Author: WorkCompAcademy

A federal judge dismissed a class action accusing the NFL of giving football players dangerous painkillers to mask their injuries.

According to the report in Courthouse News, U.S. District Judge William Alsup found the lawsuit brought by more than 500 former players must be settled under the collective bargaining agreements between the NFL and the players’ union, as the crux of the claim is that players’ teams mistreated them, and that the league did nothing to stop it in his 22 page ruling. The lead plaintiff was Richard Dent, a former Chicago Bear.

“One problem is this: no decision in any state (including California) has ever held that a professional sports league owed such a duty to intervene and stop mistreatment by the league’s independent clubs,” Alsup wrote. Alsup ruled that while the agreement’s medical care provisions may not be perfect, and its protections may not specifically discuss prescribing drugs and painkillers, “this is not a situation in which the NFL has stood by and done nothing.”

“The main point of this order is that the league has addressed these serious concerns in a serious way – by imposing duties on the clubs via collective bargaining and placing a long line of health-and-safety duties on the team owners themselves,” Alsup wrote in his 22-page ruling. “These benefits may not have been perfect but they have been uniform across all clubs and not left to the vagaries of state common law. They are backed up by the enforcement power of the union itself and the players’ right to enforce these benefits.” He continued: “Given the regime in place after decades of collective bargaining over the scope of these duties, it would be impossible to fashion and to apply new and supplemental state common law duties on the league without taking into account the adequacy and scope of the CBA duties already set in place.”

At a hearing in October that signaled Alsup’s decision, he said: “The union is supposed to be looking out for the plaintiffs. The labor union is the one that is supposed to be doing this.” Alsup ordered that the players’ union weigh in on whether the retired players could still arbitrate their grievances.

The union complied with that order, and Alsup, who found that the players’ retiree status should not bar them from arbitration, quoted the union’s letter in his ruling. “On this issue, the union’s letter has explained that ‘the current CBA and former CBAs have included various provisions negotiated on behalf of current and future players that continue to benefit those players after they retire from the NFL,’ such as provisions on retirement plans or termination pay,” Alsup wrote. “In fact, former players in other cases have been able to arbitrate their grievances against the NFL or individual clubs, notwithstanding their prior retirement from the league.”

Though Alsup found the issue should not be decided in federal court, he said: “This order does not minimize the underlying societal issue. In such a rough-and-tumble sport as professional football, player injuries loom as a serious and inevitable evil. Proper care of these injuries is likewise a paramount need.”

The players may file an appeal, or may file a motion to file an amended pleading. Thus this may not be the final word on this claim filed in San Francisco, or the Workers’ Compensation claims that may also follow.

A federal lawsuit alleging price gouging by the maker of hepatitis C drug Sovaldi mirrors a growing struggle to contain hepatitis C-related workers compensation prescription costs that can reach up to $150,000 per claimant. While Sovaldi, which entered the market a year ago, is a highly effective treatment that can cure patients of hepatitis C – unlike other treatments for the chronic liver infection – employers should carefully monitor its use to determine whether cheaper treatments are available or appropriate, experts say.

In the class action suit filed Dec. 9 in U.S. District Court in Philadelphia, the Southeastern Pennsylvania Transportation Authority in Philadelphia says it has paid more than $2.4 million for Sovaldi prescriptions for its employees in 2014. According to the story in Business Insurance, the agency accuses Sovaldi’s maker, Foster City, California-based pharmaceutical company Gilead Sciences Inc., of “selectively charging exorbitant prices” for Sovaldi, and is seeking unspecified restitution and monetary damages against Gilead for alleged unjust enrichment, violations of the Patient Protection and Affordable Care Act and other claims.

While the SEPTA suit relates to group health payments for Sovaldi, workers comp payers also are seeing rising costs related to the drug. Pharmacy benefit manager Express Scripts Inc. said spending for hepatitis C medications in workers comp increased 135% in the first six months of 2014 compared with the same period in 2013. About 66% of that increase is attributed to Sovaldi prescriptions, the company said in a statement. The cost increase occurred despite a reduction in the number of pharmacy prescriptions for hepatitis C medications at Express Scripts, where workers comp claims for the disease fell to 79 in the first half of 2014, down from 92 in the first half of 2013, according to the PBM’s data. Health care workers, emergency first responders and other workers who are regularly exposed to bodily fluids are most likely to file for workers comp benefits related to hepatitis C.

“Sovaldi is priced at an orphan drug price for a population that is not an orphan drug population. So it’s priced really at a premium that we can’t sustain,” said Brigette Nelson, senior vice president of workers compensation clinical management for Express Scripts in Cave Creek, Arizona. So-called orphan drugs are medications used for illnesses that affect only a small subset of the population.

Hepatitis C treatment costs can soar higher when Sovaldi, which costs $84,000 for a 12-week course of treatment, is paired with another new hepatitis C drug called Olysio, which is made by Titusville, New Jersey-based pharmaceutical company Janssen Therapeutics and costs $66,360 for a 12-week course of treatment. The U.S. Food and Drug Administration approved both drugs in late 2013. The medications often are used together to help increase the chances of curing a patient’s hepatitis C infection, said Phil Walls, chief clinical and compliance officer at Tampa, Florida-based PBM Matrix Healthcare Services Inc., which does business as myMatrixx.

Trying to limit drug costs for hepatitis C under a workers comp claim can be tricky. Experts agree that Sovaldi and other newer treatments are more effective than older, cheaper hepatitis C medications that include longer courses of treatment, have more side effects, require patients to take multiple doses a day and less likely to cure patients of the disease. “We’re not disputing that Sovaldi is a much better drug, because it is better tolerated than the previous therapies. It’s just the cost that we’re concerned about,” Ms. Nelson said.

Employers should work with their TPA or PBM to create prescription drug formularies that would automatically flag a claim for Sovaldi and initiate a review of whether the drug is appropriate for certain patients, Ms. Harer said. For example, patients recently exposed to bloodborne pathogens may be effectively treated with prophylactic antiviral medications that can prevent infection and are much less costly than Sovaldi and other hepatitis C treatments, she said. Mr. Walls said claim payers should consider using specialty drug pharmacies to fill prescriptions for Sovaldi or other hepatitis C drugs, since such pharmacies specialize in helping patients to adhere to drug treatments.

Proper adherence can make sure that a Sovaldi drug course works the first time, preventing a patient from needing to do another expensive round of the treatment in the future, he said. “You really need to be compliant with your therapy in order for the drug to be as effective as possible,” Mr. Walls said.

Ms. Nelson of Express Scripts said the company – the nation’s largest PBM – is pushing Gilead and other hepatitis C drug makers for more competitive prescription prices. “That’s the next step that needs to happen so that people have access to drugs at a cost that can be sustained,” she said.

The Terrorism Risk Insurance Act (TRIA) is a United States federal law signed by President George W. Bush on November 26, 2002. The Act created a federal “backstop” for insurance claims related to acts of terrorism. The Act “provides for a transparent system of shared public and private compensation for insured losses resulting from acts of terrorism.” The Act was originally set to expire December 31, 2005, was extended for two years in December 2005, and was extended again on December 26, 2007. The current law, under the Terrorism Risk Insurance Program Reauthorization Act, is set to expire on December 31, 2014.

The potential for the TRIA expiration was seen as a potential catastrophe in the insurance marketplace by some workers’ compensation experts. They reasoned that the peculiar nature of workers’ compensation policies precluded insurance carriers from excluding catastrophic losses from their policies, and as a result the increase risk of a massive claim loss should there be a repeat of an act of terrorism similar to the September 11 event could pose an unacceptable risk. As a result, the expectation was that carriers would simply exit the market rather than underwrite the risk leaving employers in an insurance marketplace with no or extremely expensive carriers.

According to a report in Property Casualty 360, It seems that this disruptive lack-of-insurance scenario will not occur on January 1.

Congress failed to act on TRIA before adjourning for the year, meaning TRIA will expire at the end of the year. This was a big surprise, as most felt the House would be the reason for TRIA not getting extended. Last week the House passed a TRIA extension bill, but it was the Senate that ultimately failed to take up a vote on the issue. Why did this happen? Unfortunately, Congress has a habit of tacking unrelated riders onto bills with the hope of getting these issues passed. In this case, the House added amendments to NARAB II legislation, which has to do with licensing of insurance agents and brokers. Some in the Senate were not comfortable with those issues, which kept the Senate from approving the House bill on TRIA.

So what happens now with TRIA? The new Congress will reconvene on January 6, 2015, and the expectation is they will take up TRIA. However, given what just happened, you cannot assume the new Congress will pass a TRIA bill. And even if they do, a new bill may look substantially different than what was on the table.

What does this mean to the workers’ compensation industry? Back in February, carriers started issuing policies that contemplated coverage without the TRIA backstops. Employers saw some carriers pull back from certain geographic locations — most notably in New York City, particularly in Manhattan. They also saw some carriers change the terms of their policies and only bind coverage through the end of the year, giving themselves the flexibility to renegotiate terms or terminate coverage if TRIA did not renew. There were legitimate concerns that the workers’ comp marketplace in New York City would be in chaos by the fourth quarter of 2014 as brokers scrambled to place coverage beyond January 1, 2015. The New York State Insurance Fund was in the middle of these discussions, as they were faced with the prospect of having to provide coverage for employers if the private marketplace did not respond.

As the year progressed, something else happened. The marketplace responded. While some carriers pulled back in certain geographic locations, others stepped up to take their place. While some carriers tied their policy expiration to the expiration of TRIA, other carriers did not. Ultimately, employers were still able to obtain workers’ compensation coverage in the private marketplace.

What does this mean going forward? There may still be some policies out there that have endorsements allowing the carrier to cancel or renegotiate terms when TRIA expires, but this does not appear to be a widespread issue. Since workers’ compensation is statutory, and carriers cannot exclude for cause, there cannot be terrorism risk exclusions on a workers’ compensation policy. The carrier’s only choice is to provide coverage or decline the risk. While this may not hold true for other lines of coverage, the workers’ compensation marketplace has adapted to the absence of TRIA. Carriers are likely paying more attention to their geographic concentration of exposures, which means employers will have fewer choices, and may see higher pricing. But, at the end of the day, employers should be able to obtain workers’ compensation coverage without the TRIA backstop in place.

On November 19, 2013, Rosa Mendez filed an in pro per civil complaint in Superior Court against Cottage Health System, the parent organization of Santa Barbara Cottage Hospital. The factual allegations were contained in an undated letter addressed to the staff at Santa Barbara City College (SBCC), a copy of which was attached to the complaint. The letter stated that on October 28, 2010, Mendez was exposed to dangerous levels of radiation while assisting an x-ray technician at Cottage Hospital.

Mendez said she was working at the hospital that day as part of her coursework in the x-ray technician program at SBCC. Mendez immediately complained to the technician and the chairperson of SBCC’s Department of Radiologic and Imaging Sciences, both of whom deemed the complaints unfounded.

After the exposure, Mendez alleged she “began to experience severe chest pain and dizziness and blurred vision.” Although the letter does not refer to the date when these symptoms purportedly began, another attachment indicates that Mendez sought treatment for blurred vision in March 2011. The letter also states that Mendez has “been suffering mentally and emotionally since [she] was exposed to unnecessary radiation.” No amount of damages was specified.

Cottage demurred to the complaint, contending among other things, that the action was barred by the statute of limitations. Mendez did not oppose the demurrer. In sustaining the demurrer, the court noted that “[t]he complaint itself alleges that [Mendez] was aware of the incident when it occurred” on October 28, 2010, yet did not file her action until November 19, 2013. The court concluded that Mendez had thus filed her action beyond the two-year statute of limitations for personal injury claims. The court nevertheless granted Mendez leave to amend “because there may exist some set [of] facts which could potentially act to bring the action within some tolling provision[.]”

Mendez then filed a first amended complaint seeking $14 million in compensatory damages, unspecified punitive damages, and “life time medical insurance” for herself and her two children. Mendez once again stated she was immediately concerned about the radiation exposure and added that she began experiencing symptoms of the exposure the following month. Mendez also alleged that the chairperson of SBCC’s Department of Radiologic and Imaging Sciences, the attorney who represented Mendez in proceedings before the Workers’ Compensation Appeals Board (WCAB), and the judge who presided over those proceedings all fraudulently induced Mendez to refrain from filing suit until after the limitations period had expired.

Cottage demurred to the first amended complaint, again asserting that the action was time-barred. Mendez opposed the demurrer, claiming that the doctrine of equitable tolling applied. The trial court sustained the demurrer without leave to amend, reasoning that the first amended complaint only alleged a claim of negligence and was filed beyond the two-year statute of limitations that applies to such claims. In rejecting Mendez’s claim of equitable tolling, the court noted that Mendez’s allegations and supporting documentation “conclusively show that she was aware of her claim on the date of the incident.” The court further noted that Mendez had not alleged that she was misled by Cottage or its employees to refrain from pursuing her claim. Judgment was entered in favor of Cottage, and Mendez appealed. The Court of Appeal affirmed the dismissal in the unpublished case of Mendez v Cottage Health Systems.

Mendez did not file her complaint until November 2013, so the court properly found it was time-barred. Even if Mendez had sufficiently alleged a claim for fraud or professional negligence, her complaint was also filed beyond the three-year limitations period that applies to such claims. Mendez’s workers’ compensation claim against Cottage was only pending from August 28, 2012, until November 5, 2012. Tolling the statute of limitations for this 69-day period would not have aided Mendez, who filed her complaint over three years after she discovered her claim.

Elite Surgical Centers, Escondido, L.P., Elite Surgical Centers, Del Mar, L.P., and Point Loma Surgical Center, L.P. (collectively Elite), had claims pending before the WCAB concerning billing disputes related to the facility fees for arthroscopic knee procedures, arthroscopic shoulder procedures, and epidural injection procedures provided by Elite to injured workers prior to January 1, 2004.

The dispute over billing began when, in 2000 when Elite increased the charges that it billed for certain outpatient services, including the services at issue in this proceeding. The defendants in the WCAB cases disputed the reasonableness of Elite’s increased charges. Rather than remitting the amounts billed, the petitioners paid only the amounts that they believed were appropriate for the services performed. For the period between April 13, 2001 and December 31, 2003, the administrative director adopted an OMFS with reasonable maximum fees for services performed by 21 San Diego area hospitals. (8 Cal. Code Regs., § 9792.1.) This OMFS did not cover facility fees charged by ASCs. As a result, there was no established “reasonable maximum fee” for procedures provided at ASCs during the relevant time period. Elite filed notices of liens which resulted in 300 consolidated claims pending before the San Diego office of the WCAB. In this case, a 17-day trial was held before the WCJ regarding the reasonable value for certain facility services provided by Elite in the consolidated cases. Both parties presented extensive documentary and testimonial evidence.

At the time the parties’ dispute over Elite’s bills arose, billing disputes were resolved through litigation before the Board. On January 1, 2013, after the case had been submitted to the WCJ but before the WCJ issued a decision SB 863 was enacted in 2012 and became effective in January 2013. One month later, on February 1, 2013, the WCJ issued his decision regarding the consolidated claims. The WCJ determined that the reasonable fee for arthroscopic knee procedures was “$5,207.85 or the amount billed, whichever is less.” This amount is approximately 28 percent of the amount that Elite customarily billed for such procedures, and is $5,377 less than what Elite stated that it accepted, on average, per bill. The Board granted reconsideration but affirmed the the original decision. The defendant CIGA appealed.

The Court of Appeal in the published case of CIGA v WCAB and Elite Surgical Centers affirmed the decision of the Board after Reconsideration and resolved the following issues: (1) Does the Workers’ Compensation Appeals Board retain jurisdiction over a medical billing dispute pertaining to more than 300 consolidated claims, after the Legislature passed SB 863 that created a new administrative independent review process for the resolution of billing disputes?; and (2) if the Board does retain jurisdiction over this dispute, is there substantial evidence to support the workers’ compensation judge’s (WCJ) findings of fact regarding his determination of the “reasonable fee” to be paid for arthroscopic knee procedures, arthroscopic shoulder procedures, and epidural injection procedures performed at three commonly managed ambulatory surgical center (ASC) facilities in San Diego County?

CIGA argued that in enacting SB 863 the Legislature intended to immediately divest the WCAB of jurisdiction over medical billing disputes. The Court of Appeal disagreed and noted that “After considering S.B. 863 as a whole, we conclude that this legislation is ambiguous with respect to whether the IBR process was intended to apply to pending billing disputes, or, rather, was intended to apply only prospectively, to new billing disputes that arise with respect to injuries that occur after the effective date of the legislation. Attempting to apply section 84 of S.B. 863 in this case would leave these parties without a process by which to have their dispute resolved by a third party, since the new IBR process may be utilized only if certain conditions precedent have been met, and the deadlines for meeting those conditions have passed. Leaving these parties without a viable process to decide their dispute cannot be what the Legislature intended. … In the face of such ambiguity, we are led to interpret the statute as operating prospectively.”

“All of the relevant deadlines that the parties to a billing dispute must meet in order to be eligible to invoke the IBR process have long since passed in this matter, years before S.B. 863 was passed by the Legislature. As a result, neither party has satisfied the requirements imposed on it by the new procedure. The Legislature made all of these events conditions precedent to the availability of the IBR process, and did not provide for an expedited or alternative procedure for disputed bills that were pending at the time S.B. 863 was enacted.”

“We conclude that although the text of the relevant legislation and resulting statutes is ambiguous, the most reasonable interpretation of the legislation is that it does not divest the Board of jurisdiction to decide the dispute at issue in this case. We further conclude that the WCJ’s findings, which the Board adopted in its decision on petitioners’ motion for reconsideration, are supported by substantial evidence. We therefore affirm the decision of the Board.”