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One Lien Activation Fee Required In Multiple Injury Claim

WorkCompAcademy

Elia Hinks claimed that she sustained industrial injury to her head, back, shoulder, lower extremities and multiple body parts as a result of a specific injury and a continuous trauma. Two applications were filed accordingly. Lien claimant, MH Express Pharmacy filed a lien in the specific injury case only in 2004. The specific injury case was then dismissed without prejudice in 2006. The pharmacy claims it was never notified of the dismissal.

The pharmacy paid the lien activation fee in the dismissed specific injury case (ADJ2499103) on March 15, 2013, six days prior to the March 21,2013 lien conference. On March 21, 2013, the WCJ issued an Order Dismissing Lien Claim for Failure to Pay Lien Activation Fee with prejudice. The WCJ notes in her Report that there was no lien activation fee paid prior to the lien conference in the remaining continuous trauma case (ADJ3239580). The pharmacy lien claimant filed a petition for reconsideration of that Order.

Administrative Director (AD) Rule 10208, subdivision (a) provides that “Any lien filed pursuant to Labor Code section 4903(b) filed prior to January 1,2013, and any cost filed as a lien prior to January 1, 2013, shall be subject to a lien activation fee in the sum of one hundred dollars ($ 100.00), payable to the Division of Workers’ Compensation prior to filing a Declaration of Readiness to Proceed for a lien conference by that party, prior to appearing at a lien conference for a case, or on or before January 1, 2014, whichever occurs first. The $100 fee is payment for the activation of a lien. A lien activation fee is required for each lien filed prior to January 1, 2013, and for each cost filed as a lien prior to January 1, 2013; however, where one or more liens or one or more costs filed as lien is filed in one or more cases involving the same injured worker and same service or services by the same lien claimant, only one lien activation fee is required.”

As a result of this regulation, the WCAB granted reconsideration and ruled in the case of Hinks vs Pavlo Weinberg and Associates, that only one activation fee was required. The Order dismissing the lien claim was rescinded, and the case was returned to the trial level for further proceedings.

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Court of Appeal Reverses Dismissal of A Premiere Medical Lien Claimant

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In 2002, the California Insurance Guarantee Corporation Association initiated a proceeding against Premier Medical Management Systems, Inc. in which it alleged that Premier engaged in billing fraud, fee splitting and the unauthorized practice of medicine. A number of other like actions were filed which were consolidated in 2004. At some point, two of Premier’s executives, David Wayne Fish and Birger Greg Bacino, as well as Premier itself, were criminally charged with filing false and fraudulent claims, filing false tax returns and unlawfully receiving compensation for the referral of clients. Fish and Bacino entered into a plea bargain in 2010 under which they agreed to dismiss with prejudice lien claims filed by the “Premier Providers” that were listed in the October 17, 2006 letter of representation provided to the WCJ by the lawfirm of Riley and Reiner

Champion Medical Group, a California Corporation doing business as Universal Psychiatric Medical Center, Inc, was one of many lien claimants represented by Premier Medical Management Systems, Inc. Universal assigned some of its liens to Premier for purposes of collection. As part of a plea bargain Premier dismissed the lien claims of 109 entities, Universal’s included. The workers’ compensation administrative law judge upheld the dismissal of Universal’s claim over its objections and the WCAB denied Universal’s petition for reconsideration without issuing an opinion of its own.

Universal claims that it was not a Premier Provider; that Universal only hired Premier to perform billing and collection services and had no authority to dismiss its liens, In response the WCJ gave 10 reasons why Premier had the power to dismiss liens of the Premier Providers including the Universal liens with prejudice.

The Court of Appeal in the unpublished opinion of Universal Psychiatric Medical Center, Inc. v WCAB ruled that “as it turns out, none of these reasons apply to Universal.” In rejecting the decision of the WCAB, the Court of Appeal went on to say that the “fundamental flaw in the WCJ’s reasoning is that the WCJ analyzed and addressed issues that were common to most of the lien claimants, whom the parties have chosen to designate collectively as the Premier Providers, and that the WCJ ignored the facts that were unique to Universal’s case. That is, the WCJ validated the resolution of the global case involving over 100 Premier Providers but failed to address Universal’s case. As it turns out, there is evidence that Universal did not authorize Premier to dismiss its liens. Concomitantly, the entire body of evidence on which the WCJ relied to find that Universal did authorize Premier to dismiss its liens is irrelevant to Universal, however relevant it may be to the Premier Providers. In fact, there is evidence that Universal cannot be included in the class of Premier Providers.”

The decision of the Workers’ Compensation Appeals Board denying Universal’s petition for reconsideration was annulled and the case was remanded to the Workers’ Compensation Appeals Board with directions to grant the petition for reconsideration and to enter an order vacating the dismissal of Universal’s liens and to conduct such further proceedings as are consistent with this opinion.

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Comp Industry Financial Condition Set to Improve

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Underwriting results for the U.S. workers’ compensation market is set to improve over the remainder of 2013 reversing several years of poor performance, according to a new Fitch Ratings report.

Workers’ compensation is the largest segment of all U.S. commercial lines, representing 18% of property/casualty industry commercial lines net written premiums in 2012. Workers’ compensation has been the worst-performing major commercial lines segment for some time. However, the 2012 industry aggregate segment combined ratio improved to 110% from 117% in the prior year.Fitch projects a 105% workers’ compensation calendar year combined ratio in 2013.

Following a long period of declining premium rates, workers’ compensation pricing has increased for two consecutive years, with little sign that pricing trends will reverse in the near term. The Council of Insurance Agents smf Brokers most recent commercial lines market survey indicates that workers’ compensation rate hikes are accelerating with a nearly 10% increase in first-quarter 2013.

Fitch notes that workers’ compensation claims costs are influenced greatly by medical cost factors that tend to expand at a higher rate than general inflations. Healthcare costs in 2012 were a bit more stable than historical patterns, but sustainability of this trend is questionable given pending implementation of healthcare reform in the U.S.

A return to economic stability is promoting a return to declining claims frequency trends. Loss reserves in the workers’ compensation segment have developed adversely for the last four consecutive years. Fitch’s analysis suggests that the industry’s loss reserve position in workers’ compensation remain inadequate. Given the prominence of workers’ compensation as a percentage of many insurers’ book of business, continued market hardening and underwriting improvements promote earnings stability that is viewed favorably from a credit perspective. Reductions in workers’ compensation loss reserve deficiencies and uncertainty would also contribute towards stability of insurer ratings at current levels.

The report ‘Workers’ Compensation Insurance Market Update’ dated June 21, 2013, is available at ‘www.fitchratings.com’ under ‘Insurance’ and ‘Special Reports’.

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U.S. Supreme Court Rejects $21 Million Drugmaker Jury Verdict

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The Supreme Court just ruled that makers of generic drugs already approved by the Food and Drug Administration cannot be held liable under state law for claims of design defects. In a 5-4 vote, the court ruled for Mutual Pharmaceutical, a unit of URL Pharma, owned by Sun Pharmaceutical Industries.

According to the summary in the Los Angeles Times, the 5-4 decision tossed out a $21-million jury verdict in favor of a New Hampshire woman who suffered horrible skin burning over most of her body and was nearly blinded after taking a pill to relieve shoulder pain. The court majority said the federal Food and Drug Administration had approved this drug for sale, and that federal approval trumps a state’s consumer-protection laws.

Karen Bartlett, the woman who suffered the severe reaction to sulindac, sued Mutual Pharmaceuticals, and a jury decided the pain pill was unreasonably dangerous. The company appealed, arguing that the verdict conflicted with federal law. Bartlett’s “situation is tragic and evokes deep sympathy, but a straightforward application of preemption law requires that the judgment [in her favor] be reversed,” Justice Samuel A. Alito Jr. wrote for the court majority. Chief Justice John G. Roberts Jr. and Justices Antonin Scalia, Anthony M. Kennedy and Clarence Thomas agreed.

Dissenting, Justice Sonia Sotomayor said that “the court has left a seriously injured consumer without any remedy despite Congress’ explicit efforts to preserve state common-law liability.”

The ruling creates an oddity in the law. People who are hurt by a brand-name drug can sue the drug maker for damages, the Supreme Court said in 2009. But the same is not true for those who take a generic drug. The court has now handed down two rulings that have closed the door to lawsuits from people injured by a generic drug. About 80% of prescriptions written in this country are for generic drugs.

Bartlett took sulindac, a non-steroidal anti-inflammatory drug, at the direction of her doctor, and she had a rare, but severe reaction. The skin on nearly two-thirds of her body burned away. She spent more than two months in the burn unit of a Boston hospital, and she was left with permanent injuries. Bartlett’s lawyers argued that sulindac was more likely than other similar pain relievers to cause the severe reaction that Bartlett suffered, known as toxic epidermal necrolysis.

The company responded that the FDA had approved Clinoril, the brand-name drug, as safe and effective, and that the generic maker was selling a version of the same drug.

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Growth of California Written Premium Now Double-Digit

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Workers’ compensation insurance executives gathered in San Francisco alongside public policymakers and other industry stakeholders on June 13 to attend the WCIRB Annual Workers’ Compensation Conference. The conference agenda included two speakers well-known to the workers’ compensation industry -David DePaolo, founder and president of WorkCompCentral, and Dave Bellusci, Executive Vice President and Chief Actuary at the WCIRB.

David DePaolo kicked off the morning session with a discussion of the role of the media in a healthy workers’ compensation system. As a frequent blogger and founder of an online news outlet, Mr. DePaolo has a unique, first-hand view of the role that new and traditional media plays in our society and the workers’ compensation industry.

Following Mr. DePaolo’s presentation, the WCIRB’s Dave Bellusci discussed the latest workers’ compensation industry results and made the following observations:

  • California written premium continues to grow at a double-digit rate due to increases in average rates and total payroll
  • Average insurer rates have increased sharply in 2012 and 2013
  • After increasing in 2010, indemnity claim frequency has remained relatively flat, while claim frequency in other states have declined
  • Claim severity trends are moderating, however, pharmaceutical costs continue to increase sharply
  • Expense ratios declined in 2012 with increasing premium levels and the loss adjustment expense severity trend is moderating
  • The accident year 2012 combined ratio decreased significantly in 2012, but remains above the national average.
  • SB 863 is estimated to moderate claim cost trend in 2013 and beyond and the WCIRB will continue to actively monitor the impact of the bill as data becomes available.

In the afternoon session, WCIRB President and CEO Bill Mudge moderated a panel discussion entitled SB 863 – A View from the Front Lines. Panelists included claims management professions, medical experts from private practice and the Division of Workers’ Compensation, an independent medical review expert, a workers’ compensation defense attorney and an applicant attorney, and a Workers’ Compensation Appeals Board Judge. Each panelist offered attendees his/her view of SB 863 based on their direct experience implementing the law.

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Cal/OSHA Fines LAX Employer $94K For Safety Violations

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The Daily Breeze reports that Cal/OSHA has issued citations resulting in fines of $94,550 against U.K.-based Menzies Aviation, a contractor at Los Angeles International Airport, for unsafe working conditions, a union official said Thursday. Jacob Hay of SEIU-United Service Workers West said that the state Department of Industrial Relations’ Division of Occupational Safety and Health, or Cal/OSHA, found the alleged violations during an investigation.

According to Hay, they included an inadequate safety guard on a high-lift industrial truck the company knew about and did not correct, and a failure to train workers on how to properly handle hazardous substances or properly store of hazardous substances in warehouses on airport property. Menzies also was cited for faulty electrical equipment, and for failing to keep an oxygen cylinder safely separated from a fuel gas cylinder, Hay said.

A regional manager for Menzies in Los Angeles said the company had no immediate comment.

The investigation began after Menzies workers filed a complaint with help from the Los Angeles Labor Federation and the Southern California Coalition for Occupational Safety and Health.

Menzies Aviation provides baggage handling, cargo, and cargo-forwarding services to airline clients at more than a dozen major airports in the country.

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70% of Americans Now on Prescription Drugs

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Mayo Clinic researchers found that nearly 70 percent of Americans are on at least one prescription drug, and more than half take two. The study found that antibiotics, antidepressants and painkilling opioids are most commonly prescribed, Twenty percent of patients are on five or more prescription medications, according to the findings, published online in the journal Mayo Clinic Proceedings.

The statistics from the Rochester Epidemiology Project in Olmsted County, Minn. are comparable to those elsewhere in the United States, says study author Jennifer St. Sauver, Ph.D., a member of the Mayo Clinic Population Health Program in the Mayo Clinic Center for the Science of Health Care Delivery.

“Often when people talk about health conditions they’re talking about chronic conditions such as heart disease or diabetes,” Dr. St. Sauver says. “However, the second most common prescription was for antidepressants – that suggests mental health is a huge issue and is something we should focus on. And the third most common drugs were opioids, which is a bit concerning considering their addicting nature.”

Seventeen percent of those studied were prescribed antibiotics, 13 percent were taking antidepressants and 13 percent were on opioids. Drugs to control high blood pressure came in fourth (11 percent) and vaccines were fifth (11 percent). Drugs were prescribed to both men and women across all age groups, except high blood pressure drugs, which were seldom used before age 30.

Overall, women and older adults receive more prescriptions. Vaccines, antibiotics and anti-asthma drugs are most commonly prescribed in people younger than 19. Antidepressants and opioids are most common among young and middle-aged adults. Cardiovascular drugs are most commonly prescribed in older adults. Women receive more prescriptions than men across several drug groups, especially antidepressants: Nearly 1 in 4 women ages 50-64 are on an antidepressant.

For several drug groups, use increases with advancing age. “As you get older you tend to get more prescriptions, and women tend to get more prescriptions than men,” Dr. St. Sauver says. Prescription drug use has increased steadily in the U.S. for the past decade. The percentage of people who took at least one prescription drug in the past month increased from 44 percent in 1999-2000 to 48 percent in 2007-08. Spending on prescription drugs reached $250 billion in 2009 the year studied, and accounted for 12 percent of total personal health care expenditures. Drug-related spending is expected to continue to grow in the coming years, the researchers say.

This new study demonstrates the statistical likelihood that there are opportunities for apportionment of permanent disability that may be overlooked by employers.

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Scientists to Grow Human Organs Within One Year

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Regenerative medicine is the “process of replacing or regenerating human cells, tissues or organs to restore or establish normal function”.This field holds the promise of regenerating damaged tissues and organs in the body by replacing damaged tissue and/or by stimulating the body’s own repair mechanisms to heal previously irreparable tissues or organs. Regenerative medicine also empowers scientists to grow tissues and organs in the laboratory and safely implant them when the body cannot heal itself. Importantly, regenerative medicine has the potential to solve the problem of the shortage of organs available for donation compared to the number of patients that require life-saving organ transplantation. Depending on the source of cells, it can potentially solve the problem of organ transplant rejection if the organ’s cells are derived from the patient’s own tissue or cells.

And this technology is advancing at a pace much faster than one would think. The advancement of medical technology should be considered by claim administrators as they set reserves for future medical care for young claimants.

The UK Telegraph reports that a panel of scientists and legal experts appointed by the government in Japan has drawn up a recommendation that will form the basis of new guidelines for Japan’s world-leading embryonic research. There is widespread support in Japan for this research that has raised red flags in other countries. Scientists plan to introduce a human stem cell into the embryo of an animal – most likely a pig – to create what is termed a “chimeric embryo” that can be implanted into an animal’s womb.

That will then grow into a perfect human organ, a kidney or even a heart, as the host animal matures. The organ will then be harvested and transplanted into a human with a malfunctioning organ.

“This recommendation is a very important step forward and one that has taken us three years to achieve,” Professor Hiromitsu Nakauchi, head of the centre for stem cell biology and regenerative medicine at the University of Tokyo, told The Daily Telegraph. Prof Nakauchi’s team have already succeeded in injecting stem cells from rats into the embryos of mice that had been genetically altered. “We can apply the same principles to human stem cells and pigs, although the guidelines have not permitted us to do this yet,” he said.

At present, the Japanese guidelines permit scientists to develop chimeric embryos in laboratory conditions for a maximum of 14 days, but the next stage in the process – the embryos being implanted into an animal’s womb – is prohibited. As soon as government officials agree on the details of the revised guidelines – a process that is expected to take 12 months – Prof Nakauchi believes the first pig carrying a human organ can be produced “quite quickly, because the technique has been established already.”

The scientists plan to initially breed a pig with a human pancreas as it is a relatively easy organ to create, Prof. Nakauchi said, and perfecting the technique will bring relief to millions of people with diabetes. Creating kidneys and a human heart will be far more complicated, he said, but are feasible. He suggested that practical use for the organs may be as little as five years away.

Eventually, he hopes to be able to have numerous human organs within each donor animal that can be harvested all at the same time.

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En Banc WCAB Reverses Award in NFL Team Case

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Issues concerning former NFL player, Wesley Carrol’s claim for California workers’ compensation benefits initially were tried on December 2, 2008. On March 17, 2009, the WCJ issued a Findings of Fact and Award, finding that Carrol incurred cumulative industrial injury to several body parts in the course of his employment by the Saints and Bengals,causing 46% permanent disability. The Bengals’ petitioned for reconsideration which was granted. On May 24, 2010, the Appeals Board panel issued its Opinion And Decision After Reconsideration in which it rescinded the WCJ’s earlier March 17, 2009 decision, “because the evidence on the issue of section 3600.5(b) is incomplete.” The case was returned by the panel to the trial level for development of the record on that issue.

In this case, the Bengals established at trial that applicant was hired outside of California and that he was only temporarily in California doing work for the Bengals when the team played one game in the state in 1993. The Bengals further showed that as a permissibly self-insured employer under the workers’ compensation laws of the state of Ohio it furnished workers’ compensation coverage that covered applicant’s employment while in California. Ohio law recognizes the extraterritorial provisions of other states, including California, and likewise exempts out-of-state employers and employees who are temporarily doing work within Ohio from the provisions of its workers’ compensation statutes.

After remand, the WCJ again found that Carroll, incurred cumulative industrial injury to numerous body parts while employed as a professional football player by the New Orleans Saints from July 14, 1991 through August 30, 1993, and by the Bengals from September 1, 1993 to April 12, 1994, causing 46 percent permanent disability and a need for future medical treatment. The WCJ further found that the “Bengals are not exempt from workers’ compensation laws of the State of California, with respect to this case, by operation of Labor Code § 3600.5(b).” The WCJ reasoned that “the essential issue in this case is whether the applicant’s employment within the State of California while employed by the Cincinnati Bengals is considered ‘regularly employed,’ as set forth in Labor Code § 3600.5(a).” In this regard it was noted that a “”professional football player in the NFL, such as Mr. Carroll, regularly engages in his employment away from his home city and state. Typically, each NFL team plays one-half of their regularly scheduled games in their home city. The other half are played in the various other states and cities, including California,” For this reason the WCJ concluded “[I]t remains the opinion of the undersigned that Mr. Carroll’s employment with the Bengals while he was in the State of California was regular employment per Labor Code § 3600.5(a)”

The Appeals Board disagreed and reversed the finding of the WCJ in the en banc decision of Carrol v Cincinnati Bengals and held that an employee and his or her employer are exempted by Labor Code section 3600.5(b) from the provisions of the California workers’ compensation law when the employee was hired outside of California and all of the following apply: (1) the employee is temporarily within California doing work for the employer, (2) the employer furnished coverage under the workers’ compensation or similar laws of another state that covers the employee’s employment while in California, (3) the other state recognizes California’s extraterritorial provisions, and (4) the other state likewise exempts California employers and employees covered by California’s workers’ compensation laws from the application of its workers’ compensation or similar laws.

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U.S. Approvals of New Drugs Highest Since 1996

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After years of disappointing research and development productivity, a new report backed by leading institutional investors sees “early indications of a recovery”, with U.S. approvals of new drugs last year the highest since 1996. The PharmaFutures thinktank said on Wednesday that getting the most out of an improving flow of novel – and costly – drugs in areas such as oncology will require a more flexible approach to developing, licensing, using and paying for medicines. But, the report summarized by Fox News says that pharmaceutical companies need to boost the benefits of drug research by working with regulators and healthcare providers to overhaul the way medicines are approved and paid for, a thinktank backed by investors says. This would allow investors in drug companies to benefit from earlier cash flows, reduced regulatory risk and less uncertainties over whether drugs will be paid for.

The thinktank has the backing of investors such as Fidelity Worldwide Investment, JPMorgan Asset Management, Robeco and Universities Superannuation Scheme Investment Management, as well as drugmakers like GlaxoSmithKline and Johnson and Johnson. PharmaFutures director Sophia Tickell saw scope for change as governments seek to overhaul healthcare and get better value, sometimes prompted by austerity.

“Today’s binary decision-making at the point of regulatory approval and price setting will need to be replaced by iterative, dynamic decision-making that adapts as evidence is accrued, and value determined over time,” the new report said. In particular, regulators should have more flexibility to take into account evidence about a drug’s effectiveness as it is rolled out and used. At the same time, the industry needs to move away from ideas of a fixed price point for medicines to a system where prices are adapted according to changing perceptions of the value of a medicine, based on how it works in clinical practice. On both fronts, there are signs that industry and regulators are starting to change. The U.S. Food and Drug Administration, for example, recently launched a programme to accelerate life-saving therapies designated as a “breakthrough,” opening to door to earlier approval based on quicker studies, where clinical data is compelling.

The European Medicines Agency also has a scheme to allow conditional approval based on good interim clinical trial results, while Britain currently plans to introduce a system of value-based pricing for new drugs in 2014, although details of this measure are still awaited.

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