Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: WCAB Ordered to End Its Longstanding Illegal Reconsideration Procedure. After SCOTUS Remand, 9th Circuit Reaffirms its Denial of Employer’s Arbitration. Jury Awards UCSD Physician $39.5 million in UC Whistleblower Case. Prosecutors Must Use Specific, Not General Statutes In Comp Fraud Cases. Last Two Defendants Plead Guilty in $66M San Diego Pharmacy Scam. CEO of Whittier Clinic Pleads Guilty to $5M Health Care Fraud. CWCI Study Shows IMR Volume Increased in First Half of 2023. July 2023 Hospital Analysis Shows Continuing Tight Financial Margins. Bipartisan Law Allow States to Recruit Foreign Doctors to Fill Shortages. California Short 36,000 Nurses – But Nursing Schools Are Full.
In August 2002, Michael Ayala was severely injured in a preplanned attack by inmates while at his job as a correctional officer at the Lancaster State Prison
He filed a workers’ compensation claim and alleged that the injury was caused by the serious and willful misconduct of his employer, California Department of Corrections and Rehabilitation (CDCR).
Labor Code section 4553 provides that ‘[t]he amount of compensation otherwise recoverable shall be increased one-half . . . where the employee is injured by reason of serious and willful misconduct” by the employer. Ayala and CDCR agreed that the injury caused Ayala 85 percent permanent disability, but they could not agree whether CDCR engaged in serious and willful misconduct.
A WJC found that CDCR did not engage in serious and willful misconduct. However, on reconsideration, the Workers’ Compensation Appeals Board (the Board) rescinded the decision and reversed, finding that CDCR had engaged in serious and willful misconduct. Over a dissent, a Board majority found that CDCR “failed to act on a credible threat of inmate violence that was specifically reported to be planned for the day of the attack and took the facility off lockdown despite this threat even though it possessed additional information . . . that this had long been planned.”
The Board’s determination established Ayala’s entitlement to an additional 50 percent of “compensation otherwise recoverable” per section 4553. Ayala and CDCR disagreed, however, about what constituted the “amount of compensation otherwise recoverable” under that section.
While he was temporarily totally disabled Ayala was paid his full salary because he was on industrial disability leave and enhanced industrial disability leave. However the WCJ found that the compensation upon which the penalty applies was what Ayala would have been paid in temporary disability. But on reconsideration, the Board again rescinded and reversed the workers’ compensation judge’s decision, this time finding that the base compensation was what Ayala was paid on industrial disability leave and enhanced industrial disability leave.
The Court of Appeal reversed in the published case of Cal. Dept. Corrections & Rehabilitation v. Workers’ Comp. App. Bd. -E079076 (August 2023).
The Court of Appeal first noted Labor Code Section 3207, entitled “Compensation,” which states that “‘[c]ompensation’ means compensation under this division and includes every benefit or payment conferred by this division upon an injured employee, or in the event of his or her death, upon his or her dependents, without regard to negligence.” However it stated that the definition is “is as capacious as it is circular.“
“Equally unambiguous, though, is that industrial disability leave benefits are not ‘compensation,’ as such benefits are not provided by Division 4 of the Labor Code. They in fact are provided outside of the Labor Code altogether. Supplied by section 19871 of the Government Code, industrial disability leave is an alternative to temporary disability and is available to certain state officers and employees, such as those who are members of the Public Employees’ Retirement System (Gov. Code, § 19869).”
Industrial disability leave provides an employee his or her full salary (net of certain taxes), but only for 22 days; after 22 days, the pay becomes two-thirds of full pay. (Gov. Code, § 19871, subd. (a).) However, a subset of eligible workers, defined in the Government Code as “excluded employees,” are entitled to receive enhanced industrial disability leave. (Gov. Code, §§ 19871.2, 3527, subd. (b); Cal. Code Regs., tit. 2, § 599.769.)
Enhanced industrial disability leave extends the period of full pay from 22 days to one year. (Gov. Code, § 19871.2.) If a worker continues to be temporarily disabled after industrial disability leave and enhanced industrial disability leave benefits terminate, then temporary disability payments begin. (Gov. Code, § 19874, subd. (a).)
There is no ambiguity here. “Compensation,” as the term is used in section 4553, includes only items provided by Division 4 of the Labor Code, but industrial disability leave is provided by the Government Code. Accordingly, the “amount of compensation otherwise recoverable” under section 4553 does not include industrial disability leave.
However, the Board concluded that section 4553 base compensation includes industrial disability leave, mainly relying on Brooks v. Workers’ Comp. Appeals Bd. (2008) 161 Cal.App.4th 1522 .
When the Court of Appeal decided Brooks it took the view that industrial disability leave equated to leave provided by the Labor Code. However in doing so Brooks construed a different statute, Labor Code section 4656, subdivision (c)(1), than does Ayala in this case. In Brooks the issue was whether the year of industrial disability leave payments the worker received counted toward the statute’s two-year limitation or whether the limitation period started only when industrial disability leave stopped and temporary disability payments began.
To the extent that Brooks could be read as support for the proposition that any features of or limitations on temporary disability necessarily must apply to industrial disability leave because of the way industrial disability leave is defined “we respectfully disagree.” “Compensation” under section 3207 “still requires that it be provided by Division 4 of the Labor Code, just as it always has.”
Last month the Centers for Medicare and Medicaid Services (CMS) updated the Self-Administration Toolkit for Workers’ Compensation Medicare Set-Aside Arrangements (Toolkit) to version 1.4. If a Medicare beneficiary decided to self-administer their WCMSA, they should review the Self-Administration Toolkit for WCMSAs.
This Toolkit describes the process and guidelines for beneficiaries managing their WCMSA account and walks them through the set-up of their WCMSA through its depletion (exhaustion).
Also available are copies of the Account Expenditure for Lump Sum Account (Attestation Letter), Account Expenditure for Structured Annuity (Attestation Letter) and a Transaction Record Sample.
Medicare beneficiaries can use the Transaction Record Sample (or a similar document) to keep track of all deposits to and withdrawals from their WCMSA account. The account expenditure letters are blank and can be used to submit the required annual attestation that the Medicare beneficiary correctly used the funds in the WCMSA account.
This Toolkit:
– – Describes the self-administration process and guidelines, from when you first set up the WCMSA bank account until all of its funds have been used.
– – Explains who you will work with to manage your WCMSA account.
– – Discusses the two types of WMCSA accounts, lump sum and structured. The lump-sum account is discussed first, and the Toolkit includes a section on Topics Unique to Structured WCMSA Accounts later on.
– – Covers special circumstances, such as when your Medicare beneficiary status changes.
A WCMSA may be funded in one of two ways. A lump sum, in which the beneficiary receives one check or deposit for the entire WCMSA, from their settlement. Or a structured settlement, in which the beneficiary receives an initial deposit and smaller annual payments in following years.
Once a WCMSA account is set up, it can only be use it to pay for medical treatment or prescription drugs related to the beneficiary’s WC claim, and only if the expense is for a treatment or prescription Medicare would cover. This is true even if the beneficiary is not yet a Medicare beneficiary (not yet enrolled in Medicare).
If an item or service is not covered by Medicare, the beneficiary will have to pay for it themselves or with other insurance. WCMSA funds may not be used for services that Medicare does not cover.
The WCMSA account may also be used to pay for the following costs when they are directly related to the account:
– – Cost of copying documents
– – Mailing fees/postage
– – Any banking fees related to the account
– – Income tax on interest income from the account
Beneficiaries will need to keep clear and accurate records of everything they do with the WCMSA account. Medicare will use these records to determine if the account funds were spent properly.
Freelance workers in the City of Los Angeles received more protections with the Los Angeles City Council’s adoption on February 24, 2023 of Ordinance 187782 which is intended to protect the Freelance industry. The new law became effective on July 1, 2023 and employers must now comply with the provisions of this ordinance.
The Ordinance defines a Freelance Worker as “an individual natural person, or an entity whose legal and beneficial interests are held entirely and whose work is performed entirely by no more than one individual natural person, hired or engaged as a bona fide independent contractor to perform services for a Hiring Entity in exchange for compensation” with some exceptions to this definition.
And a Hiring Entity is defined as “means an entity regularly engaged in business or commercial activity. A hiring entity is regularly engaged in business or commercial activity if the hiring entity owns or operates any trade or business, including a not for profit business, or represents itself as engaging in any trade, or business. A “Hiring Entity” does not include an entity that hires app-based transportation and delivery drivers to provide prearranged services.”
And the provisions of this new Ordinance apply to “a written or oral contract between a Freelance Worker and a Hiring Entity entered into on or after July 1,2023; and to work performed within the City by a Freelance Worker that is entitled to payment of $600 or more in a calendar year for the same Hiring Entity.
If the Freelance Worker and the Hiring Entity fall under the provisions of this Ordinance, they must have a written agreement that includes, at a minimum, all of the following information:
– – The name, mailing address, phone number, and, if available, email address of both the Hiring Entity and the Freelance Worker;
– – An itemization of all services to be provided by the Freelance Worker, the value of the services to be provided pursuant to the contract, and the rate and method of compensation; and
– – The date by which the hiring entity must pay the contracted compensation or the manner by which such date will be determined.
A Hiring Entity must provide full payment to the Freelance Worker on or before the date specified in the written contract or, if the written contract does not specify a due date or if there is no written contract, no later than 30 calendar days after services are rendered.
A Hiring Entity and Freelance Worker shall each retain written records related to this article for no less than four years, including contracts, payment records, and any other written or electronic records to demonstrate compliance.
A waiver by a Freelance Worker of any provision in this article shall be deemed contrary to public policy and shall be void and unenforceable.
A Freelance Worker may either file a civil action for violations under this Ordinance, or file a complaint with the Office of Wage Standards of the Bureau of Contract Administration within the Department of Public Works is the “Designated Administrative Agency” or “DAA.”
If a Hiring Entity fails to respond to the DAA’s request for information and/or documents within 20 calendar days, the Freelance Worker shall be entitled to a procedural rebuttable presumption in any subsequent civil action that the Hiring Entity committed the violations alleged in the corresponding complaint filed with the DAA.
If the Freelance Worker prevails in a civil action, in addition to damages provided in the Ordinance, they are entitled to recover all reasonable attorney’s fees and costs, injunctive relief, and other remedies as deemed appropriate by a court.
Employers should carefully read the entire Ordinance, and it would be wise to consult with legal counsel if you are unclear about the requirements of this Ordinance.
The California Attorney General’s office announced the arrest of and filing of charges against Dr. Arash Malian Padidar, a Santa Clara County physician with an office located at 105 N Bascom Ave Ste 104 San Jose, CA 95128.
He is accused of illegally prescribing opioids to patients. The arrest and charges are the result of an investigation into an alleged two-years-long illegal prescription scheme by the California Department of Justice (DOJ). Padidar was arrested by DOJ agents and booked into the Santa Clara County Jail.
DOJ investigators found that Padidar’s illegal prescription scheme was carried out between October 2018 and October 2020 and involved the highly addictive pain medication Norco. He is facing charges on seven felony counts, including for obtaining opioids by fraud, deceit and misrepresentation, issuing prescriptions without a legitimate medical purpose, forging the name of another physician who’s name he allegedly obtained, and issuing a prescription, unlawful use of personal information and conspiracy to commit a crime.
According to the allegations on the criminal complaint, Padidar wrote prescriptions that were given to an unnamed conspirator, who filled the prescriptions at several Wallgreen and other pharmacies, and then the unnamed coconspirator gave the pills back to Padidar.
Padidar’s alleged activity was uncovered when an employee who had helped with the scheme came forward a month or two after being fired by the doctor in July 2019, according to a criminal complaint filed with Santa Clara County Superior Court.
The investigation and arrest were conducted by DOJ’s Division of Medi-Cal Fraud & Elder Abuse (DMFEA), which was alerted to the alleged crimes by the DEA.
DMFEA protects Californians by investigating and prosecuting those who defraud the Medi-Cal program as well as those who commit elder abuse. These investigations are made possible only through the coordination and collaboration of governmental agencies, as well as the critical help from whistleblowers who report incidences of abuse or Medi-Cal fraud at oag.ca.gov/dmfea/reporting.
DMFEA receives 75% of its funding from HHS under a grant award totaling $53,792,132 for federal fiscal year 2022-2023. The remaining 25% is funded by the State of California. The federal fiscal year is defined as through September 30, 2023.
“Doctors are trusted with the immense responsibility of protecting our health and our lives,” said Attorney General Bonta. “When a bad actor exploits their position for personal gain, they not only shatter our trust, they harm vulnerable patients. Let today’s arrest serve as a warning: The California Department of Justice will not tolerate abuses of power and will hold perpetrators accountable.”
“This investigation focused on a trusted member of the medical community who allegedly utilized forgery and fraud to obtain highly addictive opioids for his own personal benefit,” said Drug Enforcement Administration (DEA) Special Agent in Charge Brian M. Clark. “Healthcare professionals have a duty to prescribe controlled substances in a manner that ensures the well-being of the public. DEA will continue to keep communities safe and healthy by holding those accountable who put them in harm’s way. I want to thank CA DOJ Division of Medi-Cal Fraud and Elder Abuse and DEA Diversion for their exceptional work in this investigation.”
Cal/OSHA announced it will be increasing its physical presence in Fresno, Santa Barbara and Riverside counties – allowing Cal/OSHA field inspectors to respond more efficiently in the Central Valley, Inland Empire and Central Coast areas, while providing services and resources to workers, employers and community-based organizations in these areas.
The Division is setting up temporary satellite offices and is in the process of establishing permanent office locations in:
– – Regional Office in Fresno
– – High Hazard Office in Fresno
– – District Office in Santa Barbara
– – District Office in Riverside
“While Cal/OSHA has been performing outreach and enforcement work in these regions, this planned expansion ensures a more permanent presence in these communities to serve as a resource for workers and employers,” said Department of Industrial Relations Director Katie Hagen.
“These new offices will represent an important step in continuing to scale our efforts to meet workers where they are and ensure their health, safety and rights are safeguarded.”
The additional office locations are prompted by operational needs and increased demand for responses to complaints, accidents and proactive high-heat inspections at workplaces in these areas, especially in high-hazard industries. Updates on these new offices will be posted on Cal/OSHA’s Enforcement Office location webpage.
“We are working to secure office space and hiring is already underway,” said Cal/OSHA Chief Jeff Killip.
“We invite those who want to make a significant impact on workplace safety in California to join our dynamic team at Cal/OSHA. Our team is dedicated to ensuring that employees know their rights and that employers in our state provide safe work environments. If you want to make a difference, come join our team!”
Cal/OSHA has openings for district managers, senior safety engineers, and associate safety engineers in the new Fresno, Santa Barbara and Riverside offices. Additionally, openings for industrial hygienists, public health professionals, attorneys, health and safety analysts and more will be posted soon.
Those with biology, chemistry, toxicology or environmental science degrees are also encouraged to visit the Work at Cal/OSHA webpage and apply.
Hospital acquisitions have consolidated care into fewer and larger health systems. From 2000 to 2020, the share of hospital beds that are part of health systems has risen from 58 percent to 81 percent nationally. A quarter of hospital markets no longer had any independent hospitals by 2020.
A new study published by Elevance Health describes how prices, costs, and quality change when previously independent hospitals are acquired by systems.
Hospital care is the largest segment in the $4.3 trillion U.S. healthcare sector, with $1.3 trillion in annual spending. Despite a decline in inpatient volume over the last decade, hospital spending as a share of the sector increased from 30 to 31 percent over this time.
Most prior studies did not have access to negotiated prices between plans and hospitals, and therefore had to rely on average prices inferred from accounting data reported to the federal government. However, recent work has shown that these imputed prices are only weakly correlated with true prices. As a result, the new study draws conclusions about efficiency gains of the hospitals. Prior studies have not comprehensively evaluated the impact of efficiency gains for independent hospitals after acquisition.
Hospitals experienced large cost efficiencies and higher revenues after system acquisition.
– – Operating expenses declined by 6 percent, above market trend, at the acquired hospital following system ownership, without any offsetting increase in costs at the acquirer system.
– – Reductions in personnel spending accounted for about 60 percent of the total decline in operating costs.
– – Independent hospital acquisitions by hospital systems increased average inpatient prices for commercially insured patients by 5 percent above market trend, holding procedure intensity constant.
– – Across the top seven Major Diagnostic Categories by volume, prices increased 5-8 percent, with digestive, infectious diseases, labor & delivery, respiratory, and the circulatory system experiencing the largest price increases.
– – The size of the acquiring system size did not seem to matter with respect to price increases at the acquired hospital, suggesting that price increases were uniform at acquired independent hospitals.
Hospital quality declined following acquisition, leading to worse outcomes for patients.
– – For Elevance Health’s affiliated members receiving cardiac care, readmission rates increased by 10-12 percent and remained elevated for three years after the acquisition.
– – Readmission rates for Medicare patients admitted with acute, non-deferrable conditions conservatively increased by 2-3 percent.
– – Acquired hospitals that experienced greater staff reductions experienced greater readmission rate increases, suggesting the reduction in personnel may be a contributing factor.
Access to care was generally reduced for patients at acquired hospitals.
– – The study observed the closure of maternity wards, which were concentrated in rural hospitals.
– – Given aforementioned price increases and staff reductions, one could expect a decrease in hospital patient volume, however the study did not detect a change.
– – Access to medical technology did not change after acquisition.
The Study Authors conclude by saying “This brief highlights that independent hospital mergers have negative consequences for insurers, employers, and consumers. Specifically, payers and patients are exposed to higher prices without a commensurate increase in quality of hospital care.”
“Further, access to care does not improve, with acquired systems no more likely to expand access to medical technology or services. Instead, patients are likely to experience a reduction in access to maternity wards and reduction in staff. As hospital mergers continue to occur at a high rate, it is important that stakeholders understand their implications.”
The Fair Chance Act, which went into effect on January 1, 2018, is a California law that generally prohibits employers with five or more employees from asking about a job applicant’s conviction history before making a job offer.
California enacted the Fair Chance Act to reduce barriers to employment for individuals with conviction histories. The Fair Chance Act is part of California’s employment anti- discrimination statute called the Fair Employment and Housing Act (FEHA), which is enforced by the Civil Rights Department (CRD). The Fair Chance Act is codified at Government Code section 12952.
For employers who are unfamiliar with this law, the the Civil Rights Council of the California Civil Rights Department has published an FAQ on its website.
On July 24, 2023, the California Office of Administrative Law approved the California Civil Rights Council’s modifications to regulations which implement the California’s Fair Chance Act. The new regulations take effect on October 1, 2023, and employers are encouraged to understand and implement these changes before the deadline.
Among the many changes to the regulations, is the requirement that if after a conditional offer of employment is made, and subsequently decides to deny the applicant the employment position ” based solely or in part on the applicant’s conviction history,” the employer must have made a reasoned, – and this must now under the new regulations be an “evidence-based determination” – of whether the applicant’s conviction history has a direct and adverse relationship with the specific duties of the job that justify denying the applicant the position.
The new regulations then continue to provide detail on what may be taken into consideration in assessing the factors to determine whether the applicant’s conviction history has a direct and adverse relationship with the specific duties of the job that justify denying the applicant the position.
Many of the new regulations help clarify employers obligations, and some new ones are added. These include expanded definitions which apply only to § 11017.1 “Consideration of Criminal History in Employment Decisions” such as:
– – (1) “Applicant” includes, in addition to the individuals within the scope of the general definition in section 11008(a) of these regulations, individuals who have been conditionally offered employment, even if they have commenced employment when the employer undertakes a post-conditional offer review and consideration of criminal history; existing employees who have applied or indicated a specific desire to be considered for a different position with their current employer; and an existing employee who is subjected to a review and consideration of criminal history because of a change in ownership, management, policy, or practice. An employer cannot evade the requirements of Government Code section 12952 or this regulation by having an individual lose their status as an “applicant” by working before undertaking a post-conditional offer review of the individual’s criminal history.
– – (2) “Employer” includes a labor contractor and a client employer; any direct and joint employer; any entity that evaluates the applicant’s conviction history on behalf of an employer, or acts as an agent of an employer, directly or indirectly; any staffing agency; and any entity that selects, obtains, or is provided workers from a pool or availability list.
Employers are prohibited from including statements in job advertisements, postings, applications, or other materials that no persons with criminal history will be considered for hire, such as “No Felons” or “Most Have Clean Record.”
The new regulation also adds a description of evidence of rehabilitation or mitigating circumstances that an applicant voluntarily may provide to the employer.
And in the event they do voluntarily provide such evidence, the new regulations added a provision prohibiting the employer from refusing “to accept additional evidence voluntarily provided by an applicant, or by another party at the applicant’s request, at any stage of the hiring process (including prior to making a preliminary decision to rescind the applicant’s job offer)”
According to a new report – “The Future of Workplace Safety Technology Is Now” – just published by the National Council on Compensation Insurance (NCCI) technology, part 1 of a 3 part report, the workplace, and the role of workers are changing more dramatically today and at a faster pace than ever before.
Along with shifting jobs and evolving workplaces come new and changing exposures to worker injuries. Questions continue to arise about the status and evolution of safety technologies. In fact, some insurers are testing or discussing these technologies, and in some cases, providing them to their customers/policyholders.
Based on interviews with multiple workers compensation insurers, safety technology vendors/suppliers, and insureds, this series is a presentation of perspectives from various stakeholders. In this article, the first installment of NCCI’s series it explores carrier viewpoints on the latest trends in safety technology.
The safety technology industry has evolved since NCCI published its first article on this topic in 2019. The four insurers that it interviewed for this article are currently using or exploring multiple types of safety technologies, including wearables, Artificial Intelligence (AI)/Computer Vision, the Internet of Things (IoT), software applications, and drones.
Key insights include:
– – Insurers are exploring multiple types of advanced safety technologies and are at various stages of implementation
– – Back injury prevention is a common focus for new workplace safety technology; however, applications are available to address many other injury types
– – Manufacturing, warehousing, and logistics industries are mentioned as principal target industries for modern safety solutions
– – An employer culture of “safety and trust” is seen as critical to the adoption and sustainable use of advanced safety technologies
– – Integrating workplace safety and operational efficiency may result in wider adoption of safety technologies
– – More testing and analysis are needed to fully quantify the value of modern workplace safety technologies
– – Safety technologies are deemed to be a “game-changer” by some industry experts; all interviewees see these technologies playing a major role in the future of worker injury prevention
For example, the report said that Drones, also known as Unmanned Aircraft Systems (UAS), can evaluate certain exposures without putting workers at risk for injury. Drones can evaluate roofing conditions and cell phone towers, as well as monitor air quality in confined spaces.
When asked if safety technology is a “game-changer,” the responses varied, ranging from “It can be ” – to “Absolutely.” Safety technology was mentioned as a potential differentiator to offer higher service and value. It was also noted that “safety technology will point out problems but may not point out solutions. But pinpointing the problem could lead to a solution.”
Part 1 of The Future of Workplace Safety Technology Is Now is available at no charge on the NCCI website.
Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Represented Worker Not Required to Repeat QME Procedural Steps. Arbitrator Has No Power to Cure Employers Late Payment of Arbitration Fees. 9th Circuit En Banc to Rule on Student/State Bar ADA Accommodation Dispute. Owners of Bakersfield Construction Co. Face $4M Payroll Fraud Charges. New Form 1-9 and Remote Verification Process Announced.
WCIRB 2023 State of the System Report is Essentially Good News. Workers Compensation National Insurers Show Strength and Profitability. Researchers Say DWC Data Shows 20,000 Annual Heat Related Injuries. AHA Reports Massive Dissatisfaction With Insurer Healthcare Practices. 16 Hospitals Line Up for California Distressed Hospital Loan Program.