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CVS Subsidiary Pays $15.3M for Illegal Opioid Dispensing

Omnicare, Inc., a subsidiary of CVS Health and a provider of pharmacy services to long-term care facilities, has agreed to pay the United States a $15.3 million civil penalty to resolve allegations that it violated federal law by, among other things, allowing opioids and other controlled substances to be dispensed without a valid prescription, United States Attorney Nicola T. Hanna announced today.

The Cincinnati-based Omnicare operates “closed door” pharmacies – meaning they were not open to the public – that deliver controlled substances to nursing homes and other long-term care facilities (LTCFs).

Omnicare makes daily deliveries of prescription medications to residents of LTCFs, and it also pre-positions limited stockpiles of controlled substances at LTCFs in “emergency kits,” which are to be dispensed to patients on an emergency basis. These emergency kits, which often include opioids and other controlled substances that are commonly abused and diverted, remain part of Omnicare’s inventory and must be tightly controlled and tracked. The controlled substances may be dispensed only pursuant to a valid prescription.

The United States alleged that Omnicare violated the federal Controlled Substances Act in its handling of emergency prescriptions, its controls over the emergency kits, and its processing of written prescriptions that lacked required elements such as the prescriber’s signature or DEA number.

The federal investigation found that Omnicare failed to control emergency kits by improperly permitting LTCFs to remove opioids and other controlled substances from emergency kits days before doctors provided a valid prescription. The investigation also revealed that Omnicare had repeated failures in its documentation and reporting of oral emergency prescriptions of Schedule II controlled substances.

As part of the settlement agreement announced today, Omnicare agreed to pay the $15.3 million civil penalty and entered into a Memorandum of Agreement with the Drug Enforcement Administration that will require Omnicare to increase its auditing and monitoring of emergency kits placed at LTCFs.

Omnicare dispensed powerful opioids without valid prescriptions and failed to inform federal authorities of significant losses of opioids and other drugs,” United States Attorney Hanna stated. “With the opioid crisis still a very real concern, every entity that handles dangerous drugs will be held accountable to ensure powerful narcotics are properly dispensed and not diverted to the black market.”

“Omnicare failed in its responsibility to ensure proper controls of medications used to treat some of the most vulnerable among us,” said DEA Acting Administrator Uttam Dhillon. “DEA is committed to keeping our communities safe by holding companies like Omnicare accountable for such failures, while ensuring continuity of care and necessary access to emergency prescription drug supplies.”

DWC Updates OMFS for Telehealth Services

The Division of Workers’ Compensation has posted an order dated May 7, 2020, adjusting the Physician and Non-Physician Practitioner Services section of the Official Medical Fee Schedule (OMFS) to conform to additional Medicare fee schedule changes pursuant to Labor Code section 5307.1. The order includes technical updates and provisions to support expanded access to telehealth services.

The Centers for Medicare and Medicaid Services (CMS) has issued an Interim Final Rule to adopt additional temporary modifications to the Medicare Physician Fee Schedule to improve access to medical care through telehealth during the public health emergency.

The Interim Final Rule adopts an expanded list of medical services (“Covered Telehealth Services for PHE for the COVID-19 pandemic effective March 1 2020-updated April 30 2020“) that may be billed for telehealth using video and audio technology, and includes identification of services that could be provided through audio-only where medically appropriate. DWC has retroactively adopted the revised telehealth list for services rendered on or after March 1, 2020, and has also adopted a retroactive revision to the Place of Service Code, which may result in an increase in fees for telehealth services if the physician provides the service in a “non-facility” setting.

The CMS Interim Final Rule temporarily increases fees for three telephone evaluation and management codes (CPT codes 99441, 99442, 99443) retroactive to March 1, 2020 to provide parity between these codes and evaluation and management codes for services rendered in person or by audio/video telehealth. DWC has adopted the retroactive increases for these three codes, which will support the provision of medical care for injured workers and further the goal of maintaining social distancing.

The Administrative Director order also adopts the CMS revised 2020 Relative Value Unit file, “RVU20B (Updated 05/01/2020),” which replaces the initial quarter two RVU20B file. The revised file is substantially identical to the original file. The significant change for workers’ compensation services is the increase of the relative values for CPT codes 99441 through 99443 discussed above.

Workers’ compensation claims administrators should adjust payment systems in light of the retroactive changes, and set up a process to reevaluate claims for services rendered on or after March 1, 2020 that may have additional payment due so that the balance owing is remitted to the provider. If a provider believes that the revised fee schedule would result in an increased payment for services rendered, they may submit a corrected bill or request for second review as appropriate.

The order adopting the updated Physician and Non-Physician Practitioner fee schedule can be found on the DWC fee schedule web page.

WCAB Panel Says 5814 Penalties Inapplicable to Timely UR

Angelique Diaz sustained injury to her bilateral upper extremities, psyche, and in the form of hypertension while working for the Southern California Gas Company.

On July 11, 2017, the UR physician denied a treatment request for an EMG, which was overturned by a MAXIMUS IMR Final Determination Letter dated September 12, 2017.

On October, 2, 2017, the UR physician denied a treatment request for Norco, which was overturned by a MAXIMUS IMR Final Determination Letter dated November 8, 2017.

On January 24, 2018, the UR. physician denied a treatment request for Norco and chiropractic treatment, which was overturned by a MAXIMUS IMR Final Determination Letter dated March 26, 2018.

On March 15, 2018, the UR physician denied a treatment request for bilateral upper extremity nerve conduction studies, which was overturned by a MAXIMUS IMR Final Determination Letter dated April 24, 2018.

Applicant’s attorney filed a petition for LC5814 penalties for the four UR denials that IMR overturned. The issues went to trial and the WCJ found that the UR doctors had used inappropriate guidelines.

The WCJ found that there was no wrongdoing by the defendant employer/carrier and that the UR doctors are not agents of the defendant and are not parties. Thus, there is no LC5 814 penalty.

The applicant’s petition for reconsideration was denied in the panel decision of Diaz v Southern California Gas Company.

Labor Code section 4610.1 provides as relevant herein: An employee shall not be entitled to an increase in compensation under Section 5814 for unreasonable delay in the provision of medical treatment for periods of time necessary to complete the utilization review process in compliance with Section 4610. (§ 4610.1 )

The WCAB panel agreed with the WCJ that, since applicant argues that she is entitled to penalties for delay that occurred while the utilization review was in the process of completion-i.e., while the UR physicians failed to properly address the requests of her treating physician-applicant is barred by section 4610.1 from recovering section 5814 penalties.

Accordingly, it concluded that the WCJ correctly determined that defendant is not liable for section 5 814 penalties based upon alleged delay occurring during the UR process.

Tesla CEO Musk Defies Lockdown Order

Tesla CEO Elon Musk is restarting the company’s California factory in defiance of local government efforts to contain the coronavirus. In a tweet Monday, Musk practically dared authorities to arrest him, writing that he would be on the assembly line and if anyone is taken into custody, it should be him.

State law allows a fine of up to $1,000 a day or up to 90 days in jail for operating in violation of health orders. The plant in Fremont, a city of more than 230,000 people south of San Francisco, had been closed since March 23.

KCRA reports that early Monday, the parking lot was nearly full at the massive factory, which employs 10,000 workers, and semis were driving off loaded with vehicles that may have been produced before the shutdown.

The restart defied orders from the Alameda County Public Health Department, which has deemed the factory a nonessential business that can’t open under virus restrictions. The department said Monday it warned the company was operating in violation of the county health order, and hoped Tesla will “comply without further enforcement measures” until the county approves a site-specific plan required by the state.

The department said it expects Tesla to submit such a plan by 5 p.m. Monday. “We look forward to reviewing Tesla’s plan and coming to agreement on protocol and a timeline to reopen safely,” the statement read.

No agency appeared ready to enforce the order against Tesla. County Sheriff Sgt. Ray Kelly said any enforcement would come from Fremont police. Geneva Bosques, Fremont police spokeswoman, said officers would take action at the direction of the county health officer.

County Supervisor Scott Haggerty, who represents Fremont, said he’s been working on the issue for weeks trying to find a way for Tesla to reopen in a way that satisfies the health officer. He said officials were moving toward allowing Tesla to restart May 18, but he suspects Musk wanted to restart stamping operations to make body parts needed to resume assembling electric vehicles.

Tesla planned to maintain worker safety, including the wearing of gloves and masks and social distancing. Haggerty said the company initially pushed back on checking employee temperatures before boarding a company bus to get to work. But Tesla relented, he said, and agreed to check workers.

“I’m seeing emails going back and forth between the plant and our public health department so I’m encouraged by that, and that’s what I mean by cooler heads,” he said. “There’s a lot of people whose lives depend on that plant opening safely.”

The restart came two days after Tesla sued the county health department seeking to overturn its order, and Musk threatened to move Tesla’s manufacturing operations and headquarters from the state.

Frankly, this is the final straw,” Musk wrote in a now-deleted Saturday tweet. “Tesla will now move its HQ and future programs to Texas/Nevada immediately.”

Newsom Faces Several Lawsuits Over Reopening Plan

Some California businesses and others are taking legal action against Gov. Gavin Newsom over his announced plans to reopen California for business. He now faces a slew of lawsuits over his handling of the ongoing pandemic.

Tesla filed a lawsuit Saturday against Alameda County in an effort to invalidate orders that have prevented the automaker from reopening its factory in Fremont, California. The lawsuit seeks injunctive and declaratory relief. and was filed in U.S. District Court for California’s Northern District. Elon Musk has now also threatened to move its headquarters and future programs to Texas or Nevada immediately.

Tesla had planned to bring back about 30% of its factory workers Friday as part of its reopening plan, defying Alameda County’s stay-at-home order.

A San Diego resident on Thursday filed a federal lawsuit against California Governor Gavin Newsom over his stay-home-orders and the closure of businesses. JD Bols, the man at the center of the lawsuit, said it is “a move aimed at freeing the people of California from home confinement, reopening the state’s $3.1 trillion economy, and putting Californians back to work immediately.

A federal judge last week said Gov. Newsom had the right to ban church assemblies to prevent the spread of the coronavirus. Judge John Mendez ruled Tuesday that Newsom’s stay-at-home order did not violate the constitutional rights to free assembly and religion when the Cross Culture Christian Center in Lodi was ordered to cease holding services. The church held services until its landlord, under threat of misdemeanor from county health officials, changed the locks on the church doors.

A civil rights attorney in the Bay Area has filed half a dozen lawsuits claiming Newsom’s current orders are an infringement on human rights. “The governor is overreaching on a number of grounds,” said civil rights attorney Harmeet Dhillon. “The governor has chosen to limit protests to zero in this state, which is outrageous and absurd.”

Nail salons statewide are now planning to sue the governor after he claimed the origin of coronavirus in the state stemmed from the salons. “I think my brain stopped working and I was saying, what the hell?” explained Kelvin Pham, producer of the “Nailed It” documentary which explores the history of Vietnamese salons. “I never heard anything like that before.”

Salon owners have said Newsom’s statement can be detrimental to its future business and are demanding the evidence behind his claim.

Meanwhile, the governor has also recently announced his plan to help illegal aliens with a $500 check at taxpayer’s expense. The Center for American Liberty filed the emergency petition with the California Supreme Court last Wednesday on behalf of two plaintiffs, Ricardo Benitez and Jessica Martinez, both are candidates for a seat on the California State Assembly; The California Supreme Court ordered the governor to respond to the Center for American Liberty’s emergency Writ.

California’s stay-at-home order is has no set end date, but the Democrat governor said stage three of reopening could be just a month away.

Sense of Touch Restored in Severe Spinal Cord Injury

A scientific breakthrough has given a man in Ohio the chance to reclaim a major part of his life after a devastating injury.

Ian Burkhart suffered a severe spinal cord injury in 2010 while on vacation from Ohio University. He dove into a wave and struck an unseen sandbar that paralyzed him instantly. Since 2014, researchers at the nonprofit, Battelle, and the Ohio State University Wexner Medical Center have been working on new technologies to help restore the use of Burkhart’s right arm.

In a new report, published in the journal Cell, the researchers have succeeded in connecting neural signals between Burkhart’s brain and arm. The breakthrough system is able to harness signals that are usually too small to perceive, enhances them, and sends them to the patient.

“We’re taking subperceptual touch events and boosting them into conscious perception,” Battelle research scientist Patrick Ganzer said in a statement. “It was a big eureka moment when we first restored the participant’s sense of touch.

The brain-computer interface (BCI) system implants a small computer chip in the brain and places a series of electrodes on the patient’s skin. After the connection is made to Burkhart’s arm, wires route the movement signals from his brain straight to the muscles – avoiding the damage caused by the 28-year-old’s spinal injury.

Thanks to the BCI, researchers say Burkhart has enough control over his arm now to lift a cup, swipe a credit card, or even play video games like Guitar Hero. Ganzer says that patients who have suffered a “clinically complete” spinal cord injury still have a few remnants of nerve fiber that survive the injury. The BCI helps the body boost the signals from those remaining fibers and gets the to brain respond to them.

The Ohio researchers add that their system works very much like how a cell phone or video game controller lets the user know something is going on. Using “haptic feedback,” a vibration or other force a machine produces to get a user’s attention, the BCI helps the touch signals coming from the patient’s skin to reach the brain as understandable haptic feedback.

The success with Ian Burkhart have also led to several improvements in the BCI system. The researchers say the 28-year-old has been able to detect an object by touch alone, without having to see it. He’s also been able to experience movement and the sense of touch at the same time and can sense how much pressure to apply to an object he’s holding – depending on if it’s light or heavy.

“It has been amazing to see the possibilities of sensory information coming from a device that was originally created to only allow me to control my hand in a one-way direction,” Burkhart explained.

The scientists are now hoping to design a BCI that can be worn like a sleeve at home and can be easily taken on or off.

Executive Order Creates COVID-19 Compensability Presumption

As California prepares to enter Stage 2 of the gradual reopening of the state this Friday, Governor Gavin Newsom announced that workers who contract COVID-19 while on the job may be eligible to receive workers’ compensation. The Governor signed an executive order that creates a time-limited rebuttable presumption for accessing workers’ compensation benefits applicable to Californians who must work outside of their homes during the stay at home order.

“We are removing a burden for workers on the front lines, who risk their own health and safety to deliver critical services to our fellow Californians, so that they can access benefits, and be able to focus on their recovery,” said Governor Newsom. “Workers’ compensation is a critical piece to reopening the state and it will help workers get the care they need to get healthy, and in turn, protect public health.”

Those eligible will have the rebuttable presumption if they tested positive for COVID-19 or were diagnosed with COVID-19 and confirmed by a positive test within 14 days of performing a labor or service at a place of work after the stay at home order was issued on March 19, 2020. The presumption will stay in place for 60 days after issuance of the executive order.

The Governor also signed an executive order that waives penalties for property taxes paid after April 10 for taxpayers who demonstrate they have experienced financial hardship due to the COVID-19 pandemic through May 6, 2021. This will apply to residential properties and small businesses. Additionally, the executive order will extend the deadline for certain businesses to file Business Personal Property Statements from tomorrow to May 31, 2020, to avoid penalties.

“The COVID-19 pandemic has impacted the lives and livelihoods of many, and as we look toward opening our local communities and economies, we want to make sure that those that have been most impacted have the ability to get back on their feet,” said Governor Newsom.

Since declaring a state of emergency due to COVID-19 on March 4, 2020, Governor Newsom has taken several actions to benefit workers on the front lines, including paid sick leave benefits for food sector workers that are subject to a quarantine or isolation order; critical child support services for essential workers and vulnerable populations; additional weekly unemployment benefits; and needed assistance in the form of loans for small businesses and job opportunities in critical industries for workers that have been displaced by the pandemic.

California Sues Uber and Lyft to Enforce AB-5

The state of California is suing Uber and Lyft for classifying their drivers as contractors instead of employees. The lawsuit is the first major test of a new state law intended to give gig workers more labor protections, including access to employer-sponsored health insurance.

“Uber and Lyft both claim that their drivers aren’t engaged in the company’s core mission and therefore qualify for benefits,” said Xavier Becerra, the state’s attorney general, at a press conference on Tuesday. “If drivers in California contract the coronavirus or if they lose their job as a result, guess what? They’re the ones that go missing. They’re the ones that don’t know what to do next. They’re the ones who have to worry about how they’ll pay their bills.”

Becerra said the companies are also harming taxpayers by classifying drivers as contractors rather than employees. The companies do not pay “hundreds of millions of dollars in social safety net obligations,” or state payroll taxes, he said.

The state is seeking penalties that it estimates could reach “hundreds of millions of dollars.” It also wants the companies to pay restitution to hundreds of thousands of drivers in California.

The lawsuit escalates an ongoing battle over how companies in the so-called gig economy treat the workers who make their services possible. The coronavirus pandemic has put gig workers in the spotlight and exacerbated the precariousness of their jobs.

Classifying drivers as contractors saves Uber and Lyft a lot of money because they do not provide benefits like health coverage to contractors, or pay into state unemployment insurance systems. The companies say that business model benefits drivers by giving them the flexibility to work when they want.

Becerra was flanked at the press conference by prosecutors from Los Angeles, San Francisco and San Diego, which have joined the lawsuit.

The California prosecutors contend that the companies are flouting the rules – specifically, Assembly Bill 5, a law passed last year that makes it harder for companies to say workers are not employees.

“Misclassification means cheating,” said Mike Feuer, Los Angeles City Attorney, at the press conference.

The law represents a significant threat to the apps’ business models, but Uber and Lyft have argued that it does not apply to them. Along with food delivery app DoorDash, the companies have pledged to spend $90 million on a ballot initiative seeking to overturn AB5.

On Tuesday, Uber said it would fight the lawsuit. “At a time when California’s economy is in crisis with four million people out of work, we need to make it easier, not harder, for people to quickly start earning,” the company said. “We will contest this action in court, while at the same time pushing to raise the standard of independent work for drivers in California, including with guaranteed minimum earnings and new benefits.”

Lyft struck a less combative tone in a statement it released Tuesday. It said: “We are looking forward to working with the Attorney General and mayors across the state to bring all the benefits of California’s innovation economy to as many workers as possible, especially during this time when the creation of good jobs with access to affordable healthcare and other benefits is more important than ever.”

Floyd Skeren Free HR Webinar on COVID-19 – – Time Changed!!!

The Floyd Skeren COVID-19 free webinar set for tomorrow, May 8, start time has been changed from 10:00 am to 1:00 pm.

Please join Bernadette M. O’Brien, Esq., SPHR, of Floyd Skeren Manukian Langevin, along with Senior Partner Amanda A. Manukian, Esq., for the latest on important topics for employers, human resources administrators, risk managers, and claims adjusters on COVID-19 including:

— Week of May 4, 2020-New COVID-19 developments in workers’ compensation and employment law impacting the workplace;
A closer look at:
— DOL’s enforcement of paid sick leave laws
— Sample FFCRA letter to eligible employee
— Sample letter to workforce re employee with COVID
— Update: temperature screening of employees
— Update: Are essential employees who are home due to a “fear of COVID-19” entitled to leave protections?
— A review of new workers’ compensation claim scenarios including a focus on a post-termination COVID-19 claim and defense strategies;
— Updated common questions.

Friday, May 8, 2020 from 1:00 pm until 3:00 pm. Webinar is free. Please register online

Contact:  Rebecca.zandovskis@floydskerenlaw.com for assistance.

Bernadette M. O’Brien is a Partner at Floyd Skeren Manukian Langevin, LLP, and an SPHR/SHRM-SCP certified Human Resources Consultant.

Ms. O’Brien is author of the LexisNexis publication Labor and Employment in California: A Guide to Employment Laws, Regulations and Practices, co-author of California Leave Law: A Practical Guide for Employers, and co-author of California Unemployment Insurance and Disability Compensation Programs..

Court Order Halts Sale of $45M Counterfeit N95 Masks

A federal judge on May 4 granted 3M, the maker of N95 masks, an injunction against a New Jersey-based company accused of using 3M’s trademarks and deliberately inflating the price of the face masks.

3M had filed legal action April 10 in federal court in New York City against Performance Supply LLC, alleging price gouging and deceptive trade practices in the sales of N95 respirators used in the fight against the COVID-19 pandemic, according to a news release.

According to 3M, Performance Supply LLC offered to sell $45 million in N95 masks to New York City officials at prices 500-600% over 3M’s list price.

U.S. District Court Judge Loretta Preska ordered Performance Supply LLC to cease using 3M trademarks, stating in her order that the “defendant is trading off the widespread commercial recognition and goodwill of the 3M Marks and 3M Slogan in connection with offering to sell products that 3M is widely known for manufacturing and selling, namely, N95 respirators.”

“Accordingly, it is no surprise that [Performance Supply LLC] confused New York City procurement officials into believing that [Performance Supply LLC] was an authorized vendor of 3M-brand N95 respirators,” the judge added in her order.

The judge’s order marks the first win for 3M in a series of price-gouging lawsuits against companies in Florida, California, Indiana and Wisconsin and elsewhere. There are about ten such cases now pending across the country.

3M accused a company in a California federal lawsuit of infringing its 3M-branded N95 masks by reselling the protective equipment at drastically increased prices. 3M Co. claims Utah-based Rx2Live LLC tried to sell millions of the masks to Community Medical Centers Inc. in Fresno, California, at a “grossly inflated” price that was about four to five times greater than the list price, according to the complaint.

The company doesn’t claim Rx2Live was trying to sell counterfeit versions of 3M’s masks, but was instead falsely asserting that it was a distributor of 3M products – making CMC believe the mask prices were authorized by 3M, according to the lawsuit.

In three complaints filed in Florida and a fourth in Indiana, the industrial giant accused a series of small entities of falsely claiming to be affiliated with 3M in order to sell masks to desperate government agencies at jacked-up prices.

In one of the cases, 3M accused an Indiana company of falsely claiming to work directly with 3M and having a whopping 5 billion masks to sell at more than double their shelf price.

In one of the new cases, 3M accused a Georgia entity called 1 Ignite Capital LLC of using misleading language in an attempt to sell 10 million masks to Florida’s Division of Emergency Management at more than four and a half times their actual price.

In another case, 3M accused a company called Zenger LLC and owner Zachary Puznak of even more egregious behavior. Puznak allegedly offered to sell as many as 5 billion N95 masks to the Indiana Economic Development Corporation by claiming to be in direct contact with “executives from 3M.” When pressed for verification, he allegedly accused IEDC of “paranoid irrationality.”

“3M does not – and will not – tolerate price gouging, fraud, deception, or other activities that unlawfully exploit the demand for critical 3M products during a pandemic,” said Denise Rutherford, 3M’s senior vice president, corporate affairs, in a press release.

“3M will not stop here. We continue to work with federal and state law enforcement authorities, and around the world, to investigate and track down those who are illegally taking advantage of this situation for their own gain.”