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CWCI Reports Workers’ Comp Inpatient Care Declined by 51.1%

The number of inpatient hospitalizations in the California workers’ compensation system declined 51.1% between 2012 and 2022, spurred by declining claim volume, technological advances and changes in Medicare rules that allow more outpatient procedures, the elimination of redundant payments for spinal surgery hardware, and the expansion of evidence-based guidelines for spinal fusions and other surgeries.  

A new analysis by the California Workers’ Compensation Institute (CWCI) uses data on 28.7 million inpatient hospital stays with 2012 through 2022 discharge dates compiled by the California Department of Health Care Access and Information (HCAI) to measure and compare the use of inpatient services and procedures covered by workers’ compensation, Medicare, Medi-Cal and private coverage.  Workers’ comp is by far the smallest of those payer systems, and excluding hospital stays related to pregnancy, childbirth, and newborns, which are not part of the system, the study found that the number of workers’ comp inpatient stays has declined from 21,505 (0.9% of the total for all four payer groups) in 2012 to 10,516 (0.4%) in 2022.  Between 2021 and 2022, the number of workers’ comp hospitalizations declined by 5.6%, bringing the total decline over the past 11 years to 51.1%.  In comparison, the number of hospital stays paid under private coverage fell 23.5% over that same period, while Medicare hospital stays were only down 1.4%, and those paid by Medi-Cal increased by 45.7% due to surging Medi-Cal enrollments following passage of the Affordable Care Act in 2014.

The CWCI analysis notes that the decline in the number of workers’ comp inpatient stays dates back more than a decade, fueled by fluctuations in the number and types of work injury claims, the adoption of utilization review and independent medical review programs requiring that treatment meet evidence-based medicine standards, and a sharp reduction in the number of spinal fusions.  The most recent data suggest that many of those factors continue to help contain the volume of workers’ comp inpatient stays, as unlike the other systems where inpatient hospitalizations have rebounded after falling sharply in 2020 (the first year of the pandemic), workers’ comp inpatient stays have continued to drop.  The one exception is inpatient spinal fusions, which were up 5.0% between 2020 to 2022, driving spinal fusion hospital stays back up to 18.7% of all workers’ comp inpatient discharges in 2022, the highest proportion since 2016.  

The historical data also show that in the 8 years prior to the pandemic, diseases and disorders of the respiratory system (MDC 04) accounted for 2.5% to 3.0% of all workers’ comp inpatient stays, but with the introduction of COVID claims into the system, that percentage jumped to 7.4% in 2020 and 7.0% in 2021 before falling back to 3.7% in 2022.  With the recent decline in COVID-related hospitalizations, the distribution of workers’ comp inpatient stays by diagnosis shifted back toward pre-pandemic levels.  In 2022, diseases and disorders of the musculoskeletal system and connective tissue were the predominant diagnostic category, representing 60.3% of injured worker inpatient stays, followed by diseases and disorders of the nervous system, accounting for 6.2%.

The breakdown of Surgical vs. Medical (non-surgical) stays across the different payer systems shows that Surgical stays remain far more prevalent in workers’ comp, accounting for 68.4% of inpatient discharges in 2022, compared to 24.1% for Medicare, 20.9% for Medi-Cal, and 31.6% for private coverage.  Among the workers’ comp Surgical hospitalizations, those associated with various types of spinal fusions declined 58.8% between 2012 and 2022, but they still ranked first among Surgical stays and continued to account for a much higher proportion of the Surgical procedures in workers’ comp than in other systems, representing 18.7% of the workers’ comp inpatient surgeries in 2022 compared to 1.3% of the Medicare surgeries, 0.6% of the Medi-Cal surgeries, and 1.8% of the surgeries paid by private coverage.  Joint replacements (major hip and knee joint replacements or reattachment of a lower extremity) represented 8.8% of injured worker inpatient surgeries in 2022, compared to 0.5% in Medi-Cal, 1.0% in private coverage, and 1.5% in Medicare.

Notably, the study found that the decline in workers’ comp inpatient surgeries has been moderated somewhat by the growing number of injured worker spinal fusions and total joint replacements performed on an outpatient basis.  Data from HCAI and CWCI’s Industry Research Information System database  showed that the percentage of spinal fusions provided on an outpatient basis jumped from 0.8% in 2014 to 13.3% in 2022, while the percentage of major joint replacement or revision surgeries performed on an outpatient basis increased from 0.8% in 2014 to 25.9% in 2022, with the biggest increases occurring after Medicare removed these procedures from its “Inpatient Only” list, which is used to determine the appropriate setting for workers’ comp procedures.  

CWCI has issued a Research Update Report on its study, “Utilization of Inpatient Care in California Workers’ Compensation, 2012-2022.”  CWCI members and subscribers can access the report and a summary Bulletin at www.cwci.org.  Others can purchase a copy for $18 at www.cwci.org/store.html.

Researchers Discover Potential Non-Opioid Treatment for Chronic Pain

A new approach to treating neuropathic pain is making a key step forward thanks to researchers at The University of Texas at Austin.

Among the most difficult types of pain to alleviate is neuropathic pain, pain that is usually caused by damage to nerves in various body tissues, including skin, muscle and joints. It can cause patients to suffer feelings like electric shocks, tingling, burning or stabbing. Diabetes, multiple sclerosis, chemotherapy drugs, injuries and amputations have all been associated with neuropathic pain, which is often chronic, sometimes unrelenting and affects millions of people worldwide. Many of the available pain medications are only moderately effective at treating this type of pain and often come with serious side effects, as well as risk of addiction.

Now researchers at UT Austin, The University of Texas at Dallas and the University of Miami have identified a molecule that reduces hypersensitivity in trials in mice by binding to a protein they have shown is involved in neuropathic pain.

The findings appear in the journal Proceedings of the National Academy of Sciences.

We found it to be an effective painkiller, and the effects were rather long-lived,” said Stephen Martin, the June and J. Virgil Waggoner Regents Chair in Chemistry at The University of Texas at Austin and co-corresponding author of the paper. “When we tested it on different models, diabetic neuropathy and chemotherapy-induced neuropathy, for example, we found this compound has an incredible beneficial effect.”

The new compound, dubbed FEM-1689, does not engage opioid receptors in the body, making it a possible alternative to existing pain medications linked to addiction. In addition to reducing sensitivity, the compound can help regulate the integrated stress response (ISR), a network of cellular signaling that helps the body respond to injuries and diseases. When well regulated, the ISR restores balance and promotes healing. When it goes awry, the ISR can contribute to diseases such as cancer, diabetes and metabolic disorders.

It’s our goal to make this compound into a drug that can be used to treat chronic pain without the dangers of opioids,” Martin said. “Neuropathic pain is often a debilitating condition that can affect people their entire lives, and we need a treatment that is well tolerated and effective.”

NuvoNuro Inc., a company co-founded by Martin and other authors on the paper, was recently awarded a grant from the National Institutes of Health HEAL Initiative, which funds research to find scientific solutions to the national opioid crisis, to create a drug based on their findings.

This work is the culmination of a wonderful five-year collaboration with our colleagues at UT Austin and is a great example of academic drug discovery pushing the field of non-opioid pain therapeutics forward,” said Theodore Price, a professor of neuroscience at The University of Texas at Dallas and co-corresponding author of the paper. “Our funding from NIH on this continuing project through our spin-out company, NuvoNuro, has the potential to take us toward clinical development in the next few years, which is extraordinarily exciting.”

Muhammad Saad Yousuf, Eric T. David, Stephanie Shiers, Marisol Mancilla Moreno, Jonathan Iketem, Danielle M. Royer, Chelsea D. Garcia, Jennifer Zhang, Veronica M. Hong, Subhaan M. Mian, Ayesha Ahmad and Benedict J. Kolber of The University of Texas at Dallas;  James J. Sahn and Hongfen Yang of UT Austin; and Daniel J. Liebl of University of Miami Miller School of Medicine were also authors on the paper.

The research was funded by the National Institutes of Health, Natural Sciences and Engineering Research Council of Canada and the Robert A. Welch Foundation.

Insureds May Video Record Participants During Examination Under Oath

Residential property insurance policies commonly require an insured to submit to an examination under oath (EUO) if requested by the insurer in connection with the resolution of a claim. (Croskey et al., Cal. Practice Guide: Insurance Litigation (The Rutter Group 2023) ¶ 6:289.) Insurance Code section 2071.1, subdivision (a)(4), provides that an insured subject to an EUO “may record the examination proceedings in their entirety.”

Following water damage to his home, Vladimir Myasnyankin filed a claim under his property insurance policy with Nationwide Mutual Insurance Company.

Pursuant to the policy terms, Nationwide required Myasnyankin to submit to an EUO, which was scheduled to be in person. Relying on section 2071.1, subdivision (a)(4), Myasnyankin sought to video record the entire proceeding, including Nationwide’s attorneys and claims adjusters.

Nationwide refused to proceed with the EUO, asserting section 2071.1(a)(4) only permitted Myasnyankin to video record himself. Further, Nationwide threatened to deny his claim unless he agreed to proceed with the EUO. Myasnyankin then sued Nationwide seeking a declaration of his rights under section 2071.1.

Nationwide filed a demurrer to the complaint on the grounds that neither the policy nor section 2071.1 vested Myasnyankin with the right to video record all participants at his EUO. Looking at the plain language of section 2071.1 and the legislative history, and examining the distinction between section 2071.1 and the rules of civil procedure regarding depositions (Code Civ. Proc., § 2025.330, subd. (c)), the trial court overruled Nationwide’s demurrer.

The trial court interpreted the phrase “record the examination proceedings in their entirety” as including “video recording of the persons asking the questions, the person answering the questions, and any other aspect of the proceedings.” At the trial court’s suggestion, the parties entered a stipulated judgment in favor of Myasnyankin. Nationwide appealed the judgment (No. A166946). The trial court denied plaintiff’s subsequent motion for attorney fees, and plaintiff appealed that order (No. A167445).

The Court of Appeal was presented with an issue of first impression: whether Insurance Code section 2071.1, subdivision (a)(4) entitles an insured to make a video recording of the insurer’s participants in an EUO. After considering the statute’s plain language, statutory framework, and legislative history, it concluded that the provision does confer such a right in the partially published case of Myasnyankin v. Nationwide Mutual Ins. Co. -A166946 (January 2024).

” ‘An insured’s compliance with a policy requirement to submit to an examination under oath is a prerequisite to the right to receive benefits under the policy’’ ” (Abdelhamid v. Fire Ins. Exchange (2010) 182 Cal.App.4th 990, 1001 (Abdelhamid).) “Examinations under oath are frequently conducted under circumstances where the loss is undocumented or suspect.” (Croskey et al., Cal. Practice Guide: Insurance Litigation (The Rutter Group 2023) ¶ 6:289.3.) “The purpose of the examination under oath is to enable the insurer to obtain the information necessary to process the claim: ‘ “As the facts with respect to the amount and circumstances of a loss are almost entirely within the sole knowledge of the insured, … it is necessary that it [the insurer] have some means of cross-examining, as it were, upon the written statement and proofs of the insured, for the purpose of getting at the exact facts before paying the sum claimed of it.” ‘ ” (Brizuela v. CalFarm Ins. Co. (2004) 116 Cal.App.4th 578, 591–592 (Brizuela).) “The examination is normally conducted orally before a court reporter who administers the oath and transcribes the proceeding.” (Croskey at al., supra, ¶ 6:289.).

Section 2071.1, subdivision (a), applies to “any policy that insures property and contains a provision for examining an insured under oath,” and enumerates a nonexclusive list of “rights of each insured who is requested to submit to an examination under oath.” One such right is to “record the examination proceedings in their entirety.” (§ 2071.1(a)(4).)

The parties agree the provision grants insureds the right to make an audio or video recording, but dispute who can be recorded on video. Myasnyankin argues the statute entitles an insured to video record the insurance company’s representatives, while Nationwide contends the provision only confers on insureds the right to video record themselves.

The history of section 2071.1, added in 2001 (Stats. 2001, ch. 583, § 5), is unequivocal that the motivating purpose was to provide protections for insurance consumers during the claims process. Section 1 of the enacted bill expressly so provides: “Existing legal protections for insurance policyholders proved to be inadequate after the Northridge earthquake. The public requires additional safeguards against unfair claim settlement practices by insurance companies.”

“To be sure, the legislative history does not explicitly address whether section 2071.1(a)(4) encompasses the right to video record the insurer’s representatives. However, it demonstrates an express and unequivocal intent to protect insureds from harassment in EUO proceedings, and this purpose is served by granting insureds such a right. Significantly, video records nonverbal conduct, such as eye-rolls or glares, which would not be captured by audio recordings or reporter’s transcripts.  (See Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2023) ¶8:659.)  In addition, the knowledge that a person is being video recorded may prompt that person to modify their behavior in a positive manner.  

The plain language, statutory framework, and legislative history all support a construction of section 2071.1(a)(4) granting insureds the right to make a video recording of the insurer’s representatives at an EUO, and such a construction is not unreasonable.”

Ethics Ratings of Nearly All Professions Down in U.S.

Americans’ ratings of nearly all 23 professions measured in Gallup’s 2023 Honesty and Ethics poll are lower than they have been in recent years. Only one profession — labor union leaders — has not declined since 2019, yet a relatively low 25% rate their honesty and ethics as “very high” or “high.”

Nurses remain the most trusted profession, with 78% of U.S. adults currently believing nurses have high honesty and ethical standards. However, that is down seven percentage points from 2019 and 11 points from its peak in 2020.

At the other end of the spectrum, members of Congress, senators, car salespeople and advertising practitioners are viewed as the least ethical, with ratings in the single digits that have worsened or remained flat.

Gallup began measuring the honesty and ethics of various professions in 1976 with annual updates since 1990. Several professions have been included every year, while others have been asked on a rotating basis over time. The latest ethics ratings are from a Dec. 1-20, 2023, poll in which about 800 U.S. adults rated each of 23 professions.

All but one of the professions — veterinarians — were measured in both 2019 and 2023. The honesty and ethics ratings of the 22 other careers have declined by an average of six points since 2019. Twelve of the 13 professions tested in both 2022 and 2023 show at least slightly lower ratings in the past year, except for labor union leaders.

Gallup last asked about veterinarians in 2006, when 71% of U.S. adults viewed them as highly or very highly ethical. This compares with the latest 65%.

In addition to nurses and veterinarians, four other occupations have majority-level positive ratings — engineers, dentists, medical doctors and pharmacists.

Ethics ratings for five professions hit new lows this year, including members of Congress (6%), senators (8%), journalists (19%), clergy (32%) and pharmacists (55%).

Meanwhile, the ratings of bankers (19%), business executives (12%) and college teachers (42%) tie their previous low points. Bankers’ and business executives’ ratings were last this low in 2009, just after the Great Recession. College teachers have not been viewed this poorly since 1977.

The image of many professions — particularly those in the medical field — sharply improved in 2020 amid the COVID-19 pandemic. However, that effect was short-lived, and many ratings have since declined to all-time lows. Almost all professions are now viewed less positively than they were a year ago and four years ago. A select few — led by nurses for the 22nd consecutive year — maintain overall positive ratings.

WCAB Panel Reviews Criteria to Set Aside C&R for Incompetence

Annette Valdez, who claimed to be an injured worker, was a 34 year old a meter mechanic on the last day of her alleged Cumulative Trauma (CT) period, when she claimed injury to her psyche due to alleged harassment while working for the Southern California Gas Company.While she was represented by an attorney, she settled her claim via Compromise & Release for $2,500, which was approved on 2/28/02.

Much later she claimed that that she was incompetent at the time she signed the C&R on 1/11/02 settling this particular case. the matter proceeded to trial on 2/28/22, on the sole issue of whether the Order Approving Comprise & Release (OAC&R) dated 2/28/02 should be set aside.

She testified that she was not in her right mind at the time she signed the C&R in 2002. She was not taking the right medications. She is currently taking Haldol. Beforehand, however, she took something else which put her to sleep. Now that she is taking Haldol, she is better. At the time of the C&R, she was paranoid and schizophrenic and she was fearful of pursuing her case because her coworkers might get mad and they knew where she lived. She said she went to court one time and asked how she could reopen her case and was told that she would have to show how she was incompetent at the time she signed the C&R. It is unknown when exactly this occurred or who told the Applicant this.

She offered four exhibits at trial, none of which were medical evidence supporting her claim of incompetency at the time she signed the settlement agreement.

Findings and Order issued by a WCJ on May 10, 2022 which found that that there was no good cause to set aside the February 28, 2002 Order Approving Compromise & Release. Her Petition for Reconsideration was denied in the panel decision of Valdez v Southern California Gas Company -ADJ1991445 (January 2024).

Case law has defined incompetence as “not insanity, but rather inability to properly manage or take care of oneself or property without assistance.” County of Santa Clara v. WCAB (McMonagle) (1992) 57 CCC 377, 379 (writ denied). It has been held that the term does not apply to physical inability but rather to mental incompetence. … Fox v. IAC (1943) 8 CCC 194, 195 (writ denied).

Medical evidence is required to establish incompetence. Sun Indemnity Co. of New York v. IAC (McKinney) (1948) 13 CCC 82, 85; Lamin v. City of Los Angeles Police Department (2004) 69 CCC 1002, 1005. The statute of limitations will be tolled if the court finds sufficient psychological impairment such that the injured worker is incapable, or substantially compromised. County of San Bernardino v. WCAB (Spencer) (1996) 61 CCC 860 (writ denied); Feeley v. Southern Pacific Transportation Co. (1991) 234 Cal App.3d 949. Any such decision must be based on substantial evidence.

The Applicant’s settlement was based on two QME reports, one obtained by Applicant, which was Dr. Perry Maloff, dated 2/19/98 and one by Defendant, Dr. Carl Marusak, dated 12/18/9. Both reports found the Applicant’s psyche claim to be non-industrial. Neither of these reports specifically stated that Applicant was incompetent or incapable of handling her affairs, although they do discuss significant psychological issues.

“Here, after careful consideration of the record, we agree with the WCJ that applicant did not meet her burden to show that she was incompetent at the time that she signed the C&R. Additionally, we agree with the WCJ, that on the record before us, there is no evidence that the agreement was based on fraud.”

Opinion Defines When Ending Forced Arbitration Act “Dispute” Arises

Southern California Medical Center, Inc., is a community clinic that provides care to low income and medically uninsured patients. The Center’s chief medical officer is physician Mohammad Rasekhi. In July 2016, the Center hired Omar Kader to serve as the chief financial officer. Approximately 18 months later, Kader became the chief operating officer. In May 2018, Kader signed his first agreement to arbitrate disputes with the employer.

Kadar claimed in a lawsuit that he was sexually harassed and assaulted by Rasekhi at various times in 2018 and 2019. On June 25, 2019, Kader signed a new arbitration agreement agreeing to arbitrate “employment disputes” with the Center, the human resources provider Modern HR, Inc., or any of their respective employees or officers.

Eight subsequent incidents of sexual harassment and sexual assault allegedly took place between September 2019 and February 28, 2022. Kader alleged that in July 2021, the Center’s chief executive officer Sheila Busheri began making false statements about Kader to justify retaliating against him.

Congress enacted the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (the Act; 9 U.S.C. §§ 401, 402), which invalidates predispute arbitration agreements in certain circumstances. The Act became effective on March 3, 2022.

Following the effective date of the Act, Kader filed a complaint with the DFEH in May 2022, and requested an immediate right-to-sue notice. DFEH closed the complaint and issued a right-to-sue notice on May 27, 2022. That same day, Kader filed a complaint against the Center, Rasekhi, Busheri, six of the Center’s board members, Modern HR, and two additional entities.

He alleged causes of action for sexual harassment, discrimination on the basis of race, national origin and/or sex, failure to prevent discrimination and harassment, retaliation, intentional infliction of emotional distress, negligence, sexual battery, and defamation. It was unclear from the complaint whether Kader complained about Rasekhi’s conduct to anyone other than Rasekhi. Kader alleged he felt that he could not report Rasekhi’s conduct to the Center or its related entities without suffering retaliation

The defendants filed a motion to compel arbitration and argued that the Act did not apply because: (1) Kader’s claims accrued prior to the effective date of the Act, and (2) the arbitration agreement was signed after the conduct giving rise to sexual harassment or sexual assault took place.

The trial court denied the motion to arbitrate based on the Act. The Court of Appeal affirmed in the published case of Kader v. Southern Cal. Medical Center, Inc. – B326830 (January 2023).

A statutory note to the Act adds: “This Act, and the amendments made by this Act, shall apply with respect to any dispute or claim that arises or accrues on or after the date of enactment of this Act.” (Pub.L. No. 117-90, § 3, reprinted in notes foll. 9 U.S.C. § 401.)

The Center defendants contend the arbitration agreement in this case is not a “predispute” arbitration agreement because the conduct allegedly began before Kader signed the arbitration agreement.

The Court of Appeal concluded the date that a dispute has arisen for purposes of the Act is a fact-specific inquiry in each case, but a dispute does not arise solely from the alleged sexual conduct. A dispute arises when one party asserts a right, claim, or demand, and the other side expresses disagreement or takes an adversarial posture. In other words, “[a] dispute cannot arise until both sides have expressed their disagreement, either through words or actions.”  Until there is a conflict or disagreement, there is nothing to resolve in litigation.

“In the present case, there is no evidence that a dispute existed between the parties prior to or at the time of signing the new arbitration agreement on June 25, 2019. Kader alleged three incidents of sexually harassing or assaultive conduct took place before the agreement was signed, but there is no evidence that any dispute yet existed.”

The dispute in this case arose in May 2022, after the effective date of the Act. The trial court properly concluded that the Act applied to invalidate the predispute arbitration agreement in this case.

SoCal Man Sentenced for $6M Used and Counterfeit Medical Device Fraud

A Tarzana man was sentenced to 30 months in federal prison for running a nearly $6 million scheme in which he sold used medical devices that were deliberately misbranded as new, as well as counterfeit devices that he claimed were to be used with fat-reducing laser machines.

Kambiz Youabian, 50, was sentenced by United States District Judge Dale S. Fischer, who also ordered him to pay $5,937,049 in restitution and ordered the forfeiture of $1,685,396 in seized assets.

Youabian pleaded guilty in January 2023 to one count of mail fraud and one count of introducing a misbranded medical device into interstate commerce.

Youabian owned and operated MSY Technologies Inc., a West Los Angeles-based company that did business under the names “Thermagen” and “Global Electronic Supplies” (GES).

From March 2016 to June 2022, Youabian purchased used transducers, which are medical devices used to tighten the skin of dermatology patients by delivering ultrasound energy to a patient’s skin. Used properly, transducers are designed to provide no more than 2,400 treatments. After this number is reached, the devices are considered depleted and should be disposed of in accordance with health code regulations.

Through GES, Youabian purchased depleted transducers for nominal sums, typically $50. Youabian then remanufactured the depleted transducers and added fabricated serial numbers to make the transducers appear to be new.

Then, through his Thermagen company, Youabian fraudulently marketed and sold – for many times more than he paid for them – the remanufactured transducers to health care providers and customers as “new” transducers with 2,400 remaining treatments. To conceal his connection to Thermagen, Youabian used names of fabricated Thermagen employees on correspondences with victim providers and used out-of-state commercial mailboxes for Thermagen’s return of address on shipments, which he sent through the U.S mail.

For example, in February 2020, Youabian, through Thermagen’s website, sold a device falsely advertised as “new” and “containing 2,400 lines” – and with a retail price of $1,695 – to a buyer. Youabian then shipped the device – which contained a fake serial number – from Los Angeles to Florida via the United States Postal Service.

Youabian also shipped counterfeit PAC keys, medical devices used to operate laser machines designed to reduce fat on patients, through the mail.

He then transferred his ill-gotten gains to bank account his controlled, including accounts he opened in the names of MSY Technologies, himself, and his au pair.

In June 2022, law enforcement executed search warrants at Youabian’s home and the GES-Thermagen office in West Los Angeles. In the GES-Thermagen office, law enforcement seized 75 transducers in various states of refurbishment, a manufacturing workstation containing tools and transducer parts, and detailed records of GES and Thermagen’s expenses.

Youabian unlawfully sold thousands of medical devices, including transducers and PAC keys, and receiving at least $5,821,474 in fraudulent proceeds that should have been paid to the companies that are the sole U.S. distributors for these devices. Youabian also caused reputational harm to the device manufacturers and distributors of these medical devices.

The U.S. Food and Drug Administration Office of Criminal Investigations and the United States Postal Inspection Service investigated this matter.

DWC Annual Report of Inventory for Claims Due by April 1

The California Code of Regulations, title 8, Section 10104 requires claims administrators to file, by April 1 of each year, an ARI with the Division of Workers’ Compensation (DWC) indicating the number of claims reported at each adjusting location for the preceding calendar year. Even if no claims were reported in the prior year, the report must be completed and submitted to the DWC Audit Unit. Each adjusting location is required to submit an ARI unless its requirement has been waived by DWC.

When ARI requirements are waived, claims administrators must file an annual report of adjusting locations. This report is to be filed annually on April 1 of each calendar year for the adjusting location operations as of December 31 of the prior year. Please submit the form prior to the April 1, 2024 deadline. Any document received after April 1, 2024 is late and subject to a penalty for late reporting. The preferred method of delivery is email to Audit Unit email box at DWCAuditunit@dir.ca.gov. Once the document is received by the Audit Unit, the sender will receive an email confirmation.

Claims administrators are required to report any change in the information reported in the ARI or annual report of adjusting location within 45 days of the effective date of the change. Penalties of up to $500 per location for failure to timely file this Report of Inventory may be assessed under Title 8, California Code of Regulations, Section 10111.1(b)(11) or 10111.2(b)(26).

The form for 2023 can be found on the DWC website.

Questions about submission of the ARI or the annual report of adjusting locations may be directed to the Audit Unit:

State of California
Department of Industrial Relations
Division of Workers’ Compensation – Audit Unit
160 Promenade Circle, Suite #340
Sacramento, CA 95834-2962

Email: DWCAuditUnit@dir.ca.gov, FAX 916.928.3183 or phone 916.928.3180.

S.F. City Attorney Battles U.S. News & World Report Over Hospital Rankings

San Francisco City Attorney David Chiu sent a letter to U.S. News & World Report last June seeking information on the company’s hospital rankings, which have come under scrutiny from medical experts for imprecise methodology and bias.

The letter also demanded that U.S. News publicly disclose the payments it receives from the hospitals it endorses, as required by federal regulations. The City Attorney also demands U.S. News substantiate its advertising claims, explain its methodology and how it intends to correct biases, and immediately publicly disclose the revenue it receives from hospitals.

“Consumers use these rankings to make consequential health care decisions, and yet there is little understanding that the rankings are fraught and that U.S. News has financial relationships with the hospitals it ranks,” said City Attorney Chiu. “The hospital rankings appear to be biased towards providing treatment for wealthy, white patients, to the detriment of poorer, sicker, or more diverse populations. Perverse incentives in the rankings risk warping our health care system. Hospitals are treating to the test by investing in specialties that rack up the most points rather than in primary care or other worthy specialties.”

“Smaller, rural, or community hospitals do not have the resources to compete in the rankings. This creates a cycle in which patients and crucial research funding flow to higher ranked hospitals instead of smaller, community hospitals. Those smaller hospitals continue to be under resourced and do not perform well in the rankings or are not ranked at all.”

In a thorough response to the letter dated July 19, 2023 U.S. News raised grave, pointed concerns about the City Attorney’s infringement on U.S. News’ rights under the United States and California Constitutions and California’s Reporters’ Shield Laws, while also explaining that its ranking methodology is published annually, communicated widely, and is wholly transparent.

On January 9, 2024, the City Attorney escalated his inquiry by issuing two subpoenas seeking documents and information relating to U.S. News’ hospital rankings. U.S. News escalated its response on January 23rd by filing a 44 page lawsuit against the City Attorney in the U.S. District Court for the Northern District of California.

In its lawsuit, U.S. News argues that the First Amendment to the United States Constitution safeguards the freedom of speech and the freedom of the press against viewpoint-based discrimination by the government. The Liberty of Speech Clause in the California Constitution, Art. I, § 2, similarly protects these foundational rights. And California’s Reporters’ Shield Law, embodied in the California Constitution (Art. I, § 2, subd. (b)) and California law (Cal. Evid. Code § 1070), defends the press against intrusive inquiries by the government into unpublished information, news gathering, and methodologies.

It goes on to allege the Subpoenas make clear that the City Attorney is using governmental process to engage in viewpoint discrimination – and, indeed, is proceeding as though he holds censorial (or editorial) authority over how U.S. News performs its journalistic work ranking hospitals. The Subpoenas ask U.S. News to “[d]escribe [U.S. News’] basis for not including measures of health equity in its rankings of adult Hospitals”; “[d]escribe how, if at all, [U.S. News] has incorporated primary and preventive care in each annual version of the Best Hospitals rankings”; and “[d]escribe [U.S. News’] basis for believing that Medicare outcomes information from at least 18 months ago accurately reflects current Hospital outcomes.”

U.S. News seeks a declaration that the Subpoenas violate the First and Fourteenth Amendments to the United States Constitution, Article I, section 2 of the California Constitution, and section 1070 of the California Evidence Code. U.S. News also seeks an order permanently enjoining Defendant from enforcing the Subpoenas.

Chiu, in a statement provided to The Los Angeles Times, vigorously disputed those claims. “It’s ironic that U.S. News claims its speech has been chilled, when the purpose of the company’s lawsuit is to chill and impede a legitimate government investigation of potential unlawful business practices,” Chiu said.

“Despite U.S. News’ stated commitment to transparency, the company has spent months evading tough questions about its undisclosed financial links to the hospitals it ranks. This lawsuit is yet another baseless attempt to avoid these questions and a waste of judicial resources,” Chiu said. “U.S. News is not above the law, and its bullying litigation tactics will not deter us from standing up for patients and consumers.”

NSC Expands Workplace Safety Grant Programs by $260K

Following the debut of the Research to Solutions (R2S) grant and MSD Solutions Pilot Grant in 2023, the National Safety Council is awarding up to an additional $260,000 this year through these pioneering grant programs to help uncover promising new safety solutions to prevent work-related musculoskeletal disorders, or MSDs. As a key initiative of the Council’s MSD Solutions Lab, a groundbreaking strategic program established in 2021 with funding from Amazon, a total of up to $535,000 has now been committed in grants to foster innovative, transferable methods to mitigate MSDs – the most common workplace injury – across a range of sectors and workplaces.  

“Bringing together the brightest minds and pushing the boundaries of MSD prevention research and technology is at the heart of all we do,” said Paul Vincent, NSC executive vice president of workplace practice. “We’re proud to bring back these grants for another year so we can expand our network of top innovators to solve this pervasive safety challenge and ultimately help workers lead safer, healthier lives on and off the job.”

“We are pleased to continue our partnership with NSC on the MSD Solutions Lab,” said Sarah Rhoads, vice president of global workplace health and safety at Amazon. “The Research to Solutions and MSD Pilot Grant programs will advance research and create scalable MSD mitigation programs that help improve safety for employees on a global scale.”

MSDs include tendinitis, back strains and sprains, and carpal tunnel syndrome, and are often caused by exposures to repetitive, forceful exertions like heavy lifting. They affect people in every industry and sector, and cost U.S. businesses in the private sector nearly $17 billion a year, according to the Liberty Mutual Workplace Safety Index. Recognizing the scope of these injuries, each grant is designed to further MSD prevention:

Research to Solutions, which will award up to $50,000 per approved research project, for a total of $200,000 in grants, invites academic institutions, businesses and industries to innovate new solutions for MSDs, focusing on occupational injury risk reduction that can be seamlessly integrated across a range of sectors and workplaces. R2S proposals should support one or more key research areas, including emerging technologies, solutions to jobs or tasks known to have high MSD risk, MSD management systems and total worker wellbeing.

MSD Pilot Grant, which will award up to $20,000 per approved project, for a total of $60,000 in grants, aims to reduce MSDs caused by upper-extremity work by matching organizations with innovative technology providers to trial emerging technologies in real-life applications. This grant is available to members of the MSD Pledge community willing to partner with the six leading technology providers featured at the 2023 NSC Safety Congress & Expo.

NSC will announce the list of this year’s grant recipients in May 2024, and the winners will have an opportunity to present their safety findings at the 2025 NSC Safety Congress & Expo or another event. For the current 2023-2024 grant cycle, the inaugural recipients will share their key learnings and research at this year’s NSC Safety Congress & Expo in Orlando, Florida, Sept. 16-18. Winners also shared progress reports with the MSD Solutions Lab before the end of 2023.

The R2S and MSDs Pilot Grant are two of several initiatives supported by the MSD Solutions Lab to achieve its goal of preventing MSDs.