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WCAB Reverses Lakers Player Almaraz/Guzman Based Award

Horace Grant played professional basketball from 1987 through March 12, 2004, when he injured his hip and was unable to continue in that line of work. His last year of employment as a professional athlete was with the defendant Los Angeles Lakers . In 2011, applicant filed a claim of cumulative trauma industrial injury against the Lakers.

The WCJ relied upon the reporting of applicant’s two QMEs to find that applicant was 90% permanently disabled without apportionment to any non-industrial factors. The WCJ implicitly accepted the view expressed by Dr. Styner that the AMA Guides do not straightforwardly apply to the applicant because he is a professional athlete and not a “normal person,” and that the holding in the consolidated Almaraz/Guzman cases authorized the physician to construe the AMA Guides in a way that “allows for a higher rating.”

Dr. Styner justified his rating with the following comments. “Mr. Grant was a professional basketball player for a long period of time, Professional basketball is a profession that is very exclusive and requires the participants to be in superb condition. Professional basketball players are also required to deal with daily severe pain and to be able to perform with severe pain. Furthermore, as part of the conditioning process, the basketball player must stay in tip top shape in order to be able to keep his job. This involves repetitive lifting, running, jumping, squatting, etc while lifting weights far in excess of what the average person can lift. Based on the unique qualifications required to be a professional basketball player, it is simply unreasonable to use the usual charts in the AMA Guides to rate this patient. These charts were designed to measure impairment in the average worker, not a top tier professional athlete such as Mr. Grant. Fortunately for the patient, the recent Almaraz/Guzman ruling has allowed the physician to rate the patient using the any [sic] chart within the AMA Guides that he feels is appropriate and that is what I did in my report of 8/2011. I continue to stand by my rating of this patient.”

The WCAB reversed the award in the panel decision of Horace Grant v Los Angeles Lakers ruling that “Dr. Styner’s application of the AMA Guides and understanding of the Almaraz/Guzman holding are incorrect, and his reporting is not substantial evidence in support of the WCJ’s decision.”

The WCAB reasoned that “Dr. Styner is correct in noting that there is a relationship between an injured worker’s occupation and the level of permanent disability that results from certain injuries. However, that occupational factor is already accounted for in the rating string. In this case, the DEU rater applied the occupational variant of 590J, which represents the most physically strenuous occupations. Thus, reference to applicant’s occupation as a professional athlete as reason to use other than the usual charts and tables in the AMA Guides to rate whole person impairment is unjustified. Moreover, Dr. Styner’s deviation from the usual method of measuring impairment under the AMA Guides just to obtain higher whole person impairment is contrary to the holding in Almaraz/Guzman.”

Because the WCJ’s relied upon medical reporting that is not substantial medical evidence, the December 5, 2012 decision was rescinded and the case was returned to the trial level for further proceedings.

Orange County Physician Gets 3.5 Year Prison Sentence

An Orange County doctor accused of bilking Medicare of nearly $3 million in fraudulent claims was sentenced to federal prison and ordered to pay restitution. Dr. Augustus Ohemeng, a 62-year-old Buena Park resident, was sentenced to three and-a-half years in federal prison, followed by three years of supervised release. U.S. District Judge Christina A. Snyder also ordered Ohemeng to pay nearly $2 million in restitution.

According to the story in CBS Los Angeles News, Ohemeng was convicted last March on six counts of healthcare fraud after an investigation into Pacific Clinic in Long Beach, where Ohemeng served as medical director. During his tenure, Ohemeng recruited Medicare patients and billed the federal program for needless tests and procedures, according to evidence presented at trial. Prosecutors said the doctor also signed and sold hundreds of fraudulent prescriptions for power wheelchairs and other equipment to medical supply companies that in turn billed Medicare for millions.

Court documents alleged that nearly all of the prescriptions for wheelchairs signed by the doctor “were written for people who could walk” and that many of the phony prescriptions were signed and left blank to be filled in by his office manager.

Ohememg was among 10 defendants charged with healthcare fraud resulting from an investigation into Pacific Clinic, Ivy Medical Supply in Anaheim and Santos Medical Supply in South Los Angeles. Federal prosecutors said that all 10 had either entered guilty pleas or been convicted by a jury as of Monday.

Anthem Blue Cross Opts Out of Covered California Exhange

Health insurance giant Anthem Blue Cross is spurning California’s new insurance market for small businesses, a potential setback in the state’s rollout of the federal healthcare law. Anthem, a unit of WellPoint Inc., is California’s largest insurer for small employers. The Los Angeles Times reports that the company’s surprising move raised concerns about the state’s ability to offer competitive rates and attract businesses to its new Covered California exchange that opens Jan. 1. Friday’s disclosure made Anthem the first big insurer in California to publicly pass on the small-business pool. Some other big names, such as UnitedHealth Group Inc. and Aetna Inc., have already opted out of California’s larger exchange for individual consumers. Anthem’s decision in California underscored that the small-business exchanges are the most susceptible to a lack of interest among insurers.

The state’s largest for-profit health insurer isn’t abandoning the small employer market, which is limited to firms with 50 or fewer workers. It said it would keep selling coverage to small companies outside the exchange, and it also remains one of 13 health insurers that will offer policies to individuals in Covered California.

Anthem led California with 31% of the small-employer market in 2011, according to the most recent Citigroup data. Kaiser Permanente was a close second with a 28% share, followed by Blue Shield of California with 18% of small firms. Both Kaiser and Blue Shield are expected to participate in the small-group exchange. Nonetheless, Anthem’s move caught many observers off guard. “That’s really surprising and not a good thing for the exchange,” said Micah Weinberg, a senior policy advisor at the Bay Area Council, an employer-backed San Francisco group. “Anthem is a very major player in the small-group market and you want a broad range of insurers, particularly the most compelling brand names.”

Covered California sought to downplay any potential fallout on rates and employer choice, likening Anthem’s departure to one airline pulling out of a highly competitive market. “We don’t think it will have a huge impact,” said exchange spokesman Dana Howard. “There are other companies that are just as big. This will be a competitive market.” Employers will learn more early next month when Covered California announces the health insurers and their proposed rates for the small-business exchange. In the first few years, the state estimates up to 200,000 small-business workers and family members may get coverage through the state’s market.

One concern for health insurers selling in exchanges is that too many customers with big medical bills pick a certain company and it absorbs a higher share of the medical costs among that population. “The reality is that risk is not spread equally in an exchange,” said Bruce Jugan, an insurance agent in Montebello and president of, which sells health insurance to individuals and businesses. “If SHOP can offer comparable plans with lower rates then they will get a lot of business, even without Anthem Blue Cross participating,” Jugan added.

Anthem has come under fire from regulators recently over rate hikes for small businesses. Last month, California Insurance Commissioner Dave Jones asked the exchange to bar Anthem from its small-group market because of what he viewed as unreasonable premium increases. “I think Anthem withdrew because they felt they would be excluded or at a minimum they didn’t want to face additional debate” over their rate hikes, Jones said Friday. Covered California had said it would consider the commissioner’s request alongside other factors. Anthem said the recommendation by Jones had no bearing on its decision to drop out.

Drugmaker Settles Illegal Kickback Case for $15 Million

Last week biopharmaceutical company Amgen Inc. paid the United States more than $15 million to resolve allegations that the Ventura County company provided illegal financial incentives to physicians and physician groups to induce them to prescribe the cancer drug Xgeva. Amgen, which is headquartered in Thousand Oaks, paid the money today pursuant to a settlement agreement with the United States to resolve allegations that it violated the Medicare Anti-Kickback Statute and the federal False Claims Act. The Medicare Anti-Kickback Statute prohibits anyone from offering, paying, soliciting or receiving anything of value to generate referrals for items or services payable by any federal health care program.

Xgeva, which is the brand name of the drug denosumab, was approved by the Food and Drug Administration in late 2010 for use with certain cancer patients undergoing chemotherapy. It is most commonly prescribed for patients with metastatic bone disease in order to prevent skeletal-related adverse events.

In order to increase sales of Xgeva, Amgen used data purchase agreements – which the company called the “Deep Dive” contracts – to provide financial incentives to oncologists and urologists to prescribe Xgeva. The original plan for the Deep Dive contracts called for Amgen to pay doctors to fill out a short survey on the Internet on how they were treating patients with bone cancer, including which drugs were used – whether or not Xgeva was prescribed. However, Amgen altered the original Deep Dive program design by increasing the amount of money it would pay doctors, and by offering such payments only to doctors who prescribed Xgeva for their patients. Amgen’s Xgeva marketing team also was not supposed to know the identities of the doctors who received Deep Dive contracts, but team members had access to that information. Additionally, in a further effort to influence doctors to prescribe Xgeva, Amgen provided cash payments characterized as honoraria to oncologists and urologists for participating in audience response sessions, data market research surveys, and “treatment trends” advisory board programs which touted the benefits of Xgeva.

This settlement resolves a lawsuit filed under the qui tam, or “whistleblower,” provisions of the False Claims Act, which allow private citizens with knowledge of fraud to bring civil actions on behalf of the United States and share in any recovery. The case, which was filed last year in federal court in Los Angeles by two Amgen employees – United States ex rel. Davis et al. v. Amgen Inc., et al., CV12-00570-R (MRWx) – was unsealed last week after the United States elected to take over part of the case and negotiated the settlement with Amgen. The two men who originally filed the lawsuit, William Davis and Spencer Miller, will collectively receive $2.75 million as part of the settlement.

The United States Attorney’s Office for the Central District of California, and the Justice Department’s Civil Division, handled the civil settlement. This matter was investigated by the U.S. Department of Health and Human Services, Office of Inspector General.

WCAB Extends Deadline for Comments on Proposed Rules Until August 9

On July 9, 2013, the Workers’ Compensation Appeals Board announced its intent to modify the text of proposed amendments to its Rules of Practice and Procedure that had been the subject of a public hearing on April 16. The announcement stated that written comments regarding the proposed modifications would have to be received by the WCAB by 5 p.m. on July 25.

Following this announcement, some members of the workers’ compensation community requested the WCAB to extend the time for submitting written comments. The WCAB agreed that a limited extension of time was reasonable. Therefore, the WCAB extended the time for submitting written comments by an additional 15 days to Friday, August 9 by 5 p.m. The WCAB will consider only comments it has received by that time.

As previously announced, the proposed modifications to the initially proposed Rules and related documents are posted on the WCAB’s website. The originally proposed new and amended Rules and related documents may also be found at this site.

Additionally, to facilitate further public comments, the WCAB is presently in the process of adding to its website all public comments it has received regarding the proposed Rules amendments. The documents to be posted will include the written comments the WCAB received on or before April 16, a transcript of the April 16, public hearing, and the written comments the WCAB has received in conjunction with the July 9 announcement. The posting of these written comments will be periodically updated until the August 9 closure of the written comment period.

The address for submission of comments by e-mail is The address for submission of comments by mail is: Neil P. Sullivan, Assistant Secretary and Deputy Commissioner, Workers’ Compensation Appeals Board, P.O. Box 429459, San Francisco, CA 94142-9459. The address for submission of comments by delivery service or personal delivery is: Neil P. Sullivan, Assistant Secretary and Deputy Commissioner, Workers’ Compensation Appeals Board, 455 Golden Gate Avenue, Ninth Floor, San Francisco, CA 94102.

The WCAB will consider all written comments regarding the proposed Rules modifications it receives by Friday, August 9 at 5 p.m. It encourages all interested members of the workers’ compensation community to participate in this important process.

New Study Shows Cell Therapy Benefits for Disc Pain

Scientists have developed a new method of stopping or reversing disability and pain caused by degenerative disc disease in the spine using cell therapies, according to a proof-of-concept study published in the journal Biomaterials and summarized by Medical News Today. Researchers from the Duke Pratt School of Engineering at Duke University in Durham, North Carolina, have developed new biomaterials capable of delivering a booster shot of reparative cells to the nucleus pulposus (NP), effectively stopping pain caused by degenerative disc disease. The NP is the “jelly-like” cushioning found between the spinal discs. According to the researchers, the NP tissue distributes pressure and provides spine mobility, helping to soothe back pain.

Previous laboratory research has proven that re-implanting NP cells can delay disc degeneration, the researchers say. But Aubrey Francisco of the Department of Biomedical Engineering at Duke says that although many companies offer cell delivery strategies in a attempt to stop disc degeneration, the methods are poor, ineffective and “allow cells to quickly migrate out of and away from the injection site.”

Lori Setton of the Department of Biomedical Engineering and the Department of Orthopaedic Surgery at Duke, says: “Our primary goal was to create a material that would be liquid at the start, gel after injection in the disc space, and keep the cells in the location where they’re needed. Our second goal was to create a material that would provide the delivered cells with the environmental cues to promote their persistence and biosynthesis.”

The way the new biomaterials work are by keeping the cells in place and triggering a process which mimics laminin, a protein found in native NP tissue. Laminin is usually found in juvenile but not degenerated discs. The protein allows injected cells to attach and remain in place with the delivered biomaterial. Laminin could also enable the cells to survive for a longer period, as well as producing more of the “appropriate extracellular matrix or structural underpinning of the discs that help stop degeneration.” With this in mind, the scientists developed a “gel mix” designed to reintroduce NP cells to the intervertebral disc (IVD) area.

The gel is made up of three components; protein laminin-111 – which has been chemically modified – and two polyethylene glycol (PEG) hydrogels which can attach to the modified laminin. Once injected, the gel holds the cells in place. This gel was injected into rats’ tails, the same way the cells would be delivered to a patient. The needle was held in place in the thin outer layer of the tails for one minute while the gel entered the rat’s IVD area.

Results show that the gel began to solidify after 5 minutes, and by 20 minutes it was set. Using a luciferase biomarker to monitor the progress of the biomaterials, the researchers were able to see that more cells remained in place 14 days after the injection when conducted with the new biomaterial carrier, compared to cells delivered via methods requiring a liquid suspension, in which cells usually remain in place for 3 to 4 days. The preliminary results from this study could have a positive impact on the future of cell therapy.

WCAB Reverses Firefighter’s “Ogilvie” Based Award

Ronald Gerton incurred cumulative industrial injury to his low back while working as a firefighter for the City of Pleasanton. The parties’ AME Dr. Post used the range of motion method to rate applicant’s back impairment under the AMA Guides to the Evaluation of Permanent Impairment, Fifth Edition (AMA Guides) in accordance with the 2005 PDRS, and the physician opined that applicant has a 21% whole person impairment using that rating. With regard to apportionment, Dr. Post noted that applicant obtained a prior award of 3% permanent disability for a January 11, 2004 specific injury to the back, which was rated using subjective factors under the earlier 1997 PDRS.

However, the WCJ rejected this rating, and explained that the Diminished Future Earning Capacity (DFEC) adjustment factor contained in the 2005 Permanent Disability Rating Schedule (2005 PDRS) was rebutted at trial by the testimony and reporting of applicant’s vocational expert Eugene Van de Bittner, Ph.D., who opined that applicant’s work preclusions resulted in a 65% DFEC, and the WCJ used that 65% figure to find applicant’s 62% permanent disability after applying apportionment pursuant to the opinion of the parties’ Agreed Medical Examiner (AME) Michael Post, M.D.

Defendant petitioned for reconsideration contending that Dr. Van de Bittner’s reporting was not substantial evidence in support of the WCJ’s finding of 62% permanent disability. The WCAB granted reconsideration, rescinded the aware and remanded the case of Ronald Gerton v City of Pleasanton for further proceedings.

One of the problems with the award was that the vocational expert excluded the Applicant’s actual post-injury earnings in his calculations of diminished future earning capacity. Starting in 6/10, applicant performed some work as a type of construction supervisor for his older brother and younger brothers. His first assignment was to live at a multimillion dollar home in Carmel, California during a remodel project conducted by his older brother. Mr. Gerton supervised the work of construction workers at this home. He worked for about 6 weeks at the rate of about 40 hours per week. Since then he has assisted his younger brothers in apartment remodeling projects. Apartments are gutted and remodeled when tenants vacate the premises. In exchange for his services, his brothers will perform construction work at his home in Livermore and at his cabin. Since his retirement, he has continued to work 20 to 40 hours per week as a jobsite supervisor for his brother’s construction company. He works as much as he wants to work. He is paid $45 per hour for his time

The WCJ found that those earnings were artificially high because the work was being done for a close relative, applicant’s brother. Dr. Van de Bittner found that this work lies outside what applicant could expect to compete for in the open labor market and said it was essentially sheltered employment. “The charity of Applicant’s family should not be used to create a false impression of Applicant’s true capacity for earnings.”

The WCAB disagreed. It concluded “We find no evidence in the record that supports the WCJ’s conclusion that applicant was performing “sheltered work” or that his post-injury earnings are “charity” provided by his family as stated in the Report. Instead, the expected duties of a construction supervisor, the continuing availability of that work to applicant and the $45 per hour pay he receives for it indicates otherwise, as does applicant’s expressed interest in performing that same kind of work as a volunteer overseeing the remodeling of homes. Upon return to the trial level the record should be further developed on the issue of applicant’s post-injury earnings and whether his actual earning history should be utilized to evaluate his DFEC and permanent disability.”

Pricing Survey Shows Workers’ Comp Increasing

Commercial insurance prices in aggregate increased by almost 7% during the fourth quarter of 2012, according to Towers Watson’s most recent Commercial Lines Insurance Pricing Survey (CLIPS). The survey compared prices charged on policies underwritten during the fourth quarter of 2012 to those charged for the same coverage during the same quarter in 2011.

Pricing data reported by carriers for the fourth quarter of 2012 indicated a pause in the upward industry price acceleration observed since the start of 2011. Price-change indications in total and by line of business were generally consistent with price increases in the third quarter of 2012, but with some upward movement in specialty lines.

The largest price increases were in workers compensation and employment practices liability. Increases for most lines fell in the mid- to upper-single digits. No line of business had an overall price increase of less than 3%.

Price increases were observed across all account sizes for standard commercial lines, with larger increases observed in mid-market and large accounts than in small accounts. Specialty lines prices continue to increase, but still lag the results observed in standard lines.

Historical loss cost information reported by participating carriers points to an improvement of almost 4% in loss ratios in accident-year 2012 relative to 2011, as earned price increases more than offset reported claim cost inflation. The report notes that CLIPS results are intended to exclude catastrophes. This indication is a reversal from the estimated 3% deterioration between 2010 and 2011. This improvement comes from both earned price increases and reduced estimates of claim cost inflation. Carrier estimates of claim cost inflation come in at 1% for 2012.

Total Disability Award Reversed by Court of Appeal

Michael Borman sustained continuous trauma injury to his ears (hearing loss), bilateral upper extremities, neck and head during the year prior to his last day at work for Acme Steel as a steelworker. AME Dr. David Schindler apportioned hearing loss based on both non-industrial, degenerative causes and prior injury, opining that Borman’s 100 percent “binaural neurosensory hearing loss” was 60 percent due to “occupational factors, specifically noise induced hearing loss. Approximately 40 percent of Mr. Borman’s hearing loss is the result of non-occupational factors, particularly cochlear degeneration.”

Borman told Dr. Schindler he filed a workers’ compensation claim following a December 1994 explosion at the factory that threw him 10 to 15 feet and knocked him out momentarily. He was rated at 22 percent disability due to hearing loss from the 1994 injury, and his hearing has gradually gotten worse since then. Borman was examined by Dr. David Manace in October 1994. Dr. Manace documented that the explosion experienced by Borman occurred in 1993, found Borman had “a 37.5 percent monaural loss in the right ear and a 37.5 percent monaural hearing loss in the left ear for a 37.5 percent binaural hearing loss at that time,” and concluded Borman had a bilateral high-frequency hearing loss consistent with accumulated noise exposure. Dr. Manace recommended Borman should be fitted with hearing aids.

Dr. Schindler reiterated his conclusion in a subsequent report that Borman had “a 100 percent hearing loss . . . apportioned . . . as 60 percent due to noise-induced hearing loss and 40 percent due to other factors. The noise-induced hearing loss . . . includes the explosion component that was found by Dr. Menace,” adding, “I did not apportion Dr. Menace’s portion of the hearing loss.”

In July 2012, the Workers’ Compensation Administrative Law Judge (WCALJ) issued a “Findings and Award” and “Opinion on Decision” following proceedings held in April 2012 at which Borman was the only witness. The WCALJ found Borman’s injury ratable under the post-2004 Permanent Disability Ratings Schedule. The WCALJ also found Borman a straight-forward and credible witness, noting that during testimony he “clearly had difficulty understanding questions and had to face his questioners directly in order to ‘lip read’ as well as listen. His cochlear implants have improved his hearing but his hearing . . . is quite limited[,] . . . particular[ly] . . . in crowded or noisy environments, and [he] cannot function effectively on the phone.” The WCALJ found Borman effectively rebutted any Diminished Future Earnings Capacity (DFEC) and showed 100 percent loss of earning capacity entitling him to permanent and total disability. The WCALJ based the latter finding on expert vocational testimony proffered by Borman showing there was no job in the open labor market that could accommodate Borman’s “difficulty with oral communications, limitations with use of the upper extremities, limited mobility, need for daily narcotic medication, rests and serious headaches.’ Additionally, the WCALJ found that “Labor Code section 4664 is not pertinent as prior to the instant cumulative trauma injury there was no earnings loss due to the prior award of permanent disability for hearing loss,” reasoning that “Borman continued to work [after] the prior award for prior hearing loss, [and his] hearing loss progressed to the point where he required implants, which . . . have severe limitations.”

The WCAB summarily denied Acme’s petition for reconsideration. The Court of Appeal reversed in the unpublished case of Acme Steel v WCAB (Borman), finding that the WCALJ erred “by failing to address the issue of apportionment.” The clear intent of the Legislature in enacting Senate Bill No. 899 was to charge employers only with that percentage of permanent disability directly caused by the current industrial injury. “Here, the WCAB ignored substantial medical evidence presented by Dr. Schindler, as summarized above, showing that Borman’s 100 percent loss of hearing could not be attributed solely to the current cumulative trauma. ” The matter was “remanded to the WCAB with directions to order the WCALJ to make an award consistent with this opinion.”

DWC Posts RAND Working Papers on Proposed RVRVS Fee Schedule

The Division of Workers’ Compensation (DWC) today posted three documents to provide the public with tools which assess proposed rulemaking on the Official Medical Fee Schedule.

The first document is a revised RAND working paper, providing a quality assurance review of the impact for a transition to a resource-based relative value scale (RBRVS) based physician fee schedule. The revised working paper includes updated impact tables, revised estimated transition conversion factors, and an explanation of the changes made.

The other documents include a detailed impact file intended for public use as well as a supporting document with a description of the data elements included. The impact file is a comprehensive data table which allows members of the public to focus on specific components of the proposed changes.

“I am pleased to provide this impact file so that stakeholders can better assess areas that are of specific interest to them. I believe providing this data file improves the opportunity for meaningful public participation in the rulemaking process,” said Christine Baker, Director of the Department of Industrial Relations (DIR). DWC is a division of DIR.

The revised RAND working paper and the public use data file can be found on the proposed regulations page.