Author: WorkCompAcademy

In 1996 Kathleen Murphy, while employed as a cashier for Petsmart in 1992, sustained industrial injury to her right fool and psyche causing the need for further medical treatment. The case was resolved in 2001 by a Compromise and Release for $20.000 with the exception that the defendant remained liable for reasonable medical care related to the industrial injury.

In May and June of 2012, applicant’s treating physician, oral surgeon William W. Evans, D.M.D., M.D.,filed a request for authorization for treatment, including notice that payment was expected at the time of surgery and implant placement. He went on to explain that because of the amount of implants he will need a payment before he can proceed completely with patient’s treatment. Dr. Evans sought an advanced payment of $25,600.00. The treatment plan submitted to UR stated, “Surgical Fee and Payment: Payment is expected at the time of surgery.”

Dr. Evans’ s request for oral surgery and implant placement was forwarded to the utilization review process. On July 19, 2012, defendant issued a utilization review decision authorizing the requested care. The utilization review approval letter did not expressly approve payment of any particular sum of money to Dr. Evans, nor did it expressly mention any agreement to pay Dr. Evans in advance for his services.

Later, the defendant agreed to authorize the surgery but declined to make an advanced payment as requested stating “that advanced payment is not usual and customary for treatment provided in workers’ compensation matters.” In addition, the doctor was advised that payment would be made according to a fee schedule. The physician replied “As stated in your letter it is not usual and customary to collect up front for workers comp cases. It is however usual and customary to collect up front for Implant cases due to the overhead involved. For the extractions the payment within 60 days is acceptable. We are not agreeable to except [sic] fee schedule amounts without those amounts being disclosed. As of yet we have not received any information regarding the allowed fees. Once this information is received we will he able to inform you a to whether we are in agreement.”

Ultimately on February 4, 2013, defendant issued a check in the amount of $25,510.00 to Dr. Evans as pre-payment for the dental services originally requested in June of 2012. Despite the payment, the parties went to trial on the issue of a Labor Code section 5814 penalty. The WCJ found defendant liable for a penalty, stating that: “This Judge finds no medical or legal basis for said delay and on that basis finds that defendant did unreasonably delay payment to Dr. Evans.” The WCJ thus assessed a Labor Code section 5814 penalty in the amount of$6,377.50, which was calculated as 25% of the dental treatment unreasonably delayed by the defendant..”

The defendant Petitioned for Reconsideration which was granted, and the penalty was reversed in the split panel decision of Murphy v Petsmart.

In reversing, the majority concluded that “defendant did not act unreasonably because it had no obligation to pay for applicant’s dental treatment in advance. Labor Code section 4603.2 makes clear that a defendant has no obligation to provide payment for medical services until 45 days after medical services have been “provided.”

“Although we do not wish to belabor the point, “provided” in this context is the past participle of “provide,” and thus indicates an action which has already been completed. Despite Dr. Evans’s office insistence that defendant pay for treatment in advance, there is thus no obligation for the defendant to pay for medical or dental services before they have been provided.”

Commissioner Sweeny dissented from the Opinion noting that the defendant was “clearly notified that payment in advance was required for treatment due to the high up-front cost required for this type of treatment. Defendant approved the treatment even in the face of the requirement for pre-payment, and after authorization did nothing to retract or clarify this authorization for months, until after applicant filed a Declaration of Readiness to Proceed (DOR) seeking WCAB intervention on the issue of medical treatment.” Any “confusion in this case was engendered by defendant’s approval of the suggested treatment without communicating that it did not agree to payment in advance until almost five months later. Under the specific factual scenario of this case, I would affirm the WCJ’s decision that defendant in effect agreed to the treatment and billing terms. and that failure to promptly clarify the matter deprived the applicant of necessary medical treatment for many months.”

According to Ezekiel J. Emanuel MD, an oncologist, a vice provost at the University of Pennsylvania and Obamacare architect, the bacteria are winning. His article in the New York Times points out that every year at least two million people are infected with bacteria that can’t be wiped out with antibiotics, and as a result, 23,000 people die. Direct health care costs from these illnesses are estimated to be as high as $20 billion annually. Should a health care worker or any injured worker become infected while undergoing treatment for an industrial injury, the claim cost would exponentially increase.

Just last week, the U.C.L.A. Health System announced that nearly 180 patients may have been exposed to the CRE superbug that was linked to two deaths in one of its hospitals. Today, 30 percent of severe strep pneumonia infections are resistant to multiple drugs and 30 percent of gonorrhea infections are resistant to all antibiotics. And drug-resistant enterobacteriaceae, enterococcus, acinetobacter and a slew of other unpronounceable bacteria pose serious threats.

Dr. Emanuel says “The development of antibiotics has been glacial. We need a completely new approach.”

The number of F.D.A.-approved antibiotics has decreased steadily in the past two decades. The big pharmaceutical companies have largely stopped work on these drugs. Pfizer, long the leader in developing antibiotics, closed its antibiotic research operations in 2011. Smaller biotech companies now account for 80 percent of antibiotic development. There are now about 40 new antibiotics in development. That might sound promising – but not when compared with the 771 new drugs and vaccines in clinical trials or awaiting F.D.A. review for cancer. And most of these antibiotics are unlikely to come out of the testing process as F.D.A.-approved drugs.

There are ways, apart from developing new drugs, to combat the problem of superbugs and drug resistance. One is hand-washing, especially in hospitals. Another is reversing the overprescribing of antibiotics. It’s estimated that half of all antibiotics used are unnecessary. Animal feed accounts for 80 percent of the antibiotics used in the United States and contributes to antibiotic resistance. We could also fix our antiquated system for tracking drug-resistant bacteria.

But just as important, we need to develop new treatments. Bacteria figure out a way to become resistant to every new drug. We are in an endless life-or-death struggle with bacteria.

The big problem is profitability. Unlike drugs for cholesterol or high blood pressure, or insulin for diabetes, which are taken every day for life, antibiotics tend to be given for a short time, a week or at most a few months. So profits have to be made on brief usage. Furthermore, any new antibiotics that might be developed to fight these drug-resistant bacteria are likely to be used very sparingly under highly controlled circumstances, to slow the development of resistant bacteria and extend their usefulness. This also limits the amount that can be sold.

Even though antibiotics are lifesaving, they do not command a premium price in the marketplace. As a society we seem willing to pay $100,000 or more for cancer drugs that cure no one and at best add weeks or a few months to life. We are willing to pay tens of thousands of dollars for knee surgery that, at best, improves function but is not lifesaving. So why won’t we pay $10,000 for a lifesaving antibiotic?

Congress has tried to address the problem. In 2012, it passed an act that expedited F.D.A. review and gave drug companies five more years of market exclusivity without generic competition. That has increased drug company interest in developing antibiotics, but not enough. Because it costs at least $1 billion to develop a new drug.

An report on Law360.com says that the Los Angeles law firm Reyes and Barsoum LLP launched a California state suit accusing Knox Ricksen LLP, its opposing counsel in a workers’ compensation dispute, of hacking into a computer network and illegally downloading confidential client information so it could gain an edge in the underlying case. The complaint alleges Knox Ricksen partner Eric Danowitz and associate Daniel Sharp violated California’s Computer Crime Law and business and professions code by executing a scheme in which they wrongfully obtained 2,000 case materials containing Reyes and Barsoum’s privileged documents. The attorneys allegedly gave the materials to two other Knox Ricksen attorneys, Russell Ching and Stella Mendoza, who were trying to win a discovery motion to compel deposition answers and production of documents in a workers’ compensation case pending in Marina del Rey, California.

A Workers’ Compensation Judge later found the documents to be protected as privileged, noted ethical concerns and ordered the immediate return of the materials, according to allegations of the suit. “Plaintiff asked how they obtained possession of their attorney privileged documents and confidential communications. Defendants…..attempted to perpetuate and conceal a falsehood on the court,” the suit alleges. “Under further questioning, for example whether someone gave them to you, the defendants said they didn’t know. Later, the defendants stated they were found on the Internet. When asked how they were found on the Internet, the defendants [sic] attorneys, Ching and Mendoza, spontaneously returned to their statement of lack of any knowledge.”

In February 2013, defendants allegedly hacked into a password-protected computer network owned and operated by HQ Sign-Up Services Inc., which stored privileged and confidential documents for Reyes and Barsoum.

After a judge in the workers’ compensation case allegedly ordered the return of the documents, the defendants in the civil suite allegedly filed a petition for the judge’s removal, according to the complaint. A workers’ compensation appeals board denied the request, however, and a similar writ to the court of appeals was also dismissed.

The complaint alleges that, “on November 24, 2015,” the defendants were admonished by another judge who ordered them not to use plaintiff’s intake forms, because they were privileged documents, as ruled by the judge in the workers’ compensation case. The suit further claims the defendants still haven’t turned over the materials at issue. Furthermore, they allegedly admitted to Reyes and Barsoum that they have obtained more than 30,000 attorney files, documents and property of the plaintiff and other lawyers from the HQSU website.

“Proud of the fruits of their scheme and business practices defendant, Danowitz even showed plaintiff’s [sic] a video of how easy it was to steal, hack and illegally download paintiff’s [sic] attorney privileged documents and confidential communications and property, conceding that their conduct was an intentional, unethetical [sic], unauthorized accessing, taking, use, disclosure and dissemination of plaintiff’s attorney privileged [materials]……..Subsequently, the plaintiff’s [sic] have discoved [sic] that defendants have shared its files and property with other law firms.”

The suit seeks unspecified damages, an order restraining defendants from accessing plaintiff’s privileged electronic communications, an order that defendants return all documents they allegedly illegally downloaded and other relief.

The case is Reyes and Barsoum LLP v. Knox Ricksen LLP et al., case number BC572975, in the Superior Court of the State of California for the County of Los Angeles. The lawsuit and this report are allegations of one party in litigation and cannot be assumed to be true until proven in a court of law.

The Department of Industrial Relations  announced a reduction in Independent Medical Review and Independent Bill Review fees effective January 1, 2015. This is the second reduction in fees since the inception of the IMR/IBR program and will no doubt be good news to the workers’ compensation community. The following are the announced fee reductions.

IMR Fees – Any IMR application submitted on or after January 1, 2015 will be subject to the following fee schedule:

Standard IMRs Involving Non-Pharmacy Claims*
Fee effective April 1, 2014: $420 per IMR
Fee effective Jan. 1, 2015: $390 per IMR

Standard IMRs Involving Pharmacy Only Claims**
Fee effective April 1, 2014: $390 per IMR
Fee effective Jan. 1, 2015: $345 per IMR

IMRs Terminated or Dismissed Not Forwarded to a Medical Professional Reviewer:
Fee effective April 1, 2014: $160 per IMR
Fee effective Jan. 1, 2015: $123 per IMR

IBR Fees – Any IBR application submitted on or after January 1, 2015 will be subject to the following fee schedule:

Completed IBR
Fee effective April 1, 2014: $250 per IBR
Fee effective Jan. 1, 2015: $195 per IBR

Ineligible IBR Not Sent to Review***
Fee effective April 1, 2014: $50 per IBR
Fee effective Jan. 1, 2015: $47.50 per IBR

* A “non-pharmacy-only” IMR is an IMR where not all treatments in dispute fall under the service category, “pharmaceuticals.”
** A “pharmacy-only” IMR is an IMR where all treatments in dispute fall under the service category “pharmaceuticals.”
*** Sending an IBR to review means assigning and providing the complete file to a certified coding specialist with the expertise necessary to evaluate and render decisions on all line items in dispute.

The State Fund Compensation Insurance Fund’s Board of Directors has approved a $37 million dividend to qualifying policyholders for the 2014 policy year. The dividend represents approximately 2.6 percent of policyholders’ 2014 estimated annual premium.

“In addition to declaring a $37 million dividend, we strengthened our reserve position to improve State Fund’s financial strength for the long term, thanks to strong investment returns,” said Vern Steiner, President and CEO.

In order to be eligible for the 2014 policy year dividend, policyholders must:

1) Have completed no less than 335 days of continuous coverage during their 2014 policy term.
2) Have not canceled during their 2014 policy term.
3) Have complied with the State Fund audit and as a result the final audit was completed within 18 months of the 2014 policy inception. No dividend shall be paid on any premium owed or paid as a result of an audit.
4) Be current on 2014 premium payments.

Payments for a dividend will be based on the inception dates of policies. This action brings total dividends declared by State Fund since 2011 to $287 million.

San Francisco-based State Fund is the largest workers’ compensation insurance carrier in the state with more than 130,000 employer policyholders. Dividends were temporarily suspended after a $92 million dollar distribution in 2001 until the approval of a $50 million dividend in 2011 followed by a $100 million dividend for the 2012 policy year and another $100 million dividend for the 2013 policy year and now a $37 million dividend for last year. Since its inception in 1914, the State Fund has paid more than $5 billion in dividends to policyholders.