babak Abghari are accused of owning and operating PCN3, a general contracting company that mainly conducts public works projects. Between Jan. 1, 2000, and March 30, 2015, the defendants are accused of fraudulently paying PCN3’s employees less than the prevailing wage in cash, and keeping the extra money owed to their employees. The defendants are accused of “shorting” the victims’ hours on certified payroll reports and/or requiring their victims’ to give cash back.

Martinez is accused of working as an office clerk at PCN3 and knowingly signing fraudulent certified payroll records under penalty of perjury.

Lawson is accused of working as a superintendent and Alvarado is accused of working as a foreman for PCN3 on public work’s projects. Lawson and Alvarado are accused of not paying employment taxes. Lawson and Alvarado are accused of giving paychecks or cash to victims for their work on the projects.

Houmayoun Abghari and Babak Abghari are accused of discouraging the victims from filing for workers’ compensation benefits after being injured on the work. Houmayoun Abghari and Babak Abghari are accused of knowingly filing false tax returns in which they understated the pay and amount of hours that their employees received.

One of the victims contacted the International Brotherhood of Electrical Workers, who notified the Orange County District Attorney’s Office (OCDA). The OCDA and the Department of Industrial Relations and Labor Commissioners Office investigated this case.

Deputy District Attorney Donde McCament of the Insurance Fraud Unit is prosecuting this case.

When a paralyzed mother crossed the finish line of the 26.2-mile London Marathon in a bionic suit, it marked a watershed moment for wearable technology; the exoskeleton had arrived.

The recent FDA approval of the exoskeleton, which enables paraplegics, amputees and people with muscle or nerve damage to walk, is the latest milestone in the new world of wearable technology for injured workers, according to Zack Craft, ATP, Vice President of Rehab Solutions and Complex Care Education at One Call Care Management (“One Call”).

Craft spoke on wearable technology and workers’ compensation at the RIMS 2016 Annual Conference held April 10 – 13 in San Diego, California, along with Felicia Amenta, Workers’ Compensation Program Manager for San Diego County and Imperial Schools. Their presentation, “The New Game Changer in Managing Worksite Health: Wearable Technology,” introduced attendees to ways in which wearable technology can benefit injured workers, their employers and payers.

Speaking about the exoskeleton, Craft noted: “For an employee with catastrophic injuries, the exoskeleton holds enormous potential to give them back a part of their lives they thought was lost forever.”

Other types of wearable technology that are applicable in the workplace range from postural devices to activity trackers to GPS locators. Benefits of these devices include wellness, prevention of injuries, increased productivity, compliance with treatment regimes to prevent injury and avoid re-injury, and enhanced independence and quality of life.

As wearable technologies are introduced into the workplace, and especially for the treatment of injured workers, specialists such as assistive technology experts can advise claims managers on which technologies may be most appropriate, taking into consideration the long-term view of the injury, the home environment, and patients’ needs for functionality and independence.

Assistive technology is an umbrella term that includes assistive, adaptive, and rehabilitative devices for people with disabilities and also includes the process used in selecting, locating, and using them. Assistive technology promotes greater independence by enabling people to perform tasks that they were formerly unable to accomplish, or had great difficulty accomplishing, by providing enhancements to, or changing methods of interacting with, the technology needed to accomplish such tasks.

RESNA, the Rehabilitation Engineering and Assistive Technology Society of North America, advances the field by offering certification, continuing education, and professional development; developing assistive technology standards; promoting research and public policy; and sponsoring forums for the exchange of information and ideas to meet the needs of our multidisciplinary constituency. RESNA certified assistive technology experts can be located nationwide by using the search tool on the RESNA website.

California State University in Northridge, Center on Disabilities just finished its 31st Annual International Technology and Persons with Disabilities Conference last month in San Diego. For over 30 years, the Annual International Technology and Persons with Disabilities Conference, has provided an inclusive setting for researchers, practitioners, exhibitors, end users, speakers and other participants to share knowledge and best practices in the field of assistive technology. In 2015, the conference drew more than 4,800 people to San Diego. The annual conference is a forum that showcases cutting edge technology and practical solutions.The conference is the largest of its kind in the world. The 32nd Annual CSUN Conference is scheduled for February 27 to March 4, 2017 at the Manchester Grand Hyatt Hotel in San Diego.

CSUN also just launched two new master’s degrees in assistive technology. It says that assistive technology is “one of the fastest-growing segments of the rapidly expanding health and human services field.”

Workers’ Compensation Appeals Board Chairwoman Ronnie Caplane is retiring from state service at the end of April. She was appointed commissioner in 2003 by Governor Gray Davis, reappointed in 2009 by Governor Arnold Schwarzenegger, and appointed Chairwoman by Governor Jerry Brown in 2011.

During her tenure on the Appeals Board, the California workers’ compensation laws underwent two major reforms. The first came with SB 899 in 2004; later, as Chairwoman, she presided over the first judicial body to review cases that fell under SB 863’s landmark 2013 reforms.

“Ronnie Caplane managed WCAB through significant legislative changes, and has made valuable contributions to improving the workers’ compensation system,” said DIR Director Christine Baker.

Commissioner Caplane was admitted to the State Bar in 1975 after graduating from the University of Wisconsin, Madison and UC Hastings College of Law. She was an associate attorney for Lewis, Rouda and Lewis from 1976 to 1978 and then a trial attorney for the U.S. Department of Justice’s Civil Division from 1979 to 1982. Caplane was also a partner with Bruyneel and Caplane from 1983 to 1985, and a freelance writer and columnist for East Bay area publications the Piedmonter and the Montclarion from 1992 to 2006. She has published essays in newspapers throughout the country including the San Francisco Chronicle, the Cleveland Plain Dealer, the Chicago Tribune, the Detroit Free Press, the Recorder, Legal Times, and various Jewish publications. Her essays have also appeared in several anthologies.

She has also served as a member and President of the Piedmont School Board. Her leadership in education and work to improve the East Bay community led Assemblywoman Wilma Chan to name her Woman of the Year in 2004. Her commitment to public education and to restore California to its status as a national leader led Caplane to pursue a run for the California Assembly.

In 2006, she made an unsuccessful run for a seat in the Assembly, coming in third with 12.5 percent of the vote in a five-way Democratic primary won by Assembly Member Sandré Swanson.

Commissioner Caplane suffered the tragic loss of her husband Joe Remcho – a prominent Bay Area lawyer and influential adviser to many of California’s most powerful politicians – in January 2003 as a result of a helicopter crash in the Sacramento-San Joaquin River Delta while he was the solo pilot of the craft. At the time of his death he was a partner in the San Leandro law firm of Remcho, Johansen & Purcell. For two decades, the firm has represented the state Legislature in redistricting matters and other cases involving voter initiatives, term limits and campaign finance. Remcho’s clients included Gov. Gray Davis, Attorney General Lockyer, Sen. Dianne Feinstein and Mayor Willie Brown, the former state Assembly speaker. After his death she wrote a series of “grief columns” that drew an overwhelming response from readers.

Commissioner Caplane volunteered thousands of hours for a myriad of community organizations including Oakland’s Temple Sinai, HEROS, the Henry Robinson Center and the Piedmont schools. She created a minority law school scholarship through the Bar Association of San Francisco in her husband’s honor.

Following retirement, she will be joining Zenith Insurance Company as a Vice President.