Category: Daily News

The California Department of Insurance has reached a settlement agreement with Berkshire Hathaway subsidiaries in the Shasta Linen case. The settlement includes a dismissal of the writ petition filed by the insures and the commissioner’s administrative decision in the Shasta Linen case will continue to stand as a precedent decision.

The company will however continue to sell a revised version of its controversial workers’ compensation insurance policies to California employers. The revised version will contain disclosures about the financial risks of Reinsurance Participation Agreements or RPAs,

Workers’ compensation insurance was partially deregulated by the legislature in the1990s and as a result, the insurance commissioner has only limited authority over rates and product features.

Commissioner’s regulatory authority over workers’ compensation rates is limited. The rates must be sufficient to make sure the companies remain solvent, The rates cannot tend to create a monopoly in the market. And they cannot be unfairly discriminatory.

Nonetheless, workers’ compensation insurers are required to file their policy forms with the department.  However, the commissioner has very limited authority over product features.

In May 2016, in response to a complaint by Shasta Linen, and after a hearing by an administrative law judge, the commissioner determined California Insurance Company and Applied Underwriters, both subsidiaries of Berkshire Hathaway, were selling a workers’ compensation product with illegal side agreements that modified the obligations of the parties under the policy.

Such agreements, known as Reinsurance Participation Agreements or RPAs, require department review and approval. But the Berkshire companies used the agreements without first obtaining the department’s approval.

The RPA did not disclose basic premium information, levied hefty penalties for policy cancellation, failed to disclose required binding arbitration outside the U.S., and obfuscated the methodology for calculating premiums, deposits, or other payments due.

The department concluded Applied Underwriters was trying to avoid regulatory oversight, as noted in their U.S. patent application where the company described how its patent purports to evade regulatory oversight and ostensibly allows the company to sell a complicated type of policy to smaller businesses, which most states prohibit.

The settlement effectively constitutes an acknowledgement that rates and supplementary rate information must be filed with the department consistent with longstanding insurance law. The settlement includes new disclosures that will provide policyholders with key details regarding the product.

However, the CDI claims that even the revised products are not appropriate for businesses unable to adequately evaluate the pricing, obligations, and risks of such a complex product. The department advises any employer considering such a complex product to consult an expert with legal and actuarial expertise in workers’ compensation products.

The U.S. Securities and Exchange Commission on Wednesday declined to interpret whether a workers’ compensation policy executed by a Berkshire Hathaway insurance unit can be characterized as a swap, saying its interpretation could influence an ongoing $18 million suit concerning the policies.

The agency declined to issue a joint interpretation with the Commodity Futures Trading Commission as to whether a “reinsurance participation agreement” executed by Applied Underwriters Captive Risk Assurance Company Inc. is a swap, citing a suit filed by delivery service Breakaway Courier Systems.

The Department of Industrial Relations and its Division of Workers’ Compensation have suspended Pasadena psychiatrist Jason Hui-Tek Yang from participating in California’s workers’ compensation system.

Dr. Yang was convicted in Riverside County Superior Court for his involvement in an insurance fraud conspiracy that referred patients for unnecessary care to justify workers’ compensation billing.

He was implicated in a second round of charges that expanded a Riverside County case against Peyman Heidary, a chiropractor accused of masterminding a legal and medical scheme to maximize profits by recruiting injured workers and giving them a one-size-fits-all battery of medical treatments. Prosecutors claimed Heidary ran an operation that paid people referred to as “cappers” $100 per patient to recruit injured workers who were provided the same medical care regardless of their injuries.

Heidary and three associates were initially charged in July 2014.  Later charges were filed filed against an additional six people, including three physicians. The 26 page grand jury indictment accused Yang of referring patients for unnecessary care to justify billing for “med-legal” reports, costing about $1,000 each.  Several carriers were specifically named as victims.

Dr. Yang is a 1995 graduate of the University of Southern California, Keck School of Medicine. He was licensed in California in 1998. The Medical Board of California records show his license is still active, and there is no record of disciplinary action.

DWC issued a Notice of Suspension, which Yang appealed. The appeal was heard in April by Hearing Officer William E. Gunn, who issued a recommended determination and order on May 25. The recommended decision was adopted by DWC Acting Administrative Director George Parisotto and the suspension confirmed on June 1. Dr. Yang has over 2,000 active workers’ compensation liens with an estimated total claim value of more than $13.7 million.

AB 1244 (Gray and Daly) requires the DWC Administrative Director to suspend any medical provider, physician or practitioner from participating in the workers’ compensation system in cases in which one or more of the following is true:

1) The provider has been convicted of a crime involving fraud or abuse of the Medi- Cal or Medicare programs or the workers’ compensation system, fraud or abuse of a patient, or related types of misconduct;

2) The provider has been suspended due to fraud or abuse from the Medicare or Medicaid (including Medi-Cal) programs; or

3) The provider’s license or certificate to provide health care has been surrendered or revoked.

DIR’s fraud prevention efforts are posted online, including frequently updated lists for physicians, practitioners and providers who have been issued notices of suspension, and those who have been suspended pursuant to Labor Code §139.21(a)(1).

John Carlisle, a consultant anesthetist at Torbay Hospital in the UK, used statistical tools to conduct a review of thousands of papers published in leading medical journals. While a vast majority of the clinical trials he reviewed were accurate, 90 of the 5,067 published trials had underlying patterns that were unlikely to appear by chance in a credible dataset.

While some of these errors may be the result of “misinterpretation, statistical error, or plain simple mistakes,” Carlisle says in a press release emailed to The Scientist, it’s likely that some of the research in question “may have been deliberately falsified.” He published his results on June 5 in the medical journal Anaesthesia.

The tool works by comparing the baseline data, such as the height, sex, weight and blood pressure of trial participants, to known distributions of these variables in a random sample of the populations.

If the baseline data differs significantly from expectation, this could be a sign of errors or data tampering on the part of the researcher, since if datasets have been fabricated they are unlikely to have the right pattern of random variation.

“This study is about working to correct the scientific record,” Andrew Klein, the editor-in-chief of the journal, said in a press release. “The new Carlisle screening tool has been developed here in the U.K. and it is now clear that it should be used by medical publications around the world. The integrity of medical science demands that we do everything we can to ensure complete accuracy in the publication of research.”

In the case of Japanese scientist, Yoshitaka Fuji, the detection of such anomalies triggered an investigation that concluded more than 100 of his papers had been entirely fabricated.

The latest study identified 90 trials that had skewed baseline statistics, 43 of which with measurements that had about a one in a quadrillion probability of occurring by chance.

The published review includes a full list of the trials in question, allowing Carlisle’s methods to be checked but also potentially exposing the authors to criticism. Previous large scale studies of erroneous results have avoided singling out authors.

Relevant journal editors were informed last month, and the editors of the six anesthesiology journals named in the study said they plan to approach the authors of the trials in question, and raised the prospect of triggering in-depth investigations in cases that could not be explained.

The flagged studies came from eight journals, including the New England Journal of Medicine, Anaesthesia, and JAMA. As Klein tells Retraction Watch, all the journals responded “swiftly and positively” to Carlisle, who reached out with the findings of his study. Six of the journals in the new analysis are in anesthesiology, where Carlisle has focused his efforts for several years, refining the method since 2012.

That earlier work led to the revelations that much of Yoshitaka Fujii’s research was fraudulent, and Fujii now has made 183 retractions of his voluminous “research”. The method has also been used by others to identify issues in more than 30 papers by bone researcher Yoshihiro Sato.

A Murrieta woman is accused in an insurance fraud case that allegedly netted her more than $230,000. Brooke Elizabeth Best-Freeman, 34, operated a licensed alcohol and drug treatment program in the Murrieta and Temecula areas, according to the Riverside County District Attorney’s Office.

The charges against Best-Freeman, who had run Best New Life Recovery since 2015, include four felony counts of insurance fraud and one felony count of solicitation or referral for purposes of insurance fraud – which is sometimes known as “capping.” She’s also facing a sentence-enhancing white collar crime allegation.

Her co-defendant, 49-year-old Robert Cramer of Lake Elsinore, is charged with one count of referral of a client for purposes of insurance fraud, and is the alleged “capper” in the case. He remains at large.

According to prosecutors, Best-Freeman came under investigation last September after the D.A.’s office was contacted by fraud investigators from Health Net Inc. who had flagged multiple billings from the defendant’s business, Best New Life Recovery.

The treatment facility, originally located in Murrieta, then Temecula, was licensed by the California Department of Health Care Services in 2015.

Prosecutors allege that, over a nine-month period, Best-Freeman submitted claims to Health Net and Cigna for treatments that were never provided to patients. The defendant also allegedly misclassified other services, forging or otherwise altering documents to commit acts of fraud, according to the D.A.’s office.

Cramer, the alleged “capper,” was tasked with finding prospects willing to go along with the conspiracy. He was promised $2,000 for his part, according to the prosecution.

Health Net lost just over $195,000 paying the alleged bogus claims, while Cigna suffered a $36,000 loss, according to court papers.

Over the past decade, the US has undergone an opioid epidemic. Prescriptions for opioid painkillers like oxycodone, hydrocodone, fentanyl, and morphine have skyrocketed.

The trend has been decades in the making. On careful reflection, one might ask “have we backed ourselves into this corner?”

An article in Business Insider claims that Increases in painkiller prescriptions are linked to a “big push” in the early 1990s from medical groups encouraging doctors to treat pain more aggressively, according to Dr. Ted Cicero, a professor of psychiatry at Washington University in St. Louis and an opiate-use researcher.

Though the increased focus on pain treatment resulted in increases in opioid prescriptions in most doctors initially, for years now, pain specialists have advocated using alternative treatments to alleviate their patients’ chronic pain.

There’s one problem: Health-insurance companies and worker’s compensation treatment guidelines are increasingly cutting reimbursements for these alternative treatments or not covering them at all.

Steroid injections, joint injections, fluid injections, physical therapy, nerve blocks, and radio-frequency ablation are just a few of the treatments advocated by pain specialists in place of opioids. Such treatments are frequently called interventional pain treatments.

“Every year, pain interventions go to the chopping block, and doctors have to figure out how to provide that treatment and make ends meet,” Dr. Janet Pearl, the medical director of Massachusetts-based pain-management center Complete Pain Care and the secretary of the Massachusetts Society of Interventional Pain Physicians, told Business Insider.

The policies of insurance companies have forced doctors to increasingly offer pain patients a difficult choice. Pay for expensive alternative treatments out-of-pocket, use opioids and possibly suffer a myriad of side effects and risk opioid addiction, or choose to do nothing and live with debilitating pain.

“Even if we want to climb a population out of the well of the opioid epidemic and give alternatives, we can’t,” Shah told Business Insider. “Patients can’t afford the alternatives and insurance companies won’t cover them.”

The coverage issue hasn’t gone unnoticed at a national level. In the January 2014 issue of Pain Physician, the official publication of the American Society of Interventional Pain Physicians (ASIPP), a cadre of pain specialists lamented the “draconian cuts” to numerous interventional pain treatments by commercial insurers and Medicare in a piece titled “Declining Value of Work of Interventional Pain Physicians.”

The article referred to reimbursement cuts ranging from 19% to 56% for various epidural injections by the Centers for Medicare and Medicaid Services (CMS). While some evidence suggests that the shots can ease lower-back pain caused by nerve problems in the short-term, they’re not going to provide long-term benefits. Thus, treatment guidelines such as the ACOEM Guideline concluded that treatment had no impact on functional impairment, the need for surgery, or pain relief beyond three months.

Applying the same logic to prescribing opiates for pain would rule them out also. They do not provide pain relief for more than a few hours. Yet, somehow opiates are authorized as a treatment option for decades, and epidural injections that last three months are not. This approach seems to have backed the industry into the corner of epidemic addiction problems, and increasing annual death rates.

Maybe it is time to rethink the cost versus benefits of pain treatment alternatives. A recent study published by the Pain Physician Journal found the cost utility analysis of caudal epidural injections in the treatment of disc herniation, axial or discogenic low back pain, central spinal stenosis, and post surgery syndrome in the lumbar spine shows the clinical effectiveness and cost utility of these injections at less than $2,200 per quality-adjusted life year.