Author: WorkCompAcademy

The Division of Workers’ Compensation has posted an adjustment to the pathology and clinical laboratory section of the Official Medical Fee Schedule to conform to the 2016 changes in the Medicare payment system, as required by Labor Code section 5307.1.

The update includes all fee schedule changes identified in Center for Medicare and Medicaid Services (CMS) Change Request (CR) number CR 9465, which can be accessed on the CMS website.

The 2016 update includes significant changes to the codes and rules related to drug testing. The Administrative Director’s order adopts the Medicare 2016 Clinical Laboratory Fee Schedule and the “Calendar Year (CY) 2016 Clinical Laboratory Fee Schedule (CLFS) Final Determinations” document. The order is effective for services rendered on or after Jan. 1, 2016 and can be found on the DWC website .

Some analysts believe the rate changes for lab testing could shave as much as 91% off the price of some tests. Current coding for testing for drugs of abuse relies on a structure of “screening” (known as “presumptive” testing) followed by “confirmation” to confirm the results of the screening tests and quantitative or “definitive” testing that identifies the specific drug and quantity in the patient. CMS was concern about the potential for overpayment when billing for each individual drug test rather than a single code that pays the same amount regardless of the number of drugs that are being tested.

Thus in 2014 CMS created alphanumeric G codes to replace the 2014 CPT codes that were deleted for 2015. In Jul y 2015, CMS proposed to delete all current drug testing G codes, and continue to not recognize the new AMA CPT codes, and create a single G code for presumptive testing and a single G code for definitive testing. After public comment the final rule creates three G codes for presumptive testing and for definitive drug testing, it will create four tiered G codes. The revised fee schedule will continue to not recognize the AMA CPT codes 80300 – 80377

Photocopy services are required to be registered and bonded under Business and Professions Code sections 22450 and 22455. However section 22451(b) exempts “[a]member of the State Bar or his or her employees, agents, or independent contractors” from the registration requirements. This WCAB en banc case considered a photocopy lien claimant’s contention that it was exempt from being registered and bonded.

Rogelio Cornejo through his attorney Jonathan C. Rosen, Esq., of the JCR Law Group, Inc., filed two Applications for Adjudication of Claim. Both were jointly settled by a compromise and release agreement. As part of the agreement, defendant agreed to “pay, adjust or litigate any and all liens filed according to Labor Code § 4903.5, reserving any and all-defenses, with the WCAB retaining jurisdiction in the event of a dispute.”

Western Imaging Services (WIS) filed a lien claim for “copy service” in one of the cases in the amount of $1,585.56. At the time WIS was not registered and bonded, but was by the time the case was decided. The WCJ disallowed the lien claim of WIS based upon his finding that “Business and Professions Code Section 22451 did not exempt lien claimant Western Imaging Services from registration and bonding pursuant to Sections 22450 and 22455.”

The WCAB reversed in the en banc decision of Cornejo v. Younique Cafe, Inc., Zenith Insurance.

The WCAB held that the Business and Professions Code requirements by its own terms does not apply to a lien claimant seeking to recover copy service fees that are medical-legal expenses under Labor Code section 4620(a) when the lien claimant is an agent and/or independent contractor of a member of the State Bar at the time the documents are photocopied.

When a lien claimant makes an unrebutted prima facie showing that it is an agent and/or independent contractor of a member of the State Bar at the time the documents are photocopied, proof of compliance with the registration and bonding provisions of Business and Professions Code sections 22450 and 22455 is not required.

A San Diego grand jury has indicted the owners of Good Neighbor Services as well as six accomplices for a massive, ongoing insurance fraud and tax evasion scheme. Two defendants, Hyok “Steven” and Woo “Stephanie” Kwon, own a janitorial company that provides cleaning staff to major hotels across San Diego, Los Angeles and Riverside Counties, including The Hotel Del Coronado, Loews Coronado, La Costa Resort and Spa, The Grand Del Marin La Jolla, L’Auberge Del Mar, The Ritz Carlton, Four Seasons, Hilton and Hyatt hotel chains.

The Kwons have been indicted on 11 counts of workers’ compensation premium fraud, 18 counts of payroll tax evasion and one count of extortion. The investigation uncovered a methodical and systematic shell game involving six straw owners. These straw owners were used to conceal the existence of hundreds of hotel workers to avoid paying millions of dollars in insurance premiums and payroll taxes. If convicted of all charges, they each face up to 31 years in prison.

Six co-defendants have also been charged with workers’ compensation premium fraud and tax evasion. They are Melquiades Brizuela Jr, Manuel Rodriguez, Veronica Lucas Cuin, Aimee Sunmyung Kwon, Daniel Kwon and Hyun Bung Chae for their involvement in the scheme. They face sentences between six and eight years in prison.

For nearly a decade, Good Neighbor Services allegedly concealed their real payroll information in order to fraudulently obtain workers’ compensation insurance from multiple companies including Travelers, Norguard, AIG, Southern Insurance, Everest National, Preferred Employers, State Compensation Insurance Fund and Employers Compensation Insurance. In doing this, the company avoided paying more than $3.6 million in insurance premiums and evaded paying over $3.3 million in payroll taxes.

Employees who were interviewed said they were paid with checks bearing the name of businesses other than Good Neighbor Services throughout the course of their employment,even though they wore uniforms with the Good Neighbor Services’ logo and identified the Kwons as the owners. The employees also said they did not receive overtime pay or workers’ compensation benefits when they were injured on the job, and they feared retaliation if they reported their injuries. One employee said she had to repeatedly ask for medical attention for her injury. When she was finally sent to a doctor, she found out later the Kwons sent her to a dentist rather than a physician.

Urgent Nurses Resources Inc., is a nursing registry. It provides hospitals with temporary nurses at hospitals’ requests.

After Urgent receives a hospital’s request for a temporary nurse, it offers certain nurses in its registry, who have been preapproved by the hospital, the requested assignment. The nurses are free to reject the assignment without explanation or penalty. Once a nurse accepts an assignment, Urgent reviews with the nurse a checklist provided by the hospital of the assignment’s duties. If the nurse can perform the duties, the nurse reports to the hospital. The nurse provides his or her own uniform, shoes, stethoscope, watch, and occasionally other small supplies (such as pens and pen lights) for the assignment, but does not provide any other equipment. The nurse completes the assignment, usually a shift, under the supervision of hospital. Once the nurse completes the assignment, the hospital pays Urgent for the nurse’s and Urgent’s services. Urgent later distributes the nurse’s portion of the payment to the nurse.

Urgent allows nurses in its registry to choose whether to be designated as an employee or independent contractor. To be classified as an independent contractor, Urgent requires, in part, that the nurses sign an independent contractor agreement and provide their own liability insurance. These nurses receive Internal Revenue Service forms 1099 (1099 Nurses).

Urgent was audited by State Fund at the end of 2007 and 2008. State Fund determined Urgent owed it premiums for the 1099 Nurses. Urgent disagreed and refused to pay. State Fund sued Urgent for the premiums. The trial court held the 1099 Nurses were independent contractors and consequently Urgent did not owe State Fund for the 1099 Nurses’ premiums. State Fund appealed. The trial court was affirmed in the unpublished case of SCIF v Urgent Nurses Resources Inc.

Urgent presented substantial evidence the 1099 Nurses were independent contractors under the Borello factors. (S. G. Borello & Sons, Inc. v. Department of Industrial Relations (1989) 48 Cal.3d 341, 349), It is of note other courts have similarly decided that nursing registries are agents for independent contractor nurses. For example, in Avchen v. Kiddoo, the court reasoned that nursing registries role was that of a commercial matchmaker, where a commissioned go-between attempts to put buyers and seller of goods and services in contact with each other and found that nursing registries are not employers.

The Department of Industrial Relations released its 2015 Legislative Digest which summarizes new laws and vetoed bills relevant to DIR and its divisions.

Most of the chaptered bills are slated to take effect on January 1 , 2016. Highlights of the chaptered bills include:

1) SB 358 mandates that women be paid equally for work that is substantially similar to the work of their male colleagues . It also prohibits discrimination or retaliation of employees who discuss their wages and those of their male colleagues .
2) SB 579 gives workers more flexibility to take job – protected leave to address child care issues, a schoo l emergency or to enroll or re – enroll a child in school.
3) AB 970 authorizes the Labor Commissioner’s office to issue citations for violations of local minimum wage laws and failure to reimburse employees for unpaid business expenses.
4) AB 1124 requires the Division of Workers’ Compensation to establish a prescription drug formulary for the California workers’ compensation system.
5) AB 1513 clarifies pay requirements for piece – rate workers’ mandated rest and recovery breaks and other nonproductive time, and addresses back liability by providing employers the opportunity, within a specified period, to make back wage payment s for rest and recovery breaks and other nonproductive time in exchange for relief from statutory penalties.