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DWC Posts Proposed Changes to MPN Regulations

As part of its ongoing efforts to implement Senate Bill 863, the Division of Workers’ Compensation (DWC) has posted proposed changes to the existing Medical Provider Network (MPN) regulations to the online forum where members of the public may review and comment on the proposals. The reform provisions of SB 863 substantially modified the MPN requirements. The modifications include:

  • Expanding the types of entities who may qualify to have an MPN.
  • Establishing an MPN approval period of four years.
  • Allowing any person to submit a complaint against an MPN.
  • Providing a petition process to either revoke or suspend an MPN.
  • Authorizing DWC to conduct reviews of MPN s and assess administrative penalties for violations of statutory and regulatory requirements.

The proposed amendments to the MPN regulations modify regulatory definitions, which include a definition of an entity that provides physician network services. The regulations also detail the changes to MPN operating requirements, which include physician acknowledgments, Internet Web site postings of providers, medical access assistants, quality of care, geocoding and MPN disclosure requirements to medical providers. In addition, the regulations set the requirements for MPN approval for a period of four years and the procedural timelines for MPN re-approval.

Regarding compliance and enforcement, the proposed regulations set forth the process for filing a written complaint against an MPN, and the manner to petition DWC for the suspension or revocation of MPN status. Finally, the regulations detail more enforcement actions, establishing additional grounds for the probation, suspension, or revocation of an MPN, and the procedure by which MPNs are reviewed by the Division and assessed administrative penalties.

The proposed changes to the MPN regulations start with section 9767.1 of title 8 of the California Code of Regulations. The forum can be found online on the D WC website. Comments will be accepted on the forum until 5 p.m. on May 23 . Please feel free to participate in this important process.

Brookdale Inn Owner Pleads No Contest in Fraud Case

The Santa Cruz Sentinel reports that the owner of the Brookdale Inn and Spa pleaded no contest to felony insurance fraud and two misdemeanors related to unpermitted construction and a lack of worker’s compensation insurance. Sanjiv Kakkar, 51, faces less than a year of jail time, a $10,000 fine and restitution to an insurance company when he is sentenced in October. Judge Timothy Volkmann said in court that the sentence might be served through work release or another alternative. Prosecutor Kelly Walker said outside court that the pleas were “appropriate, given the circumstances.”

In 2011, inspectors found disturbed asbestos during a construction project at the Inn. Authorities told Kakkar not to allow anyone in the dining hall. Later that day, Kakkar held a Valentine’s Day luncheon with about 150 senior citizens, prosecutors said. None of the seniors were sickened. Kakkar pleaded guilty to a misdemeanor health and safety code violation for unlawfully operating the dining facility.

Kakkar and his wife, 49-year-old Neelam Kakkar, bought the Brookdale Lodge at 11570 Highway 9 in the summer of 2007 and renamed it. Built in the 1890s, it had hosted Marilyn Monroe and President Herbert Hoover in its heyday. It had 46 hotel rooms, 45 apartments, 30 storage units and a large restaurant and bar.

In 2008, a worker spoke with Sanjiv Kakkar about filing a worker’s compensation claim. But prosecutors said Kakkar dissuaded him from filing the claim. He pleaded no contest to felony insurance fraud related to dissuading the employee. Sanjiv Kakkar also pleaded no contest to felony insurance premium fraud because he paid some employees in cash to reduce the payroll amount he reported to insurers. Sanjiv Kakkar also failed to maintain worker’s compensation insurance, a misdemeanor to which he also pleaded no contest. Neelam Kakkar also had faced charges because she signed her name on some payroll documents, but her charges were dismissed in the plea agreement.

A 2010 civil suit brought by six former employees alleged that Kakkar bounced paychecks, inflicted emotional distress and did not provide rest and meal breaks, according to the civil filing. That case is due back in court July 25 potentially to set a trial date.

Also in 2010, a judge ordered Kakkar to pay $17,000 to the state Department of Fish and Game and other agencies after chemicals used to unclog a kitchen pipe killed about 50 endangered steelhead trout.

In 2009, a fire destroyed 20 apartments and displaced 65 people. County officials red-tagged some buildings on the property after the fire, and some remain closed. The Inn has not reopened since the properties were red-tagged.

Court of Appeal Rejects Peace Officer Presumption of Cardiac Injury

The Court of Appeal affirmed the denial of a peace officers presumed industrial disability retirement claim notwithstanding the accepted workers’ compensation claim. Here is what happened in the unpublished opinion of Henry Kirk v Retirement Board of of the City and County of San Francisco

Henry Kirk was a police officer for the San Francisco Police Department from 1975 until his retirement in June 2008 due to his heart-related physical impairment. His heart trouble appears to have surfaced in the 1980s, when he began to notice rapid heart beating and other symptoms, first, when exercising in 1983, and, next, when he passed out while driving a police vehicle in pursuit of a suspect in 1983 or 1984.

He was diagnosed with paroxysmal supraventricular tachycardia (PSVT) in 1990, high blood pressure in 1994, hypertensive cardiovascular disease and possible cardiomyopathy in 1997. In 1998 he was evaluated for his worker’s compensation claim. The evaluator determined that since the cardiomyopathy developed during the years he was a police officer, he qualified for workers’ compensation benefits under the “California Presumption Statute.” His treating physician however continued to express doubts about the diagnosis of cardiomyopathy.

On July 28, 2007, Kirk collapsed and lost consciousness while dancing at a private event, suffering a cardiac arrest. After initially receiving emergency medical care that included emergency catheterization, hypothermia treatment and life support, kirk received an implantable cardiac defibrillator. Then, following nearly six months of recuperation, appellant returned to police duty on January 19, 2008.

On January 17, 2008, Kirk was examined by Dr. Robert Blau in connection with his July 2007 workers’ compensation claim. Dr. Blau did not address the link (if any) between Kirk’s heart condition and his police service except to state “[he] has already received acknowledgement of his hypertension and cardiovascular disease being industrial.”

On March 18, 2008, Kirk suffered another cardiac arrest while driving home from work and effectively retired on June 28, 2008. Just before his retirement, on June 10, 2008, Kirk applied for an industrial disability retirement, identifying a “cardiac arrest” in July 2007 as his disabling condition. Dr. Thomas Allems found Kirk unfit to serve as a law enforcement officer in any capacity and thus “appropriately medically retired on a non-service connected basis.” With respect to the underlying cause of his heart trouble, Dr. Allems found it unrelated to his service as a police officer: He said that “[Kirks’s] dilated cardiomyopathy is likely idiopathic in nature; he may have a genetic predisposition. As a result of his cardiomyopathy he has had symptomatic supraventricular and ventricular arrhythmias, dating back to the 1980s, with eventual ventricular arrhythmic arrests on two occasions in July 2007 and March 2008. This sequence of events reflects the natural history of his underlying cardiomyopathy.” After acknowledging that his heart disease had been accepted for workers’ compensation as industrial, Dr. Allems nontheless concluded that “With reasonable medical probability, his cardiomyopathy . . . was unrelated to any factors of his employment as a San Francisco police officer. His heart pathology would have occurred at the same time (becoming symptomatic shortly after his employment began) and progressed at the same rate and requested the same degree of medical treatment absent his being employed as a peace officer.”

His industrial disability retirement was denied after an arbitrator adopted the conclusion of Dr. Allems. The City of San Franciso adopted the arbitrators award and Kirk appealed.

The Court of Appeal in the unpublished opinion of Henry Kirk v Retirement Board of of the City and County of San Francisco affirmed the denial of his disability retirement claim. The task on appeal was to determine whether the trial court’s judgment is supported by substantial evidence. Contrary evidence developed in his workers’ compensation claim does not require reversal, particularly in light of the great deference accorded lower court findings in writ. proceedings. The Court of Appeal concluded that Dr. Allems did more than simply point out the lack of evidence that the applicant’s condition was industrial. Dr. Allems provided factually-supported medical opinions demonstrating the non-industrial nature and non-industrial progression of appellant’s condition, thereby successfully rebutting the applicable presumption

Backlash Begins Over DSM-V

The new Fifth edition of the Diagnostic and Statistical Manual of Mental Disorders, or DSM-V, will be published this month. Evaluations under California Workers’ Compensation law must be performed in accordance with the latest edition of this Manual. And according to a story published in the Guardian, pushback from the mental health community over this new edition has already begun.

In a groundbreaking move that has already prompted a fierce backlash from psychiatrists, the British Psychological Society’s division of clinical psychology (DCP) issued a statement declaring that, given the lack of evidence, it is time for a “paradigm shift” in how the issues of mental health are understood. The statement effectively casts doubt on psychiatry’s predominantly biomedical model of mental distress – the idea that people are suffering from illnesses that are treatable by doctors using drugs. The DCP said its decision to speak out “reflects fundamental concerns about the development, personal impact and core assumptions of the (diagnosis) systems”, used by psychiatry.

Dr Lucy Johnstone, a consultant clinical psychologist who helped draw up the DCP’s statement, said it was unhelpful to see mental health issues as illnesses with biological causes. “On the contrary, there is now overwhelming evidence that people break down as a result of a complex mix of social and psychological circumstances – bereavement and loss, poverty and discrimination, trauma and abuse,” Johnstone said.

The provocative statement by the DCP has been timed to come out shortly before the release of DSM-5, the fifth edition of the American Psychiatry Association’s Diagnostic and Statistical Manual of Mental Disorders. The manual has been attacked for expanding the range of mental health issues that are classified as disorders. For example, the fifth edition of the book, the first for two decades, will classify manifestations of grief, temper tantrums and worrying about physical ill-health as the mental illnesses of major depressive disorder, disruptive mood dysregulation disorder and somatic symptom disorder, respectively. Some of the manual’s omissions are just as controversial as the manual’s inclusions. The term “Asperger’s disorder” will not appear in the new manual, and instead its symptoms will come under the newly added “autism spectrum disorder”.

The DSM is used in a number of countries to varying degrees. Britain uses an alternative manual, the International Classification of Diseases (ICD) published by the World Health Organization, but the DSM is still hugely influential – and controversial.

But Professor Sir Simon Wessely, a member of the Royal College of Psychiatrists and chair of psychological medicine at King’s College London, said it was wrong to suggest psychiatry was focused only on the biological causes of mental distress. And in an accompanying Observer article he defends the need to create classification systems for mental disorder. “A classification system is like a map,” Wessely explains. “And just as any map is only provisional, ready to be changed as the landscape changes, so does classification.”

Anti-Pro Athlete Bill Amended With Controversial 80-8 Rule

AB 1309 was authored by Insurance Committee Chairman Perea to address abuse of California’s ultra-lenient workman’s comp system. As is, the system lends itself to abuse by allowing former professional athletes to file claims in CA even if their contacts with the state are minimal. During the insurance committee hearing, Assemblywoman Torres noted that an insurance company’s statistics showed that claims paid out to approximately 2% of claimants involved former athletes whose only contact with California was their agents. They had never played for a California team, played a game in California, or even lived in California. But because of the system’s set up, they were somehow able to file a successful claim.

So to close the “loopholes” and prohibit athletes from “taking advantage” of the system, AB 1309 was introduced. AB 1309 will effectively exclude professional athletes from filing workman’s comp claims in the state of California. If passed, it will retroactively wipe out pending claims as well, some that have been in the pipeline for 4-5 years. There are approximately 1,000 pending workman’s comp claims in the state that would be precluded if the bill passes.

The original version of the bill introduced in February would preclude a claim if the athlete played on another pro-team domiciled in another state, unless he played more than 90 days in California within the last 365 days of employment. Critics argued that players like LaDainian Tomlinson, Tim Brown or the late Junior Seau would all be precluded from filing a claim in California because they played on out-of-state teams even though they spent a majority of their career on a California team.

Assemblyman Perea attempted to address these concerns by amending the bill in April to include what is being called the 80-8 rule. The amendment would allow players who played 80% of their career and 8 years on a California team to file a workman’s comp claim even if the last year of the employment was with an out of state employer. The bill language reads “This paragraph shall apply to all occupational disease and cumulative injury claims filed against an employer of professional athletes if the employer is subject to this division, unless the professional athlete was employed for eight or more consecutive years by the same California-based employer pursuant to a contract of hire entered into in California, and 80 percent or more of the professional athlete’s employment as a professional athlete occurred while employed by that California-based employer against whom the claim is filed.

Critics of the amendment point out that the average NFL career is 3.5 years – there are probably a handful of players who will actually play 8 years on one team, let alone 8 years total in the NFL. The duration of most NFL contracts are 1-4 years. These contracts are not guaranteed, and players often move from team to team after being cut or their contracts expire. Thus they say that the 80-8 rule will not help many players who started their career with a California team and moved elsewhere for the remaining years of their limited career.

Liberty Mutual Reports 31% Income Decline

Liberty Mutual reports first-quarter net income fell 31 percent, impacted by the devaluation of Venezuela’s currency and premium declines primarily in Workers’ Compensation.The Boston-based company reports a $141 million drop in net income to $318 million. The combined ratio improved 2.6 points to 98.3 thanks to overall premium increases and light catastrophe losses.

Speaking during a conference call CEO David H. Long notes the company is shedding poorly-performing accounts on rate increases while keeping retentions in the mid-80s and growing new business. He says premium growth came in the personal and global specialty lines where rates rose more than 6 percent.
The devaluation of the Venezuela bolivar in February resulted in $223 million in realized losses, he says. However, he expects much of that loss to reverse itself over the year with the addition of premium.

On Workers’ Comp, net written premium decreased $238 million resulting from a decline in new business and a reduction of 29 percent in exposures resulting from disciplined underwriting. Rate increases of 10 percent partially offset the drop.

Long says the increases were significantly higher in the middle market. Commercial insurance Property and Casualty premium declined 11.6 percent in the quarter because of workers’ comp, and excluding rate increases, exposures declined 18 percent. With the actions the company has taken, he says commercial is becoming more profitable each month. The first-quarter combined ratio for commercial improved 8 points over last year to 101.6.

Long says prices escalated across all lines of business, led by workers’ comp and property, amounting to more than 9.3 points of rate increase compared to 6.6 points of increase during 2012’s first quarter. “We think we are on the right track and we will stick with our plan,” says Long. “We will continue to grow where we can do so profitability and walk-away from underpriced risk.”

Study Says Antibiotics Could Cure 40% of Chronic Back Pain

Surgeons in the UK and elsewhere are reviewing how they treat patients with chronic back pain after scientists discovered that many of the worst cases were due to bacterial infections. The finding means that some patients with unrelenting lower back pain mayl no longer face major operations but can instead be cured with courses of antibiotics. One of the UK’s most eminent spinal surgeons said the discovery was the greatest he had witnessed in his professional life, and that its impact on medicine was worthy of a Nobel prize. “This is vast. We are talking about probably half of all spinal surgery for back pain being replaced by taking antibiotics,” said Peter Hamlyn, a consultant neurological and spinal surgeon at University College London hospital.

Specialists who deal with back pain have long known that infections are sometimes to blame, but these cases were thought to be exceptional. That thinking has been overturned by scientists at the University of Southern Denmark who found that 20% to 40% of chronic lower back pain was caused by bacterial infections.

“This will not help people with normal back pain, those with acute, or sub-acute pain – only those with chronic lower back pain,” Dr Hanne Albert, of the Danish research team, told the Guardian. “These are people who live a life on the edge because they are so handicapped with pain. We are returning them to a form of normality they would never have expected.”

The Danish team describe their work in two papers published in the European Spine Journal. In the first report, they explain how bacterial infections inside slipped discs can cause painful inflammation and tiny fractures in the surrounding vertebrae. Working with doctors in Birmingham, the Danish team examined tissue removed from patients for signs of infection. Nearly half tested positive, and of these, more than 80% carried bugs called Propionibacterium acnes. The microbes are better known for causing acne. They lurk around hair roots and in the crevices in our teeth, but can get into the bloodstream during tooth brushing. Normally they cause no harm, but the situation may change when a person suffers a slipped disc. To heal the damage, the body grows small blood vessels into the disc. Rather than helping, though, they ferry bacteria inside, where they grow and cause serious inflammation and damage to neighboring vertebrae that shows up on an MRI scan.

In the second paper, the scientists proved they could cure chronic back pain with a 100-day course of antibiotics. In a randomized trial, the drugs reduced pain in 80% of patients who had suffered for more than six months and had signs of damaged vertebra under MRI scans.

Albert stressed that antibiotics would not work for all back pain. Over-use of the drugs could lead to more antibiotic-resistant bacteria, which are already a major problem in hospitals. But she also warned that many patients will be having ineffective surgery instead of antibiotics that could alleviate their pain.”We have to spread the word to the public, and to educate the clinicians, so the right people get the right treatment, and in five years’ time are not having unnecessary surgery,” she said.

Hamlyn said future research should aim to increase the number of patients that respond to antibiotics, and speed up the time it takes them to feel an improvement, perhaps by using more targeted drugs.

Many medical guidelines don’t consider costs

Medical treatment under the California workers’ compensation system must be based upon evidence based medicine, that is, treatment that is recommended in published peer reviewed treatment guidelines. But, a new study shows how those guidelines may not consider costs as part of the equation.

According to the article in Reuters Health, researchers found that just over half of the top medical societies with at least 10,000 members considered costs when developing best practices. The other half either implicitly considered costs or didn’t address them at all.

“Even when they said they looked at costs, they didn’t seem to have a clear, consistent or rigorous way to do so,” said Dr. Steven Pearson, the study’s senior author and a visiting scientist in the Department of Bioethics at the National Institutes of Health in Bethesda, Maryland. Pearson and his colleague Dr. Jennifer Schwartz write in JAMA Internal Medicine that while a lot of debate has focused on the cost of healthcare in the U.S., few researchers have looked at whether professional societies develop their treatment recommendations with costs in mind.

Clinical guidelines are often crafted by professional medical societies to help doctors decide which therapies are best for certain conditions. But saying a treatment is not worth the cost may spark fears of care rationing. “It’s obviously very controversial about when costs should be included in the discussion of healthcare,” Pearson said.

But the professional practice recommendations may factor into reimbursement policies among organizations that pay for treatment, like the Centers for Medicare and Medicaid Services.

For the new study, the researchers examined the publicly available clinical guidelines issued by the 30 largest U.S. medical societies between 2008 and 2012 to see which ones discussed costs. More than half – 17 of the 30 societies – explicitly included costs in their discussion of clinical guidelines, four at least implicitly considered costs, three purposely excluded costs and six did not mention prices. The researchers then examined the 279 guidelines published by the 17 societies that included costs in their decisions. Based on that review, they found nine had a formal evaluation system for costs. The other eight societies had several methods to evaluate costs or didn’t mention their process. “I think it’s encouraging the societies are now starting to include costs into their guidelines. And when they decide not to, I think it’s important to be transparent about that,” said Schwartz, a research fellow in the NIH Department of Bioethics.

Dr. Joseph Drozda, from the Center for Innovative Care at Mercy in Chesterfield, Missouri, said he believes more and more societies will be including cost analyses in their guidelines. “(The researchers) caught it on the upslope so I think we’re going to see more attention to cost in guidelines,” said Drozda, the chair of the American College of Cardiology Foundation’s Clinical Quality Committee who wrote a commentary accompanying the new study. “I think clearly there is – over time – more of an interest in incorporating cost issues into guidelines,” said Dr. Steven Weinberger, executive vice president and CEO of the American College of Physicians in Philadelphia. “What a lot of organizations are doing – and certainly what we’re doing – is recognizing that there are so many areas of overuse and misuse of care,” said Weinberger, who has written about cost-conscious care but was not involved in the new research. He added that the discussion of costs in healthcare is not about rationing, but finding which treatments offer the best value. “I would really like to see a much more open dialogue between physicians and patients about costs,” Weinberger said.

Medical-Legal Lien Claimants Cannot Avoid Activation Fees

A new WCAB en banc decision in the case of Luis Martinez vs Ana Terrazas held that a medical-legal lien claimant cannot avoid the lien activation fee by pursuing their fees as “costs” under Labor Code 5811.

On April 18, 2011, applicant Luis Martinez resolved his claim against Ana Terrazas and Allstate Insurance Company by compromise and release. On August 8, 2011, New Age filed a lien for copying and related expenses. The billings submitted with the lien show that the expenses claimed were for subpoenaing and copying various records at the request of applicant’s attorney, namely: (1) the records of applicant’s employer on September 28, 2009, (2) the records of Dr. Zaragaff on October 12, 2009, (3) the records of the U.S.C. Medical Center on September 21, 2009, (4) the records of the Law Office of Lionel Quiroz on September 16, 2009, (5) the records of the WCIRB on July 26, 2010,3 and (6) the records of Specialty Risk Services (defendant’s claims administrator) on June 16, 2011.

After January 1, 2013, the effective date of Senate Bill 863 but prior to any lien proceedings, New Age withdrew its lien and in lieu of it filed a petition for costs under Labor Code section 5811 for the same expenses it previously sought to recover by its lien, apparently in an attempt to avoid payment of a lien activation fee under section 4903.06. The WCJ denied the petition for costs, determining that New Age could not “abrogate” its obligation to pay the lien activation fee. New Age appealed.

The WCAB in the en banc decision held that section 5811 “costs” do not include costs and expenses that are governed by other specific statutory schemes. The Legislature has established an extensive statutory scheme for claimed medical-legal expenses. In light of the specific statutory framework established by the Legislature for pursuing claims of medical-legal expenses, the WCAB concluded that medical-legal expenses cannot be sought through the filing of a petition for costs under section 5811. “[I]t would be an abuse of discretion to permit medical-legal expenses to be claimed under section 5811.”

“However, given the uncertainty in the law when New Age withdrew its lien and given that its lien was never formally dismissed, we will deem its lien reinstated. This reinstatement principle shall be applied to lien claimants in other cases who withdrew their liens and filed petitions for costs on or before the issuance date of this decision, if their liens have not been dismissed.”

The WCAB went on to note that although “the case presently before us relates to copy service expenses claimed through a medical-legal lien filed before January 1, 2013 under former section 4903(b), we emphasize that this holding applies to all medical-legal expense claims, regardless of: (1) whether a pre-January 1, 2013 lien was filed; (2) when the claimed medical-legal expenses might have been incurred; or (3) the nature of the medical-legal expenses claimed.”

Employers Names Bradley Hatfield as Vice President of Underwriting

EMPLOYERS® has named Bradley N. Hatfield vice president of underwriting for Strategic Partnerships and Alliances. With more than 25 years of experience in the insurance industry, he brings to EMPLOYERS underwriting and risk management experience from various regional and corporate roles throughout his career. Hatfield’s experience in insurance management, workers’ compensation, strategic planning and implementation, and a diverse background in underwriting, marketing, loss control, product development and project management are just some of the assets that he will bring to EMPLOYERS. He will be based out of EMPLOYERS’ office in Glendale, California.

Hatfield joins EMPLOYERS from National Specialty Underwriters of Bellevue, Wash. where he was responsible for the creation and growth of medical professional liability underwriting programs at NSU, and helped develop three programs: small medical facility and allied healthcare binding authority; diagnostic imaging; and correctional medicine.

Employers Holdings, Inc. is headquartered in Reno, Nevada and listed on the New York Stock Exchange. EMPLOYERS is a holding company with subsidiaries that are specialty providers of workers’ compensation insurance and services focused on select small businesses engaged in low-to-medium hazard industries. The company, through its subsidiaries, operates coast to coast. Insurance is offered by Employers Insurance Company of Nevada, Employers Compensation Insurance Company, Employers Preferred Insurance Company, and Employers Assurance Company, all rated A- (Excellent) by A.M. Best Company.