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U.S. HealthWorks Expands Operations in Bay Area

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U.S. HealthWorks, one of the largest operators of occupational health and urgent care centers in the United States, announced it has acquired Muir/Diablo Occupational Medicine, an affiliate of John Muir Health, effective January 9, 2016. Muir/Diablo Occupational Medicine operates three occupational care centers in the East Bay region of the San Francisco Bay Area.

U.S. HealthWorks currently has 11 centers throughout the San Francisco Bay Area, including two in the East Bay (Oakland and Berkeley). The acquisition of these three centers allows U.S. HealthWorks to better serve the large population in the region and brings the total number of U.S. HealthWorks medical and onsite clinics to 227 nationwide in 20 states.

The acquired centers are located at: 2231 Galaxy Court , Concord, CA 94520, 1981 N. Broadway, Suite 190, Walnut Creek, CA 94596 and 2400 Balfour Road, Suite 230, Brentwood, CA 94513. The facilities will continue to offer a wide range of occupational health services, including injury management, physical exams, corporate medical services and physical rehabilitation.

“The physicians at Muir/Diablo have proven expertise in managing workplace injuries and reducing workplace risk,” said Joseph Mallas, President and Chief Executive Officer of U.S. HealthWorks. “We are pleased to bring these centers into the U.S. HealthWorks family and look forward to the opportunity to expand our service to clients and patients in this key California region.”

“We appreciate the opportunity to become part of the U.S. HealthWorks team in this region,” said John Gunderson, MD, President of Muir/Diablo Occupational Medicine. “U.S. HealthWorks is a leader in the field of occupational care, and with greater resources and an expanded team of experts, we look forward to continuing to provide exceptional patient care.”

The terms of the transactions were not disclosed.

U.S. HealthWorks, a subsidiary of Dignity Health, is one of the country’s largest operators of occupational healthcare centers with 227 medical and worksite clinics in 20 states and more than 3,600 employees, including about 800 medical providers. Its centers collectively serve more than 13,000 patients each day.

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Say Goodbye to Some Old Legacy Liens!

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The Division of Workers’ Compensation ended its collection of lien activation fees at midnight on December 31, 2015. Any liens not activated by that time were dismissed by operation of law.

New liens are still required to pay a filing fee.

Lien fees are one of the components of Senate Bill 863’s workers’ compensation reforms. SB 863 requires a provider to pay a $150 filing fee for filing any new lien on or after January 1, 2013. For liens filed prior to January 1, 2013, prior to filing a Declaration of Readiness to Proceed (DOR) to request a lien conference or prior to appearing at a lien conference on or before January 1, 2014 were required to pay a lien activation fee. In addition any lien not activated by January 1, 2014 was to be dismissed by operation of law.

Litigation enjoined lien activation fees for two years until the U.S. Court of Appeals upheld the constitutionality of the fees. DWC resumed collection of the lien activation fees on November 9, 2015 before ending December 31, 2015.

One court provision stated that if between November 9, 2015 and December 31, 2015, the lien activation payment system became non-operational for six or more hours in a 24-hour period, the deadline would be extended by one calendar day for each day of non-operation. However, this was not necessary as the system remained operational. During this period more than 254,000 liens were activated. A total of 461,650 lien activation fees were filed between January 2013 and December 31, 2015. A total of 536,945 new liens were filed during the same time period.

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Ambulance Fees Reduced in Revised OMFS

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The Division of Workers’ Compensation administrative director has adopted an order incorporating the Centers for Medicare and Medicaid Services (CMS) revised ambulance fee schedule rates, ZIP code files and inflation factor for services rendered on or after January 15, 2016.

This order adjusting the ambulance services section of the Official Medical Fee Schedule (OMFS) conforms to changes in the Medicare payment system as required by Labor Code section 5307.1.

Effective for services rendered on or after January 15, 2016, the maximum reasonable fees for Ambulance Fee Schedule shall not exceed 120% of the applicable California fees set forth in the calendar year 2016 ambulance services, contained in the electronic Public Use file.

The Administrative Director incorporates by reference the following CMS files from the CMS website:

1) The CY 2016 Public Use File, as revised December 22, 2015
2) The CMS Zip Code Files as revised November 17, 2015

The adjustment incorporates the 2016 ambulance inflation factor which has been announced by CMS. The ambulance inflation factor for calendar year 2016 is negative 0.40 percent (-0.40%).

The Ambulance Fee Schedule may be accessed on the DWC website.

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California has Highest Claim Frequency in Nation

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In the latest update to the Analysis of Changes in Indemnity Claim Frequency report, WCIRB researchers find that indemnity claim frequency increased in California by 3% from 2010 to 2014 while frequency for National Council on Compensation Insurance (NCCI) states declined by 11% over the same period. The WCIRB report reflects insurer unit statistical and aggregate financial call data submitted to the WCIRB through the third quarter of 2015, as well as other external data, in order to identify the key factors driving these recent frequency increases.

The key findings of the report include the following:

1) Approximately 10% of indemnity claims are estimated to be reported after 18 months from the beginning of the accident year for 2014 as compared to less than 2% for 2007. A significant proportion of these late-reported claims are for cumulative injury claims, which are approximately four times as likely to be reported late as non-cumulative injury claims.
2) Approximately 18% of indemnity claims are estimated to involve a cumulative injury in 2014, as compared to approximately 8% in the 2005 to 2007 period. The growth in cumulative injury claims beginning in 2009 has been concentrated in claims involving more serious injuries and multiple injured body parts.
3) The long-term shift in California’s industrial mix toward less hazardous employments, which has typically dampened indemnity claim frequency, has moderated in recent years as economic recovery is occurring in high hazard industries such as construction and manufacturing.
4) The increase in indemnity claim frequency in 2010 was generally experienced across the state. Since then, the increases have been concentrated in the Los Angeles area. Indemnity claim frequency increased by an estimated 13% in the Los Angeles/L.A. Basin region from 2010 to 2014 while frequency in the remainder of California declined by 6% during this same period. The Los Angeles area also has experienced significantly higher numbers of cumulative injury claims and claims involving multiple body parts than other regions of California.
5) The proportion of injured workers with less than 2 years of experience at their current job has grown by almost 10 percentage points from 2010 to 2015, suggesting the economic recovery is likely one of the drivers of recent claim frequency increases.

The full Analysis of Changes in Indemnity Claim Frequency – January 2016 Update Report is available in the Research and Analysis section of the WCIRB website.

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State Attorney Generals Join Health Insurance Merger Probe

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Reuters Health reports that about 15 state attorneys general have joined the Justice Department’s probe of two big insurance mergers, according to people familiar with the matter, increasing the scrutiny on proposed deals that would reduce the number of nationwide health insurers to three from five. The formation of a large group to scrutinize Aetna Inc’s plan to buy Humana Inc and Anthem Inc’s bid for Cigna Corp complicate what is already expected to be a tough and lengthy review by federal antitrust enforcers.

Connecticut, Florida, Iowa, Massachusetts and Tennessee are among the states that have joined forces to investigate the proposed deals, according to sources close to the states, who spoke to Reuters over recent days. Antitrust probes are designed to determine if a merger would lead to higher prices or otherwise hurt consumers. The other states participating in the roughly 15-member group could not be learned. The sources asked not to be named because the investigation is not public.

The presence of a large number of attorneys general joining a Justice Department probe underscores the hurdles that both proposed combinations face in winning U.S. regulatory clearance.

Democratic presidential candidate Hillary Clinton, several lawmakers and the American Medical Association, a leading physicians group, have said they feared the pending acquisitions would hurt consumers by leading to higher insurance premiums or limited access to healthcare providers.

While it is up to the Justice Department to ultimately decide whether to file a lawsuit to stop a merger, states provide data to the department on how the mergers would affect their jurisdictions and conduct joint calls to gather data from the companies, as well as critics and supporters of the deals.

The chief executive of Anthem, Joseph Swedish, said in an interview that the decision of the state attorneys general to join with the Justice Department was “a good thing.” “The states created this path with the DOJ (Justice Department) to promote education, engagement. They develop a lot of insights so that when the DOJ does rule, our work with all of these states is probably enhanced quite a bit because we are not starting from scratch,” he said.

Aetna, separately, voiced confidence in the process. “We are confident that our transaction will receive a fair, thorough and fact-based review from the Department of Justice and the states,” it said in a statement.

Humana declined to comment, while Cigna did not immediately respond to a request for comment.

Anthem announced in July it would buy Cigna for about $54.2 billion to create the largest U.S. health insurer by membership. The announcement came weeks after Aetna struck a $37 billion agreement to buy Humana. Healthcare insurers say that becoming bigger will allow them to squeeze out administrative costs, negotiate with doctors and hospitals and push down the soaring costs of some drugs.

But the American Medical Association estimates that 41 percent of U.S. metropolitan areas already have a single health insurer with a commercial market share of 50 percent or more. It believes the decrease of nationwide health insurers to three from five would make more regions anticompetitive.

The American Antitrust Institute, in a letter to the Justice Department on Monday, said the deals would “substantially lessen competition in numerous health insurance markets.”

“The AAI recommends that the DOJ ‘just say no’ to the two deals that would fundamentally restructure the nation’s health insurance markets and create further incentives for ‘reactive’ consolidation in the healthcare supply chain,” the group said in the letter.

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Nightclub Owner Faces 18 Years for Premium Fraud

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Los Angeles nightclub owner Jonathan DeVeaux, 44, of Cerritos surrendered himself to Los Angeles Superior Court and was booked on multiple counts of insurance and tax fraud totaling more than $1.1 million.

DeVeaux part-owner and operator of Los Angeles Entertainment Inc. DBA: Savoy Entertainment Center a nightclub in Inglewood allegedly underreported the number of employees working for him to reduce his reportable payroll, so he could illegally reduce his workers’ compensation premium. As a result, he cheated his workers’ compensation insurer, the State Compensation Insurance Fund out of more than $143,000 in premium between 2009 and 2014.

During the same period, DeVeaux allegedly paid many employees in cash, which allowed him to cheat the California Employment Development Department out of more than half a million dollars in payroll taxes.

“DeVeaux’s alleged underground economy operation cheated his patrons, other businesses, the state and his insurer,” said Insurance Commissioner Dave Jones. “These are not victimless crimes. Everyone involved paid for DeVeaux’s crimes, including California taxpayers.”

DeVeaux was also charged with sales tax evasion by underreporting his sales to the California Board of Equalization between 2006 and 2014. An audit of the nightclub’s sales records revealed the business actually underreported sales by $5.4 million. While DeVeaux collected sales tax from nightclub patrons, he allegedly kept the more than half a million dollars and did not remit it to the state.

Detectives from the Department of Insurance worked in tandem with investigators from the Employment Development Department and the Board of Equalization to unravel DeVeaux’s scheme to cheat the system and operate in the underground economy.

If convicted on all counts, DeVeaux faces up to 18 years in prison.

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Another Contractor Booked for Premium Fraud

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A Sacramento construction company owner has been arrested for allegedly not paying workers’ compensation premiums for employees.

William Huffman, 47, of Sacramento, owner of Capitol City Contractors was arrested on nine felony counts of workers’ compensation insurance fraud and tax evasion totaling $187,707 in losses.

Huffman allegedly underreported $755,899 in payroll to avoid paying workers’ compensation premiums for dozens of employees.

An insurer notified the Department of Insurance of suspected fraud. A forensic audit of the company’s bank records revealed the alleged fraud. Detectives discovered evidence that Huffman was paying employees under the table and classifying some payroll checks as expenses for supplies and materials.

Huffman was booked into Sacramento County Jail. He will be arraigned today at 1:30 PM at Sacramento Superior Court, Room 63. Bail is set at $100,000. The Sacramento County District Attorney’s Office is prosecuting this case.

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Researchers Struggle to Show Effectiveness of Back Pain Exercises

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Lower back pain (LBP) is one of the most common health conditions globally, incurring substantial health and economic costs due to disability, general ill health and lost days at work. Despite its high prevalence, the source of pain is often unclear, with the result that it is often described as “non-specific LBP.”

The article in Medical News Today, reports that previous studies have suggested that LBP involves impairments in the control of the deep trunk muscles. These muscles are responsible for maintaining the coordination and stability of the spine. Motor control exercise (MCE) was developed with the aim of restoring the coordination, control and capacity of the trunk muscles that support the spine. It is widely prescribed for people with LBP. MCE involves training the isolated contraction of deep trunk muscles, with further integration of these muscles into more complex static, dynamic and functional tasks. It should also improve coordination and optimal control of the global trunk muscles. Patients are initially guided by a therapist to practice normal use of the muscles through simple tasks; as their skill increases, more complex exercises are set, including the functional tasks needed to perform work and leisure activities.

In the the new study, published in the Cochrane Review Library, researchers, led by Bruno Saragiotto, a physiotherapist from The George Institute, University of Sydney in Australia, gathered data from 29 randomized trials involving a total of 2,431 men and women, aged 22-55 years. The team looked at MCE’s effectiveness as a treatment for lower back pain compared with other forms of exercise or doing nothing. The treatment programs lasted from 20 days to 12 weeks, with one to five sessions per week. MCE appeared to bring about some reduction in pain, disability and perceived quality of life, compared with minimal intervention at all follow-up periods.

The researchers describe this as “low to moderate quality evidence that motor control exercise (MCE) is more effective than a minimal intervention for chronic low back pain.” When results were compared for pain and disability between MCE and other types of exercise at intervals between 3-12 months, the difference was not considered clinically significant.

Despite the low quality of evidence, it is thought that MCE might be slightly more effective than exercise plus electrophysical agents (EPA) for pain, disability, global impression of recovery and physical quality of life in the short and intermediate term.

No clinically important difference was observed between MCE and manual therapy for any of the outcomes investigated.

The researchers conclude that despite minimal evidence of MCE being better than other forms of exercise, it appears to be a safe form of exercise.

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Former San Jose Presiding Judge Dies of Natural Causes

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The industry is mourning the loss of Andrew Cohen, the former presiding judge of the San Jose office of the Workers’ Compensation Appeals Board. Judge Cohen passed away on Tuesday December 29, of natural causes.

Cohen, 75, earned his B.A. with Honors in Economics from Dartmouth College in 1961. He then graduated from Stanford University Law School in 1968 and then was in a private law practice from 1969 until 1989. He then served as a Worker’s Compensation Judge from 1989 to 1994 and before his retirement he was the Presiding Judge from 1994 until 2003.

He lived in Menlo Park since 1991, and served on the Menlo Park City Council from 2004 to 2012 and was at one time the Menlo Park mayor. He made numerous contributions to city matters with his compassion and influence.

The City Council and staff have fond memories of Judge Cohen. Mayor Rich Cline stated, “I’ve known Andy since 2006, when we first met for a walk at Bayfront Park to discuss the city’s future. He was then and always remained a gentleman with great curiosity and a big heart. He cared deeply about helping those in need and he walked the walk. He led our city to enact many policies that helped folks keep their homes when the market collapsed in 2008 and went above and beyond to seek common ground. This is a very sad day for many of us who grew to know Andy. We are a better community for having had Andy as one of our leaders. Our heartfelt sympathies for Andy’s family during this difficult loss.”

He decided not to run again for City Council at the time of the 2012 election. He told The Daily News he was ready to indulge in more leisurely pursuits but felt pulled by a desire to keep fighting for the issues he feels strongly about, such as creating more housing in the city. In a sign of his internal struggle, Cohen pulled candidate papers on July 17 but returned them blank less than a week later, then returned to City Hall a few days later to get new forms. Early Friday, he sent City Clerk Margaret Roberts an email saying he would not file papers to run again.

At the time Judge Cohen declined to elaborate about his decision other than to say he is looking forward to doing other things for his “personal betterment.”

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Former Senator Calderon Corruption Trial Continued for Fifth Time

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Former state senator Ronald Calderon is charged with ten counts of mail and wire fraud through the deprivation of honest services (18 U.S.C. §§ 1341, 1343, and 1346), four counts of bribery (18 U.S.C. § 666), one count of conspiracy to commit money laundering (18 U.S.C. § 1956(h), seven counts of money laundering (18 U.S.C. § 1956(a)(1)(B)(i), and two counts of tax fraud (26 U.S.C. § 7206(2). Thomas Calderon, a former state assemblyman, is charged with one count of conspiracy to commit money laundering (18 U.S.C. § 1956(h) and seven counts of money laundering (18 U.S.C. § 1956(a)(1)(B)(i)).

The 28-page indictment filed back in 2014 accuses Ron Calderon of accepting $100,000 in cash bribes, as well as plane trips, gourmet meals and golf resort junkets in exchange for championing laws favorable to those who paid him and fighting laws that could harm them. He is allegedly involved in taking bribes from Michael Drobot to perpetuate an audacious, $500 million Pacific Hospital of Long Beach health care and workers’ compensation fraud, setting up high courtroom drama reminiscent of ABSCAM in the 1970s and ’80s, or ShrimpGate in the 1990s. Drobot has pleaded guilty and agreed to cooperate with investigators.

Ronald is represented by a celebrity lawyer, Mark Geragos. Clients that Geragos has represented include Michael Jackson, actress Winona Ryder,politician Gary Condit, Susan McDougal and Scott Peterson. He was also involved in the Whitewater controversy. Geragos represented suspended NASCAR driver Jeremy Mayfield; Paul and Kulbir Dhaliwal, two brothers injured after a tiger escaped in San Francisco Zoo; and musician Chris Brown, who pleaded guilty in the assault of his then girlfriend Rihanna.

The Calderon case was set for trial on March 1, 2016. Thomas Calderon is currently out of custody on a $25,000 bond and Ronald Calderon is currently out of custody on a $50,000 bond pending trial. The parties estimate that the trial in this matter will last approximately 10 days. The Court has previously continued the trial date four time in this case, most recently from August 11, 2015 to March 1, 2016.

The parties jointly moved for the fifth continuance of the trial date because Geragos said he has five cases scheduled to begin trial over the next two months and needs more time to prepare. U.S. District Judge Christina Snyder granted the motion, and the trial is continued to May 10, 2016 at 9:30 AM.

Since the Drobot arrest, many defendants in addition to Drobot have pleaded guilty and agreed to “fully” cooperate in a wide-ranging federal investigation into the fraud, dubbed “Operation Spinal Cap” by the FBI and other federal authorities. For those who have pleaded guilty, sentencing has not yet occurred. It appears that the sentences are being held over their heads to incentivize “cooperation.” Currently cooperating defendants include orthopedic surgeons Philip Sobol M.D., Mitchell G. Cohen M.D. The Calderons are among the few accused who have not yet entered a guilty plea, been convicted or acquitted.

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