Author: WorkCompAcademy

It what might be considered bad news for health insurers and consumers, pharmaceutical giants Pfizer Inc. and Allergan just announced a $160-billion merger that would create the world’s largest drugmaker with high-profile products such as Botox, Lipitor and Viagra, while increasing pressure on Washington policymakers to address corporate tax policy because the deal would shelter the new firm’s global earnings. Although New York-based Pfizer is the larger company, the deal is structured so that Allergan technically is the purchaser.

The Los Angeles Times reports that the move allows the new firm – which would take Pfizer’s name and be headed by its current chief executive, Ian Read – to be headquartered for tax purposes in Dublin, Ireland, where Allergan already is located, to take advantage of that nation’s lower corporate tax rate. The tactic, known as an inversion, would lead to an effective tax rate for the new company of about 17% to 18%, Pfizer and Allergan said Monday. Pfizer’s effective tax rate last year was about 27%. The new firm would have its global headquarters in New York, but its principal executive offices would be in Ireland, which has a 12.5% corporate tax rate. The U.S. has a 35% corporate tax rate, the highest of any developed economy.

Corporate mergers and acquisitions this year are on pace to break the record of $4.6 trillion set in 2007, according to Dealogic, which tracks the market. Healthcare, in particular, has seen a spree of takeovers as providers, insurers, pharmaceutical makers and drugstores reposition themselves for industry changes spawned by the federal Affordable Care Act.

But critics have raised concerns about the increased number of takeovers. In the case of healthcare, some have said that as the number of players in each sector shrinks, consumers will have fewer choices and prices will rise. The Pfizer-Allergan deal drew such criticism amid the ongoing debate about higher drug prices.

The Department of Industrial Relations (DIR) has posted California’s 2014 occupational injury and illness data with detailed information on employer-reported injuries involving days away from work. The data shows that the incidence of occupational injuries remains at its lowest level in 13 years.

“As a whole, the lower work-related injury and illness rates reflect California’s commitment to on-the-job health and safety,” said DIR Director Christine Baker. “However, employers in industry sectors that have a disproportionate share of work-related injuries must focus on prevention to further protect the health and safety of employees.”

The Survey of Occupational Injuries and Illnesses (SOII) data reflect a total of 460,000 reportable injury and illness cases in 2014, of which 265,000 cases involve lost work-time, job transfer, or restriction-from-duty cases (referred to as lost work-time cases), with over 140,000 of those cases involving days away from work. The incidence of nonfatal occupational injuries and illnesses in California remain at their lowest level in the past decade in all three categories.

For cases involving days away from work, Latino workers continue to experience the highest incidence of occupational injuries, comprising 59 percent of all reported days away from work cases. In construction, manufacturing, mining and natural resources, 3 out of 4 workers injured on the job and losing work days are Latino.

In private industry, new hires and young workers have higher rates of injury. One of every four workers whose injury or illness at work involved days away from work in private industry had been on the job less than a year. Teenagers from 16 to 19 years of age suffered the highest incidence of days away from work compared to all other age groups.

Sprains, strains and tears are the largest injury category involving days away from work. Among private sector workers, the greatest number of injuries or illnesses requiring days away from work were caused by overexertion and bodily reaction, by contact with an object or piece of equipment, and by falls, trips and slips.

Tables and charts reflecting nonfatal occupational injuries and illnesses data for 2014 (and prior years’ data) for California are posted online.

Glaus Pyle Schomer Burns and Dehaven, Inc. is in the telecommunications business. Part of Glaus Pyle’s operations includes doing work for major cell companies by providing site audits on cell phone transmission equipment. Glaus Pyle subcontracted with ITC Service Group, which provided workers to conduct the site audits. Under this contract, employees of ITC Service Group traveled to the locations of the cell phone transmission sites being audited to conduct the site inspections. ITC Service Group assigned Chris Anderson to the job of inspecting the sites.

In June 2009, Anderson was injured when conducting a field inspection of cell phone transmission equipment. Anderson’s injury stemmed from exposure to radio frequency radiation emitted from the cell tower. Anderson filed a workers’ compensation claim against ITC Service Group, and he settled that claim. In June 2011, Anderson sued Glaus Pyle, alleging negligence and gross negligence in connection with his injuries. The theory of his case was that Glaus Pyle negligently maintained the site and was grossly negligent in failing to protect him from excess radiation.

Glaus Pyle filed a motion for summary judgment, contending it did not owe Anderson a duty of care because employees of an independent contractor cannot sue the third party that hired the contractor to do the work. The trial court agreed with Glaus Pyle, granting summary judgment. The Court of Appeal affirmed in the unpublished case of Anderson v Glaus Pyle Schomer Burns and Dehaven, Inc.

In affirming the dismissal, the Court of Appeal relied on the “Privette” doctrine. “Generally, when employees of independent contractors are injured in the workplace, they cannot sue the party that hired the contractor to do the work. . . . [¶] By hiring an independent contractor, the hirer implicitly delegates to the contractor any tort law duty it owes to the contractor’s employees to ensure the safety of the specific workplace that is the subject of the contract.” (SeaBright Ins. Co. v. US Airways, Inc. (2011) 52 Cal.4th 590, 594; see Privette v. Superior Court (1993) 5 Cal.4th 689, 696; Toland v. Sunland Housing Group, Inc. (1998) 18 Cal.4th 253, 257 [the hiring person “has no obligation to specify the precautions an independent hired contractor should take for the safety of the contractor’s employees” and “[a]bsent an obligation, there can be no liability in tort”].)

The WCIRB has released its Senate Bill No. 863 WCIRB Cost Monitoring Report – 2015 Retrospective Evaluation which is part of a multi-year cost monitoring plan developed by the WCIRB following the signing of SB 863 by the California Governor on September 18, 2012.

This Report includes an updated retrospective evaluation of the cost impact of a number of SB 863 provisions based on data emerging through the third quarter of 2015. Based on the most current information, the WCIRB estimates the impact of SB 863 is an annual net savings of $770 million, or 4.1%, of total system costs.

The measure sought to change the long-standing practice in workers’ compensation cases of charging unregulated medical fees for care by tying fees to other publicly financed health care programs. The medical care portions of the bill appear to be having the desired effect. SB 863’s elimination of the duplicate payment for spinal surgical implants was estimated to save approximately $20,000 per procedure, while WCIRB Medical Data Call (MDC) data shows an over $25,000, or 28%, reduction in the average cost of these procedures since 2013.

The changes to PD related to FEC were estimated to eliminate any increases to PD for the Ogilvie decision and included significant savings to frictional costs resulting from the elimination of Ogilvie. However, since the implementation of SB 863, average allocated loss adjustment expense (ALAE) costs per claim have not declined and, in fact, have increased significantly, suggesting no savings to ALAE from the elimination of Ogilvie are emerging.

Expedited hearings related to medical treatment disputes were expected to be substantially eliminated by the new IMR process, while approximately 5,500 more expedited hearings have been held per year since the implementation of SB 863.

The number of lien filings was projected to decrease by approximately 41% as a result of the SB 863 lien filing fee and statute of limitations. Although filings in 2013 and 2014 decreased by approximately 60% annually when compared to 2011 levels, the number of liens filed increased significantly in 2015 and are projected to be only 20% lower than 2011 levels. However, some of this increase may be a result of temporary increases in lien filings due to the transition of the statute of limitations on filing liens from three years to eighteen months for dates of service on or after July 1, 2013. As a result, at this time it is not clear whether the SB 863 lien provisions will produce saving more or less than originally projected.

Department of Insurance detectives arrested Ramon Humerto Otero, 37, of Adelanto, and Efrain Heredia Ojeda, 43, of Corona, last week on multiple felony counts of insurance fraud and grand theft. The duo allegedly conspired to steal an $18,946 settlement check intended for a client whose workers’ compensation case Otero was presiding over and who passed away before the settlement with the insurer was achieved.

The Department of Insurance alleges that Otero, a hearing representative for the law offices of Ramon Otero Jr., negotiated a workers’ compensation settlement agreement for his client. During the course of the negotiation, his client passed away. Otero still proceeded with negotiations despite the passing of his client and reported to the insurer that his client’s address changed. Suspecting fraud, the State Compensation Insurance Fund referred the claim to the Department of Insurance for investigation. Detectives found evidence that Otero instructed the insurer to mail the settlement check to the residence of Ojeda, an interpreter and close associate of Otero. Ojeda allegedly forged the deceased’s signature to endorse the settlement check and deposited it into his personal bank account.

A search for the law office of Ramon Otero Jr. shows an office located at 522 W Holt Ave. in Pomona. Yet a search of California State Bar records for an attorney with the name of Ramon Otero Jr. shows only one individual with that name in Pomona, and he is reported to be “deceased.”

Otero was booked into the Inmate Reception Center in Los Angeles. Ojeda was booked into the Robert Presley Detention Center in Riverside. Both face a maximum five-year prison sentence if convicted on all counts. This case is being prosecuted by the Los Angeles County District Attorney’s Office.