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DWC Sets Online MTUS Public Hearing for July 23

The Division of Workers’ Compensation has issued a notice of conference call public hearing for proposed evidence-based updates to the Medical Treatment Utilization Schedule (MTUS), which can be found at California Code of Regulations, title 8, section 9792.23.

The conference call public hearing is scheduled for Thursday, July 23 at 10 a.m. and members of the public may attend by calling 866-390-1828 and using access code 5497535#. Members of the public may review and comment on the proposed updates no later than July 23.

The proposed evidence-based updates to the MTUS incorporate by reference the latest published guidelines from American College of Occupational and Environmental Medicine (ACOEM) for the following:

— Occupational Interstitial Lung Disease Guideline (ACOEM November 8, 2019)
Knee Disorders Guideline (ACOEM December 3, 2019)
— Workplace Mental Health Guideline: Depressive Disorders (ACOEM February 13, 2020).
— Occupational/Work-Related Asthma Guideline (ACOEM June 5, 2020)

The proposed evidence-based updates to the MTUS regulations are exempt from Labor Code sections 5307.3 and 5307.4 and the rulemaking provisions of the Administrative Procedure Act. However, DWC is required under Labor Code section 5307.27 to have a 30-day public comment period, hold a public hearing, respond to all the comments received during the public comment period and publish the order adopting the updates online.

$1M Fees and Costs Awarded in FEHA Claim Following Industrial Injury

Noe Abarca worked for Citizens of Humanity in their quality control department, inspecting boxes of jeans. He suffered an an industrial injury with a work restriction. After the work restriction expired, Citizens fired Abarca.

Abarca sued Citizens and prevailed on his claims for retaliation, disability discrimination, failure to prevent discrimination and retaliation under the Fair Employment and Housing Act (FEHA), and wrongful termination.

The jury found that, while Citizens had other nondiscriminatory reasons for terminating Abarca, its ultimate decision to fire him was based on discrimination and constituted conduct that was malicious, oppressive, or fraudulent.

The jury awarded Abarca $100,000 in compensatory damages: $35,000 for past lost earnings; $20,000 in other past economic loss; $45,000 in past noneconomic loss including mental suffering; and nothing for future noneconomic loss. The jury also awarded Abarca $550,000 in punitive damages.

Abarca’s attorneys represented him on a contingency basis, with no retainer. Abarca moved for an award of attorney fees in the amount of $1,652,255, plus a multiplier of 2.0, for a total of $3,304,510 under Government Code section 12965, subdivision (b).

The trial court awarded Abarca attorney fees in the sum of $1,084,160 pursuant to Code of Civil Procedure sections 1032 and 1033.5 and Government Code section 12965, subdivision (b).

The trial court did not reduce the number of hours billed, finding them reasonable and noting that “[t]his case was litigated to the hilt. Defendant litigated every possible issue, in this court’s opinion, at times, excessively. If the number of hours here is exceptional, that is the reason why. An exceptional number of hours is required to overcome an exceptionally tenacious defense.”

The trial court did, however, find Abarca’s attorneys’ hourly rates excessive, reducing the hourly rates of three attorneys from $700 to $450, another’s rate from $700 to $500, an associate’s rate from $350 to $300, and the rate of two paralegals from $200 to $125. The trial court also denied Abarca’s request for a multiplier.

With the exception of clerical mathematical errors, the Court of Appeal affirmed the award of fees and costs in the unpublished case of Abarca v Citizens United.

A laundry list of errors were asserted by Citizens, and the discussion in the Opinion is an excellent treatise on the award of fees and costs in FEHA litigation. It concluded that “It is disingenuous to engage in aggressive litigation tactics and then complain about the fees those tactics generated from the opposing side.”

L.A. Pharmacist Charged with Price Gouging KN95 Masks

Misdemeanor price gouging charges have been filed by the California Attorney General against Katrin Golian, doing business as RxAll Pharmacy, an independently-owned business located at 1125 South Beverly Drive, Suite 100, Los Angeles, California.

On March 4, 2020, Governor Gavin Newsom declared a state of emergency in response to the COVID-19 pandemic, which triggered price gouging prohibitions statewide. The Governor later issued Executive Order N-44-20, which prohibits businesses that did not sell certain emergency-related items prior to the emergency declaration from charging a price for the items that is greater than 50 percent more than the seller’s cost of purchase.

The criminal complaint alleges that Ms. Golian, a licensed pharmacist, knowingly sold KN95 masks at prices exceeding the 50 percent mark-up permitted under the executive order. This is the first time that charges have been filed under Governor Newsom’s executive order on price gouging.

Following a consumer complaint against RxAll Pharmacy, an investigation conducted by the California Department of Justice revealed that Ms. Golian had been purchasing individual masks for $5 each and selling them at $10 each – 100 percent more than her cost for the masks – despite the Governor’s executive order.

After being warned by special agents that the price of the masks violated the Governor’s executive order, Ms. Golian acknowledged the warning and agreed to reduce the price on masks.

Several days later, special agents returned to RxAll Pharmacy and found that Ms. Golian was still selling masks at the same price she had previously been told violated the order. Ms. Golian sold undercover agents two masks at the unlawful price of $10 each.

Under California law it is unlawful to refuse or willfully neglect to obey any lawful order issued under the Emergency Services Act. Violation of this section is punishable as a misdemeanor, including imprisonment in county jail for not more than six months and/or a fine of not more than $1,000. This offense has a one-year statute of limitations.

June 15, 2020 – News Podcast


Rene Thomas Folse, JD, Ph.D. is the host for this edition which reports on the following news stories: Stipulation to “Upper Extremity” Includes Thoracic Outlet Syndrome, Workers Sue Amazon Over COVID-19 Working Conditions, 3M Sues California Company Selling Fake N95 Masks, California Agricultural Industry Braces for COVID-19 Claims, Head of Las Gatos Testing Lab Charged with $69M Hoax, Reopenings Continue Despite COVID-19 Hotspots, EU Regulators Join FTC Efforts Against Drugmaker Pay-for-Delay Deals, Fake Hydroxychloroquine Study Retracted by Lancet and NEJM, Workers’ Comp Trails Commercial Lines Growth.

Emergency Regulations Mandate Recalculation of Comp Premiums

The California Insurance Commissioner issued an Order adopting emergency workers’ compensation regulations in response to the COVID-19 pandemic.

These new regulations will mandate insurance companies to recompute premium charges for policyholders to reflect reduced risk of loss consistent with Commissioner Lara’s April 13 and May 15, 2020 Bulletins, and will result in savings for many policyholders as businesses continue to struggle financially during the COVID-19 pandemic.

The new regulations will go into effect on July 1, 2020.

Under these emergency regulations, employers are permitted to reclassify an employee if the employee’s duties have changed to a clerical classification that has reduced risk than the employee’s previous classification.

This reclassification will reduce the employer’s premiums for employees who are a lower risk because they are now working from home even though they may not have previously done so. This change would be retroactive to March 19, 2020, the first day of the Governor’s statewide stay-at-home order, and conclude 60 days after the order is lifted.

These emergency regulations also exclude from premium calculations the payments made to an employee, including sick or family leave, while the employee is not performing duties of any kind for the employer. Typically, these payments would be used as a basis for the employer’s workers’ compensation premium. This change will lower the employer’s rate by reducing the amount of payroll assessed, and the employer will not pay premium for paid workers who are otherwise being furloughed.

This new regulation will also exclude claims related to a COVID-19 diagnosis from being included in future rate calculations so that employers are not penalized with higher rates due to COVID-19 claims.

Insurers will also be required to report injuries involving a diagnosis of COVID-19 which will allow the Commissioner’s statistical agent – the WCIRB – to keep track of COVID-19 injuries, and will aid in the WCIRB’s future analyses of the workplace and market impacts.

Five Charged in Sober Living Facility Insurance Fraud

A joint effort by the California Department of Insurance and the Orange County District Attorney’s Office has led to charges against five defendants in connection with a fraud ring allegedly designed to traffic vulnerable substance abuse patients from outside California into treatment facilities in Orange and Riverside counties and to bilk insurance companies out of millions of dollars.

Authorities charged Jeremy Ryan, 42, of Orange, Daniel Reaman, 41, of Mount Rainier, Maryland, Richard Roberts, 61, of Stockton, Reiner Nusbaum, 54, of San Clemente, and Michael Castanon, 56, of San Juan Capistrano, with multiple felony counts including insurance fraud, money laundering, and conspiracy.

The defendants face between 12 years, 8 months and 21 years and four months in prison for their alleged involvement in a scheme that resulted in $60 million in fraudulent billing and $11.7 million in insurance losses.

Authorities allege that Ryan, Reaman, and five previously charged defendants used mass media marketing campaigns to identify addicted “clients” from across the country who were seeking treatment. The conspirators and their witting employees then falsified clients’ health care insurance applications to circumvent California residency requirements and closed enrollment periods, employed a money-laundering scheme they devised to conceal their involvement in paying clients’ insurance premiums, and trafficked their clients into Southern California treatment facilities.

The conspirators allegedly used their own nonprofit, Healthcare Relief Foundation, and exploited the unwitting non-profit, StopB4UStart, to conceal their involvement in funding their scheme.

Authorities further allege they conspired with the owners and employees of over 17 substance treatment facilities, including facilities owned by defendants Roberts, Nusbaum and Castanon, to traffic clients into these facilities in order to collect thousands of dollars on their investment in unlawful, per-client, kickbacks.

Roberts, Nusbaum, and previously charged conspirators owned and operated RNR Recovery and Diamond Recovery, both Orange and Riverside County businesses offering inpatient detox treatment and residential sober living and assistance. Castanon owned and operated Luminance Recovery Center, a San Juan Capistrano based treatment facility.

Deputy District Attorney James Bilek of the Insurance Fraud Unit at the Orange County District Attorney’s Office is prosecuting this case.

S.F. District Attorney Files DoorDash Misclassification Case

San Francisco’s District Attorney has joined a growing chorus of California regulators and enforcement officials taking aim at gig economy companies for what they see as the misclassification of workers as contractors.

The chief prosecutor announced the filing of an employee protection action against DoorDash alleging the company has and continues to illegally misclassify its delivery workers as independent contractors when, in fact, they are employees. The action seeks restitution for workers, an injunction requiring DoorDash to properly classify its delivery workers as employees, and civil penalties.

DoorDash is a business that delivers food, beverages and other items from local restaurants and stores to nearby customers. It refers to its delivery workers as “Dashers” and employs them to pick up orders from merchants and deliver them to customers. DoorDash is headquartered in San Francisco.

According to the complaint, misclassification is a major issue negatively impacting California workers. The California Supreme Court has discussed that misclassification is a “very serious problem” that was depriving “millions of workers of the labor law protections to which they are entitled.”

The California Legislature has stated that misclassification contributes to the rise in income inequality and the shrinking of the middle class.

Additionally, the San Francisco Board of Supervisors recently adopted a Resolution urging “City Attorney Dennis Herrera and District Attorney Chesa Boudin to seek immediate injunctive relief to prevent the misclassification of San Francisco workers as they seek to access basic workplace rights like paid sick leave, unemployment insurance, and benefits provided under the San Francisco Health Care Security Ordinance.”

Under California’s protective labor laws, workers are presumed to be employees and it is the employer’s burden to justify classifying workers as independent contractors.

The District Attorney also claims that “properly classifying employees is especially important during the ongoing COVID-19 pandemic. Dashers were already performing dangerous work, forced to navigate traffic conditions as quickly as possible to make their deliveries or risk being suspended or terminated by DoorDash. The job of a Dasher became substantially more perilous during this pandemic. Dashers have been deemed essential workers yet DoorDash does not even provide them with workers’ compensation insurance and prevents them from having access to paid sick and disability leave under state laws.”

COVID-19 Distancing Rules Becoming a “Political Hazard”

The first wave of COVID-19 came slowly to San Joaquin County in the heart of California’s breadbasket, but the much-feared second surge is roaring through, sickening as many people in the two weeks since Memorial Day as in March and April combined.

In San Joaquin County, Health Officer Maggie Park attributes the rise in cases to two cherry packing plants where people are working in close proximity, and to families and friends gathering without wearing masks or physical distancing, along with recent moves to re-open the economy.

Hospitalizations have spiked by 40%, and the county is one of ten in the most populous U.S. state put on a watch list of places that might be ordered to lock down their economies again after weeks of careful reopening.

But Reuters reports that when Michael Tubbs, mayor of the county seat of Stockton, submitted an ordinance requiring residents to wear masks when they are in public, he did not get a single vote from the six other members of the city council.

It is “a political hazard to act in the interest of public health,” complained Tubbs, a liberal whose city has several conservatives on the council.

The pushback Tubbs experienced – and the spike in cases the county’s health director says was exacerbated when people celebrated Mothers Day and Memorial Day without following physical distancing rules – offers a glimpse into the complicated politics around lifting coronavirus restrictions.

Last week, the chief health officer for Orange County in Southern California resigned amid protests and personal attacks after she issued an order to wear masks in public. Four other health officers in California have resigned or retired in the last two months, as have two public health department directors, local media have reported as cases and deaths continue to rise in the state.

On Tuesday, the state reported nearly 160,000 confirmed COVID-19 cases and over 5,200 deaths.

Health directors and the U.S. Centers for Disease Control and Prevention say wearing face coverings in public is essential to slow the spread of the virus.

Public health restrictions run against the grain of individualism in American culture, and often generate resistance, said U.C. Berkeley epidemiologist Arthur Reingold. Chafing under rules requiring masks in public is reminiscent of prior health care emergencies, such as the uproar that followed efforts to close gay bath houses during the HIV epidemic, Reingold said.

Throughout the country, resistance to public health measures has also taken on a partisan tinge. A Reuters/Ipsos survey conducted last month found that just one-third of Republicans were “very concerned” about the virus, compared to nearly half of Democrats. Trump eschews wearing a mask in public, while his Democratic opponent in November, Joe Biden, generally wears one.

In California, Governor Gavin Newsom has loosened the state’s shutdown even as cases in some areas continue to rise. Stockton, which also has a number of conservative members of the county Board of Supervisors, is emblematic of places where wearing a mask has become politicized.

Contracting Industry Injuries Highest in Opioid Use

Strong responses to the opioid epidemic have led to decreased opioid use over the past five years. However, has the decline been consistent across industries?

A new article published by the National Council on Compensation Insurance (NCCI) explores the difference in opioid use between industry groups by looking at data-driven trends underlying opioid prescribing patterns in workers compensation – with a special focus on the contracting industry.

Studies have shown that certain industry groups have been more prone to opioid use and abuse than others. Further, NCCI data shows that the treatment of injured workers in certain industry groups is significantly more likely to include opioids. For example, in the contracting industry, the quantity of opioids prescribed to injured workers is more than double the average number prescribed to those in all other industry groups.

The share of claims receiving an opioid is greater for the contracting industry group (20%) when compared with all other industry groups combined (14%).

This means that, on average, one out of every five contracting claims involves at least one opioid prescription. In addition, these contracting industry group claimants, on average, receive both 20% more opioid prescriptions and opioid prescriptions that are 20% stronger.

One factor contributing to the higher opioid usage in the contracting industry group is the greater likelihood for serious injuries to occur. Higher medical costs are typically associated with more serious injuries-claims that may be more likely to require pain management efforts, including the potential use of opioids.

For accidents occurring in 2017, the average medical cost per claim, including prescription costs, in the contracting industry group was approximately 2.3 times greater than that for all other industry groups combined.

Opioid usage has experienced decreases in recent years, including among the contracting industry. Between 2012 and 2017, overall, per-claim opioid usage fell by 49% in the contracting industry group.

Decreased opioid usage in the contracting industry group can be primarily explained by a combination of two factors: fewer claimants receiving an opioid prescription, and a reduced number of opioid prescriptions for those who do receive them.

WCRI Reports on Workers’ Compensation Prescription Regulations

The Workers Compensation Research Institute (WCRI) released a new report that gathers in one place the numerous state regulations affecting drugs prescribed to workers with injuries in all 50 states and the District of Columbia.

“Across the country, states have implemented an array of different regulatory strategies, overseen by different agencies, to address prescribing of medicine,” said Ramona Tanabe, WCRI’s executive vice president and counsel.

“This report provides policymakers and system stakeholders with a basic understanding of the different strategies adopted by states, with references to the regulations for those seeking more detail.”

The report, Workers’ Compensation Prescription Drug Regulations: A National Inventory, 2020, also provides information on some of the most prominent prescription drug issues stakeholders are concerned about today, such as the following:

— Rules for Limiting and Monitoring Opioid Prescriptions
— Medical Marijuana Regulations
— Workers’ Compensation Drug Formularies
— Prescription Drug Monitoring Programs
— Price Regulations for Pharmacy- and Physician-Dispensed Drugs
— Drug Testing Regulations

The tables in this report were compiled from completed surveys of two agencies for each of the 50 states and the District of Columbia as of January 1, 2020.

For more information or to purchase, visit its website.