Category: Daily News

Robert Gravlin was employed by the City of Vista as a firefighter from January 6, 1975 until January, 2005. He filed claims for several industrial injuries sustained during the course of that employment including an application alleging cumulative trauma injury to the heart/hypertension and to the skin (skin cancer) sustained during the period from the date when he started working, January 6, 1975, to April 25, 2002, the date applicant received medical information diagnosing hypertension, with an indication of permanent disability and request for treatment.

This date was based upon the November 25, 2002 report of Qualified Medical Evaluator Prakash Jay, M.D., Gravlin subsequently obtained medical evidence of permanent disability in relation to his skin cancer injury when he received the October 23, 2002 report of QME John F. Shega, M.D.

After the examinations by the QMEs, the parties selected Daniel J. Bressler, M.D., to serve as their Agreed Medical Evaluator. Dr. Bressler reported that both applicant’s skin cancer and his heart trouble were presumed by law to have arisen out of and in the course of his firefighter employment.

The dispute at trial was to resolve issues raised by applicant’s contention that one cumulative trauma case is properly applied to both the admitted injury to the skin and to the injury to the heart, and defendant’s contention that there are separate dates of injury for the injury to the heart and for the injury to the skin, and “Anti-Merger,” presumably in reference to the provisions of section 3208.2.

The WCJ accepted applicant’s contention and found one cumulative trauma injury causing injury to the heart and skin.The recommended permanent disability rating for the heart injury is 55% and the recommended permanent disability rating for the skin injury is 35%. Under the MDT, the two ratings combine for a single rating of 74% permanent disability.

Reconsideration was granted and the WCJ’s decision was rescinded in the split panel decision of Gravlin v City of Vista. New findings were entered that applicant sustained two separate cumulative injuries, one to the heart/ hypertension and the other to his skin. The different dates of injury support separate awards of permanent disability for those separate conditions.

Section 5500.5 establishes liability for cumulative trauma based upon the date of injury “as determined” under section 5412, or based upon the last date on which the employee was exposed to the hazards of the occupational disease or cumulative injury, “whichever occurs first.” Here, the dates when applicant obtained knowledge of the disabilities caused by his skin cancer and by his heart condition occurred before the last date of injurious exposure.

The facts in this case are like those in Aetna Casualty and Surety Co. v. Workers’ Comp. Appeals Bd (Coltharp) (1973) 35 Cal.App.3d 329 [38 Cal.Comp.Cases 720] (Coltharp), where the Appeals Board determined that the applicant sustained two cumulative injuries.

Commissioner Newman dissented. He would uphold the decision of the WCJ for the reasons expressed in her Report. Although applicant may have learned of the employment origin of those conditions at different times before he stopped working, the time period of injurious exposure and employment was the same for both conditions. In this circumstance, the WCJ correctly found that both conditions were sustained as part of a single cumulative trauma injury.

A Petition for Writ of Review was filed on May 10, 2017 in the 4th Appellate District, Division 1, case D072155.

A Southern California doctor facing 77 criminal counts of insurance fraud has attacked a new state law that prevents him and his medical groups from collecting any of their fees for treating workers’ compensation patients.

In another federal lawsuit against California’s two top workers’ compensation officials, Dr. Eduardo Anguizola claims an anti-fraud law that took effect Jan. 1 violates his rights to due process, to make a contract and to hire and pay his criminal defense attorney.

Plaintiffs include Vanguard Medical Management Billing, One Stop Multi-Specialty Medical Group, One Stop Multi-Specialty Medical Group & Therapy and Nor Cal Pain Management Medical Group: medical billing companies and other businesses connected to the doctor’s practice. The sixth plaintiff is David Goodrich, the Chapter 11 bankruptcy trustee of another business, Allied Medical Management.

Anguizola, 66, is a pain-management doctor who has practiced in Santa Ana for decades. “He is highly respected in both the medical community and the Latino community for his work providing needed care to injured workers,” his lawsuit states.

Three years ago, he was one of 15 doctors, pharmacists and business owners indicted on charges of defrauding insurers of more than $100 million for a very strong – even toxic – prescription analgesic cream made from three expensive prescription drugs. The Orange County District Attorney’s Office also charged the cream’s developer, Kareem Ahmed, and two others with involuntary manslaughter in the death of a small child who ingested the cream. Prosecutors said Ahmed paid $35 to $72 for each tube of the cream but billed insurance companies $1,200 to $1,900 for them.

Ahmed allegedly paid about $25 million in kickbacks to medical providers, including $2.3 million to Anguizola, for prescribing the cream to patients, the district attorney said in an August 2014 statement.

While the law ostensibly was designed to deny medical criminals fraudulent fees, Anguizola et al. claim in the lawsuit that it is an attempt to keep doctors who face criminal charges from defending themselves in court.

“Labor Code Section 4615 represents California’s legislative response to complaints by local district attorneys that defendants who were merely charged, but not convicted, of medical fraud offenses, were using income from their professional practices to pay for their legal defense,” Anguizola says in his May 17 complaint.

The law “represents a money grab for assets that are unconnected to any charged activity and intentionally cuts off untainted funds that providers need to retain lawyers,” Anguizola says in a request for a preliminary injunction. “Now that the doctors have provided a service in reliance on their contractual right to payment, the California Legislature has suddenly interfered, leaving doctors uncompensated and virtually incapable of being compensated,” the motion states.

Courthouse News reports that Christopher Jagard, chief counsel for the industrial relations department, said in an emailed statement that he is confident the law will be upheld. “These reforms are not only entirely appropriate and constitutional, but are important to ensuring integrity within the workers’ compensation system and protecting injured workers from fraudulent medical practices,” he said.

The plaintiffs’ attorney, M. Cris Armenta of Manhattan Beach, said to Courthouse News the complaint and motion speak for themselves and declined further comment.

Anguizola’s defense attorney, Katherine Corrigan, did not return a Courthouse News call about the case. Ahmed’s attorney, Benjamin Gluck, said he cannot comment on it.

Anguizola has pleaded not guilty to all charges. Yet “because of the mere fact that charges have been made,” all the lien debt owed him by insurers is frozen. His “financial situation is dire, and he cannot afford a defense attorney.” He estimates his defense costs will be more than $250,000. He says that is the real point of Labor Code Section 4615.

The lawsuit quotes Baker, speaking at an annual workers’ compensation event in March,’ apparently explaining the provision: “When we had our fraud meetings across various groups, the DA’s were the ones who said we are in the courts trying to convict the doctors‘….. ‘Can you do something about it?’ …… Their defense was getting paid for by the liens, ….. And we have stayed all those liens.” (Ellipses in complaint.)

That shows the purpose of the law was to interfere with providers’ Sixth Amendment right to attorneys, according to the motion for a preliminary injunction. “The law encourages prosecutors simply to charge medical providers with fraud – regardless of the evidence – knowing that merely to charge is to remove the ability to defend.”

Anguizola et al. say the law also constitutes an unconstitutional illegal taking.

A hearing on their motion for a preliminary injunction is set for June 19 before U.S. District Judge George Wu in Los Angeles.

AB 1512 (McCarty) as amended May 9, 2017, if passed, establishes the Opioid Addiction Prevention and Rehabilitation Act in California, and would impose a tax upon the distribution of opioids at the rate of $0.01 per milligram of active opioid ingredient. According to the Board Of Equalization “an estimated $88.1 million in fee revenues could be generated.”

The proposed California law requires the wholesaler to collect the tax from the manufacturer and requires the wholesaler to separately state the amount of the tax imposed by the provisions of this bill on the purchase order. The purchase order shall be given by the wholesaler to the manufacturer at the time of sale. The wholesaler will be required to remit the tax to the California State Board of Equalization (BOE).

The Assembly Committee Staff speculates that “If this tax were to work as envisioned, funding for local addiction prevention and rehabilitation programs would reduce future opioid addiction and use, which, in turn, would reduce opioid sales and funding for these programs. In a way, this tax functions almost as a Pigouvian tax (similar to the tax on tobacco products) although it is unclear if the purpose of the tax is meant simply to fund prevention and rehabilitation programs or if it is meant to decrease the use of opioids as a prescription drug. As currently drafted, this bill would accomplish both because a tax placed on the supplier will inevitably reduce opioid production and consumption.”

A Pigouvian tax is a tax levied on any market activity that generates negative externalities (costs not internalized in the market price). The tax is intended to correct an inefficient market outcome, and does so by being set equal to the social cost of the negative externalities.

However, unlike tobacco, opioids are predominantly paid by third parties other than the consumer of the opioid. In essence the tax will be paid by insurance carriers, self insured employers, and government subsidized health care plans. For the most part, consumers of opioid medications will not notice any adverse financial effect should this bill become law.

The California Council of Community Behavioral Health Agencies (CCCBHA) in support of the bill argues that this bill would provide critical resources needed to help end California’s opioid addiction epidemic. CCCBHA cites reports that show that three out of four heroin users began their addiction by abusing prescription drugs, that up to 25% of people who use prescription pain pills over the long term become addicted to these medications, and that ERs across the state are flooded with opioid-related patient emergencies. According to CCCBHA, this bill will provide counties with critical resources needed to interrupt the cycle of opioid and heroin addiction in California.

The Healthcare Distribution Alliance (HDA) in opposition, argues that this bill creates a new and onerous tax that will have a burdensome impact on the healthcare industry and ultimately the patient. HDA further argues that drug distributors and wholesalers do their part in the fight against drug abuse by maintaining highly secure facilities that are both state and federally inspected. Finally, HDA states that other states have considered implementing a similar tax, however after fully understanding the impact and unintended consequences these efforts have been abandoned. TEVA Pharmaceuticals argues that an additional tax will directly affect the health plans and ultimately the patients who require opioid medicines. The Pharmaceutical Research and Manufacturers of America (PhRMA) argues that this bill establishes a complicated, arbitrary regulation and tax on an already overtaxed sector.

The California Chamber of Commerce has listed this proposed law as one of its 2017 “Job Killer” bills. It claims the proposed law “unfairly imposes an excise tax on opioid distributors in California, which will increase their costs and force them to adopt measures that include reducing workforce and increasing drug prices for ill patients who need these medications the most, in order to fund drug prevention and rehabilitation programs that will benefit all of California.”

The Trump Administration has recently awarded grants for states to combat the opioid crisis. The funding, which is the first of two rounds, will be provided through the State Targeted Response to the Opioid Crisis Grants administered by the Substance Abuse and Mental Health Services Administration.

A new California Workers’ Compensation Institute (CWCI) report on the use of ICD-10 codes in California workers’ comp during the transition from the ICD-9 system finds that 99% of submitted medical bills used ICD-10 codes and, as expected, a wider range of codes were provided than in the past.

But many lacked the additional characters that better define the injury, identify the type of encounter and improve communication.

On October 1, 2015, the 10th revision of the International Statistical Classification of Diseases and Related Health Problems (ICD-10) became the standard classification system for all healthcare delivery systems in the U.S., including workers’ comp. The adoption of the new system was the first time in 21 years that the codes used by medical providers to describe a patient’s clinical status had been updated. The transition from the outdated ICD-9 coding system was primarily intended to allow more accurate and precise descriptions of a patient’s clinical status in order to facilitate communication between medical providers, providers and payers, and government agencies.

Following Medicare’s lead, the California Division of Workers’ Compensation allowed medical providers a one-year transition period during which they could use ICD-10 codes that did not strictly meet the level of coding specificity called for by the new classification format and structure, but as of October 1, 2016, workers’ comp medical services that are not coded at the required specificity level are out of compliance.

The CWCI report, the first in a two-part series, examines the components of injury classification and compares ICD-9 diagnostic codes submitted by California workers’ comp medical providers in the final nine months under the old coding system to the ICD-10 codes submitted in the first nine months of the transition period. Key findings from the analysis:

– The top 10 ICD-10 diagnoses accounted for 20.4% of the primary diagnoses submitted in the first nine months of the transition.
– Diagnosis codes related to lumbar spine injuries accounted for 6 of the top 10 ICD-10 codes for services rendered in the first nine months of the transition. Despite high levels of specificity allowed by the ICD-10s, lumbar spine codes ranged from very low specificity (i.e., “low back pain” was the number one code submitted) to more specific diagnoses such as radiculopathy, disc displacement and disc degeneration.
– More than 1 in 5 ICD-10 codes submitted for shoulder pain diagnoses failed to include a sixth character to identify which shoulder was injured.
– A diagnosis of “injury, unspecified” continued to account for 1.6 percent of primary diagnosis codes under ICD-10, as was the case under ICD-9 submissions.

CWCI has published its analysis as a Research Update report, Injury Classification in California Workers’ Comp, Part 1: Medical Coding During the ICD-10 Transition, which is available from the CWCI store at www.cwci.org, or CWCI members and subscribers may log in to download a copy from the Research section of the website. Part 2 of the series will compare the two diagnosis and injury classification systems now used in California workers’ compensation: the ICD-10 codes submitted by medical providers and the body part, nature of injury, and cause of injury data noted by claims administrators.

William Zachry is a senior fellow at the Sedgwick Institute and is former group vice president for risk management for Albertson’s Companies. According to his commentary published in the East Bay Times, things have gotten much better in California Workers’ Compensation. Here are his comments.

California’s system is as maligned as any in the nation. A $26 billion behemoth, the rap on California’s system is that it overcharges employers and short-changes workers, with the difference ending up in the pockets of scurrilous medical providers and other ne’er-do-well vendors.

Such criticisms are frequently based on cases that fall outside of the typical claims experience. These cases drive news coverage, which spawn legislative proposals to “fix” the system.

But beneath the headlines, facts show that California’s system has improved by many measures.

— Higher benefits. In 2012, lawmakers increased injured worker disability benefits by $1 billion, using money squeezed out of system inefficiencies and cracking down on fraud. A review by the Department of Industrial Relations shows that benefits have increased by 30 percent.
— Stable insurance rates. California remains the most expensive state in the nation. But reforms have halted the wild swings that took employers for a ride every few years. Compared to 2001-2009, when rates shot up 80 percent and then fell by 67 percent, rates have moved up and down by 5 percent or less over the past four years.
— Fewer claims. Between 2010 and 2014, workers’ comp claims were increasing in California while decreasing in other states, driven largely by injury claims in Los Angeles. In 2015, claim filings started to decrease again, consistent with national trends and California’s own decades-long decline in workplace injuries.
— Quicker claims closure. All data and workers’ comp wisdom says the system is at its best when workers get treated, paid and back to work. Shorter claim life improves an injured worker’s chance of making a full recovery, both physically and economically. Since 2009, California’s rate of claims closed within three years has increased from 55 percent to 60 percent.
— Ousted Medical Fraudsters. In 2016, lawmakers empowered the Department of Industrial Relations to suspend medical providers who have been indicted or convicted of medical fraud, yet continue to treat injured workers and submit payment demands known as “liens.” Thus far, the DIR has halted $1 billion worth of these liens and suspended 23 fraudulent medical providers.
— Evidence-based medicine. Since the early 2000s, California has worked to adopt medical treatment guidelines for injured workers that are based on published medical evidence. Although criticized as “cookbook medicine” and criticized as an impediment to care, research shows that today 95 percent of all medical treatment requests are approved through “utilization review.” Just 4 percent are properly denied because they aren’t supported by medical evidence. That’s a 99 percent success rate for evidence-based care.
— Lower medical costs. Squeezing inappropriate and fraudulent care out of the system has halted huge spikes in California’s workers’ comp medical inflation. After a five-fold increase since 1990, average medical costs per claim have decreased by 10 percent since 2011.

Does California’s system still have problems? Absolutely.

California’s system is still the most expensive. We have more claims that result in a partial permanent disability award than any other state in the nation. We also have a new species of fraud which has to be stamped out. Our claims are more expensive and involve more litigation than elsewhere. We spend a disproportionate amount on expenses to deliver benefits to injured workers. And our claims drag on too long.

On balance, however, Mr. Zachary concludes that California’s workers’ compensation system is as healthy and stable as any time in recent history.