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WCAB Imposes 5814 Penalties and Attorney Fees for Following “Unreasonable” UR Determination.

Adel Salem sustained an industrial injury to his back and neck in 1978, while employed as a Deputy Sheriff by the County of Riverside. In 1981, he received an award of 45% permanent disability pursuant to Stipulations with Request for Award, together with an award of further medical treatment . Applicant has had four back surgeries between 1981 and 2002. He claimed that the defendant had “suddenly stopped approving all prescribed medications for Mr. Salem in August 2011.” At the time he was under the treatment of Dr. Watkin. and was taking approximately four Norco per day. Watkin reported that it was “inappropriate to just take a person off Norco abruptly.”

The non-certification of continued pain medication refills was explained by the UR physician as follows: “Ongoing and chronic use of a narcotic analgesic is not medically supported for this patient. The patient is essentially at maximum medical improvement and has received benefit from recent cervical epidurals. Given that the patient has had 65-70% improvement following cervical epidurals, there is no ongoing significant pain for which a narcotic analgesic would be necessary. Chronic and long-tern use of narcotic analgesics should be avoided in the chronic phase of treatment given the potential for abuse/addiction. The medical records do not establish moderate to severe pain for which ongoing use of hydrocodone/APAP would be indicated. Therefore, my recommendation is to retrospectively non-certify the request for hydrocodone/acetaminophen.”

Applicant filed a petition for penalties in 2013, alleging that defendant unreasonably denied medical treatment awarded under the 1981 stipulated award, by terminating his long standing prescription for pain medication to treat his ongoing pain symptoms. The workers’ compensation administrative law judge denied applicant’s petition for a penalty pursuant to Labor Code section 5814, finding applicant did not establish that defendant unreasonably delayed or denied his medical treatment by withdrawing authorization for applicant’s narcotic medication, as defendant established a good faith medical dispute based upon its reliance on its Utilization Review (UR) process.

The WCAB granted reconsideration and reversed in the panel decision of Adel Salem v County of Riverside.

The WCAB noted that applicant “has established that defendant delayed the provision of his medical treatment, thus the burden shifts to defendant to establish it had genuine doubt from a medical or legal standpoint to justify its abrupt termination of applicant’s prescribed medication. Defendant has not met this burden.” Applicant had been prescribed pain medication for many years, when defendant decided to seek utilization review of Dr. Roach’s prescription refill for the first time. The UR physician’s non- certification of applicant’s medications did not justify defendant’s abrupt termination, and thus the UR physician’s medical opinion does not constitute substantial evidence upon which defendant could rely to establish a genuine doubt. The MTUS expressly recommends “a slow taper” of opioid medications, which would encompass applicant’s prescription for Norco. “Thus, the record does not contain any evidence to support defendant’s denial of authorization of applicant’s prescriptions for pain medications, and in fact the applicable MTUS standards actually recommended against defendant’s immediate termination of refills. Defendant could not reasonably rely upon the UR physician’s report as a basis to immediately terminate applicant’s prescriptions. Thus, there is no evidence to support a finding that defendant had a genuine doubt from a medical or legal standpoint as to its liability for the continued provision of the narcotic medication prescribed by applicant’s primary treating physician.”

Moreover, as these proceedings were brought to enforce the prior award of medical treatment, the WCAB ruled that applicant’s attorney is entitled to payment of a reasonable attorney’s fee pursuant to Labor Code section 5814.5.

Commissioner Deidra Lowe dissented and indicated she would affirm the WCJ’s determination that the UR de-certification of narcotic prescriptions provided defendant with a genuine doubt as to its liability to continue to authorize the medications.

Study Says Minimally Invasive Spine Fusions Have Better Outcomes

Department of Neurosurgery, Oakland University William Beaumont School of Medicine findings published in the February online issue of Spine shows that patients who have a low back surgery called minimally invasive transforaminal lumbar interbody fusion (MITLIF), end up better off in many ways than patients who have more invasive surgery to alleviate debilitating pain.

Lumbar fusion serves to eliminate abnormal motion and instability while maintaining load-bearing capacity and proper alignment to provide symptomatic treatment for spinal instability, stenosis, spondylolisthesis, and symptomatic degenerative disc disease.1 During the past few decades there has been a dramatic increase in the rates of lumbar fusion procedures in the United States.

For many surgical procedures, the method of choice is shifting from traditional open surgery to minimally invasive techniques. Postoperative histological and imaging studies have demonstrated that conventional open techniques are associated with increased scar tissue formation, significant muscle stripping, and muscle retraction which adversely affect outcomes, and increase reoperation rates. Minimally invasive techniques are performed via a muscle-dilating approach that helps to preserve paraspinal muscular anatomy and bone architecture, and have been shown to diminish iatrogenic soft-tissue injury significantly. Reasons for widespread transition to minimally invasive spine (MIS) techniques include decreased postoperative pain, decreased intraoperative blood loss, shorter postoperative hospital stay, faster return to normal activity, and reduced reoperation rates.

Use of minimally invasive fusion techniques in lieu of traditional open fusion techniques remains a crucible of debate as long-term prospective outcomes in patients undergoing minimally invasive spinal fusion for debilitating back pain has not been well studied. This study was designed to contribute evidence to this debate by reporting long-term, prospectively collected outcomes on 1 of the largest currently available series of minimally invasive transforaminal lumbar interbody fusion (MITLIF) with a minimum follow-up of 24 months, and to determine if adjacent level pathology (ALP) is reduced by preservation of the normal anatomical integrity of the spin

The Beaumont study, led by Dr. Perez-Cruet, found that minimally invasive procedures with smaller incisions can reduce chronic low back pain, hospital stays, complications and scarring. It also can lower costs and infection rates compared with more invasive, open procedures. The seven-year study looked at 304 patients who received the minimally invasive procedure. There were 120 men and 184 women with a mean age of 62.4 years, ranging from 19 to 93 years.

The article concluded that the “MITLIF approach seems to provide both short- and long-term statistically significant outcome improvements in patients experiencing debilitating low back pain. In addition, long-term benefits observed in this study include a reduced rate of adjacent segment disease requiring reoperation while providing high rates of fusion and a low rate of complications. From a clinical prospective these patients show an extremely high rate of satisfaction in the treatment of their chronic back pain disorders. In fact, the majority of these patients are completely pain free and have returned to work or activities of daily living full time. The MITLIF procedure is a highly cost-effective approach for addressing a costly and debilitating medical condition.”

Paso Robles Contractor Arrested

A Paso Robles man was arrested for allegedly failing to correctly report his employee payroll to the State Compensation Insurance Fund. Jay Scott Silva, 53, owner of Drywall Dynamics, was arrested last month by the San Luis Obispo County District Attorney’s Office and booked into the county jail on two felony counts of workers’ compensation insurance fraud.

The California Department of Insurance began its investigation after the Carpenters/Contractors Cooperation Committee notified the department’s Fraud Division of Silva’s improper conduct regarding employee wages. Department investigators determined Silva was incorrectly reporting employee payroll, which reduced his rate of paid premium by $67,000.

“Workers’ compensation premium fraud hurts hard working men and women trying to make a living and feed their families,” said David Kersh, Executive Director of the Carpenters/Contractors Cooperation Committee. “It hurts honest employers that play by the rules and want to create good paying employment opportunities in our communities. In addition to the issue of premium fraud, Drywall Dynamics had also cheated its workers out of hundreds of thousands of dollars in wages. We applaud the work done by the Department of Insurance in cracking down on construction contractors that break the law.”

If convicted Silva faces a maximum of five years in jail, possible fines and full restitution. Bail was set at $30,000.

Governor Brown Signs Time Extension for Death Benefits

Governor Brown has now signed AB 1035 into law. The new law provides an extension for dependents of deceased firefighters and peace officers to file for workers’ compensation death benefits who died from cancer; tuberculosis; Methicillin-resistant staphylococcus aureus (MRSA) skin infections; or bloodborne infectious disease. This extension is for up to 420 weeks from the date of injury, or slightly more than 8 years, but in no case more than one year from the date of death. This extension will sunset on January 1, 2019. This bill further declares the need for the Administrative Director of the Division of Workers’ Compensation (DWC) to study mortality rates prior to extending or allowing the extension to sunset.

Governor Brown issued the following statement as he signed the new law. “Last year, in vetoing AB 1373, I expressed concern in enacting legislation prior to the availability of more research and fiscal data on the risks of death from cancer and other job related diseases on firefighters. The results of the National Institute for Occupational Safety and Health study on mortality and cancer incidence on US firefighters are now available for review and provide better data on the fiscal impacts of this bill. Importantly, a review of this data anticipates that fewer than 20 cases a year throughout the state would be affected if the provisions only apply to diseases diagnosed during active service.”

“Therefore, I am signing AB 1035 to extend the time period to file a claim for workers’ compensation benefits from 240 weeks to 420 weeks after date of injury, and to require a claim to be filed within one year after the date of death. The bill has been drafted to apply only if the date of injury is during active service, as defined in Section 5412 of the Labor Code, and also contains a sunset date to allow us to examine additional data collected by the Division of Workers’ Compensation before reauthorizing the statute.”

CWCI Update Study Shows Limited Reduction in Opioid Abuse

Over the past decade, the widespread use of Schedule II and Schedule III opioid analgesics to manage both acute and chronic pain has become a hotly debated issue as the volume of prescriptions for these drugs has grown despite a growing body of evidence linking their long-term use to adverse outcomes, including delayed recoveries, functional impairment, increased sensitivity to pain, addiction, overdoses, and death. This new CWCI study updates earlier analyses that examined utilization and reimbursement trends for Schedule II and Schedule III opioids in California workers’ compensation by reviewing data on prescription drugs dispensed to injured workers through June 2013.

The findings show that in the first half of 2013, Schedule II opioids, which include powerful narcotics such as oxycontin, fentanyl and morphine, have grown to 7.3 percent of California workers’ compensation prescriptions – nearly 6 times the proportion noted in 2002. Over the same period, payments for these drugs have increased from 4.7 percent to 19.6 percent of California workers’ compensation prescription dollars. The data also suggest that the use of Schedule II drugs in workers’ compensation may have stabilized near this record level, as over the most recent 3-1/2 years these drugs have accounted for between 6.5 and 7.3 percent of all prescriptions dispensed to injured workers, while over the most recent 4-1/2 years Schedule II drug payments have represented about 1 out of every 5 dollars paid for workers’ compensation prescriptions in California.

The findings also show that since 2002, less powerful Schedule III opioids – primarily Vicodin or other forms of hydrocodone compounded with a non-steroidal drugs such as acetaminophen -have accounted for a much more consistent share of workers’ compensation prescription drugs, generally representing around 20 percent of all prescriptions dispensed to injured workers and 10 to 11 percent of the overall drug spend. The only exception was a brief dip in both Schedule II and Schedule III prescriptions following the implementation of the 2002-2004 reforms and the adoption of the pharmacy fee schedule, which took effect in January 2004.

The analysis of the prescribing patterns for Schedule II opioid prescriptions reveals that a relatively small percentage of providers continue to account for the vast majority of these prescriptions in California workers’ compensation. In 2010, the top 10 percent of doctors who prescribed Schedule II opioids to California injured workers accounted for 79 percent of all workers’ compensation prescriptions for these drugs and 88 percent of the associated payments. The more recent data from 2012/13 show similar results, as the top 10 percent of the doctors who wrote these prescriptions accounted for 82 percent of the prescriptions and 86 percent of the payments. The prescribing patterns data also found that more than 8 out of 10 physicians who ranked among the top 3 percent of Schedule II opioid prescribers in 2012/13 were also in the top 3 percent in 2010. In addition, as in the earlier study, almost half of all Schedule II prescriptions dispensed to injured workers in the 2012/13 sample were for relatively minor injuries for which the use of these drugs is not supported by evidence-based medicine.

These findings suggest that the widespread publicity about the dangers associated with opioid medications, the public policy efforts to curb the utilization and cost of these drugs through the adoption of chronic pain medical treatment guidelines and the pharmacy fee schedule, and the attempts to tighten controls over the use of Schedule II and III drugs through utilization review have thus far had limited success in reducing system-wide use.

Nationwide Fraud Bust – Eight Caught in LA

The Medicare Fraud Strike Force in six cities charged 90 individuals — 27 doctors, nurses and other medical professionals — for their alleged participation in Medicare fraud schemes involving hundreds of millions. According to the story in Southern California Public Radio, eight of the people charged in Tuesday’s nationwide Medicare fraud crackdown operated in the Los Angeles area, and were responsible for $32 million in fraudulent billing. All told, the government’s Medicare Fraud Strike Force charged 90 health care workers, including doctors and suppliers, for allegedly bilking Medicare out of $260 million. he Medicare Fraud Strike Force charged people in six cities, including Los Angeles. The Strike Force is part of the Health Care Fraud Prevention and Enforcement Action Team, a joint initiative of the Justice Department and the Health and Human Services Department. Among the eight in the Los Angeles area, two are doctors, several run medical supply companies and the rest are marketers, whose job it is to bring Medicare beneficiaries to the doctors. The group is responsible for $32 million in fraudulent payments for equipment that was not necessary and for treatments that were never provided, according to the government.

Below are the individuals charged in California on Tuesday:

1) Robert A. Glazer, doctor at Glazer Medical Clinic in Los Angeles. Glazer allegedly billed for services that were never provided. He also allegedly received kickbacks for signing home health certificates that were not necessary and for prescribing equipment like power wheelchairs that were not needed. Between 2006 and 2014 Glazer was paid $735,000 by Medicare. Medical equipment companies were paid $2.6 million based on Glazer’s false prescriptions and Home Health Agencies received $16.4 million based on Glazer’s prescriptions. Glazer’s office did not return a call seeking comment.
2) Sylvia Ogbenyeanu Walter-Eze, Judith Bongcayoa Estrella and Wilmer David Guzman. Walter-Eze is owner of Ezcore 900, a durable medical equipment company in Valencia. Estrella and Guzman were marketers that brought Medicare patients to Ezcore. Walter-Eze is accused of filing false and fraudulent claims for power wheelchairs and accessories to Medicare. The company received nearly $2 million in payments from Medicare. The phone number for Ezcore 900 was disconnected, and the link to the company’s website is no longer functional.
3) Zoila O’Brien, patient recruiter/marketer for a medical equipment company. According to the court documents, she found Medicare beneficiaries and took them to a doctor for prescriptions they didn’t need and worked with the medical supplier to submit fraudulent claims. The indictment says she received $600 to $700 per beneficiary she found. In total, the court file alleges, the company she worked with was paid 356,000.
4) Eucharia Okeke, owner of Eastern Medical Supply in Inglewood. The indictment alleges she worked with a doctor who wrote fraudulent prescriptions for power wheelchairs. The lawsuit says she would pay marketers and doctors kickbacks for referring Medicare beneficiaries. Okeke’s company received $311,000 in payment. The phone number for Eastern Medical Supply was disconnected.
5) Jason Ling, medical doctor in Spring Valley, near San Diego. He wrote unnecessary prescriptions for Medicare recipients. He was working with Eucharia Okeke (above). His alleged activities resulted in payment of about $311,000 from Medicare. Ling did not return a call seeking comment.
6) Hakop Gambaryan, owner of Colonial Medical Supply in Van Nuys. According to the court documents Gambaryan was paid $1.7 million by Medicare for false and fraudulent claims. Gambaryan did not return calls seeking comment.

Restaurant Owner Gets 6 Years 8 Months Sentence

El Dorado County District Attorney Vern Pierson announced the sentencing of Michael Adams and Brenda Adams, the owners of Poor Reds in Diamond Springs, who failed to report $1,320,400 in taxes and committed insurance fraud.Poor Red’s opened in 1948 and is best known for its signature drink, the Golden Cadillac, a frothy blend of Galliano, half-and-half, white cream de cacao and ice.

Defendant Michael Adams was sentenced to 6 years 8 months in state prison, and ordered to pay $629,818 as restitution for the unpaid taxes and investigation costs. Defendant Brenda Adams was sentenced to a year in county jail, and also ordered to pay $629,818 as restitution for the unpaid taxes and investigation costs. The length of time from plea to sentencing was much longer than had been anticipated, but necessary in order to attempt to obtain transfer of ownership of Poor Reds. The sentence was the result of guilty pleas to 8 felony counts, including insurance fraud, tax evasion and an admission of an aggravated white collar crime enhancement.

This case was textbook example of multi-agency collaboration and joint investigation by the California Board of Equalizations (BOE), Employment Development Department (EDD) Franchise Tax Board (FTB), Department of Insurance (DOI), and investigators from the El Dorado County District Attorney’s Office. County of El Dorado

WCAB , DWC Issue New Forms

The Workers’ Compensation Appeals Board and the Division of Workers’ Compensation have created a new form and made modifications to two existing forms for use in the Electronic Adjudication Management System (EAMS). The new and modified forms will be posted on DWC’s website today. The changes were necessitated by SB 863. The forms are:

1) DWC-CA 10214 a-1 [Stipulations with Request for Award (Rev. 4/2014)]
2) DWC-CA 10208.3 [Declaration of Readiness to Proceed (Expedited Trial) (Rev. 4/2014)]
3)DWC-CA 10232.2 [Document Separator Sheet]

The DWC-CA 10214 a-1 [Stipulations with Request for Award DOI post 1-1-2013 (Rev. 4/2014)] is a new form to be used for injuries on or after January 1, 2013. Pursuant to SB 863, the 15 percent increase or decrease in permanent disability under Labor Code 4658(d) has been eliminated. This form is used by e-form filers and it is now available for use by OCR filers. The old form will be accepted for OCR filing for injuries on or after January 1, 2013 until October 1, 2014. At a later date, the revised form will be placed in use for JET filers.

The current form DWC-CA 10214(a) [Stipulations with Request for Award (Rev 11/2008)] remains in use for e-form and OCR filers for injuries before January 1, 2013. JET filers will continue to use this form for all dates of injury.

The DWC-CA 10208.3 [Declaration of Readiness to Proceed (Expedited Trial) (Rev. 4/2014)], which is used for expedited trials, was also modified. Medical treatment issues are limited to those not arising out of utilization review. Medical Provider Network (MPN) issues for medical treatment purposes have been added. Vocational rehabilitation appeal has been removed. This form is in use for e-form filers and it is now available for use by OCR filers. The older version of this form will be accepted for OCR filing until October 1, 2014. At a later date, the new form will be placed in use for JET filers.

DWC-CA 10232.2 [Document Separator Sheet] (Rev. 4/2014) for OCR filing also updates the document types and titles used for OCR filers and the Unstructured E-form. At a later date it will be placed in use for JET filers.

The modifications to existing document types or document titles are posted in the DWC website. These changes to document types and titles are in use for OCR and e-form filers currently. The older version of this form will be accepted for OCR filing until October 1, 2014.

Medical Costs Moderated Before SB 863

A study issued by the Workers Compensation Research Institute shows medical costs for injured workers in California moderated before sweeping reforms were implemented.

CompScope Medical Benchmarks for California 14th Edition provides baseline data for monitoring the impact of the California’s reform legislation Senate Bill 863, which took effect on Jan. 1, 2013. For the study, WCRI examined the bill’s effect on the state workers’ compensation system and compared changes implemented through SB 863 with reforms in other states. The goal of the study is to set benchmarks for such systems in order to weigh their costs and benefits.

Researchers found that in 2010 and 2011, medical payments per claim in California grew by about 3%, down from 8% annual growth since 2005. According to the Insurance Journal, the drop can be attributed to stability of: prices paid for professional services; and use of non hospital services. However, hospital payments per inpatient visit increased significantly between 2006 and 2011, according to the report.

Based on experiences in other states, WCRI predicted that California’s shift to a “resource-based relative value scale fee schedule” likely will shift payments from specialty care to primary care providers

Physician Dispensed Narcotics Linked to Poor Outcomes

A new study in the Journal of Occupational and Environmental Medicine reveals a negative impact on medical costs, indemnity costs and lost time from work on workers’ compensation claims when physicians, rather than pharmacies, dispense narcotic-related drugs to injured workers within the first 90 days of injury. The study, titled “The Effect of Physician Dispensed Medication on Workers’ Compensation Claim Outcomes in the State of Illinois,” was authored by Jeffrey Austin White, director of Medical Management Practices & Strategy, and members of the Medical Center of Excellence team of Accident Fund Holdings, Inc., in partnership with researchers from the Johns Hopkins University School of Medicine.

The authors studied a sample of 6824 workers’ compensation indemnity claims that were opened and closed between January 1, 2007, and December 31, 2012, by Accident Fund Holdings in the State of Illinois.The number of prescriptions per claim and pharmaceutical, medical, and indemnity costs, as well as time out from work, were significantly higher in claims where a pharmaceutical was dispensed by the physician within 90 days of injury than in claims where physician dispensing did not occur. These differences persisted controlling for age, sex, attorney involvement, and injury complexity.The major findings of the study align with previous research from a February 2013 report on physician-dispensed repackaged drugs in the state of California by the California Workers’ Compensation Institute. “These studies leave little doubt that physician dispensing of medications, especially opioid medications, results in poor outcomes for injured workers,” said Dr. Dan Hunt, corporate medical director of Accident Fund Holdings. “Longer recoveries, more time away from work and increased medical costs are all unfortunate outcomes of this prescribing practice in workers’ compensation.”

In the last several years, there has been a surge in the cost and quantity of drugs dispensed from physician offices in workers’ compensation insurance. A 43% increase in drugs dispensed by physicians and a 63% percent increase in medication payments in the state of Illinois prompted researchers to perform an investigation on claims outcomes. The analysis demonstrated a 2.99 times higher number of prescriptions dispensed from the physician’s office in comparison to the pharmacy. When opioids were dispensed by the physician, the medical costs were 78% higher, the indemnity costs were 57% higher and the number of days off work were 85% higher than pharmacy dispensations after adjusting for differences in age, gender, attorney involvement and injury complexity.

“The ability of physicians to profit from dispensed narcotics in workers’ compensations puts a burden on the industry and jeopardizes the safety and well being of our injured workers,” said White. “State laws for managing and controlling physician dispensing in workers’ compensation are mostly non-existent and are, at the very least, in serious need of careful evaluation and reform.”