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Insurance Broker Arrested for Padding Work Comp Premiums

An insurance salesman was arrested on allegations he stole $30,000 from a San Rafael nonprofit by fraudulently claiming an extra broker’s fee. Russell Joseph Sage, 39, of Sacramento is scheduled to be arraigned Thursday in Marin Superior Court, said Chief Deputy District Attorney Barry Borden. Sage is charged with felony theft by false pretenses.

The alleged victim is Center Point Inc., which provides substance abuse rehabilitation and other services. In 2012, Sage sold the nonprofit a $500,000 workers’ compensation policy. A broker’s fee was included in the structure of the policy, but Sage sent Center Point separate invoices for a commission, according to an affidavit by Deputy District Attorney Tom McCallister, a financial crimes prosecutor in Marin. Center Point paid Sage in two checks of $15,000 each, McCallister said.

Sage was arrested Monday in Yolo County, where he was serving a jail sentence in a different insurance fraud and money laundering case, according to Jonathan Raven, a Yolo County prosecutor. Raven remained in custody Tuesday at Marin County Jail in lieu of $30,000 bail. Sage surrendered his professional licenses last year, according to the California Department of Insurance website. The website reflects a long history of disciplinary issues. On or about April 29, 2004, in Case No. 2:03CR00552-01, in the United States District Court, Eastern District of California, Sacramento, the Department claimed he was convicted of theft of government property, a violation of Title 18, Section 641 of the United States Code, a misdemeanor.

Center Point officials did not respond to a call seeking comment Tuesday.

Tenants Complain About WCAB Santa Barbara Satellite Office

On January 13, the Division of Workers’ Compensation began operations at a satellite to the Oxnard District Office, located at 411 East Canon Perdido in Santa Barbara. The Santa Barbara satellite was opened in order to continue service to the population formerly served by the Goleta District Office, which was closed last December in an effort to consolidate and conserve State resources.

While the Santa Barbara satellite was welcomed for making DWC service locally accessible, the Division has been made aware that the current space cannot accommodate the volume of users. The size of the lobby, hearing room and available parking is particularly insufficient for all parties on conference days, and the crowding is negatively impacting other tenants in the facility. An increase in tenant complaints over the last few weeks have made it clear that the Division must take immediate measures to reduce its impact on the shared facility space. Therefore, beginning on Monday, March 3 all conferences that would have taken place in Santa Barbara will be scheduled on Mondays in Oxnard. The Oxnard District Office, located approximately 38 miles to the south of Santa Barbara, has ample room for all case participants in a typical conference calendar. Recognizing that some applicants may have difficulty travelling to Oxnard, the Division encourages use of Court Call in lieu of personal appearance for attorneys who represent applicants in the Santa Barbara area. DWC will also explore alternatives for unrepresented injured workers, which may include a telephone appearance option to be facilitated by DWC’s Information and Assistance staff.

The Santa Barbara satellite will continue to be used for a limited number of trials and expedited hearings held on Tuesdays, Wednesdays and Thursdays. There will be no hearings scheduled on Fridays, which are termed a “dark day,” set aside for judges to work on their decisions. The Information and Assistance Office in Santa Barbara will stay open five days a week.

DWC is actively pursuing a more spacious satellite location in the greater Santa Barbara area, as to remain accessible to those who had frequented the Goleta District Office. “The Division remains committed to serving the County of Santa Barbara,” affirmed Christine Baker, Director of Industrial Relations. “In the meantime, we appreciate the community’s patience while we continue to seek a sustainable presence in the area.”

NSA Surveillance Targets Law Firm Communications

Many industries, including the workers’ compensation claims process involves communications with law firms on a daily basis. The sanctity of the privacy of communications between lawyers and their clients has always been highly protected in every state and at the federal level – at least until now. The New York Times reports that the list of those caught up in the global surveillance net cast by the National Security Agency and its overseas partners now includes American lawyers.

A top-secret document, obtained by the former N.S.A. contractor Edward J. Snowden, shows that an American law firm was monitored while representing a foreign government in trade disputes with the United States. The disclosure offers a rare glimpse of a specific instance in which Americans were ensnared by the eavesdroppers, and is of particular interest because lawyers in the United States with clients overseas have expressed growing concern that their confidential communications could be compromised by such surveillance.

The government of Indonesia had retained the law firm for help in trade talks, according to the February 2013 document. It reports that the N.S.A.’s Australian counterpart, the Australian Signals Directorate, notified the agency that it was conducting surveillance of the talks, including communications between Indonesian officials and the American law firm, and offered to share the information. The Australians told officials at an N.S.A. liaison office in Canberra, Australia, that “information covered by attorney-client privilege may be included” in the intelligence gathering, according to the document, a monthly bulletin from the Canberra office. The law firm was not identified, but Mayer Brown, a Chicago-based firm with a global practice, was then advising the Indonesian government on trade issues. On behalf of the Australians, the liaison officials asked the N.S.A. general counsel’s office for guidance about the spying. The bulletin notes only that the counsel’s office “provided clear guidance” and that the Australian agency “has been able to continue to cover the talks, providing highly useful intelligence for interested US customers.”

The N.S.A. declined to answer questions about the reported surveillance, including whether information involving the American law firm was shared with United States trade officials or negotiators. Duane Layton, a Mayer Brown lawyer involved in the trade talks, said he did not have any evidence that he or his firm had been under scrutiny by Australian or American intelligence agencies. “I always wonder if someone is listening, because you would have to be an idiot not to wonder in this day and age,” he said in an interview. “But I’ve never really thought I was being spied on.”

The 2013 N.S.A. bulletin did not identify which trade case was being monitored by Australian intelligence, but Indonesia has been embroiled in several disputes with the United States in recent years. One involves clove cigarettes, an Indonesian export. The Indonesian government has protested to the World Trade Organization a United States ban on their sale, arguing that similar menthol cigarettes have not been subject to the same restrictions under American anti-smoking laws. The trade organization, ruling that the United States prohibition violated international trade laws, referred the case to arbitration to determine potential remedies for Indonesia. Another dispute involved Indonesia’s exports of shrimp, which the United States claimed were being sold at below-market prices.The Indonesian government retained Mayer Brown to help in the cases concerning cigarettes and shrimp, said Ni Made Ayu Marthini, attaché for trade and industry at the Indonesian Embassy in Washington. She said no American law firm had been formally retained yet to help in a third case, involving horticultural and animal products.

Mr. Layton, a lawyer in the Washington office of Mayer Brown, said that since 2010 he had led a team from the firm in the clove cigarette dispute. He said Matthew McConkey, another lawyer in the firm’s Washington office, had taken the lead on the shrimp issue until the United States dropped its claims in August. Both cases were underway a year ago when the Australians reported that their surveillance included an American law firm. Mr. Layton said that if his emails and calls with Indonesian officials had been monitored, the spies would have been bored. “None of this stuff is very sexy,” he said. “It’s just run of the mill.”

Most attorney-client conversations do not get special protections under American law from N.S.A. eavesdropping. Amid growing concerns about surveillance and hacking, the American Bar Association in 2012 revised its ethics rules to explicitly require lawyers to “make reasonable efforts” to protect confidential information from unauthorized disclosure to outsiders.Last year, the Supreme Court, in a 5-to-4 decision, rebuffed a legal challenge to a 2008 law allowing warrantless wiretapping that was brought in part by lawyers with foreign clients they believed were likely targets of N.S.A. monitoring. The lawyers contended that the law raised risks that required them to take costly measures, like traveling overseas to meet clients, to protect sensitive communications. But the Supreme Court dismissed their fears as “speculative.” Maybe it is not so speculative anymore.

LA Officials Say “Obscenely Ridiculous” Employment Law Will Cost $26 Million Payout for No-Nap Rule

Los .Angeles. officials wanted to make absolutely sure the city’s trash truck drivers would not get caught sleeping in their trucks – a sight sure to enrage taxpayers or possibly attract a TV news camera. So they laid down a set of break time rules prohibiting naps and placing other restrictions on where and how drivers could have lunch. But the Los Angeles Times reports these rules have the city facing a $26-million legal payout, most of it for more than 1,000 trash truck drivers who said they were improperly barred from catching a few winks during their 30-minute meal breaks. The City Council, meeting behind closed doors, moved ahead Wednesday with the payout, designed to end an 8-year-old class-action lawsuit. The drivers would receive an average of $15,000 each in back pay, according to Matthew Taylor, their attorney. He argued that they effectively were required to remain “on duty” – but not paid – during nine years of meal breaks.

Taylor said the no-napping rule created dangers on the road involving heavy city garbage rigs. “It’s a hazard to the public if you have commercial truck drivers who are fatigued and are not allowed to take a nap during their breaks,” he said. In addition to banning naps, the Bureau of Sanitation also prohibited drivers from congregating in large groups or traveling to locations away from their pickup routes during lunch breaks. Those rules were abandoned last summer.

City lawyers warned council members that they might have to pay as much as $40 million if the court battle over the drivers’ work rules continued. A Superior Court judge and a state appeals court panel have already sided with the drivers. “The city does impose duties during meal periods: the duties to stay awake and to avoid congregating,” trial court Judge John Shepard Wiley Jr. ruled in 2011. “The drivers are thus subject to the city’s control during their meal periods.”

Some lawmakers expressed outrage at the rulings, saying the work rules had a legitimate purpose. “I just am appalled that a court can take it upon themselves to assert that we have to retroactively pay [workers] for lunch breaks that were in fact taken by our employees,” said Councilman Paul Krekorian, who added that the city’s unions signed off on the work rules. Krekorian, who heads the council’s Budget and Finance Committee, would not discuss Wednesday’s closed-session deliberations. But three other officials familiar with the lawsuit, who asked to remain anonymous because they were discussing a confidential legal matter, told The Times the council voted to go ahead with the $26-million settlement. Those sources said the only opposing votes were cast by council members Joe Buscaino and Mitchell Englander. Both declined to comment.

City officials said the contested work rules were intended to guard the public image of the trash collection service and enhance safety. By limiting the number of workers who could gather in one spot for a meal, the city kept large numbers of oversized trash trucks from being parked together in a single neighborhood or in restaurant parking lots, said Enrique Zaldivar, who runs the sanitation bureau. The no-sleeping rule, Zaldivar said, was imposed to ensure members of the public would not see trash truck drivers asleep in or near their vehicles.”It’s impossible for the general public to know whether a driver is on duty or not while sleeping, he said. “So we felt it was prudent to not have any sleeping occur when the driver is in public view, or during any time that could be construed as on duty.”

The work rule dispute dates back to 2006, when trash truck driver Jose Gravina filed a lawsuit alleging he was routinely denied meal breaks owed after five hours of work. Gravina had been disciplined for napping during his meal break, his lawyer said. Gravina’s case received class-action status in 2011, the year he retired. After losing at the trial court level, city lawyers appealed, arguing state meal break regulations do not apply to employees of cities like Los Angeles, which operate under voter-approved charters. An appeals court also sided with the drivers, saying issues of vehicle and public safety trumped any local governance concerns. Councilman Mike Bonin called the court rulings in the case “obscenely ridiculous,” saying the image of a city employee in uniform in a city vehicle sleeping would be “an affront” to his constituents. Krekorian said the public would also draw the wrong conclusions upon seeing multiple trash trucks parked outside a restaurant. “It looks as though they’re not tending to their duties,” he said.

Final IMR and IBR Regulations Now In Effect

The Office of Administrative Law approved the new Independent Medical Review (IMR) and Independent Bill Review ( IBR) regulations . Both sets of regulations were filed with the Secretary of State on February 1 2 , 2014 and are effective immediately . Prior to March 1, 2014, any version of the IMR Application form adopted by the Administrative Director under section 9792. 10.2 may still be used.

The final IMR regulations include revisions to the IMR application form and improved instructions .Clarification that IMR determination cannot be based solely on information provided by a UR determination . And provisions for penalties to be assessed against a claims administrator for failure to timely produce medical records

The final IBR regulations include revisions to the forms used by providers to request a second bill review and IBR . Limitations on the consolidation of separate IBR requests to 20 requests . Required index of supporting documentation . And updated versions of the Electronic Medical Billing and Payment Companion Guide a s well as the California Division of Workers’ Compensation Medical Billing and Payment Guide ..

Stress From Claims Process Makes Injuries Worse

People injured in an accident or at work sometimes file for monetary compensation, and according to some studies those who file tend to have worse long-term health than those who do not. A new survey of Australian accident victims found that claims stress often comes from confusion about the process, delays and related medical assessments. Those who were most stressed by filing a claim tended to have higher levels of disability years later.

According to the article in Reuters Health, study author David M. Studdert of Stanford University in California said past studies have compared people who filed for compensation to people who did not, but those groups might have different types of injuries to begin with. Another aspect to consider is that people who file claims have an incentive to exaggerate their symptoms to receive more compensation for longer. “The novelty of this study was to look within a group of claimants to test whether those who reported experiencing the most stress also had the slowest recoveries,” Studdert said. “They did.”

He and his colleagues polled a random selection of more than 1,000 patients hospitalized in Australia for injuries between 2004 and 2006. Six years later, 332 of the patients who had filed for workers’ compensation or another accident claim told the researchers how stressful the process had been. Claims can take four to five years to conclude, Studdert noted. A third of the claimants reported high stress from understanding the claims process and another third were stressed by delays in that process. A slightly smaller proportion said repeated medical evaluations and concern for the amount of money they would receive were sources of stress.\Negative attitudes from doctors, friends, family or colleagues, on the other hand, did not seem to be common sources of stress.

People with the most stress tended to score higher on a disability scale and have higher levels of anxiety and depression and lower quality of life, the researchers reported in JAMA Psychiatry. “While it’s intuitive that the compensation process is going to be stressful for some claimants, what is less clear is whether that stress has a substantial impact on recovery many years after the injury,” Studdert said. “We were surprised by the size of the compensation effects on outcomes like level of disability and quality of life – they were fairly strong,” he told Reuters Health.

“There is much debate at the moment about the role of ‘systems,’ in this case ‘compensation systems’ on health outcomes,” said Michele Sterling, who studies injuries and rehabilitation at the University of Queensland in Herston, Australia. She was not involved with the current study. “If it can be established which parts of the process cause stress and/or poor outcomes or recovery then the system could look at targeting these specific areas and improve them,” Sterling told Reuters Health. “Some insurance regulators are already trying to do this in some areas.” This study deals with severe injuries that require hospitalization, and her own research focuses on more minor injuries, she noted, but the relationship between stress and health is likely the same, she said. She has found that posttraumatic stress symptoms predict poor recovery, and that could be worsened by stresses in the claims system, she said.

“Our study joins many others that show the rate of mental health problems among people who are injured is astonishingly high,” he said, adding that medical systems are excellent at treating physical injuries but not as good at treating mental conditions Studdert said. “I think the point that needs to be made is that those managing these systems, insurers or workers’ compensation boards, or no fault automobile compensation schemes, should realize that they are undermining their own mission of getting workers back on their feet if the process is unnecessarily stressful,” said Katherine Lippel, who studies occupational health and safety law at the University of Ottawa in Ontario, Canada and was not involved in the study. The authors suggest that compensation schemes could be redesigned to get the process over with quicker and make it easier for patients to understand, which could alleviate some sources of stress.

Studies such as this one may be a basis to seek apportionment of permanent disability based upon causation. New Labor Code sections 4663, subdivision (a) and 4664, subdivision (a) eliminate the bar against apportionment based on pathology and asymptomatic causes. Thus, under the post SB 899 workers’ compensation system, apportionment of permanent disability shall be based on causation (§ 4663, subd. (a)), and the employer shall only be liable for the percentage of permanent disability directly caused by the injury arising out of and occurring in the course of employment. Creative trial work coupled with a comprehensive forensic presentation may accomplish a persuasive argument to apportion away the effects of stress from the disability after a physical industrial injury.

No Jurisdiction in Federal Court Over Subrogation Money

A federal judge has ruled he is without authority to decide whether Sacramento County should continue workers’ compensation payments to a former sheriff’s deputy who survived a 2005 helicopter crash that killed two other deputies.

According to the report in the Sacramento Bee, U.S. District Judge Morrison C. England Jr. threw out Eric Henrikson’s lawsuit that claimed the county is not entitled to offset his $26 million recovery from the helicopter’s manufacturer against his workers’ compensation. England ruled that Henrikson “has identified no basis for this court’s jurisdiction over this matter.” Henrikson’s arguments against the county’s third party credit rights, including a contention that the county waived those rights because it paid the benefits for five years before stopping last year, “are issues that must be addressed” by the California Workers’ Compensation Appeals Board, the judge said. Contrary to an argument by Henrikson’s lawyers, the judge also ruled that there is nothing in the documents memorializing Henrikson’s settlement with Turbomeca S.A., the French company that manufactured the helicopter’s engine, obligating the county to continue workers’ compensation payments. Henrikson’s lawyers argued that the county waived its credit rights when it agreed to forgo a claim for part of the Turbomeca settlement money.Not so, said Judge England. “The waiver is utterly silent with regard to any impact on separate workers’ compensation proceedings,” he wrote in a 12-page order.

Turbomeca has never publicly admitted liability, but it settled two lawsuits accusing it of supplying a defective part that caused the helicopter to slam into a hillside near Lake Natoma on July 13, 2005. The company settled with the families of Joseph Kievernagel and Kevin Blount, the deputies who died in the crash, and with Henrikson. The settlement bars the parties and lawyers from publicly discussing its terms, and the amount of money received by the families of the deceased deputies has never been revealed. The amount Henrikson received was disclosed as a result of his suit against the county. Turbomeca also paid Sacramento County $1.5 million to resolve its suit over various damages alleged to have resulted from the crash.

The incident ended Henrikson’s career in law enforcement. He was 28 at the time and had been with the Sheriff’s Department eight years. He had collected $2 million in workers’ compensation before the county pulled the plug in May on the monthly payments and medical coverage. Kievernagel and Blount were 36 and 29, respectively, when they perished in the crash.

$1 Billion in Cuts to California Courts Leaves System on Life Support

The Bee reports that Sacramento County Superior Court has swallowed a 23 percent budget cut over the last five years. With 230 of 800 employees gone, the pain is acute in every aspect of court operations. Twenty-five court counter windows have closed. Courts remain open, but the wheels of justice grind so slowly that a lot of people have given up. Statewide, civil filings dropped 43 percent over three years ending in fiscal 2011-12. “Access to justice has been hurt badly, and it affects everybody in the community,” said Robert Hight, the court’s presiding judge. In Sacramento, the queue at family court can take seven hours. Small-claims courts are on life support, if they operate at all. And getting a trial date is not a guarantee there will be a courtroom available that day. Some local trials have been continued to a later date multiple times, for months at a time.

The cuts hurt companies large and small, say business advocates. A worker who needs a restraining order but fails to make it to the front of the line will have to go back another day. The attorney whose trial was bumped will have to prepare for trial all over again. “I think some people are giving up,” Hight said. Couples frustrated with family court split and don’t file, he said. And some business owners resolve disputes outside the court system. They pay for private alternative dispute-resolution services instead of using the tax-supported justice system.

As stated in a 2009 New York Times editorial, “[A]t some point, slashing state court financing jeopardizes something beyond basic fairness, public safety, and even the rule of law. It weakens democracy itself.” Since 2009 when this editorial was published, California trial courts have lost nearly three-quarters of a billion dollars in State General Fund support.

California has the largest judicial system of any state, but it has suffered the deepest financial reduction of any state, according to a new report on the state of the judiciary in Sacramento County. Statewide, the judicial branch has undergone $1 billion in cuts over the last six years. Fifty-one courthouses and 205 courtrooms have closed. After five years of court cuts, there is no fat left in the system. “People lose faith and feel it is no longer open to them,” said Tani Cantil-Sakauye, chief justice of the California Supreme Court. “It’s a nefarious way to deny people their rights.”

Because the federal Constitution gives priority to criminal cases, state budget cuts have disproportionately affected civil courts where most business cases are filed. A 10 percent cut in court funding translates to a 40 to 50 percent cut in access to justice in civil cases because that’s the only place to cut, said Nancy Drabble, executive director of the California Consumer Attorneys Association. This of course has an adverse effect on Workers’ Compensation subrogation efforts. Delays affect both employees and employers, said Allen Zaremberg, president and CEO of the California Chamber of Commerce.

Gov. Jerry Brown’s proposed state budget includes $100 million for trial court operations and $5 million to support the state judiciary. Cantil-Sakauye, chief justice of the California Supreme Court

Analysts Predict Obamacare Caused Comp Treatment Delays

Though parts of the Affordable Care Act have been in place since 2010, key reforms began on January 1, 2014. According to industry experts quoted in a Claims Journal article,,the ACA won’t affect the medical bill payment process; however, insurers will likely see an increase in the cost of medical care for auto accident patients, more subrogation liens from health insurers and the potential for delayed treatment in workers’ compensation claims.

According to a Travelers white paper, The ACA and its Potential Impact on the P/C Industry, some key ACA components expected to affect the P/C industry include:a 15 percent increase in demand for a fixed supply of healthcare services. A potential increase in costs in pharmacy and durable medical equipment (DME) taxes and assessments by 1.5 percent and 2.3 percent respectively. Enhanced electronic record keeping and sharing of medical data among providers.

Michele Hibbert-Iacobacci, vice president of information management and support for San Diego-based Mitchell International, has been with the company since 1994, since they acquired the property/casualty bill review company that she worked for at that time. She described Mitchell’s general predictions for the ACA’s impact on property/casualty lines and workers’ compensation in 2014. “We don’t see any changes in the way bills are paid. However, because of the extensive amount of population predicted that would be joining the health care system that didn’t have it before, it could impede patients from getting care as quickly as they do today,” said Hibbert-Iacobacci, emphasizing that for auto injuries, in particular, patients will flock to emergency rooms because they won’t be able to get in to see their primary care physician.

Another prediction, according to the Mitchell exec, is that subrogation is going to become an even bigger deal as more patients become insured. “Today, if you and I get in an automobile accident, we may go to the emergency room, if we have insurance, and usually we get referred to our primary care to start directing our care. They’re being paid by the healthcare [carrier], but the healthcare [carrier] is not going to tolerate that for a very long period of time. They’re going to want their money from the property/casualty insurer,” said Hibbert-Iacobacci. Auto is particularly vulnerable because there are policy limits for available just for medical expenses. “We will see that in auto, because auto has the money. They’ve got it there in their pocket. They plan on spending it, up to the policy’s limit, if need be, for the patient. It’ll just be more frequent than it ever was before. The carriers need to really have an expectation that their process of subrogation is going to take more time than it ever did before,”said Hibbert-Ioabacci.
Impact on Workers’ Comp Slow

As far as workers’ compensation, Hibbert-Iacobacci doesn’t think the ACA will have an immediate effect. “In workers’ comp, we do not see an immediate change initially,”she said. During the Casualty Actuarial Society’s (CAS) Ratemaking and Product Management Seminar held last year, Anne M. Petrides, a director and consulting actuary with Towers Watson, noted that greater access to healthcare could lower costs in workers’ compensation if it created a healthier workplace.

Ruth Estrich, chief strategy officer for MedRisk, a company that specializes in return to work treatment programs, thinks the ACA will impact workers’ compensation in two ways. Like Petrides, she said there could be a benefit if injured people turn to their healthcare provider instead of potentially claiming a work injury. On the flip side, Petrides said that if there was a provider shortage or delayed treatment, it could increase costs. Estrich said that if there is a provider shortage, treatment could take longer for the majority of workers’ compensation claimants. “Reducing access to primary physicians could have a significant impact on workers’ comp,” said Estrich. Estrich said that given the choice, primary care physicians will treat regular patients before workers’ compensation claimants. That’s due to the necessary authorization for treatment, fee schedules, litigious nature of those types of claims and the extensive paperwork involved.

Drug Shortages Persist

Despite efforts by the Obama administration to ease shortages of critical drugs, shortfalls have persisted, forcing doctors to resort to rationing in some cases or to scramble for alternatives, a government watchdog agency said on Monday. At the end of the day, this will translate to increases in medical costs for payment systems including workers’ compensation. According to the article in the New York Times, drug shortages have become an all but permanent part of the American medical landscape. The most common shortages are for generic versions of sterile injectable drugs, partly because factories that make them are aging and prone to quality problems, causing temporary closings of production lines or even entire factories. The number of annual shortages – both new and continuing ones – nearly tripled from 2007 to 2012.

The analysis by the United States Government Accountability Office, released Monday, was required by a 2012 law that gave the Food and Drug Administration more power to manage shortages. The watchdog agency was charged with evaluating whether the F.D.A. had improved its response to the problem, among other things. The accountability office concluded that the F.D.A. was preventing many more shortages now than in the past – 154 potential shortages in 2012 compared with just 35 in 2010 – but that the number of shortages has continued to grow.

“We are at a public health crisis when we don’t have the medicines to treat acutely ill patients and we don’t have the basics like intravenous fluids,” said Erin Fox, a drug expert at the University of Utah whose data was used in report. The most acute shortage now is that of basic I.V. fluids, she said.

The drug industry rarely spells out the precise reason for a shortage, citing its need to protect competitive trade information. Dr. Douglas C. Throckmorton, a senior F.D.A. official who deals with shortages, said in written testimony released on Monday that 66 percent of production disruptions that led to shortages were caused by quality problems and efforts to fix them.

The 2012 law required that drug companies provide the F.D.A. with a general reason, but Ms. Fox said that it was often not specific enough to understand what was driving the shortage.

Economic factors are also contributing to the shortages. Narrow profit margins are making some drug companies reluctant to invest in fixing old production facilities. Dr. Throckmorton compared aging drug facilities to an old car, which requires significantly more upkeep than a new one. Changes in Medicare reimbursement and the role of group purchasing organizations, which buy drugs on behalf of hospitals, could also be contributing, by further reducing prices.

The F.D.A. said in a statement that it is “committed to the prevention of new drug shortages and the resolution of ongoing drug shortages, which remain a significant public health issue in the United States.”