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DWC Proposes Updated Chronic Pain Guideline

The Division of Workers’ Compensation (DWC) has posted proposed “Chronic Pain Medical Treatment Guidelines” to its online forum. Members of the public may review and comment on the proposal online until Thursday, December 18.

The current Medical Treatment Utilization Schedule (MTUS) Chronic Pain Medical Treatment Guidelines is based on a “frozen” 2009 adaptation of the Official Disability Guidelines (ODG) published by the Work Loss Data Institute.

The proposed guidelines consist of an edited version of the ODG “Treatment in Workers’ Compensation – Chapter on Pain (Chronic),” published April 10, 2014, which DWC has adapted with permission from the publisher. The proposed guidelines were developed in cooperation with the multidisciplinary Medical Evidence Evaluation Advisory Committee (MEEAC) and are based on the best available medical evidence and scientific studies.

“Chronic pain is a public health problem, a significant factor in delayed recovery, and the main reason for medical treatment disputes in the workers’ compensation system,” said DWC Executive Medical Director Dr. Rupali Das. “A key goal of these guidelines is to incentivize a multidisciplinary approach to chronic pain treatment to restore function and reduce pain and ultimately to encourage return to work following injury. The guidelines promote an evidence-based, comprehensive approach to treating pain, emphasizing measures that prevent or reduce chronic pain, suffering, and disability.”

The proposed MTUS “Chronic Pain Medical Treatment Guidelines” provide a set of best practices for considering a multidisciplinary approach to the management of chronic pain issuing from work-related injuries. The guidelines consist of an introduction (Part 1) and specific recommendations on interventions and treatments for chronic pain (Part 2), in addition to extensive bibliography and reference summaries. Specific guidance on opioid use is not contained in the “Chronic Pain Medical Treatment Guidelines” but is provided in a separate MTUS chapter. The proposed new guideline presents a 132 page “menu” of procedures in alphabetical order similar to the existing guideline. Next to each procedure or topic, the “Summary of Medical Evidence” is given with a conclusion such as “recommended” or “not recommended.” After the procedure summary, the Guideline lists the citations to the scientific studies used to support the conclusion for a total of 964 pages contained in the proposed new guideline.

“Chronic pain is a national concern. By issuing these guidelines, California continues to be on the forefront of providing appropriate care and improving outcomes,” said Department of Industrial Relations (DIR) Director Christine Baker. DWC is a division of DIR.

The MTUS regulations can be found in Title 8 of the California Code of Regulations, beginning with section 9792.20. The proposed guidelines are in section 9792.24.2.

WCIRB Reports 12% Premium Increase Above 2013

The WCIRB has completed its report on workers’ compensation insurer loss and premium experience through September 30, 2014. This report is based on data reported to the WCIRB by insurers who wrote almost 100% of the statewide market. The major findings of the report include:

1) California written premium (gross of deductible credits) for calendar year 2013 is approximately $14.8 billion. This is approximately 18% above the written premium reported for 2012 and 68% above the written premium reported for 2009. Written premium for the first nine months of 2014 is approximately $12.5 billion, which is approximately 12% above the written premium reported for the first nine months of 2013.
2) The projected industry average charged rate for policies written in the first nine months of 2014 is $2.93 per $100 of payroll, which is up approximately 2% since 2013 and up approximately 40% since 2009. Even so, the industry average charged rate remains approximately 53% less than it was for the second six months of 2003.
3) The WCIRB projects total ultimate losses and allocated loss adjustment expense (ALAE) for accident year 2013 to be $12.5 billion. While approximately 6% above the projection for accident year 2012 and 25% above the projection for accident year 2009, it remains below the highs experienced prior to the 2002 through 2004 reforms.
4) The WCIRB projects an ultimate accident year combined loss and expense ratio of 111% for 2013. This projection is below that of the last several accident years primarily as a result of increased premium levels and relatively low claim severity growth in 2013.
5) The calendar year combined loss and expense ratio for 2013 reported by insurers is 109%, which is somewhat below the combined ratios for the last few years but represents the sixth straight calendar year with a combined ratio of over 100%.
6) The WCIRB projects indemnity claim frequency for accident year 2013 to be 3.9% above the frequency for 2012 and approximately 14% above the frequency for 2009. The projected indemnity claim frequency for the first nine months of 2014 is 0.9% higher than that for the first nine months of 2013.
7) The WCIRB projects the average cost (or “severity”) of a 2013 indemnity claim to be approximately $85,000, which is generally consistent with the projected severities for the last several accident years. The projected 2013 average loss and ALAE severity reflects an increase of almost $30,000 (or more than 50%) since the full implementation in 2005 of the 2002 through 2004 reforms.
8) The WCIRB currently projects the total statewide ultimate losses on all injuries that occurred on or before December 31, 2013 to be approximately $9.6 billion more than the amounts reported by insurers.

The full report is available in the Research and Analysis section of the WCIRB website.

WCAB Panel Says No to Joint and Several Award

Isaiah J. Kacyvenski is a former football linebacker of the National Football League. He was drafted by the Seattle Seahawks in the fourth round of the 2000 NFL Draft. Kacyvenski played six-plus seasons with the Seahawks recording 267 tackles in 90 games and was elected as the Special Teams Captain 3 years in a row. In 2002, Kacyvenski earned the starting job at Middle Linebacker, after battling for the position with Orlando Huff. In 2005, Kacyvenski was Special Teams Captain of the Seahawks and helped lead the team to Super Bowl XL, which was played in Detroit, Michigan. He was released by the team on September 30, 2006. Kacyvenski then signed a one-year contract with the St.Louis Rams on October 3, 2006, and played in ten games for them during the remainder of the 2006 season. As an unrestricted free agent in the 2007 off season, Kacyvenski then signed a one-year contract with the Oakland Raiders on July 11. He was placed on season-ending injured reserve on August 7 and released with an injury settlement a week later after undergoing microfracture surgery on his leg. In September 2008, it was reported that Kacyvenski had decided to retire.

On May 8, 2008, Kacyvenski filed an Application for Adjudication of Claim alleging that he sustained cumulative injury through 2007 to various body parts while a professional football player for the Raiders. The Raiders admitted left knee injury, and the Rams were joined as defendants. At the Mandatory Settlement Conference of July 8, 2014, Kacyvenski elected to proceed solely against the Raiders under Labor Code section 5500.5(c). As a result of the election against the Raiders, the Rams did not appear at the scheduled trial of August 20, 2014, during which time the Raiders and Kacyvenski entered into the Stipulations with Request for Award. The WCJ issued the Joint Award against the Raiders and Rams the same day based on stipulations between the Raiders and Kacyvenski.This Joint Award provided that applicant sustained cumulative injury to various body parts from October 3, 2006 through August 13, 2007 while employed as a professional athlete, resulting in 44% permanent disability and a need for medical treatment.

Although the Rams did not participate in the trial as the non-elected employer, the WCJ awarded benefits to applicant jointly and severally against the Oakland Raiders and against the Rams even though they did not sign the stipulation. The Rams filed a timely Petition for Reconsideration. In their petition, the Rams’ contended that: (1) the Joint Award is based solely on the Stipulations between the Raiders and applicant; (2) the Rams are not a party to the Stipulations and Joint Award since Kacyvenski previously elected to proceed against the Raiders under Labor Code section 5500.5(c); (3) applicant.’s election precluded the Rams’ participation at trial when the Raiders and applicant entered into the stipulated award; and (4) therefore the Joint Award against the Rams violates due process. The Rams contended that the Joint Award is in excess of the WCJ’s powers under section 5903(a}, and request the WCAB to grant reconsideration and order an amended Joint Award solely against the Raiders.

The WCAB agreed in the panel decision of Kacyvenski v Oakland Raiders and granted reconsideration for purposes of amending the Award to remove the Rams from joint and several liability.

It is fundamental that due process requires opportunity to participate in the proceeding determining liability before liability is imposed. (Katzin v. Workers’ Comp. Appeals Bd. (1992) 5 Cal.App.4th 703, 711-712 [57 Cal.Comp.Cases 230, 236]; Fidelity and Cas. Co. of New York v. Workers’ Comp. Appeals Bd. (Harris) (1980) 103 Cal.App.3d 1001, 1015 [45 Cal.Comp.Cases 381).)

Here Kacyvenski elected to proceed solely against the Raiders, and further participation by the Rams at trial resulting in the Joint Award was precluded under section 5500.S(c).

In September 2008, Kacyvenski, the first of five other former NFL players that soon followed, agreed to donate his brain upon his death to the Center for the Study of Traumatic Encephalopathy, a joint program between the Boston University School of Medicine and Sports Legacy Institute in order to have research into the effects of concussions on the human brain performed. Kacyvenski was elected to the Board of Directors of Sports Legacy Institute in 2008, and has used this as a platform for awareness surrounding head trauma and making contact sports safer to play. Kacyvenski now works for cutting-edge conformal electronics technology company MC10, running their Sports Business. He developed the technology behind the CHECKLIGHT, a head impact measurement system, in a partnership with Reebok that launched in June 2013

DWC No Longer Accepting Paper MPN Reapproval Requests

The Division of Workers’ Compensation has posted an example of a medical provider network (MPN) Application/Plan for Reapproval to help MPN applicants comply with SB 863’s statutory requirements and recent changes to MPN regulations that became effective August 27.

The DWC is no longer accepting paper submissions. When filing an MPN Application or Plan for Reapproval, MPN applicants shall submit two non-password-protected or unencrypted compact discs or flash drives in word-searchable PDF format that includes:

1. A completed section 9767.4 Cover Page for Medical Provider Network Application or Plan for Reapproval with an original signature (e-signatures are acceptable); and
2. A completed MPN Plan. Using the example described in this Newsline is advised. It can be found on the DWC website in the “Example Medical Provider Network (MPN) Application/Plan for Reapproval.”

Please be aware that per Labor Code section 4616, any MPN that was approved prior to January 1, 2011 and has not been reapproved by January 1, 2015 will expire and will not be able to accept new claims. Additionally, the DWC will not accept an MPN Application or Plan for Reapproval that fails to follow the requirements set forth in the California Code of Regulations, Title 8, Section 9767.3.

One Out of Three Say “You Need a PhD” to File a Comp Claim

A stubborn stigma persists toward injured workers who file workers’ compensation claims, according to a new survey commissioned by Summit Pharmacy Inc. The survey revealed:

1) Nearly two in five Americans (37 percent) believe “most workers’ compensation claims are made by people who don’t want to work.”
2) One in three American workers (34 percent) believe if they were injured on the job, “it would be a nightmare process to get the pain medication(s) my doctor prescribed.”
3) More than one-third of Americans (35 percent) agreed with this statement: “You need a PhD to complete all the necessary paperwork associated with a worker’s compensation claim.”

Methodology: This survey was conducted online within the United States from September 29-October 1, 2014 among 2,016 adults ages 18 and older by Harris Poll on behalf of Summit via its Quick Query omnibus product. Figures for age, sex, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population. Propensity score weighting was used to adjust for respondents’ propensity to be online.

Respondents for this survey were selected from among those who have agreed to participate in Harris Poll surveys. The data have been weighted to reflect the composition of the adult population. Because the sample is based on those who agreed to participate in the Harris Poll panel, no estimates of theoretical sampling error can be calculated.

State Fund Discontinues Group Insurance Plan

Since the implementation of tiered rating in March 2013, State Fund has broadened its pricing structure and allowed more accurate rating to an individual policyholder’s risk. Under tiered rating, State Fund is able to offer fair prices to a much broader range of employers, allowing it to remain a strong and stable provider of workers’ compensation insurance for all California employers.

Throughout 2014, State Fund performed an in-depth evaluation to understand how the group insurance discount was working with tiered rating. Originally, State Fund introduced the group insurance discount to recognize and reward employers whose loss history demonstrated a culture of safety. Trade associations who had agreements with State Fund received an administrative fee, which averaged approximately four percent to six percent of premium.

The study concluded that the tiered rating plan has the same effect on policyholders as the group discount, reflecting individual performance and recognizing employers with demonstrated safety records with appropriate pricing.

In light of this analysis, State Fund has decided to discontinue group insurance and will not be renewing group agreements in 2015. Additionally, the group insurance discount will be eliminated April 1, 2015 for all groups, including the California Farm Bureau Federation.

State Fund underwrites many Alternative Dispute Resolution (ADR) groups. Beginning in 2015, specialized claims handling for these groups, but we will no longer discount the policies nor pay administrative fees.

“The workers’ compensation market has changed dramatically and the decision to discontinue the group insurance program is not a reflection on the quality of the employer associations’ value to their industry and members, but rather supports our efforts to manage costs and support fair pricing for all California employers,” said Jennifer Vargen, Executive Vice President, Public Affairs. “State Fund recognizes the value employer associations bring to California and will seek opportunities to collaborate with them on safety and other issues important to California employers.”

Ventura Orthopedic Surgeon Faces Fraud Charges

A former Ventura County neurosurgeon who was last based in Detroit, allegedly defrauded the Medicare health care program of millions of dollars by performing unnecessary spinal surgeries on patients, according to a criminal complaint recently unsealed in federal court. Neurosurgeon Dr. Aria Sabit is accused of performing lumbar spinal fusions on numerous patients and billing insurers despite failing to install medical devices in patients whose pain continued after surgery. The 40-page criminal complaint caps a lengthy investigation by the Federal Bureau of Investigation and U.S. Department of Justice that spanned at least two states, and involved multiple patients and tens of millions of dollars. The criminal complaint follows a civil case filed against the same doctor, and others, in Los Angeles federal court last September.

A disheveled, unshaven Sabit, dressed in jeans and a white T-shirt and wearing handcuffs and leg shackles, made a brief court appearance after his arrest. He could face 10 years or more in prison, if convicted.

According to the report in the Detroit News, Sabit, 40, was the focus of a front-page article in the Wall Street Journal last year that concluded he profited from implants he used in dozens of surgeries on patients, including at least one who died. The charges come two months after the Justice Department sued Sabit and a medical network over the alleged fraud. He is accused of using various businesses and medical practices to perpetuate the alleged fraud, including Southfield-based Michigan Brain and Spine Physicians Group. The firm allegedly billed health care programs for services that were not provided or overcharged for the services, according to the criminal complaint.

Sabit performed surgery on almost everyone who walked through his office, an unnamed employee told an FBI agent. Sabit previously was licensed in California and was the subject of more than two dozen medical malpractice lawsuits between 2009-10. In July, he agreed to surrender his California medical license. The new criminal complaint references five former Michigan patients, four of whom were told by Sabit that they needed to undergo spinal fusion surgery. Subsequently, after continuing pain, all patients received second opinions from other doctors stating that no such spinal fusion had been performed and there was no evidence of any screw, or any medical device in the spinal column of the patient,

The United States has also filed civil complaints in a federal district court in Los Angeles, under the False Claims Act against Sabit, spinal implant company Reliance Medical Systems, a Utah company, two Reliance distributorships – Apex Medical Technologies and Kronos Spinal Technologies, both , Florida companies – and the companies’ owners, Brett Berry, John Hoffman and Adam Pike. Reliance Medical Systems allegedly sold spinal implants in Southern California through distributorships that it controlled, including Apex Medical Technologies and Kronos Spinal Technologies. Drs. Aria Sabit and Sean Xie were physician-investors in Apex, and Drs. Gowriharan Thaiyananthan who practices neurosurgery in Orange California and Ali Mesiwala who practices in Pomona California were allegedly physician-investors in Krons. The Los Angeles civil complaints allege that Apex Medical and Kronos Spinal paid physicians, including Sabit, to induce them to use Reliance spinal implants in the surgeries they performed. The litigation also involves Ventura County neurosurgeon Moustapha Abou-Samra, M.D. and Community Memorial Health System hospital in Oxnard. The private complaint alleges that in the spring of 2009, defendant Moustapha Abou-Samra, M.D. a Board Certified neurosurgeon and president of Ventura County Neurosurgical Associates with full privileges at Community Memorial Health System (CMH), recruited Aria Omar Sabit, M.D., a non-board certified neurosurgeon, to relocate from New Jersey to Ventura County, California to be employed by Abou-Samra’s corporation. Sabit was allegedly allowed to perform highly specialized neurosurgical operative procedures including spinal surgeries with open reduction and internal fixation, spinal fusions, laminectomies and pedicle screw implantation at CMH despite demonstrations that his surgeries were allegedly plagued with high infection rates, high return-to-surgery rates, violations of operating room protocols, failures in instrumentation, surgical mishaps, inappropriate case selection and high complication rates. Sabit had allegedly performed over 375 procedures from June 2009 to December 2010 while under provisional privileges at CMH. Some 27 patients who were injured by Sabit’s procedures brought individual lawsuits in the Superior Court of the State of California for the County of Ventura against Sabit and some of the other defendants for medical malpractice.

Sabit is originally from Afghanistan and is accused of illegally obtaining U.S. citizenship last year. Sabit allegedly failed to disclose that he knowingly committed health care fraud, prosecutors said. The government wants Sabit held in jail pending trial, noting that he was questioned in September in Atlanta while trying to fly to Dubai. Sabit told a customs officer that he owned a company involved in mining in Afghanistan. In his luggage, officers found a ruby and a 3.6-carat emerald, according to the complaint.

Sedgwick Acquires Software Company

Sedgwick Claims Management Services, Inc. has acquired Absentys, LLC., a Chattanooga-based software application developer and service provider. Absentys’ LeaveLink and ADALink software platforms will benefit Sedgwick’s claims services within the framework of the Family and Medical Leave Act, state-specific leave laws, the Americans with Disabilities Act and the ADA Amendment Act of 2008.

Absentys builds technology platforms designed to help employers ensure compliance with federal and state leave and accommodation regulations. Its proprietary, web-based LeaveLink® and ADALink® software solutions help companies navigate the framework of the Family and Medical Leave Act (FMLA), state-specific leave laws, the Americans with Disabilities Act (ADA) and the ADA Amendments Act of 2008 (ADAAA). The press release notes that Absentys’s state-of-the-art software solutions are easily configured to meet each employer’s unique needs and allow for self-administration or co-sourcing of leaves of absences and accommodation requests. The company’s software platforms currently administer leaves of absence and accommodation requests for more than 500 organizations and 3 million workers.

“Combining Absentys’ powerful software solutions with Sedgwick’s current capabilities allows us to not only bring our industry-leading expertise to organizations seeking to self-administer their employee absence and accommodation programs but also to augment our technology-enabled claims and productivity service offerings for large employers,” said David North, Sedgwick president and CEO.

In October, Sedgwick Claims Management Services, Inc. made another significant acquisition, of T and H Global Holdings. According to a release, this acquisition includes membership in the global vrs Adjusters’ organization, which is one of the top organizations in corporate and complex loss adjustment and claims management worldwide. Sedgwick’s move will expand the company’s international footprint beyond North America. T and H subsidiaries have a presence in all 50 states and the U.K. It includes VeriClaim Inc.; VRS VeriClaim U.K Ltd; Unified Investigations and Sciences, Inc.; Cramer, Johnson, Wiggins and Associates, Inc.; and Ellis May Chartered Loss Adjusters.

In 2010, Sedgwick was acquired by Affiliates of Stone Point Capital LLC and Hellman and Friedman LLC.

Hospitals Achieve “Historic Improvement” in Medical Errors

About 50,000 people are alive today because U.S. hospitals committed 17 percent fewer medical errors in 2013 than in 2010, according to a report in Reuters Health. The lower rate of fatalities from poor care and mistakes was one of several “historic improvements” in hospital quality and safety measured by the Centers for Medicare and Medicaid Services. They included a 9 percent decline in the rate of hospital-acquired conditions such as infections, bedsores and pneumonia from 2012 to 2013.

Secretary of Health and Human Services Sylvia Burwell is scheduled to announced the data at the CMS Healthcare Quality Conference in Baltimore. It is based on a detailed analysis of tens of thousands of medical records, but because data was collected differently before 2010, it is not possible to compare pre-2010 figures to later ones. CMS is a unit of Burwell’s department.

The deadly problem of hospital error burst into the national spotlight in 1999, when the Institute of Medicine estimated that as many as 98,000 people die every year because of hospital mistakes that allow patients to contract infections, fall, develop pneumonia from being on a ventilator, or suffer other serious but preventable harm.

In 2010, the HHS inspector general estimated that poor care in hospitals contributed to the deaths of 180,000 patients covered by Medicare, which insures the disabled and those 65 or older, every year. Officials offered several possible explanations for the steep decline in sometimes-fatal hospital-acquired injuries, infections and other conditions. Hospitals have made a concerted effort to improve safety, spurred in large part by changes in how Medicare pays them. President Barack Obama’s healthcare reform law requires CMS to reduce the reimbursement rate for hospitals that re-admit too many patients within 30 days, an indication of poor care the first time. As a result of the improvements in hospital safety, 1.3 million fewer patients suffered a hospital-acquired condition in 2013 than if the 2010 rate had remained steady, CMS Deputy Administrator Dr. Patrick Conway told reporters. That produced savings of some $12 billion from avoidable costs, such as for treating a single bloodstream infection due to a catheter, at a $17,000.

Compounding Pharmacies Sue Express Scripts

This past summer, Express Scripts began blocking coverage for approximately 1,000 active ingredients used to make a variety of compounded medicines, mostly ointments, creams and powders that are found in topical treatments. The move by the nation’s largest pharmacy benefit manager was made in response to the growing cost of some of these medicines. At the time, Express Scripts official said the average cost for each prescription had risen to about $1,100 from $90. Express Scripts officials maintained that less expensive prescription medicines are readily available.

But according to the story in the Wall Street Journal, three compounding pharmacies are fighting back. Last week, three compounders filed a lawsuit charging Express Scripts is illegally blocking legitimate prescriptions and unfairly forcing patients to seek more expensive treatments or forgo medical care.

An Express Scripts spokesman declined to comment on the lawsuit and referred us to a page on the company web site in which an explanation for the policy change was made.

The compounders maintain that Express Scripts is violating federal law, because the pharmacy benefits manager allegedly lacks the authority to alter the terms of the affected health plans, according to the lawsuit. As an example, the lawsuit cites a health plan served by Express Scripts in which compounded medicines and ingredients have not been listed as excluded. “In order to cover up its financially driven scheme, Express Scripts….. is issuing intentionally deceptive and misleading letters to patients informing them that there is an unspecified change in their compound medication benefits and that there is a purported lack of FDA approval for compound medications, which is untrue,” the lawsuit states. The lawsuit goes on to argue that, until now, Express Scripts “routinely paid” for compounded drugs as “medically necessary, efficacious and properly prescribed by patients. The letters are a misleading scare tactic and pretext invented to cover up its true financial goal behind the scheme.” The lawsuit cites a document indicating the move is designed to cut compound spending by 95%.

The safety of some compounded medications became a hot topic two years ago after an outbreak of fungal meningitis was traced to a compound pharmacy in Massachusetts and led to dozens of deaths. This prompting Congress to pass a law called the Drug Quality & Security Act to boost oversight. The FDA, meanwhile, has responded by increasing inspections and issuing warning letters.

Compound pharmacies, however, have been chafing over the law, which creates two classes of compounders – one that voluntarily chooses to register with the FDA and another that may decline to do so. The first group is subject to certain conditions, such as meeting good manufacturing practices, but the FDA hopes the requirements will give hospitals and physicians the confidence needed to purchase needed compounded medicines.

Recently, the International Academy of Compounding Pharmacists, a trade group, began lobbying Congress to alter the law and make “technical corrections.” In response, a group of trade groups for drug makers, along with the Pew Trust, wrote to the FDA to express support for the law in its existing form.