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Controversial WCAB MSC Goes Off Calendar

Attorneys representing John Pike and the University of California will try to reach a deal over the former UC Davis police lieutenant’s worker’s compensation claim, out of court and away from the media spotlight. The sides had been scheduled to take part in a mandatory settlement conference on Aug. 13 in Sacramento to discuss Pike’s claim of psychiatric injury. That hearing has been scratched from the calendar, according to State Department of Industrial Relations spokesman Peter Melton. The case will not go before a judge unless the sides fail to reach an agreement.

Pike, a former U.S. Marine with 17 years of law enforcement experience, gained worldwide notoriety after he pepper-sprayed seated, unarmed Occupy UC Davis protesters who blocked police on a Quad sidewalk on Nov. 18, 2011. Hackers posted his personal information online, and Pike received threatening calls and emails.

After the Davis Enterprise first reported Pike’s injury claim on its website July 25, the pepper-spraying regained regional and national attention. That may have pushed the sides back to the table.

Protesters with ties to Occupy UCD had planned to hold a tongue-in-cheek “support” rally for Pike outside the scheduled hearing, mocking an injury claim that would see the former cop “rewarded” for his actions, in the words of Davis attorney Bernie Goldsmith. Because the hearing was removed from the court calendar, another event, the Officer Pike Fiesta of Emotional Support has also been canceled. The fiesta was meant as an opportunity for a demonstration for those opposed to Pike receiving workers’ compensation.

Pike ceased to be a university employee in July 2012. He was fired, according to a Sacramento Bee account, despite a confidential internal affairs investigation finding his actions “reasonable” and recommending discipline, not termination. He remains entitled to retirement credit for his years of service, but he was to receive no other payout. He collected eight months of his $121,680 annual salary while being investigated by a separate task force that found both the police and UCD administration at fault.

Protesters pepper-sprayed or arrested that day split a $1 million settlement. Criminal charges were not filed against police or protesters.

Legislators Propose Fed Work Comp Benefits Reduction

A provision in bipartisan Senate postal reform legislation would overhaul workers’ compensation policies for all federal employees.

Titled the 2013 Workers’ Compensation Reform Act, the provision — introduced by Sens. Tom Carper, D-Del., and Tom Coburn, R-Okla. — would cut benefits for federal workers injured on the job once they reach retirement age. Currently, federal employees receive 66 2/3 percent of their basic salary tax-free, designed to approximately replicate their entire post-tax salary. That figure is bumped to 75 percent if the employee has dependents. Related medical expenses are also covered.

The new plan would trim the benefit to 50 percent of an employee’s salary, once that employee is eligible for retirement. Additional compensation for dependents would no longer be provided.

The changes would not affect individuals eligible for retirement on the date of the bill’s enactment, those with an exempted disability condition or those who “face financial hardship” — such as workers eligible for food stamps. The proposal also contains a provision that would boost efforts to help employees on workers’ compensation return to work.

A similar proposal was included in the postal reform bill Carper sponsored last Congress, which cleared the Senate but died in the House. Some Democrats and federal employee unions opposed that measure.

Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform Committee, has expressed support for previous Senate proposals to overhaul the federal workers’ compensation system. Issa’s own postal reform bill included changes for only postal workers’ compensation, but he said during the bill’s markup he only put them in so the final bill would adopt the Senate’s broader plan after going through conference negotiations.

Court Finds “Probability” that El Centro Regional Medical Center Adversely Risks Patient Care

San Diego Hospital Based Physicians (SDHBP) and its two owners, Dr. Maria Ramirez and Dr. Dalia Strauser, sued El Centro Regional Medical Center alleging the Hospital retaliated against plaintiffs for complaining about patient care practices. The Hospital is a municipal agency owned by the City of El Centro and is governed by a seven-person Board of Trustees. SDHBP is an entity that provides hospitalist personnel and services. SDHBP is owned by Dr. Strauser and Dr. Ramirez, who both specialize in internal medicine and hospital medicine. Dr. Strauser has practiced medicine for more than 20 years and Dr. Ramirez has practiced medicine for more than 15 years. Hospitalists are generally internal medicine doctors who treat hospitalized patients to ensure they receive proper care, including diagnosis and appropriate specialty referrals.

According to allegations in the complaint, the Hospital hired Team Health, Inc. to manage and operate the Hospital’s emergency department. Shortly after, SDHBP became concerned about Team Health’s practices and the nature of the contract between the Hospital and Team Health, which SDHBP believed negatively affected patient care. SDHBP doctors found that Team Health physicians frequently admitted patients into the Hospital (or sought to compel SDHBP physicians to do so) despite the fact that these patients were not properly stabilized, diagnosed, or treated in the emergency room and/or that they should have been transferred to other hospitals with available surgeons and/or necessary medical equipment.

Dr. Ramirez and Dr. Strauser reported to Hospital administrators “at the highest levels” their concerns about patient care arising from Team Health practices and operations. The doctors identified approximately 35 specific cases of inadequate patient care. Later, SDHBP sent an email to Dr. George Hancock, the Hospital’s chief of medicine (who became medical chief of staff on January 1, 2011), detailing 19 separate cases in which Team Health and Hospital practices allegedly negatively affected patient care in a substantial manner. SDHBP also sent the email to several other Hospital officials, including the Board president, the Hospital’s chief of staff, and the Hospital’s quality committee chair.

On March 22, 2011, the Hospital’s Board held its monthly public meeting. During a closed (nonpublic) portion of this meeting, the Board voted to terminate the SDHBP Agreement “without cause.” When Dr. Strauser asked Hospital official Virgen why the Agreement was terminated, he allegedly said ” ‘you turned on the light and all the cockroaches ran away scared.’ ”

Several months later, plaintiffs filed their lawsuit against the Hospital and Team Health. Plaintiffs alleged five causes of action against the Hospital. In the first three, plaintiffs alleged the Hospital violated statutes prohibiting retaliation against physicians for complaining about, or advocating for, patient care. The Hospital moved to strike the complaint under the anti-SLAPP statute. (§ 425.16.) The Hospital argued that plaintiffs’ complaint arose from constitutionally protected activity because it was based on the Board’s contract termination decision, which it said was a “quasi-legislative” act made at an “official proceeding.” The trial court denied the motion, and the Hospital appealed. The Court of Appeal sustained the denial of the anti-SLAPP motion in the unpublished opinion of San Diego Hospital Based Physicians vs El Centro Regional Medical Center.

One of the elements required to reject an anti-SLAPP motion to dismiss is a determination that there is a “probability” that plaintiffs will prevail on its claims. In meeting this burden, the plaintiff cannot rely solely on the allegations in the complaint and must present evidence that would be admissible at trial. The Court of Appeal concluded that plaintiffs met this burden, and may proceed with their case.

American Claims Management Awarded El Camino Hospital TPA Contract

The Insurance Journal reports that American Claims Management Inc., a national third party administrator (TPA), has been selected as the workers’ compensation TPA for El Camino Hospital in Northern California. Under the terms of the contract, which was effective July 1, 2013, ACM will manage claims, bill review, managed care, subrogation, investigation and other ancillary services for new claims. ACM will also take over the administration of approximately 300 existing claims from the prior TPA.

“After conducting a very thorough search, we are excited to work with ACM,” said Sandra Speer, director of Employee and Labor Relations at El Camino Hospital. “ACM is well-suited to help us manage workers’ compensation claims while continuing to provide quality care for our employees.”

“El Camino Hospital and ACM are a great match because both companies embrace innovation,” says Deirdre Gonzalez, president of ACM’s Workers’ Compensation Division. “In fact, El Camino Hospital and its advanced robotics program were featured in a piece by 60 Minutes showcasing the economic impact of robots. So, it’s no surprise that the organization sought an equally forward-thinking TPA.”

Since 1988, American Claims Management has been a nationwide third party claims administrator specializing in both commercial and personal lines.

Nine States Adopt Significant Comp Law in 2013 reports that nine states have seen significant workers’ compensation reform bills signed into law in 2013. Oklahoma’s workers’ compensation reform laws have received the most attention lately because of the inclusion of an opt-out provision, known as the Oklahoma Option. The Oklahoma Option is significantly different from the Texas opt-out option. Employers that opt out in Texas cannot simply endorse their excess liability policy to cover Oklahoma. Rather, employers in Oklahoma that choose the option are required to provide a written benefit plan that serves as a replacement for the workers’ compensation coverage. This benefit plan must provide for full replacement of all indemnity benefits offered in the workers’ compensation system. The key component of the Oklahoma Option for employers is that it gives them full control of the medical treatment through their benefits plan. Unlike the Texas opt-out, the Oklahoma Option does not permit employees to pursue a negligence action through the civil courts.

The recently passed reform bill in Delaware was designed to control medical costs and encourage return-to-work efforts.

The use of physician-dispensed medication has been a significant issue in Florida workers’ compensation. Physicians were charging several times what the same medication would cost from a retail pharmacy, and the costs were not regulated by a fee schedule. New law creates a maximum reimbursement rate for physician-dispensed medication of 112.5% of the average wholesale price, plus an $8 dispensing fee.

Legislation passed in Georgia should have a positive impact on workers’ compensation costs for employers. Effective July 1, 2013, medical benefits for non-catastrophic cases are capped at 400 weeks from the date of accident, whereas previously, injured workers were entitled to lifetime medical benefits for all claims.In Indiana, legislation was passed that establishes a hospital fee schedule at 200% of Medicare rates. This is consistent with other states that base their fee schedules on Medicare rates.

Minnesota joined most other states in amending its statutes to allow for mental-mental injuries (a psychiatric disorder without a physical injury).

Missouri’s reforms were focused on addressing the insolvent second injury fund and returning occupational disease claims to the workers’ compensation system.

Recent legislative changes in New York will reduce employer costs by about $800 million annually. These savings are derived primarily by streamlining the assessment collection process and eliminating the 25-a fund and its associated assessments. New York’s workers’ compensation assessments are the highest in the nation, so employers welcome any relief in this area.

Tennessee and Oklahoma both moved its workers’ compensation dispute resolution process from a court-based system to an administrative system, leaving Alabama as the only state that still uses the trial courts for all such litigation.

EMPLOYERS® Celebrates 100 Year Anniversary

EMPLOYERS Insurance celebrated its 100th anniversary on July 31, 2013. In recognition and celebration of its rich history, EMPLOYERS hosted commemorative events at its Reno, Nevada headquarters and at its offices across the country.

The company originated in 1913 as Nevada’s State Fund as a means to increase workplace safety for the state’s workers and provide insurance for the state’s businesses. After a successful and industry-leading privatization in 2000, the organization transformed in 2005 into a mutual holding company, the first ever in Nevada. In 2007, EMPLOYERS demutualized and completed an initial public offering to become a publicly traded company listed on the New York Stock Exchange. The company has continually added to and expanded its operations to better meet the needs of more small businesses, as well as to increase the ease of doing business with insurance agents. Today, the company operates in 31 states and the District of Columbia.

“EMPLOYERS’ growth and evolution from a monopolistic state fund to a publicly traded company is impressive. Its 100-year anniversary is a tremendous milestone, and it couldn’t have been achieved without the support of our dedicated and talented employees, as well as our valued policyholders, agents, partners, and shareholders. Together, we have delivered on an ambitious vision,” stated Douglas D. Dirks, president and chief executive officer. Dirks added: “I’m very proud of what we have accomplished as an organization and am confident of our future as we continue to help America’s small businesses succeed.”

Employers Holdings, Inc. is headquartered in Reno, Nevada and listed on the New York Stock Exchange. EMPLOYERS is a holding company with subsidiaries that are specialty providers of workers’ compensation insurance and services focused on select small businesses engaged in low-to-medium hazard industries. The company, through its subsidiaries, operates coast to coast. Insurance is offered by Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Preferred Insurance Company, and Employers Assurance Company, all rated A- (Excellent) by A.M. Best Company.

“Big and Famous” Hospitals Fall Short in Quality

In the first effort of its kind, the nonprofit publisher of Consumer Reports magazine released ratings of 2,463 U.S. hospitals in all 50 states on Wednesday, based on the quality of surgical care. The group used two measures: the percentage of Medicare patients who died in the hospital during or after their surgery, and the percentage who stayed in the hospital longer than expected based on standards of care for their condition. Both are indicators of complications and overall quality of care, said Dr John Santa, medical director of Consumer Reports Health.

According to the story in Reuters Health, the ratings will surely ignite debate, especially since many nationally renowned hospitals earned only mediocre ratings. The Cleveland Clinic, some Mayo Clinic hospitals in Minnesota, and Johns Hopkins Hospital in Baltimore, for instance, rated no better than midway between “better” and “worse” on the CU scale, worse than many small hospitals. Because CU had only limited access to data, the ratings also underline the difficulty patients have finding objective information on the quality of care at a given facility.

Nevertheless, “this is a step in the right direction,” said Paul Levy, former president of Beth Israel Deaconess Medical Center in Boston, who was not involved in the project. “To whatever extent you can empower patients to get better care and become partners in pushing the healthcare system to make improvements is to the good.”

CU’s ratings are based on Medicare claims and clinical records data from 2009 to 2011 for 86 kinds of surgery, including back operations, knee and hip replacements, and angioplasty. The rates are adjusted to account for the fact that some hospitals treat older or sicker patients, and exclude data on patients who were transferred from other hospitals. These are often difficult cases that, CU felt, should not be counted against the receiving hospital.

Although the ratings do not explicitly incorporate complications such as infections, heart attacks, strokes, or other problems after surgery, the length-of-stay data captures those problems, said Santa.

Some of the findings are counterintuitive. Many teaching hospitals, widely regarded as pinnacles of excellence and usually found at the top of rankings like those of U.S. News and World Report, fell in the middle of the pack.

“This isn’t the first time we’ve seen this sort of surprise,” said Dr Marty Makary, a surgeon at Johns Hopkins Hospital and author of the 2012 book, “Unaccountable: What Hospitals Won’t Tell You and How Transparency Can Revolutionize Health Care.” “For a complex procedure you’re probably better off at a well-known academic hospital, but for many common operations less-known, smaller hospitals have mastered the procedures and may do even better” with post-surgical care.

CU also found that several urban hospitals did well despite serving many poorer, sicker patients, including Mount Sinai Hospital in New York and University Hospitals Case Medical Center in Cleveland. Rural hospitals did better, on average, than other hospitals, and many hospitals practically unknown beyond their zip code outranked famous ones, including Kenmore Mercy near Buffalo, New York; Arrowhead in Glendale, Arizona; Sacramento Medical Center in California; and Arkansas Heart in Little Rock.

San Gabriel DME Supplier Gets 2 Years in Prison

The owner and operator of a durable medical equipment (DME) supply company was sentenced yesterday to serve 24 months in prison for conspiring to submit nearly $1 million in fraudulent claims to Medicare.

Tigran Aklyan, 37, of Van Nuys, California, was sentenced today by U.S. District Judge Michael W. Fitzgerald in the Central District of California. In addition to his prison term, Aklyan was sentenced to serve three years of supervised release and ordered to pay $653,461 in restitution.

In April 2013, Aklyan pleaded guilty to conspiracy to commit health care fraud. In his plea agreement, Aklyan admitted that he was the owner and president of Las Tunas, a DME supply company located in San Gabriel, California. Aklyan admitted that from in or around October 2007 through in or around May 2009 he conspired with others to commit health care fraud by providing medically unnecessary power wheelchairs and other DME to Medicare beneficiaries and submitting false and fraudulent claims to Medicare. Aklyan admitted that he paid the owners and operators of fraudulent medical clinics to provide him with prescriptions and supporting medical documentation for the power wheelchairs and DME that he billed to Medicare. Aklyan knew that the prescriptions and medical documents that the clinics produced were fraudulent, yet he certified to Medicare with the submission of each claim that the DME was medically necessary. Aklyan also admitted that he knew that it was illegal for him to pay for prescriptions, but he did so anyway.

From on or about December 17, 2007, through on or about February 20, 2009, Aklyan, through Las Tunas, submitted approximately $910,377 in fraudulent claims to Medicare for PWCs and related services, and Medicare paid Las Tunas approximately $653,461 on those claims.

The case was investigated by the FBI and the Los Angeles Region of HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California. This case is being prosecuted by Assistant Chief Benton Curtis and Trial Attorneys David M. Maria and Blanca Quintero of the Criminal Division’s Fraud Section.

Lien Claimants File Federal Suit to Invalidate SB 863 Activation Fee

Angelotti Chiropractic, Mooney and Shamsbod Chiropractic, Christina-Arana and Associates, Joyce Altman Interpreters, Scandoc Imaging and Buena Vista Medical Services filed a lawsuit yesterday in the United States District Court, Central District of California seeking to avoid payment of millions of dollars in lien activation fees before the end of 2013. The Defendants are Edmund G. Brown (Governor), Kamala D. Harris (Attorney General), Christine Baker (DIR Director), Ronnie Caplane (WCAB Chair) and Destie Overpeck (DWC Acting Director)

The suit requests declaratory, injunctive and other relief and challenges the constitutionality of certain provisions of SB 863 that retroactively impose a $100 “activation” fee on workers’ compensation liens filed prior to January 1, 2013. Plaintiffs allege that they filed valid liens prior to December 31, 2013 that constitute “vested property rights.” They allege that the mandatory dismissal provisions of the activation fee law interfere with those rights.

The Plaintiffs also complain that other “large holders of workers’ compensation liens are arbitrarily exempted from the fee” such as insurance companies, HMOs and labor union benefit plans. Thus they say that SB 863 “specifically targets independent providers of services to workers’ compensation claimants and was adopted with the purpose of destroying their liens.”

Thus, they allege that these “provisions of SB863 are unconstitutional under the Takings, Due Process and Equal Protection Clauses of the United States Constitution. Accordingly, this action seeks preliminary and permanent injunction preventing Defendants from enforcing these provisions of SB863.”

Christina Arana and Associates Inc. holds approximately 4,500 liens, Joyce Altman Interpreters, Inc. holds approximately 4,745 liens, Sandoc Imaging Inc. holds approximately 2,300 liens and Buena Vista Medical Services Inc. allege they hold approximately 20,888 liens. In total Plaintiffs allege they hold “tens of thousands of liens” which require activation fees in an amount of “more than $2 million” and the Plaintiffs allege they presently lack the ability to pay the lien activation fees.

The complaint will now be served on the defendants, who will likely demur the complaint. This will test the legal validity of the Plaintiff’s’ constitutional theories before a federal judge. After that step, should they survive the demurrer, it is likely that the case will be submitted by way of the summary judgment process inasmuch as there are no substantial disputes as to the facts. This case will move rapidly through the federal system, at least at the trial level.

Study Says Non-Guideline Back Pain Treatment Increasing

Despite guidelines to treat back pain conservatively, the proportion of people prescribed powerful painkillers or referred for surgery and other specialty care has increased in recent years, according to a new study reported in Reuters Health. “This is kind of concerning,” said Dr. Steven Cohen, an anesthesiologist and critical care doctor at the Johns Hopkins School of Medicine in Baltimore who didn’t participate in the research. Surgery, injections and scans for back pain “have all gone up pretty dramatically,” he told Reuters Health. “We have increased utilization, yet we don’t have better treatment outcomes.”

The American College of Physicians and the American Pain Society recommend that people with low back pain consider treatment with Tylenol or non-steroidal anti-inflammatory drugs (NSAIDs), as well as heating pads and exercise. The groups say doctors should only order CT and other scans when they suspect nerve damage. Opioids are only recommended for patients with “severe, disabling pain” that doesn’t get better with over-the-counter medicines – and their risks, such as for abuse and addiction, should be weighed against potential benefits.

For the new study, Dr. Bruce Landon from the Harvard Medical School in Boston and his colleagues tracked nationally-representative data on outpatient visits for back and neck pain collected between 1999 and 2010. The researchers had information on about 24,000 visits, which represented a total of 440 million appointments across the U.S.

During that span, they found the proportion of patients prescribed Tylenol and NSAIDs dropped from 37 percent to 25 percent. At the same time, the proportion given narcotics rose from 19 percent to 29 percent. About 11 percent of people with back pain had a CT or MRI scan in 2009 and 2010, compared to seven percent in 1999 and 2000. Finally, although the rate of referrals to physical therapy held steady during the study period, the proportion of patients referred to another doctor – likely for surgery or other treatments – doubled from seven to 14 percent, the researchers reported Monday in JAMA Internal Medicine. “Physicians want to offer patients treatments that are going to work sooner and patients are demanding them and sometimes it’s just easier to order the MRI or order the referral,” Landon said. But, he added, “They often lead to things that are unnecessary and expensive and maybe not better in the long run and maybe even worse,” such as surgery or injections that haven’t proven to be effective.

According to the National Institutes of Health, eight out of ten people have back pain at some point in their lives. One of the difficulties of treating back pain, Cohen said, is that there are so many possible causes – including disc, joint and nerve problems. He said the strongest evidence supports treating the pain with exercise, including stretching and some aerobic activity. Landon said 95 percent of patients will recover from back pain with a little bit of time and conservative treatment. “They key thing for patients is, give it time,” he told Reuters Health. “Patients expect and want it to get better in seconds and that’s not always going to happen. But if you give it time, work on it, do stretching and physical therapy exercises, that’s what’s going to make it better in the long run.”