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Author: WorkCompAcademy

Outpatient and ASC Fee Schedules Now Final

The Division of Workers’ Compensation (DWC) has adopted and filed an amendment to the hospital outpatient departments and ambulatory surgical centers fee schedule section in the official medical fee schedule (OMFS) with the Secretary of State.

The amended regulation:
1) Transitions hospital outpatient department facility fee allowances currently paid under the pre – 2014 OMFS physician fee schedule to be paid an OMFS RBRVS – based facility fee;
2) Makes the alternative payment methodology inapplicable for services rendered on or after September 1, 2014; and
3) Adjusts the Medicare multiplier to conform to changes in Medicare’s payment rules regarding the additional percentage added for outliers ;
4) Makes minor clarifications and technical edits. The regulation amends title 8, California Code of Regulations sections 9789.30, 9789.31, 9789.32, 9789.33, 9789.37 , and 9789.39, and is effective September 1, 2014.

The regulation can be found on the DWC website .

Task Force Issues 60 Citations to Illegally Uninsured Contractors

A multi-agency task force led by the California Department of Insurance, consisting of more than 100 detectives and investigators focused on curbing California’s underground economy, conducted a sweep across major metropolitan areas statewide issuing more than 60 citations for various violations and six work stop-orders. Investigators also took the opportunity to educate homeowners about their responsibility to verify contractors have a license and workers’ compensation insurance before they hire them.

Homeowners who hire contractors or vendors that do not have proper licenses or workers’ compensation insurance may risk their home and assets if someone is injured on their property or shoddy work results in damage to their home. Many homeowner policies have a criminal activity clause that means the insurance company may not cover damage caused by shoddy work performed by an unlicensed contractor or liability coverage if a worker is injured and the contractor does not have workers’ compensation insurance.

“Homeowners must be aware of their obligation to verify that contractors they hire have proper licenses and valid workers’ compensation insurance,” said Insurance Commissioner Dave Jones. “It is not worth risking your home or other assets because you hired an unlicensed contractor or didn’t take the time to verify their license and insurance coverage. A few minutes spent ensuring your contractor or vendor is following the law is a small investment to protect yourself and your assets.”

At a private home in the Los Angele area investigators found a sub-contractor working on the job site without workers’ compensation insurance. According to detectives, the homeowner was surprised to learn he was responsible for verifying not only the general contractor’s workers’ compensation insurance, which he had done, but also for all sub-contractors. Other violations found among the nearly 100 businesses contacted included no workers’ compensation insurance, no valid contractor’s license, serious safety violations cited by the Division of Occupational Safety and Health, including one with an estimated $20,000 regulatory fine. The Contractors State License Board found six violations, ranging from advertising to safety issues. The Employment Development Department identified 15 possible administrative violations.

“California’s underground economy results in a multi-billion dollar hit to California’s economy,” said Insurance Commissioner Dave Jones. “This fraudulent activity hurts legitimate businesses that play by the rules. The coordinated effort of this multi-agency task force is an ongoing effort to level the playing field by putting a stop to the illegal activities of business owners that cheat the system at the expense of law abiding businesses and consumers.”

WCIRB Submits January 1, 2015 Regulatory and Pure Premium Rate Filing

The WCIRB submitted the Regulatory Filing containing proposed changes to the Insurance Commissioner’s regulations contained in the California Workers’ Compensation Uniform Statistical Reporting Plan–1995, the California Workers’ Compensation Experience Rating Plan – 1995, and the Miscellaneous Regulations for the Recording and Reporting of Data – 1995. This filing contains the following proposals:

1) Amendments to the California Workers’ Compensation Uniform Statistical Reporting Plan – 1995, including amendments to the Standard Classification System developed by the WCIRB. These amendments are proposed to become effective January 1, 2015 with respect to new and renewal policies as of the first anniversary rating date of a risk on or after January 1, 2015.
2) Amendment to the Miscellaneous Regulations for the Recording and Reporting of Data – 1995 to become effective January 1, 2015 with respect to new and renewal policies as of the first anniversary rating date of a risk on or after January 1, 2015.
3) Amendments to the California Workers’ Compensation Experience Rating Plan – 1995 to become effective January 1, 2015 with respect to new and renewal policies as of the first anniversary rating date of a risk on or after January 1, 2015.

Upon receipt of the Commissioner’s Decision , the WCIRB will post the Decision on its website and will issue a WCIRB Bulletin notifying members of any and all approved rules and classifications to assist in preparing individual company rate filings. The WCIRB will submit a separate filing in mid – August that will include proposed changes to the advisory pure premium rates and experience rating values to be effective January 1, 2015 .

WCAB Broadly Interprets Definition of a “Prescription” for Home Health Care.

Roque Neri Hernandez filed a claim against Geneva Staffing, a result of a severe crush injury to his right dominant hand on July 11, 2011 During his initial hospitalization, applicant had three surgeries on his hand. Once he was home, he developed a serious infection in his hand, which necessitated a fourth surgery on September 19, 2011. Then, on December 20, 2011, he had a fifth surgery. Further surgery on applicant’s right hand has been recommended.

Applicant was cared for at his home by his spouse. A handwritten note on St. Mary’s Medical Center letterhead stated “This is to notify that Neri Hernandez Roque has been under the care of Dr. Charles K. Lee for severe injury to his right hand since 7-11-11 at which time he has needed constant care from his wife Adrianna Bayona. Mr. Neri Hernandez will need continuous care as his ongoing treatment goes on. [sic]” What appears to be a signature for Dr. Lee is scrawled on the bottom of the letter.

In his November 5, 2012 report, Dr. Gordon opined that: “As far as the second question which relates to an attendant, I do feel that it is reasonable for the patient to have support, transportation, and attendant care at the rate of six hours per day. There does not appear to be any particular need for skilled nursing as at this time there are no bandages or unusual care that is needed, and this would be at the unskilled level.”

Applicant sought an order for home health care services provided by his spouse; an award “for retroactive payment . . . to the date of injury payable to the applicant as a medical benefit;” and attorney’s fees. Applicant contended that his spouse’s testimony was an adequate basis to determine the hourly rate of reimbursement. Defendant contended that the November 11, 2011 report by Dr. Lee was not a valid prescription for home health care services as it did not specify the type of care or number of hours of care required; that neither Dr. Lee’s nor Dr. Gordon’s report was sufficient to determine the type of care required; and that Senate Bill [SB] 863 controlled.

A Findings and Award, found that applicant was entitled to medical treatment in the form of home health care services beginning on August 3, 2011 and continuing and awarded applicant payment for self-procured home health care services. He awarded services for 24 hours per day, 7 days per week from August 3, 2011 to November 4, 2012, and for 6 hours per day, 7 days per week from November 5, 2012 and continuing. He awarded payment based on applicant’s spouse’s regular hourly rate of pay at the day care center where she worked. Defendant sought reconsideration and contended that newly enacted Labor Code sections 4600(h) and 4603.2(b)(1) applied.

The WCAB reversed in the en banc decision of Hernandez v Geneva Staffing. With regard to the SB 863 additions and amendments to the Labor Code regarding home health care services, which became effective January 1, 2013, the Appeals Board held:

1) Sections 4600(h), 4603.2(b)(1), and 5307.8 apply to requests for home health care services in all cases which are not final regardless of date of injury or dates of service.
2) The prescription required by section 4600(h) is either an oral referral, recommendation or order for home health care services for an injured worker communicated directly by a physician to an employer and/or its agent; or, a signed and dated written referral, recommendation or order by a physician for home health care services for an injured worker.
3) Under section 4600(h) home health care services are subject to either section 5307.1 or section 5307.8; section 5307.1 applies where an official medical fee schedule or Medicare schedule covers the type of home health care services sought; and otherwise, section 5307.8 applies.

Section 4600(h) makes clear that home health care services are included in the definition of “medical treatment,” but it also limits an employer’s duty to provide that treatment by imposing two additional conditions which are part of an injured worker’s burden of proof. The first condition requires that home health care services be prescribed by a physician, and an employer may become liable for home health care services provided 14 days prior to receipt of a prescription. The second condition requires that an employer’s liability for home health care services is subject to either section 5307.1 or section 5307.8. Section 5307.1 applies where an official medical fee schedule or Medicare schedule covers the type of home health care services sought. When the type of services sought is not covered by an official medical fee schedule or Medicare schedule, section 5307.8 applies.

The WCAB concluded that the note written by Dr. Lee “is a prescription for home health care services within the meaning of section 4600(h).” But the WCAB went to on conclude “It may be that defendant received medical records from the hospital from before November 11, 2011 containing a referral or recommendation for home health care services or providing notice of applicant’s need for home health care services. Applicant’s spouse’s testimony suggests that Dr. Lee may have communicated with defendant about applicant’s need for home health services and at a minimum, raises an inference that defendant may have received notice of the need for home health care services such that it should have investigated. Thus, we are unable to determine based on the evidence in the record before us whether the liability period may have begun at an earlier time.” Thus “we rescind the Findings and Award and return the matter to the WCJ for further development of the record consistent with this opinion and a new decision.”

Five Accused in $4 Million Fraud Case

Five owners and employees of a Corona-based paving company have been charged with wage theft, insurance premium fraud and workers compensation fraud, the Riverside County district attorney’s office announced.

Laura Fitzpatrick, 31, of Anaheim Hills, Alex Trujillo, 26, of Pacoima, and Corona residents Lucia Trujillo, 39, Rick Trujillo, 37, and Sabas Trujillo, 35, are each charged with more than three-dozen felony and misdemeanor counts, including forgery, workers’ compensation fraud, wage theft and willful misrepresentation of payroll accounts. The defendants are slated to appear before Superior Court Judge Helios Hernandez at the Riverside Hall of Justice. They’re being held at Riverside County correctional facilities in lieu of bail amounts ranging from $1.3 million to $3.7 million.

According to the District Attorney’s Office, Sabas and Lucia Trujillo are married, and Rick Trujillo is Sabas’ older brother. The trio own and operate United Paving and its sister company, Prestige Striping Services Inc. The other two defendants were employed there. The companies specialize in re-topping streets and parking lots.

According to prosecutors, dozens of current and former employees began filing complaints about two years ago, alleging they were being cheated of wages. The complaints were directed to the Inland Empire Premium Task Force, comprised of regional prosecutors and agents from the California Department of Insurance and the Employment Development Department. The resulting probe resulted in the seizure of computers, bank and payroll records, as well as other documents that enabled investigators to audit the two companies’ activities connected to “several hundred projects,” according to the D.A.’s office.

Criminal complaints were filed against the defendants last week. In addition to the criminal action, prosecutors have also petitioned the court to freeze $6 million in assets under the defendants’ management.

Simple Ice Packs Reduce Post Surgical Pain and Narcotics

An article in Reuters Health notes that patients given ice packs for the first 24 hours after major abdominal surgeries reported less pain and needed fewer narcotic painkillers, according to a new U.S. study. “We aren’t talking about saying to a patient, here is some ice and then cut off all their pain medication. The ice was only meant to increase the patient care,” Dr. Viraj Master told Reuters Health. Master, a urologist and professor at Emory University in Atlanta, Georgia, led the study. He said post-operative pain is an unavoidable consequence of major surgery. Although you can make it better with pain medication, those drugs are not without side effects like constipation, drowsiness and even dependence. “The idea was to keep patients out of pain but not have them suffer from using too many narcotics,” he said. “The physician could give the patient any medication he wanted, we just added the ice.”

Using ice as a treatment for surgical wounds, known as cryotherapy, is not new, Master said. The cold reduces pain by reducing inflammation and swelling, which lets more oxygen flow to cells, he said. At the same time, it slows down the metabolism of a cell so that less oxygen is needed. It also makes the nerve endings less sensitive to the pain. Cryotherapy is commonly used after orthopedic and hernia procedures, Master and his coauthors write in the Journal of the American College of Surgeons. They wanted to see if it could help patients after major surgeries too.

The researchers recruited 55 patients scheduled for major abdominal operations, mostly to remove cancers of the liver, pancreas, colon and other organs, then randomly assigned them to two groups. The 27 patients in the cryotherapy group would get ice for their wounds after their procedure while the 28 assigned to the comparison group would get no ice. Immediately after surgery, members of the cryotherapy group were given their ice pack to wear over their wound for a full 24 hours. Nurses kept the patients supplied with fresh ice packs during that time. After the first 24 hours, the patients could use the ice packs only when they wanted to.

For the three days following their surgeries, the patients rated their pain level twice a day on a scale of 0 to 10. Zero meant no pain, and 10 meant the worst pain imaginable. Their use of narcotic painkillers was also recorded during that period.

There was no significant difference in how long patients from either group stayed in the hospital, and one hour after their procedures, pain levels were not different in the two patient groups. But after the first hour and at all points during days one through three, patients in the cryotherapy group had lower pain scores than in the comparison group. On the first morning after surgery, for example, patients using ice packs rated their pain at 3 while those in the comparison group rated theirs at a 5. The researchers also saw a significant difference in pain on the evening of day three when the ice-treatment patients had an average pain score of less than 2 and the non-ice patients had scores that averaged almost 4.

The researchers standardized the pain medications used by patients into units of morphine equivalents and found that on days one and three, patients in the cryotherapy group used less medication. On day one after surgery, patients with ice packs used about 14 morphine equivalents’ worth of pain medication, compared to 17 in the group without ice. Use of the narcotics shot up on the second day in the cryotherapy group, but then fell again on day three, when they used about 11 morphine equivalents compared to 15 in the non-ice group. Because ice works locally and only for a short time, it was not surprising that the effect on narcotic use only lasted while patients used 24-hour ice packs, the authors write.

Some patients did continue using ice packs after the first day and said that it helped their pain. Eighty-one percent of the cryotherapy group said the ice brought them some relief, and 76 percent said they would use ice packs if they had another surgery.

Master noted that safety was a very important part of the experiment. “There was no wound breakdown caused by the ice and we conducted the treatment on a variety of surgical patients,” he said.

At $2 per ice pack, the treatment is cost-effective, the researchers point out in their report. They also say that cryotherapy should be complementary to other pain management strategies because it is easy, affordable, well-received by patients and has minimal to no toxicity.

City of LA Employee Arrested for Double Dipping

A Los Angeles city worker was arrested on suspicion of grand theft and filing a fraudulent insurance claim, according to an announcement by the California Department of Insurance. Kelvin Piazza, 51, of Lakewood was arrested on suspicion of grand theft and filing a fraudulent insurance claim. The fraudulent claim was allegedly associated with a non-industrial injury in July 2010 during his employment as a wastewater collector for the city of Los Angeles, Sanitation Department.

Piazza was arrested as a result of a criminal investigation involving his disability insurance claim. The investigation revealed that Piazza returned to work full time in June 2011 and failed to notify Standard Insurance Company of his change of employment status and continued to receive and cash disability checks between June 6, 2011 and October 18, 2011 totaling $13,746.

This case is being prosecuted by the Los Angeles County District Attorney’s office. If convicted Piazza faces a maximum of five years in state prison. He is currently being held on $50,000 bail.

Court of Appeal Narrowly Applies Power Press Exception in Meat Packer Case

Martha Salgado was injured at work when four fingers of her right hand were severed by a cutting blade in a meat-packing machine. Under the worker’s compensation exclusivity rule (Lab. Code, § 3600, subd. (a)), and under the power press exception to that rule (§ 4558), she cannot recover against her employer, Modern Meat, Inc. unless she can show that she was hurt while working on a power press that was lacking a point of operation guard.

Salgado worked for Modern Meat as the operator of a labeling machine at their meat packaging facility in San Bernardino. On the day of her injury, she was working at a VA-430 meat packaging machine. The VA-430 is roughly 20 feet long and three feet wide. It creates individual sealed packages through a four-step process. In the third step, a second sheet of plastic is heated and sealed to the first sheet by heat and pressure, and a cross-hatch or diamond pattern is embossed into the plastic from the sealing frame. Salgado contends that the imposition of the pattern into the plastic is a “stamping” operation. The purpose of the pattern is unclear. Modern Meat speculated the embossed cross-hatch pattern is decorative, improves grip on the package, or creates a better seal; Salgado’s expert could only propose that it would allow quality assurance to confirm that there is a seal between the upper and lower sheets.

The packages are separated at the last station by means of a 16-inch serrated blade and a series of circular-shaped knives. Salgado was injured in this step of the process when she cleared a jam from the machine. Salgado suffered partial amputation of four fingers on her right hand. A safety guard that would likely have prevented her injury had been removed by a line supervisor.

In her civil lawsuit against the employer, the trial court granted summary judgment to Modern Meat, finding that the VA-43 was not a power press within the meaning of section 4558. Salgado appealed. The Court of Appeal affirmed the dismissal in the unpublished case of Saldago v Modern Meat Inc.

Section 4558, subdivision (a)(4) defines a “power press” in the following terms: “‘Power press’ means any material-forming machine that utilizes a die which is designed for use in the manufacture of other products.” Title eight, section 4214, of the California Code of Regulations contains Article 55, subtitled “Power Operated Presses.” That article applies only to those mechanically or hydraulically powered machines that shear, punch, form, or assemble metal or other material by means of tools or dies attached to slides, commonly referred to as power operated presses. The trial court found that the VA-430 was not a power press. In announcing its decision, the trial court stated that the VA-430 was a “vacuum forming machine,” noting the absence of a “powerful pressing or shaping motion which can cause a serious crushing injury.” The trial court also found that the machine did not employ a die. There is little clear guidance in case law for the application of the power press exception.

Salgado’s counsel argues that the trial court’s ruling improperly included a requirement that the pressure applied by the machine must be powerful and that the finding that the VA-430 did not employ a die was factually incorrect. If there is a requirement that a “power press” apply powerful pressure, Salgado argues, it is Modern Meat’s burden on summary judgment to establish the VA-430’s lack of such pressure as an undisputed fact. Salgado argued that the sealing station’s cross-hatch impression is made by pressure, and also proposes on appeal that the sealing station utilizes pressure to hold the heated plastic against the pull of the vacuum pump. Salgado has presented evidence that the VA-430 employs both a die and pressure in its operation of those stations.

The Court of Appeal concluded that “although the cross-hatching or forming processes could inflict a serious crushing or pinching injury to an unprotected operator, the fact that a device can inflict a similar injury to those caused by a power press does not allow us to rewrite the statute to include the machine that caused Salgado’s injury…. It is an unreasonable construction of the statute to apply the power press exemption to any machine where there is an incidental application of pressure; a machine that applies labels to wrappers or icing to cupcakes employs pressure, but to equate it to metal-stamping presses would make the exception swallow the whole of the workmen’s compensation system. Although the VA-430 may have the characteristics of a power press, reason and precedent require us to give a narrow construction to the exception that places the VA-430 outside of its coverage.”

Uninsured Rapper Sued by Housekeeper

Rapper Mickey Avalon has been slapped with a lawsuit from a housekeeper who alleges she was electrocuted while scrubbing his filthy oven.

Lula Malone filed legal documents claiming she was jolted by an electric current while cleaning the cooker in Avalon’s Los Angeles home and insists the appliance and his house were “maintained in an unsafe manner,” according to legal papers obtained by

The maid is suing the Mr. Right hitmaker for medical expenses and loss of earnings because Avalon does not have workers’ compensation insurance to cover her bills.

Mickey Avalon (born Yeshe Perl; December 3, 1975) is an American rapper from Hollywood, California. Upon entering the rap scene in 2000, Avalon first adopted the stage name, “The Relevant” and made his first appearance on Met Fly (who would later be known as Andre Legacy)’s album entitled “Wiggin’ Out”. In 2004, Avalon first collaborated with Existereo of the Shape Shifters’s on the song “No Class.” He later collaborated with Existereo again on: “Couple o’Shitbags and The Fly’s That Go With ’em” (2005), “Wrong Side” (2006), “I Love Who” (2007). In November 2006, Mickey Avalon released his self-titled debut solo album. Released through Interscope/Shoot to Kill Records in association with MySpace Records, the album spawned the singles “Jane Fonda” and “Mr. Right”.

Perhaps in this case he will end up Mr. Wrong. Representatives for the hip-hop star had not responded to requests for comment.

Feds Have Over 2000 Open Health Care Fraud Probes

Crooks love American health care for two reasons. First, as Willie Sutton said of banks, it’s where the money is – no other country spends nearly as much on pills and procedures. Second, unlike a bank, it is barely guarded.

Health care is a tempting target for thieves. Medicaid doles out $415 billion a year; Medicare nearly $600 billion. Total health spending in America is a massive $2.7 trillion, or 17% of GDP. In America the scale of medical embezzlement is extraordinary. According to Donald Berwick, the ex-boss of Medicare and Medicaid, America lost between $82 billion and $272 billion in 2011 to medical fraud and abuse. The higher figure is 10% of medical spending and a whopping 1.7% of GDP – as if robbers had made off with the entire output of Tennessee or nearly twice the budget of Britain’s National Health Service (NHS).

Federal prosecutors had over 2,000 health-fraud probes open at the end of 2013. A Medicare “strike force”, which was formed in 2007, boasts of seven nationwide “takedowns”. In the latest, on May 13th, 90 people, including 16 doctors, were rounded up in six cities – more than half of them in Miami, the capital city of medical fraud.

Punishments have grown tougher: last year the owner of a mental-health clinic got 30 years for false billing. Efforts to claw back stolen cash are highly cost-effective: in 2011-13 the government’s main fraud-control program, run jointly by the Department of Health and Human Services (HHS) and the Department of Justice, recovered $8 for every $1 it spent.

As fraud-fighting has intensified, dodgy billing has tumbled in areas that were most prone to abuse, such as durable medical and home visits. Home-health fraud – such as charging for non-existent visits to give insulin injections – got so bad that the CMS, which runs the programs, called a moratorium on enrolling new providers in several large cities last year. Since tighter screening was introduced under Obamacare, the CMS has stripped 17,000 providers of their license to bill Medicare. Thousands of suppliers also quit after being required to seek accreditation and to post surety bonds of $50,000.

Fraud migrates. Take one popular scam: overbilling for HIV infusion, an outdated therapy that Medicare still covers despite the existence of cheaper, better alternatives. This scam waned in Florida after a crackdown, only to pop up in Detroit, run by relatives of the original perpetrators. Fraud mutates, too. As old hustles are rumbled, fraudsters invent new ones. “We’ve taken out much of the low-hanging fruit,” says Gary Cantrell, an investigator at HHS – an example being the thousands of bogus equipment suppliers registered to empty shopfronts. Scams now need to be more sophisticated to succeed, he argues. Doctors, pharmacies, and patients act in league. Scammers over-bill for real services rather than charging for non-existent ones. That makes them harder to spot.

Some criminals are switching from cocaine trafficking to prescription-drug fraud because the risk-adjusted rewards are higher: the money is still good, the work safer and the penalties lighter. Medicare gumshoes in Florida regularly find stockpiles of weapons when making arrests. The gangs are often bound by ethnic ties: Russians in New York, Cubans in Miami, Nigerians in Houston and so on.

In one fast-growing area of fraud, involving pharmacies and prescription drugs, federal investigators have seen caseloads quadruple over the past five years. Elderly patients may receive kickbacks to sell their details to a pharmacist. He will then provide them with drugs they need while billing Medicare for costlier ones. Another scam is to turn a doctor’s clinic into a prescription-writing factory for painkillers and resell them on the street. A clinic in New York was recently charged with fraudulently producing prescriptions for more than 5m oxycodone tablets, which were sold locally for $30-$90 each. The alleged conspirators included doctors and traffickers who ran crews of “patients” so large that long queues sometimes formed outside the clinic. The doctors charged $300 per large prescription. One raked in $12m. To cover their backs they would ask for scans or urine samples purporting to show injuries. The fake patients typically obtained these from the traffickers at the clinic door.

False billing by pharmacies is rife. New York’s Medicaid sleuths have stepped up spot checks to see if the drugs in the back room square with invoices. But this is a lot of work, so most outlets are never checked.