Category: Daily News

Workers’ Compensation Appeals Board Chairwoman Ronnie Caplane is retiring from state service at the end of April. She was appointed commissioner in 2003 by Governor Gray Davis, reappointed in 2009 by Governor Arnold Schwarzenegger, and appointed Chairwoman by Governor Jerry Brown in 2011.

During her tenure on the Appeals Board, the California workers’ compensation laws underwent two major reforms. The first came with SB 899 in 2004; later, as Chairwoman, she presided over the first judicial body to review cases that fell under SB 863’s landmark 2013 reforms.

“Ronnie Caplane managed WCAB through significant legislative changes, and has made valuable contributions to improving the workers’ compensation system,” said DIR Director Christine Baker.

Commissioner Caplane was admitted to the State Bar in 1975 after graduating from the University of Wisconsin, Madison and UC Hastings College of Law. She was an associate attorney for Lewis, Rouda and Lewis from 1976 to 1978 and then a trial attorney for the U.S. Department of Justice’s Civil Division from 1979 to 1982. Caplane was also a partner with Bruyneel and Caplane from 1983 to 1985, and a freelance writer and columnist for East Bay area publications the Piedmonter and the Montclarion from 1992 to 2006. She has published essays in newspapers throughout the country including the San Francisco Chronicle, the Cleveland Plain Dealer, the Chicago Tribune, the Detroit Free Press, the Recorder, Legal Times, and various Jewish publications. Her essays have also appeared in several anthologies.

She has also served as a member and President of the Piedmont School Board. Her leadership in education and work to improve the East Bay community led Assemblywoman Wilma Chan to name her Woman of the Year in 2004. Her commitment to public education and to restore California to its status as a national leader led Caplane to pursue a run for the California Assembly.

In 2006, she made an unsuccessful run for a seat in the Assembly, coming in third with 12.5 percent of the vote in a five-way Democratic primary won by Assembly Member Sandré Swanson.

Commissioner Caplane suffered the tragic loss of her husband Joe Remcho – a prominent Bay Area lawyer and influential adviser to many of California’s most powerful politicians – in January 2003 as a result of a helicopter crash in the Sacramento-San Joaquin River Delta while he was the solo pilot of the craft. At the time of his death he was a partner in the San Leandro law firm of Remcho, Johansen & Purcell. For two decades, the firm has represented the state Legislature in redistricting matters and other cases involving voter initiatives, term limits and campaign finance. Remcho’s clients included Gov. Gray Davis, Attorney General Lockyer, Sen. Dianne Feinstein and Mayor Willie Brown, the former state Assembly speaker. After his death she wrote a series of “grief columns” that drew an overwhelming response from readers.

Commissioner Caplane volunteered thousands of hours for a myriad of community organizations including Oakland’s Temple Sinai, HEROS, the Henry Robinson Center and the Piedmont schools. She created a minority law school scholarship through the Bar Association of San Francisco in her husband’s honor.

Following retirement, she will be joining Zenith Insurance Company as a Vice President.

A Napa doctor has agreed this month to pay the U.S. government $400,000 to settle allegations that he filed false claims for Medicare reimbursement,. The agreement with Ali Vaziri, M.D., a gastroenterologist, settles the civil allegations but it provides that , while agreeing to pay the $400,000, Vaziri does not admit to any liability. Vaziri is a board-certified gastroenterologist with a practice called the “Center For Digestive & Liver” in Napa.

Federal attorneys said that between 2007 and 2011, Vaziri billed Medicare for patient office visits that were longer and included more services than the consultations he actually provided. He was also alleged to have billed separately for office visits that were required to be billed together with colonoscopies.

Vaziri, a 1990 graduate of the Tufts University School of Medicine, has faced a number of legal challenges in recent years.

In June 2015, the Medical Board of California placed Vaziri on seven years’ probation and prohibited him from supervising physician assistants because of a criminal conviction for tax fraud.

In June 2014, Vaziri was sentenced to a year and a day in federal prison for tax fraud after cheating the IRS of more than $116,700, according to federal prosecutors. Vaziri, who was indicted in 2012, served his sentence at a federal facility in Lompoc, said his attorney, Malcolm Segal of Sacramento, in a 2015 interview.

The physician was sentenced under a plea agreement reached in early 2014, when he agreed to plead guilty to four counts of filing false income tax returns between 2005 and 2008. The charges were filed in connection with income and expenses from his medical practice. In 2005, Vaziri falsely inflated his business expenses, causing the IRS to lose $14,535 in taxes and then repeated the fraud for the next three years, underpaying $60,620 in 2006, $27,476 in 2007 and $14,072 in 2008, according to U.S. Attorney Melinda Haag.

In exchange for his guilty plea, entered in the U.S. District Court for the Northern District of California, federal officials dropped health care fraud allegations.

Vaziri attracted the attention of federal officials beginning in June 2009 when he was suspected of overbilling and falsely billing Medicare, according to a sentencing memorandum filed by prosecutors. As the investigation progressed, federal investigators delved into potential income tax fraud. In June, 2012 he was was charged by a federal grand jury in San Francisco with nine counts of health care fraud and six counts of filing a false federal income tax return.

“Dr. Vaziri will be fully permitted to practice medicine. Any restrictions will not impede his ability to practice,” said Segal according to the 2015 report in the Napa Valley Register.

The Center for Investigative Reporting is a nonprofit news organization based in Emeryville, California, and has conducted investigative journalism since 1977. It is known for producing stories that reveal scandals or corruption in government agencies and corporations. In 2010, CIR launched its California Watch reporting project. Its current investigatory effort exposes fraud in California’s workers’ compensation system. An analysis of more than a million court cases details how workers have been swept into medical billing mills, prescribed unregulated medications and advised to undergo sometimes unneeded or high-risk surgery by doctors who were raking in bribes. The CIR report has now birthed follow up articles in many California leading publications.

The Sacramento Bee in a series of related articles points out that a review of thousands of criminal court records by The Center for Investigative Reporting shows a system in which pay-to-play schemes trump patient care, particularly in unregulated treatments rejected by insurers and “disputed in obscure courts throughout the state.” Prosecutors are pursuing charges against more than 80 medical professionals who’ve handled more than 100,000 injured-worker cases, most of them originating in Southern California. They allege that the cases account for $1 billion in fraud.

And the Sacramento Bee story suggests that “nobody cares about policing health care for injured workers.” Thousands of unregulated medical providers can spurn legislated checks and balances on medical care in the only-in-California network of 24 workers’ compensation courts. Anyone can demand money – a process known as filing a medical lien – for unregulated medical treatments that include the use of questionable devices, pain creams, shockwave therapies and DNA tests. And in an overburdened system that favors settlements over trials, they often succeed”.

“We know there’s a problem,” said Christine Baker, director of the state Department of Industrial Relations, which administers workers’ compensation. Baker’s agency worked with lawmakers on a 2012 law that was meant to limit the filing of medical liens. It established a $150 fee required to demand payment in workers’ compensation courts. It also gave insurers new powers to deny money to providers that aren’t approved to treat injured workers.

Yet claims for unapproved care still are cropping up, Baker said. And the number of liens filed last year is even higher than it was when one of Baker’s advisers initially concluded that the system “rewards bad behavior.” Baker said her department has begun reviewing the medical providers who currently file the largest number of liens. The result: “We do note that many are (criminally) indicted.”

“We’re talking about a patient that has become a commodity,” said Don Marshall, chairman of the state’s Fraud Assessment Commission, which distributes funds to prosecutors who fight workers’ compensation fraud. “It’s become something to trade and sell on the open market for no other reason than to generate income.”

Workers who’ve been hurt on the job often are the last to find out that they have been exploited – if they find out at all.

Artificial disk replacement is a newer surgical procedure for relieving spine pain. Similar to hip or knee joint replacements, a disk replacement substitutes a mechanical device for an intervertebral disk in the spine. The device is meant to restore motion to the spine by replacing the worn, degenerated disk. It is an alternative to the commonly performed anterior cervical discectomy and fusion (ACDF), a surgical procedure that is designed to address the pathology by eliminating motion at the diseased disc level. Artificial disk replacement initially gained FDA approval for use in the U.S. in 2004. Over the past several years, numerous other disk replacement designs have been developed and are currently being tested. Development of these procedures first appeared in the lumbar spine, and more recently cervical total disc replacements (cTDR) at one level, and now at two levels.

The natural cervical intervertebral disc is an amazing mechanical structure from an engineering perspective. It has the ability to absorb a large compressive load while still providing an impressive range of motion between the bones in the neck. Duplicating the natural disc’s form and function with a synthetic – or artificial – disc is challenging. However, several artificial cervical discs have been developed and are available as a surgical option for patients with symptomatic cervical disc problems.

One of the newer developments, Mobi-C is a cobalt chromium alloy and polyethylene mobile-bearing prosthesis specifically designed as a bone-sparing, cervical intervertebral disc replacement for both one and two-level indications. All other cervical disc prostheses are FDA approved for one-level use only. In addition to the unique mobile-bearing feature, Mobi-C offers a simplified surgical technique.

Although both ACDF and cTDR satisfactorily treat clinically symptomatic cervical pathology, fusion alters cervical mechanics by placing increased stresses on adjacent segments, which may contribute to the development of symptomatic degeneration at those adjacent levels. In comparison, at least in theory, by preserving the motion of the operated segment, cTDR places comparatively less stresses on adjacent levels, which may serve to protect those levels. Multilevel ACDF is biomechanically more demanding than single-level ACDF with concomitant greater stress distribution on adjacent levels. Additionally, reoperation rates are generally higher in multilevel versus single-level ACDF. Currently there is a paucity of medical evidence evaluating the outcome of multilevel cTDR procedures.

However this month there is a new published study. Five-year clinical results of cervical total disc replacement (cTDR) compared with anterior discectomy and fusion for treatment of two-level symptomatic degenerative disc disease: a prospective, randomized, controlled, multicenter investigational device exemption clinical trial has just been published by the Journal of Neurosurgery: Spine.

A total of 225 patients received the Mobi-C cervical total disc replacement device and 105 patients received ACDF. Both cervical total disc replacement and ACDF significantly improved general and disease-specific measures compared with baseline. However, there was significantly greater improvement in general and disease-specific outcome measures and a lower rate of reoperation in the 2-level disc replacement patients versus ACDF control patients.

In both groups, the overall rates of patient satisfaction were high. However, there was significantly higher reported patient satisfaction in the cTDR group versus the ACDF group. At 5 years, 96.4% of cTDR patients and 89.5% of ACDF patients reported being either very satisfied or somewhat satisfied with their treatment. At 5 years, 94.8% of patients in the cTDR group and 84.2% of patients in the ACDF group reported that they would definitely or probably recommend the surgery to a friend.

In 2015, the industry observed the emergence of “captive pharmacies,” or pharmacies that enter arrangements to be owned or operated by pharmaceutical manufacturers. Captive pharmacies typically promote the manufacturer’s products instead of other lower-cost, equally effective medications. The intent is to circumvent formulary management programs designed to protect the patient and the plan sponsor from unnecessarily filling high-cost medications. The most high-profile captive pharmacy arrangements were between Valeant Pharmaceuticals International and Philidor Rx Services, and Horizon Pharma PLC and Linden Care Pharmacy.

Express Scripts Holding Co, the largest U.S. pharmacy benefit manager, is “reviewing and evaluating all similar captive pharmacy arrangements that we know of and will work to identify others,” said Brian Henry, a spokesman for Express Scripts. He defined a captive pharmacy as one that derives the vast majority of prescription volume from one manufacturer or one product. CVS Health, the second-largest pharmacy benefit manager, also said it is continuing to investigate other pharmacies to uncover inappropriate billing and dispensing activities.

The New York Times reports that Valeant has encouraged doctors to submit prescriptions for its products to Philidor Rx Services, rather than send patients to the corner drugstore. That makes it more difficult for pharmacists and insurers to substitute a less expensive alternative. Co-payments are often subsidized, making it easier for the patients to agree to get the higher-priced Valeant drug. And Philidor handles the task of fighting for reimbursement from insurers, taking that off doctors’ hands. What has raised even more suspicion is that Valeant did not disclose its relationship with Philidor until recently, when word started to get around, even though it had paid $100 million for an option to acquire the pharmacy, for no additional payment. Valeant said the transaction was too small to be material.

Phildor Rx Services was denied a license to dispense drugs in California because, the state said, it had not been truthful identifying its owners and financial officers. When Philidor failed to get the license in California, entities affiliated with it bought stakes in at least two California pharmacies. One of those, R&O Pharmacy, has presented evidence in litigation that the entity that bought the stake tried to hide that it was a front for Philidor. It also claims that Philidor used R&O’s pharmacy identification numbers to help fill its own prescriptions.

R&O Pharmacy is a small storefront community pharmacy amid rows of low-slung office buildings in Camarillo, California. According to Bloomberg News, 64-year-old pharmacist Russell Reitz agreed to sell his business there to a Delaware-registered company for $350,000. Even before the sale agreement was executed, other pharmacies began using an R&O identification number to bill for prescriptions that R&O hadn’t filled, sometimes for drugs the store didn’t stock, according to the court documents. Reitz asked why R&O’s suitor had signed an insurance-company audit for the pharmacy that Reitz still controlled. The next day, he received surprise visitors from a firm called Philidor RX Services, whose links to the buyer Reitz struggled to understand. Increasingly alarmed as millions of dollars in payments flowed in, Reitz started stashing away the checks. Then he got sued. It wasn’t pocket change. Valeant’s general counsel, in a September 4 letter to Reitz, said R&O owed Valeant in connection with gross invoices of $69.9 million. He threatened to take “any and all actions” to ensure payment.

As a result of publicity following the R&O lawsuit Valeant finally revealed that it had a secret network of pharmacies pushing its products around the country. In March, 2016 Valeant announced the litigation between the parties has been resolved by a “confidential settlement agreement that resolves all claims between them.” Reuters reported that Philidor Rx Services also has had questionable transactions with West Wilshire Pharmacy in Los Angeles.

One of the products dispensed by Philidor is Solodyn, a Valeant acne drug that costs more than $1,000 a month and is a formulation of an old generic antibiotic, minocycline. Another product is Jublia, an ointment for toenail fungus that costs more than $500 a bottle and is one of Valeant’s fastest-growing treatments. Philidor handled 44 percent of Valeant’s Jublia business in the third quarter.