JPMorgan Chase has sued the state of California on Thursday for $5.9 million in legal fees, resulting from the bank’s intervention to save the state from a dubious purchase of N95 face masks early in the Covid-19 pandemic.
According to the report in Courthouse News, the suit, filed in a Sacramento state court, claims the bank was involved in litigation by the medical supply company purportedly selling the face masks to California, after JPMorgan Chase raised concerns about the more than $456 million transaction.
JPMorgan Chase seeks to recover the legal fees generated defending itself from the medical supplier’s lawsuit.
According to the allegations of the complaint, John Thomas introduced himself to high- level California officials, including the State Controller, and said that his company, Blue Flame Medical LLC, could deliver 100,000,000 N95 masks.Over the next few days, the State Controller’s Office (SCO), the Governor’s Office of Emergency Services (OES), and California Department of General Services (DGS) corresponded with Blue Flame about a potential transaction.
DGS prepared a purchase order for 100,000,000 N95 masks, and Blue Flame prepared an invoice. The total purchase price was $609,161,000 and 75% prepayment was required. It then tried to issue a $456,888,600 wire (constituting approximately 75% prepayment) to Blue Flame on March 25.
During its “diligence in reviewing the transaction,” the bank alerted the state to concerns stemming from its internal investigation of the wire transfer. The complaint claims that JPMorgan Chase learned from Blue Flame’s bank that “Blue Flame’s account was new, that the account had been opened by a political lobbyist and that the size of the wire was unusual for this client.”
Made aware of the concerns about Blue Flame, California reversed course on the wire transfer. JPMorgan Chase claims the funds were returned to the state the same day the wire was initially approved.
The complaint cites multiple statements from the involved state officials at a California Assembly oversight hearing in May 2020 in which they credited JPMorgan Chase for helping retrieve the funds and alerting them to some of the concerns regarding Blue Flame.
In September 2021, a federal judge in Virginia granted summary judgment to Blue Flame’s bank, compelling JPMorgan Chase to indemnify the bank for their losses in the transaction between Blue Flame and California. JPMorgan Chase settled with the bank, agreeing to pay $5.9 million in attorneys’ fees and expenses.
It now seeks to recover that sum from the State of California after the state declined to reimburse the bank.
Blue Flame has faced multiple probes into its financial dealings, including allegations that it failed to deliver products to state governments who purchased masks and other personal protective equipment. These include a criminal inquiry by the U.S. Department of Justice and a congressional committee investigation.
Single-payer health care didn’t stand a chance in California this year. Democratic lawmakers shied away from legislation that would have put state government in charge of health care and taxed Californians heavily to do so – a massive transformation that would have forced them to take on the powerful health care industry.
Gov. Gavin Newsom, who had promised to spearhead single-payer when he ran for governor four years ago, dashed its chances this year when he declined to publicly support it.
Instead he is pushing for “universal health care,” which aims to provide all Californians with coverage but, unlike single-payer, would keep private health insurance intact.
And according to a report by CaliforniaHealthline.org. the death of single-payer in the nation’s most populous state also deals a major blow to similar campaigns elsewhere in the nation – which had looked to California for inspiration and leadership – casting doubt on their ability to succeed.
“We’re also fighting in New York, but just like in California, there’s not 100% Democratic consensus among legislators,” said Ursula Rozum, co-director of the Campaign for New York Health, which is working to pass single-payer legislation. “It feels like a constant question of ‘Can we win this?’”
Health policy experts agree that California’s failure to adopt single-payer dampens momentum across the country.
“California, given its size and politics, has always been a bellwether for progressive policy, so this certainly sends a signal to other states about how hard this is,” said Larry Levitt, executive vice president for health policy at KFF.
But Rozum and single-payer activists in Colorado, Washington state, and elsewhere say that rather than giving up, they are taking key lessons from California’s failure: It is essential to win – and keep – support from the governor. Groups pushing single-payer must unite Democrats, bringing in business-friendly moderates and broader support from organized labor. And they say they must learn how to counter intense lobbying by doctors, hospitals, and health insurance companies fighting to preserve the status quo.
So far, single-payer proponents haven’t been able to broaden their movement beyond liberal activists or convince people that they should pay higher taxes in exchange for scrapping health care premiums, deductibles, and copays.
The only state that has passed single-payer, Vermont, didn’t implement it. Vermont adopted a single-payer plan in 2011 with unequivocal support from its then-governor, Democrat Peter Shumlin. But he abandoned the effort in 2014 amid growing concerns about tax increases and runaway health care costs.
But progressive dreams for single-payer didn’t die when Vermont retreated. “Medicare for All” became a liberal rallying cry for Democrats nationally when Vermont Sen. Bernie Sanders stumped for it during his presidential campaigns. After President Joe Biden was elected, the movement shifted to the states, in part because Biden has opposed Medicare for All.
Activists in Colorado are mobilizing for another single-payer campaign after the overwhelming defeat of a 2016 ballot initiative that failed partly because of intense health care industry opposition. Organizers in Washington state are pushing legislation and trying to get a single-payer initiative on the ballot next year.
On February 7, 2018, Steven Brow, sustained industrial injury to his left thumb while employed as a machinist by Sepragen Corporation, insured by The Hartford.
Mr. Brow’s case-in-chief was never the subject of a Stipulated Award or Compromise and Release, and the case was administratively closed by The Hartford.
Medical treatment and a surgery was provided by the United States Department of Veterans Affairs. The hearing was initiated by the V.A. for reimbursement of treatment provided for the injured employee’s left thumb injury, including for an outpatient nerve repair procedure.
The defendant partially reimbursed the V.A., the V.A. claimed additional reimbursement.
The WCJ found that an extensive body of federal or state case law, and statutory law, supports preemption of Labor Code section 5307.1 and the California Official Medical Fee Schedule (OMFS) with respect to the V.A.’s billings. And that section 5307.1 and the OMFS are preempted by federal law, and that the applicable federal billing schedules, and not the OMFS, apply to the V.A.’s billings in this case.
The Hartford petition for reconsideration of the Findings, Award and Order. Reconsideration was denied in the panel decision of Brow v. Sepragen Corporation (Feb 2022 – ADJ12210104).
Defendant contends, in substance, that there is nothing to trigger federal preemption of state law because there is no conflict between state and federal law, which both hold that a standard of reasonableness applies to the medical treatment charges incurred by the V.A.
The panel noted that “although defendant states it does not contend that the California OMFS applies to the V.A.’s billings for medical treatment, defendant nevertheless contends that the V.A.’s billings are subject to a standard of reasonableness under California state law.” ….”As such, defendant’s contention indirectly attacks part of the WCJ’s seventh Finding, wherein the WCJ found that ‘applicable federal billing schedules’ apply to the V.A.’s billings in this case.”
The WCJ stated on page five of his Opinion on Decision that federal law expressly preempts state law on the question of the extent of the V.A.’s entitlement to reasonable reimbursement. That is, there are various kinds of preemption, but here defendant erroneously relies upon conflict preemption, which is not on point given the facts of this case. (See People v. Hamilton (2018) 30 Cal.App.5th 673 [The four species of preemption include express, conflict, obstacle, and field preemption].)
The V.A. still has the burden of establishing the reasonableness of its charges in accordance with the billing applicable to V.A. cases, as well as establishing all other applicable elements justifying the payment sought.
In conclusion the panel “affirm[ed] the WCJ’s finding that the V.A.’s medical treatment charges are not governed by California state law, but rather are subject to the ‘applicable federal billing schedules.’ ”
ID.me was touted by Gov. Gavin Newsom as a crucial tool in combating unemployment insurance fraud, and the system was credited with being a huge help in doing just that.
Newsom touted ID.me at a September, 2020, news conference where he detailed the findings of his strike team, a blue-ribbon group he created to recommend ways to make EDD more efficient.ID.me can verify someone’s identity by having them take a photo or video of themselves. That is then digitally compared to the documents in their application.
He said the program would allow people “to do selfies, to provide additional verification in ways that we think could substantially, not exclusively, no one’s naive, but substantially mitigate fraud.”
But now, SecurityInfoWatch.com reports that California’s nonpartisan Legislative Analyst’s Office is urging lawmakers to take another look at ID.me. And ID.me, under pressure from Washington lawmakers and others, is saying it will offer alternatives to the controversial facial recognition system.
The analysts said Newsom and his unemployment insurance strike team’s use of ID.me was warranted during the height of the COVID-19 pandemic in 2020 and 2021, “when the magnitude of the claims backlog called for prompt and decisive action.”
In California, ID.me has proven an important way of reducing fraud and making the overwhelmed unemployment system more effective, the analyst’s report found.
“Setting up automated identity verification substantially sped up EDD processes so benefits could be paid promptly during the pandemic,” the Legislative Analyst’s Office said in its report. The system “likely also reduced fraud in the temporary federal programs.”
But, the analyst’s report said, “Now that this critical period has passed, we recommend the Legislature pause and carefully consider the implications of requiring third-party biometric scanning -in this case, facial recognition performed by artificial intelligence.”
The state’s Employment Development Department, which manages the unemployment program, declined to comment. Assemblywoman Wendy Carrillo, D- Los Angeles, who chairs a budget subcommittee on state administration that plans a hearing on EDD Tuesday, did not respond to a request for comment.
And key members of Congress have expressed concern.
“Facial recognition should not be a prerequisite for accessing unemployment insurance or any other essential government services,” wrote Senate Finance Committee Chairman Ron Wyden, D- Oregon, and Sens. Sherrod Brown, D- Ohio, and Elizabeth Warren, D- Mass., in a letter this week to Labor Secretary Martin Walsh.
“It is particularly concerning that one of the most prominent vendors in the space, ID.me, not only uses facial recognition and lacks transparency about its processes and results,” they said, “but frequently has unacceptably long wait times for users to be screened by humans after being rejected by the company’s automated scanning system.”
Two Minnesota workers’ compensation cases have been elevated to the Supreme Court of the United States, that may determine the outcome of controversy over conflicting state and federal law on the use of medical cannabis in workers’ compensation claims.
The Minnesota Supreme Court ruled late last year that both workers comp claims were invalid because of marijuana’s Schedule I status under the federal Controlled Substances Act.
In the first case, Susan Musta filed a petition with the U.S. Supreme Court in November after her state’s highest court determined that the CSA did, indeed, mean her employer did not need to provide reimbursement for medical cannabis after she was injured at her place of work, a dental center. Her case before SCOTUS is Susan K. Musta, Petitioner v.Mendota Heights Dental Center, et al. (No. 21-676).
And the Minnesota Supreme Court made the same judgment in another case where Daniel Bierbach was injured at his job working for an all-terrain vehicle company and sought compensation for medical marijuana. His case is Daniel Bierbach, Petitioner v. Digger’s Polaris, et al. (No. 21-998).
The issue presented in both cases is whether the Controlled Substances Act preempts an order under a state workers’ compensation law requiring an employer to reimburse an injured employee for the cost of medical marijuana used to treat a work-related injury.
Filings in both cases were distributed on February 2 for a Supreme Court conference that was scheduled on February 18. The justices are now seeking input on the issue from the Biden administration, as the February 22, 2022 entry on the both dockets reads “The Solicitor General is invited to file a brief in this case expressing the views of the United States.”
Congress recently has prohibited the U. S. Department of Justice from impeding state medical marijuana programs. Specifically, in appropriations bills since 2014, Congress consistently has barred DOJ from expending funds to “prevent” States “from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” E.g., Consolidated Appropriations Ac t, 2021, Pub. L. No. 116- 260, § 531, 134 Stat. 1182, 1282-83 (2020) (App. 109a).
Minnesota authorized the use of marijuana for medical purposes in 2014 with the Medical Cannabis Therapeutic Research Act. Under the Cannabis Act, the Minnesota Department of Health administers a program that permits certain registered patients to possess marijuana for medical purposes.
The Minnesota Supreme Court reasoned in both cases that the CSA preempted an order obligating an employer to reimburse an employee for the cost of medical cannabis because compliance with that order would expose the employer to criminal liability under federal law for aiding and abetting unlawful possession of cannabis.
State supreme courts are divided on whether the CSA preempts an order under a state workers’ compensation law requiring an employer to reimburse an injured employee for the cost of medical marijuana used to treat a work-related injury.
The supreme courts of Maine and Minnesota have held that the CSA preempts an order under their States’ workers’ compensation laws requiring reimbursement for medical marijuana. See Bourgoin v. Twin Rivers Paper Co. , 187 A.3d 10, 12 (Me. 2018); and Musta v. Mendota Heights Dental Ctr. , 965 N.W.2d 312, 327 (Minn. 2021); and Bierbach v. Digger’s Polaris, 965 N.W.2d 281, 282 (Minn. 2021)
But the supreme courts of New Hampshire and New Jersey have reached the opposite conclusion with respect to their States’ medical marijuana laws. See Appeal of Panaggio, 260 A.3d 825, 835, 837 (N.H. 2021); and Hager v. M&K Constr., 247 A.3d 864, 887, 889 (N.J. 2021).
These decisions manifest a mature split of authority that typically warrants review by the U.S. Supreme Court.
U.S. Supreme Court Justice Clarence Thomas recently took issue with the government’s inconsistent stance on cannabis. In a statement issued in June, after the court declined to take up a tax case centered on cannabis, Thomas criticized the government’s approach as “contradictory” and “unstable.”.
“Once comprehensive, the Federal Government’s current approach is a half-in, half-out regime that simultaneously tolerates and forbids local use of marijuana,” he wrote.
Daryol Richmond, 31, a Kern Valley State Prison inmate pleaded guilty to conspiracy and aggravated identity theft charges for his role in a $25 million unemployment insurance fraud scheme during the COVID-19 pandemic,
According to the plea agreement, Richmond obtained the personal identifying information for other individuals, including inmates and non-inmates, without their authorization. He then provided this information to his co-conspirators inside and outside of prison through emails and jail calls.
The co-conspirators then filed applications for unemployment insurance with the California Employment Development Department (EDD) that falsely stated that the inmates, minor children, and others previously worked as clothing merchants, handymen, and other jobs, and recently became unemployed because of the COVID-19 pandemic. In the plea agreement, Richmond acknowledged that he was responsible for $1.4 million worth of the fraudulent claims.
Richmond is scheduled to be sentenced by U.S. District Judge Dale A. Drozd on Sept. 19, 2022. He faces up to 20 years in prison and a $250,000 fine for the conspiracy charge. He also faces a mandatory, additional two years in prison for the aggravated identity theft charge. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account several variables.
Charges are pending against the other defendants in this case: Telvin Breaux, 29, an inmate at the California Correctional Institution in Tehachapi; Holly White, 30, of Los Angeles; Cecelia Allen, 33, of Downey; Fantasia Brown, 33, of Los Angeles; Tonisha Brown, 28, of Los Angeles; Fantesia Davis, 32, of Victorville; and Shanice White, 28, of Hawthorne.
This case is the product of an investigation by the Federal Bureau of Investigation, California Department of Corrections and Rehabilitation, EDD, and Department of Labor Office of Inspector General. Assistant U.S. Attorney Joseph Barton is prosecuting the case.
Delivery of healthcare services is a critical factor in the administration of workers’ compensation claims. However, a recent poll shows that there might be trouble ahead, and staffing challenges to deliver quality care.
New USA Today-Ipsos research finds that workers in the American healthcare sector are resilient in the face of two years of the pandemic.
However, this survey also finds numerous warning signs of the ongoing strain these workers are experiencing, with half reporting they are burned out and almost a quarter thinking about leaving the field in the near future.
Additionally, optimism among these workers has declined relative to Spring 2021 – as the vaccine was rolling out – as people in the healthcare field widely disapprove of how the rest of the country has handled the pandemic.
The large majority of healthcare workers report being satisfied with their jobs, only slightly down from findings in a Spring 2021 KFF/WP poll.
– – Four in five (80%) of healthcare workers report being somewhat or very satisfied with their current job, down slightly from the 89% saying the same in a Spring 2021 Kaiser Family Foundation/Washington Post poll.
– – Three quarters (73%) agree with the statement “I love working in healthcare”.
– – A majority report feeling “hopeful” (59%), “motivated” (59%), or “optimistic” (56%) about going to work. However, the number saying hopeful (to 59% from 76%) or optimistic (to 56% from 67%) is down compared to last year.
However, there are warning signs about the resiliency of workers in the healthcare sector after two years of the pandemic.
– – About half (52%) report feeling “burned out”, on par with the 2021 numbers (55%).
– – Over a third (39%) report agreeing with the statement “the American healthcare system is on the verge of collapse”.
– – A third either disagree (16%) or don’t know how they feel (18%) regarding if they could pick a career over again, “I would still decide to go into health care”.
– – A quarter of healthcare workers (23%) say they are likely to leave the field in the near future.
These are some of the findings of an Ipsos poll conducted between February 9-16, 2022 based on a nationally representative probability sample of 1,170 healthcare workers ages 18 or older.
And the American Nurses Association reports that by 2022, there will be far more registered nurse jobs available than any other profession, at more than 100,000 per year. With more than 500,000 seasoned RNs anticipated to retire by 2022, the U.S. Bureau of Labor Statistics projects the need for 1.1 million new RNs for expansion and replacement of retirees, and to avoid a nursing shortage.
One of the nation’s largest unions has taken aim at America’s largest hospital operator, HCA Healthcare, for practices that “maximize profits at the expense of patient care, working conditions, and responsible corporate behavior” including “apparent Medicare fraud,” the union says. The basis for that last, most explosive claim: HCA’s unusually high emergency room admission rates.
According to the story in Fortune, the allegations, leveled in a 45-page investigative report published last week by Service Employees International Union (SEIU), are based on the organization’s analysis of Medicare data and lawsuits filed by whistleblowers and health professionals against HCA.
That analysis found the company has had an average emergency department admission rate that exceeded the national average by more than 5% between 2014 and 2019 (the most recent data available). In some states, including Texas and California, HCA’s average ER admission rate is 10% higher than the state average. Inpatient admissions receive higher Medicare reimbursement rates, and so the pattern raises concerns, says SEIU, that those higher admission volumes are driven by “corporate efforts to boost their profits” and “without respect to medical need.”
In a statement to Fortune, HCA rejected SEIU’s conclusions.
SEIU’s accusations come at a time when American households continue to struggle with the world’s highest medical costs – with bills for unexpected hospital stays among the biggest pain points – and when unnecessary hospitalizations present a particular health danger.
They also echo past allegations of wrongdoing by hospitals.
Similar trends were observed at for-profit hospital operators Community Health Systems (CHS) and Health Management Associates (HMA) before drawing scrutiny and government investigations during the past decade.
A 2012 investigation by 60 Minutes revealed that HMA (since acquired by CHS) gave its physicians admission targets to hit, for example. Both companies settled false claims charges with the government over those allegations of improper Medicare billing; neither company admitted wrongdoing. (HCA also has a history of settlements with the Department of Justice over alleged fraud.)
While a 5%-higher-than-average admission rate may seem trivial, SEIU contends it enabled HCA to bring in “over $1 billion in excess Medicare payments” in five years. Given HCA’s presence in 20 states, and the consistency of the trend – state by state, the SEIU found HCA’s average admission rate exceeded the state average in all but one – the report’s authors argue the patterns can’t be coincidental.
The Guardian reports that a sheriff’s department in southern California is encouraging law enforcement officers who oppose vaccine mandates to “take back [their] freedom” and apply for jobs with the department.
The Kern county sheriff’s office released a video last week inviting applications from deputies within Los Angeles county, where officials passed an order that could lead to the termination of thousands of county workers who haven’t received the Covid-19 vaccine or provided a religious or medical exemption.
“Drive north, we have a place for you – Kern county is a community that backs the blue,” the minute-long ad says as country singer George Strait sings The Weight of the Badge, a song paying tribute to police.
Covid-19 vaccination rates inside the LA sheriff’s department have lagged far below that of the public with just 54% of workers fully vaccinated, despite a vaccination mandate for county employees. Last week the county board of supervisors moved to shift vaccine mandate enforcement power away from LA county Sheriff Alex Villanueva. Villanueva, who has criticized mask orders and said he will not fire workers who refuse the vaccine, said such an act could lead to more than 4,000 unvaccinated deputies losing their jobs.
The sheriff’s office in Kern county, a deeply conservative expanse located immediately to the north of Los Angeles, responded with its video the next day. “So take back your freedom, and APPLY today to work at the Kern county sheriff’s office. You deserve a job that welcomes you and your values, with open arms.”
The battle over vaccine mandates for law enforcement in southern California highlights the divide over Covid health rules across the state. Vaccination rates continue to lag in more rural and conservative regions of California, where 70% of all residents are vaccinated.
Kern county doesn’t require vaccinations for its workers. Its sheriff, Donny Youngblood, said in a press conference on Friday that he doesn’t know how many of his department’s deputies are vaccinated. Just 52% of Kern county residents are vaccinated, compared to 70% of LA county residents, according to the New York Times.
“There’s a substantial number of deputies that already work here that aren’t vaccinated,” he said. “I have no idea [how many] and don’t care,” Youngblood said at the press conference.
Though vaccination rates among law enforcement across the state have trailed behind the statewide rate, Youngblood said Kern county specifically wanted to target LA deputies. “The reason we reached out specifically to LA is there will be 4,000 deputy sheriffs if this were to happen that have real families have real children have real bills that could be unemployed because they refuse to take the vaccination.“
As Los Angeles County residents face rising crime and rising numbers of homelessness, Sheriff Alex Villanueva is speaking out against what he describes as a political push fueled by police activists to lay off 4,000 department employees of the sheriff who have not been vaccinated against the coronavirus.
“This is nothing but a power grab by the board. And it’s shameful, and it’s going to harm public safety,”