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Category: Daily News

Allstate Wins Another Million Dollar Fraud Case Against Chiropractor

Allstate Insurance Company received a judgment this month of more than $7 million, following a Racketeering Influenced in Corrupt Organizations (RICO) investigation nearly 10 years in the making.

The RICO complaint was filed in 2008 in the Las Vegas Federal District Court against chiropractor Obteen Nassiri, D.C., and his businesses: Advanced Accident Chiropractic Care, ONN Management, Digital Imaging Services and Digital X-Ray. Since the suit was filed, the Chiropractic Physicians’ Board of Nevada revoked Obteen Nassiri’s license.

Allstate’s lawsuit alleged Nassiri began defrauding Allstate in 2003 by exaggerating clinical findings, submitting improbable diagnoses, charging for treatment he did not provide, providing unnecessary and excessive treatment, grossly misrepresenting billing, making inappropriate referrals, and exhibiting a general pattern of illegal and fraudulent conduct. The jury in the case also found Nassiri’s spouse, Jennifer Nassiri, liable for negligent misrepresentation in the overall fraudulent scheme to harm Allstate. The verdict sided with Allstate in June and the final judgment and award was made this month. The total judgment against the defendants included an award to Allstate for $3.59 million in compensatory damages, $2.51 million in punitive damages and $1 million in pre-judgment interest. The company is also pursuing more than a million dollars in attorney’s fees and costs.

Over the last decade, Allstate has filed a series of civil fraud related cases against alleged perpetrators in various states across the nation.

Allstate recently filed a $5.6 million lawsuit in August in New Jersey. It alleges that Shams M. Qureshi MD, age 63, made payments to individuals who acted as middlemen by brokering auto accident patients from New Jersey and New York clinics to Qureshi’s surgery center.

In early 2013 Allstate filed against three New York-area medical providers who allegedly engaged in a fraudulent medical billing scheme seeking $1.7 million Property Casualty 360 reports that since 2003, the insurer has filed a total of 46 fraud lawsuits in the state of New York State seeking more than $233 million in damages.

Last year A Los Angeles Superior Court Judge has ordered Daniel H. Dahan, D.C., and his business, Progressive Diagnostic Imaging, to pay Allstate Insurance Company $7 million in a qui tam (“Whistleblower”) lawsuit arising out of a scheme to defraud insurance companies. Dahan is president of Practice Perfect Management and Consulting Services, of Long Beach, California, which specializes in helping chiropractors set up clinics that combine chiropractic, medical, and physical therapy services. Allstate’s lawsuit alleged that Dahan purchased report-writing software that purported to analyze x-rays and form medical opinions and diagnoses, including opinions concerning permanent impairment ratings, and thereafter formed Progressive Diagnostic Imaging to solicit x-rays from chiropractors, with the assurance that “board certified radiologists” would analyze the films.

As far back as 2004 a Dallas jury found that Texas’ largest chiropractic chain, Accident and Injury Pain Center Inc., conspired in a statewide scheme designed to defraud Allstate. The jury ordered them to pay $2.8 million in actual damages and $3 million in punitive damages.

Cal/OSHA Fines Engineering Firm $100K for Trench Collapse

Cal/OSHA cited Covina-based Los Angeles Engineering, Inc. following a trench collapse in March which killed one employee and severely injured another. The two pipe layers were checking the depth of the trench when an unshored wall caved in. The Los Angeles County coroner’s office identified the dead man as 50 year old Gilbert Vargas. Emergency workers recovered his body after about nine hours of digging in the 200 block of North Temescal Canyon Road, just north of Pacific Coast Highway. The workers had been excavating with back hoes on a city storm water project. The Temescal Canyon project was part of a $50-million city program, funded by voter-approved bonds, to clean up Santa Monica Bay.

Cal/OSHA issued four citations to Los Angeles Engineering, Inc., one general, two serious and a willful serious violation, totaling $100,635. Violations included failure to properly protect the trench from caving in, not inspecting the trench after a cave-in that occurred earlier in the day, lack of employee training on heat illness prevention, and lack of an effective Injury and Illness Prevention Plan. The citation was classified as Willful because the employer failed to install the required shoring in the trench after the earlier cave-in and still sent workers into the unprotected trench.

A Willful violation is cited when an employer is aware that a hazardous condition exists but makes no reasonable effort to eliminate it. A Serious workplace safety violation is cited when there is a realistic possibility that death or serious physical harm could result from the actual hazard created by the violation. A General violation is one in which an accident or illness may result but would probably not cause death or serious harm.

“Incidents like this are heartbreaking because they are so unnecessary,” said Acting Cal/OSHA Chief Juliann Sum. “Employers must be more vigilant in protecting worker safety.” “When safety is not a priority, there can be tragic consequences, and this incident is a sad reminder of that fact,” said Christine Baker, director of the Department of Industrial Relations (DIR). Cal/OSHA, also known as the Division of Occupational Safety and Health, is a division of DIR.

Construction is a dangerous business. Of the 4,609 worker deaths nationally in 2011, 721, or nearly one in six, happened during construction, according to the federal Bureau of Labor Statistics. By way of comparison, 125 law enforcement officers that year died in the performance of their duties.

Employee’s Admission Limits Power Press Exception

Heriberto Hernandez was an employee of Thermal Structures Inc. As part of his job, he used a power press to shape sheet metal. The press was not supposed to operate unless two buttons were pushed simultaneously. The buttons were mounted on a pedestal, three and a half feet apart from each other The pedestal was separate from the main body of the press, though connected to it by a cable. Hernandez suffered a gruesome on-the-job injury when his hands were crushed in the power press.

Under the worker’s compensation exclusivity rule (Lab. Code, § 3600, subd. (a)), and under the power press exception to that rule (Lab. Code, § 4558), Hernandez cannot recover against his employer in the tort action he filed against Thermal Structures, Inc. unless he can show that the accident occurred because Thermal either removed or failed to install a point of operation guard on the press.

The trial court granted the employer’s summary judgment ruling that there was no triable issue of fact that would cause this exception to the exclusive remedy to apply. Hernandez appealed, and the Court of Appeal sustained the dismissal in the unpublished case of Hernandez v Thermal Structures Inc.

When the accident occurred, the press did have a point of operation guard — two buttons, mounted on a pedestal; the press was not supposed to operate unless both buttons were pushed simultaneously. Hernandez’s theory was that Thermal “removed” the guard by adding wheels to the pedestal, which allowed the pedestal to move so close to the main body of the press that he could push the buttons with his elbows while his hands were still dangerously close to the press.

The problem with this theory was that, in discovery, Hernandez admitted that (1) Thermal did not remove a point of operation guard, (2) no changes were ever made to the press, and (3) the buttons were not being pushed when the accident occurred. Hernandez argues that the questions he was asked on this topic — and hence his responses — were ambiguous. The Court of Appeal reviewed his question and answer. “So as far as you know, no changes were ever made to the machine?”; he answered, “That I know of, no.” The Court concluded that this “was unambiguous and flatly inconsistent with his later testimony that Thermal added wheels.”.

Accordingly, the trial court properly granted summary judgment in favor of the employer.

Hospital Acquired MRSA Infections Reduced by 54%

MRSA infections are often picked up while patients are in the hospital being treated for something else. When they are being treated for an industrial injury, the infection can become a compensable consequence claim. Symptoms of a staph infection include small red bumps on the skin, which can turn into more severe sores. When the bacteria spread past the skin, they may cause life-threatening infections in bones, organs and the bloodstream.

Hospitals and other healthcare providers have been making a big push to cut down on transmission of MRSA inside their facilities. Reducing methicillin-resistant Staphylococcus aureus (MRSA) in both healthcare and community settings continues to be a high priority for the Centers for Disease Control and Prevention. The agency is engaged in several short- and long-term surveillance (infection tracking) projects that involve collaboration with partners including health departments, individual hospitals, and academic medical centers, among others. Understanding the burden of MRSA – how much is occurring, where it is happening, and how it is being spread – is essential for developing effective prevention programs and measuring their impact.

In 2010, encouraging results from a CDC study published in the Journal of the American Medical Association showed that invasive (life-threatening) MRSA infections in healthcare settings are declining. Invasive MRSA infections that began in hospitals declined 28% from 2005 through 2008. Decreases in infection rates were even bigger for patients with bloodstream infections. In addition, the study showed a 17% drop in invasive MRSA infections that were diagnosed before hospital admissions (community onset) in people with recent exposures to healthcare settings.

This study (or report) complements data from the National Healthcare Safety Network (NHSN) that found rates of MRSA bloodstream infections occurring in hospitalized patients fell nearly 50% from 1997 to 2007.

In newer CDC studies reported in Reuters Health, researchers analyzed 2011 data on infections from selected counties in nine U.S. states, and compared it to a 2005 CDC report on MRSA incidence. Overall, the number of serious MRSA infections diagnosed while people were in the hospital fell by 54 percent between 2005 and 2011 – from about 9.7 infections per 100,000 people to about 4.5 per 100,000 people. The incidence of serious infections diagnosed while people were home but after being in contact with a healthcare setting also decreased, by about 28 percent, during that time – from 21 infections per 100,000 people to about 15 infections per 100,000 people.

While the new study cannot explain why infection rates are dropping, it’s likely attributable, in part, to hospital efforts to reduce the spread of infections. “It’s also possible that there has been evolution of these strains and they’re less invasive,” Dr. Franklin Lowy, from the Columbia University College of Physicians and Surgeons in New York who wrote an editorial accompanying the new study in JAMA Internal Medicine, said.

WCIRB Recommends 6.9% Rate Increase

The Workers’ Compensation Insurance Rating Bureau’s Governing Committee voted unanimously last week to authorize the WCIRB to submit a Jan. 1, 2014 Advisory Pure Premium Rate Filing to the California Insurance Commissioner. The pure premium rates for the 494 standard classifications proposed to be effective January 1, 2014 average $2.70 per $100 of payroll. This is $0.17, or 6.9%, greater than the corresponding industry average filed pure premium rate of $2. 53 as of July 1, 2013.

The proposed advisory pure premium rates reflect deterioration in the projected cost of losses and loss adjustment expenses of approximately 5.9 % as compared to the WCIRB’s amended January 1, 2013 filing. Below are some of the reasons for the recommended increase.

SB 863 provided for significant increases to permanent partial disability maximum weekly benefits effective January 1, 2014. While policies incepting in 2013 were partially impacted by the January 1, 2014 SB 863 permanent disability benefit increases, the full impact of these increases will be reflected in policy year 2014 cost levels. Almost one-third of the 5.9% deterioration in the indicated pure premium rate level is attributable to the January 1, 2014 SB 863 increases in permanent disability benefits.

In general, for many years, indemnity claim frequency has declined. This decades-long decrease in indemnity claim frequency, which has averaged approximately 3% to 4% per year, is attributable to multiple factors including long-term shifts from heavy manufacturing to a more service-based economy, increased mechanization within industries, and increased employer-sponsored safety efforts. However, in 2010, there was a sharp increase in claim frequency that was partly attributable to a spike in cumulative injury claims in the immediate post-recession environment. Rather than returning to the long-term pattern of decline, indemnity claim frequency in 2011 and 2012 remained high and early indicators for 2013 suggest a further indemnity claim frequency increase.

An increase in cumulative injury claims has been a driver in the recent high level of indemnity claim frequency. Not only does an influx of cumulative injury claims affect indemnity claim frequency, but WCIRB research has indicated that changes in the proportion of indemnity claims involving cumulative injuries is a strong predictor of changes in the number of non-cumulative injury indemnity claims.

The pure premium rates approved by the California Insurance Commissioner are only advisory in that insurers may, and often do, file and use rates other than those approved by the Insurance Commissioner.

Employers “Cautiously Optimistic” About Rate Increases

An article in the Insurance Journal says that the reaction from an employers’ group to a suggested hike in California’s advisory workers’ compensation rates of nearly 7 percent was – surprisingly – cautiously optimistic. The Workers’ Compensation Action Network, a group that represents the interests of employers, expressed hope that reforms ushered in last year will take hold and keep rates from continuing to head upward.

“It’s too early to tell whether the 2012 reforms will help blunt or reverse the trend,” Jerry Azevedo, a WCAN spokesman said. “The system is in the process of absorbing substantial benefit increases under SB 863. Regulators are only partially through their efforts to implement a variety of process changes intended to make the system work more efficiently. These changes, however, were really intended to offset the benefit increase, rather than cut costs.” What the group finds most distressing has been a 35 percent increase in premiums since 2009 is that the both the cost and frequency of claims now seem to be trending up again in 2013 after a few flat years. “It’s too early to tell whether the 2012 reforms will help blunt or reverse the trend,” Azevedo said. “The system is in the process of absorbing substantial benefit increases under SB 863. Regulators are only partially through their efforts to implement a variety of process changes intended to make the system work more efficiently. These changes, however, were really intended to offset the benefit increase, rather than cut costs.”

“The margin of error in getting the SB 863 reforms right is very small, and we still won’t know their impact for months or years,” Azevedo said. “There’s also litigation and other attacks that could undermine what the legislature was attempting to achieve. We’re cautiously optimistic, but employers continue to look for ways to make the system more fair and efficient for all parties.”

Insurance Fraud Survey Predicts More to Come

Insurance fraud is on the rise That’s the consensus of a majority of respondents to a 2013 survey commissioned by FICO. With just a few exceptions, most survey respondents expect most categories of personal lines to experience an increase in fraud losses of 10% to 20% or more in 2012 versus the prior year. A majority of those surveyed, more than 60%, attribute the continued rise in fraud, more than any other factor, to sustained economic hardship in America.

Some 57% of respondents anticipate an increase in personal property fraud by individual policy holders. Around 58% said the same for personal auto insurance fraud, and 69% expect a rise in workers’ compensation fraud.

Only around 11% of respondents view criminal gangs as the number-one factor driving insurance fraud increases. Yet 61% expect to see an increase in auto insurance fraud perpetrated by organized rings, and 55% believe the same for workers’ compensation fraud. This underscores a growing need for solutions that enable insurers to identify organized criminal activity. Some 30% of respondents report that they are already using link analysis in their efforts to detect fraud today, applying predictive analytics to find patterns among different claims that suggest organized activity.

When asked to identify their major priorities in the fight against fraud (from a list of 12 choices), 52.2% cited the detection of fraud in a claim before it is paid, and 39.6% cited adopting or upgrading their fraud analytics capabilities. These two top priorities go hand in hand –predictive analytics offer the most effective and efficient solution for accurately detecting fraud early in the claims process, enabling carriers to sharply limit their losses due to payments against fraudulent claims. About 45% of the survey respondents said they are using predictive analytics for fraud detection in their operations today, compared to around 29% using rules-based systems in an attempt to stop known types of fraud. This is a strong indication that analytics-powered solutions are becoming more widespread, although there is still plenty of room for adoption in the industry. Besides being more efficient and yielding fewer false positives compared to stand-alone, rules-based systems, analytics have the advantage of being able to adapt quickly to new and emerging fraud schemes beyond those already known.

Around 54% of the respondents surveyed employ anti-fraud teams, either centralized or dedicated to specific lines of business. However, only 20% cited the hiring of additional special investigative unit personnel among their major priorities. This suggests that many of the insurers surveyed continue to face headcount constraints, and need to figure out ways that smaller teams can work larger caseloads.

13 States Now Follow California Physician Dispensed Prescription Reforms

In 2007, California became the first state to change reimbursement rules with the intention of equalizing the prices paid for physician- and pharmacy-dispensed prescriptions.

A 2012 WCRI study found that the 2007 change in California reduced the average prices paid for physician-dispensed prescriptions to close to the prices paid to pharmacies for the same drug. After the reform, many physicians continued to dispense in California – nearly half of all prescriptions were dispensed at doctors’ offices in post-reform California.

Since then, the WCRI says that a number of states have adopted reforms similar to those in California. As of July 2013, at least 13 other states have made law or rule changes with the intention of reducing the prices paid for physician-dispensed drugs while continuing to allow physicians to dispense drugs directly to their patients. These states include Alabama, Arizona, Connecticut, Florida, Georgia, Idaho, Illinois, Indiana, Michigan, Mississippi, Oklahoma, South Carolina, and Tennessee. Florida also made law changes, effective July 2011, that were aimed at eliminating so-called pill mills by prohibiting all Florida physicians from dispensing Schedules II and III narcotics.

A few states have sought to prohibit or severely limit physicians from dispensing prescription drugs directly to their patients. In the United States, six states prohibit physician dispensing in general; Massachusetts, New York, and Texas, Montana, Utah, and Wyoming. Louisiana limits physician dispensing of narcotics to a 48-hour supply.

According to the new WCRI study, The Prevalence and Costs of Physician-Dispensed Drugs, most states still allow physicians to dispense prescription drugs at their offices directly to the patient. Previous WCRI studies reported considerably higher prices paid for physician-dispensed prescriptions when compared with prices paid to pharmacies for the same drug. These studies also reported rapid growth of physician dispensing in several study states.

UCLA Study Says “Futile Treatment” Common in ICUs

A new study published in the JAMA Internal Medicine and summarized by Reuters Health says that more than one in ten patients being treated in intensive care units (ICUs) was at some point receiving what doctors deemed to be futile care. In those cases, critical care doctors believed people would never survive outside an ICU or that the burdens of their care “grossly outweighed” any benefits. And, researchers found, treating each of those patients cost about $4,000 every day.

“Many physicians find that the provision of futile care is not only contradictory to their professional responsibility, but harmful to patients,” Dr. Neil Wenger, director of the UCLA Healthcare Ethics Center at the David Geffen School of Medicine, and senior author of the study, said. “The biggest issue, more important than the cost issue, is the use of highly advanced medical care that was designed to rescue people that instead gets used to prolong the dying process,” such as ventilators and medicines that raise blood pressure, he told Reuters Health.

For their study, Wenger and his colleagues first convened a group of 13 doctors who worked in critical care to agree on a definition of futile treatment. Categories included care for patients who were permanently unconscious or for whom death was imminent, or treatment that could not achieve the patient’s goals.

Then, the researchers surveyed the attending critical care specialist in five ICUs every day for three months about each of that doctor’s patients to find out how many were receiving futile care under the focus group’s definition. During the study period, 36 doctors assessed 1,136 patients, with an average of six assessments per patient. Of those patients, 123 – or 11 percent – were determined to be receiving futile treatment, and another 98 (8.6 percent) were perceived as receiving probably futile treatment.

Eighty-four of those receiving futile care died before discharge, and another 20 died within six months of their ICU stay, the researchers reported in JAMA Internal Medicine. The rest were left in “severely compromised” states, with many kept alive by machines. Wenger and his team calculated hospital costs for futile care were about $4,000 per day, adding up to $2.6 million of treatment provided unnecessarily.

Dr. Michael Niederman, chair of the department of medicine at Winthrop-University Hospital in Mineola, New York, said how often futile care is provided is likely to vary between ICUs. “It’s very difficult to come up with a definition of futile care,” he told Reuters Health. “I think there are many things we do where over time we realize we’re unable to help the patient.”

Niederman, who has studied futile care but wasn’t involved in the new research, said along with the costs of providing intensive care that is unlikely to help, there may be times when such treatment hurts other patients as well. For example, many very sick patients in the ICU are on antibiotics, even if they don’t currently have an infection. One study he cited showed one quarter of them developed multi-drug resistant bacteria – which could then be spread to other patients on the unit.

Of course, the researchers said, doctors are not making treatment decisions on their own, and families may have different opinions on what constitutes futile care, or when the benefits of treatment outweigh the burdens. “Many times family members have a sense of guilt and responsibility to their loved ones that they want everything done, and I think many times they don’t understand what it means to do everything,” Niederman said.

“The implied discussion here is, do we have the resources in this country to give people care whenever they want it regardless of whether we think the care has benefit?” he said. “That’s a very difficult discussion.” Wenger said for him, the study highlights the importance of having conversations with patients about their end-of-life care while they are still able to participate in those talks. “It’s a very complex process making decisions for very ill patients who are on the brink of death,” he said. “The main message is that early discussions and advance planning are absolutely critical.”

Hospitalizations for Valley Fever Increase In California

Coccidioidomycosis commonly known as “cocci” or “valley fever” as well as “California fever” and “San Joaquin Valley fever” is a fungal disease.that is sometimes claimed to be an industrial injury especially among construction workers or those exposed to newly excavated work sties.

It is endemic in certain parts of Arizona, California, Nevada, New Mexico, Texas, Utah and northern Mexico. It is dormant during long dry spells, then develops as a mold with long filaments that break off into airborne spores when the rains come. The spores, known as arthroconidia, are swept into the air by disruption of the soil, such as during construction, farming, or an earthquake.

Infection is caused by inhalation of the particles. The disease is not transmitted from person to person. The infection ordinarily resolves leaving the patient with a specific immunity to re-infection. However, in some cases the infection may manifest itself repeatedly or permanently over the life of the patient. In those cases the industrial claim may be costly.

The U.S. national public health institute Centers for Disease Control and Prevention (CDC) called the disease a “silent epidemic” and acknowledged that there is no proven anticoccidioidal vaccine available.

And now a new CDC report shows an increase in California hospitalizations for Coccidioidomycosis over the last decade. Only 719 cases were reported annually in 1998. The annual number showed a steady increase up through 2011 when 5697 cases were reported. The incidence rate per 100,000 population increased from 2.1 in 1998 to a record of 14.9 in 2011 as well.

Similar increases were reported in Arizona, Nevada, New Mexico and Utah.