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Category: Daily News

Pacific Gas and Electric Again Under Safety Investigation

The state Public Utilities Commission unanimously approved a $2 million utility-financed wide-ranging investigation to gauge Pacific Gas and Electric Co.’s emphasis on safety in the aftermath of the San Bruno gas explosion. The panel previously imposed a historic $1.6 billion penalty for the Sept. 9, 2010, blast that killed eight people. Now the company’s string of post-San Bruno regulatory troubles suggested that utility was simply too big to regulate and might need to be broken up.

The investigation will amount to a deeper review of the companies organizational culture, governance, and operations, and the systemic issues identified by the National Transportation Safety Board. The safety board blames the 2010 explosion largely on PG & E’s “organizational failure” and lax safety leading up to the event. The safety arm of the commission will now work with an outside consultant to draft a report that will be reviewed by an administrative law judge in charge of the proceeding.

Meanwhile, the Los Angeles Times reports that the Public Utilities Commission itself — beset by criticism that its officials have a too-cozy relationship with the utilities they regulate — failed to respond to a search warrant for records related the California attorney general’s investigation of agency operations. A court document filed Aug. 7 states that “after multiple requests, and two months after the search warrant was served on CPUC, no records have been produced.” Special Agent Reye Diaz of the attorney general’s office added: “No extension has been requested and no indication has been given as to when the records will be produced.”

The attorney general is investigating secret talks between the commission and Southern California Edison, the state’s second largest investor-owned utility, that led to decisions that are costing utility customers billions of dollars.

WCAB Indicates Intention to Suspend Lien Claimant

On August 14, 2013, the WCJ in the case of Trinh v Tzeng Long USA Inc. issued an Order For Costs And Sanctions against Professional Lien Services, Inc., (PLS), ordering it to pay defendant’s costs and attorney’s fees in the amount of $2,355 along with a separate court sanction of $1,000. The sanctions were imposed for PLS’s bad faith and frivolous conduct in pursuing a trial on the issues of penalty and interest when it did not offer evidence at the trial adequate to meet its initial burden of proof.

Neither PLS nor its representative, Mike Traw petitioned for reconsideration or otherwise appealed the August 14, 2013 Sanction Order and it is now final and binding for all purposes.

Deputy Commissioner Rick Dietrich, Secretary of the Appeals Board, notified PLS in October 2013 that payment of the $1,000 court sanction was expected within ten days and further advised that failure to pay the sanction was grounds for suspending the privilege of appearing before the WCAB pursuant to section 4907. PLS replied that it was petitioning for reconsideration, but that was not the case.

Defendant also made unsuccessful efforts to recover the costs and attorney’s fees that PLS is obligated to pay as part of the Sanction Order. Thus the En Banc panel concluded “None of the efforts by the Appeals Board and the defendant have resulted in voluntary compliance with the August 14, 2013 Sanction Order by PLS and Mr. Traw, and it appears they are willfully disobeying the August 14, 2013 Sanction Order.”

Section 4907(a)(2) provides for suspension of the privilege of appearing before the WCAB for, “failure to pay final order of sanctions, attorney’s fees, or costs, issued under Section 5813.” The failure to comply with an order or regulation of the WCAB, including an order to pay a sanction, is an interference with the judicial process that provides good cause for suspending or removing the privilege of appearing before the WCAB.

For this reason it was ordered that “that the Appeals Board intends to suspend the privilege of Professional Lien Services, Inc., and Mike Traw of appearing before the Workers’ Compensation Appeals Board pursuant to Labor Code section 4907 for ninety (90) days unless good cause is shown why the suspensions should not be imposed.”

Court of Appeal Affirms Termination of Injured LAPD Officer

On October 5 or 6, 2011 Richard Gurrola, a Police Officer II with the City of Los Angeles, suffered a back spasm, which was a flare-up of a prior work-related injury. He scheduled an appointment with Dr. Simon Lavi, who had treated the initial injury, but could not get an appointment earlier than October 11, 2011. Dr. Lavi’s office, which had previously backdated medical notes for Gurrola, assured him he would receive injured on duty (IOD) pay notwithstanding the delay in seeing the doctor.

What followed was numerous communications between Gurrola and the LAPD about his status, and the documentation that was needed from his doctors. Finally Gurrola was served with a personnel complaint and notice of relief from duty and proposed removal, suspension or demotion issued by Chief of Police Charlie Beck, charging him with one count of being absent from work without leave and one count of providing false statements during the investigation into his absence.

There was conflicting testimony from seven witnesses on the board of rights hearing on several points. The board of rights found Gurrola guilty of count 1 and not guilty of count 2 and he was terminated. He appealed his termination and the Court of Appeal affirmed in the unpublished case of Gurrola v City of Los Angeles.

In a mandamus proceeding to review an administrative order, the determination of the penalty by the administrative body will not be disturbed unless there has been an abuse of its discretion. In considering whether an agency abused its discretion, “the overriding consideration in these cases is the extent to which the employee’s conduct resulted in, or if repeated is likely to result in, ‘[harm] to the public service.’ [Citations.] Other relevant factors include the circumstances surrounding the misconduct and the likelihood of its recurrence.”

Using this standard the Court of Appeal concluded “Although the penalty of termination is harsh, these facts do not present the exceptional case in which reasonable minds cannot differ: The board properly found that public service was compromised by Gurrola’s two-month absence from work without leave, requiring other personnel to cover his shifts. In addition, the evidence supports a finding Gurrola’s actions were consistent with a pattern of improperly taking extended absences from work.”

Benefits of Spinal Epidural Injections Remain Controversial

A new study published in the Annals of Internal Medicine and summarized by Reuters Health says that spinal epidural injections of steroids may relieve low back pain from a ruptured disc, but only briefly. And the injections offer no significant relief for pain related to narrowing of the spaces around the spinal cord, the researchers say. Some earlier studies have reached similar conclusions, but others have shown some benefit. Meanwhile, the use of epidural steroid injections has been increasing in the face of contradictory guidelines for physicians.

To clarify this confusing situation, Dr. Roger Chou from Oregon Health and Science University in Portland and colleagues sorted through the evidence from 63 published reports about the use of epidural steroid injections for treating low back pain from ruptured discs or spinal narrowing. “I think the important thing is for patients and clinicians to be able to make informed decisions,” Chou told Reuters Health by email. “Epidural corticosteroid injections are perceived as being more effective than they are.”

Spinal steroid injections brought immediate relief of pain and improvement in function in patients with ruptured discs, but not in patients with spinal narrowing, or stenosis, the researchers reported in Annals of Internal Medicine. Injections also seemed to reduce the need for disc surgery in the short term. But in the long term, the effects of injecting steroids epidurally were no better than the effects of a placebo, the researchers say, and there was no reduction in the need for surgery. It didn’t seem to matter what specific injection technique or which particular steroid was used.

The new analysis seems unlikely to settle any controversies, however. Dr. Zack McCormick, who specializes in physical medicine and rehabilitation at Northwestern University Feinberg School of Medicine in Chicago, told Reuters Health by email that because the studies available for analysis by Chou’s team were of low quality, the conclusions “cannot be applied to the realistic day-to-day practice of spine medicine. The goal of epidural steroid injection is not for long term ‘cure,’ but rather to (improve) symptoms in order to allow restoration of sleep, quality of life, and tolerance of physical therapy,” McCormick said.

Dr. Laxmaiah Manchikanti from the University of Louisville, Kentucky, who is CEO and Chairman of the Board of American Society of Interventional Pain Physicians, was also skeptical, and he told Reuters Health by email that patients with lower back pain from a ruptured disk or spinal stenosis should talk to their physician rather than trust the new conclusions. “Over a million people receive epidural injections either with steroids or with local anesthetic alone per year and at least 60% of them receive significant relief,” he said.

Dr. Steven P. Cohen, a pain specialist at Johns Hopkins School of Medicine in Baltimore, Maryland told Reuters Health by email, “I do not think we should categorically discontinue epidural steroid injections for either of these conditions, but we need to limit their use to those people who are most likely to benefit, and to only repeat them if patients obtain clearly defined improvements in function and quality of life. Otherwise, the costs and risks may outweigh the benefits.”

CWCI Report Confirms Decade of Relentless Cost Increases

A new CWCI update report takes an look at California workers’ compensation medical and indemnity loss trends,comparing paid losses on claims from 2002 through 2014.

The data shows that between 2002 and 2013, the average amount paid on indemnity claims at 12 months post injury for medical benefits, excluding medical management/medical cost containment (MCC), increased by 30.3 percent (from $5,859 to $7,631). In 2011, the average medical payments on indemnity claims at the 12-month valuation registered a brief decline, falling 4.1 percent to $6,988, before climbing back up again over the next two years,

Given the timing of the implementation of the various SB 863 reforms and the reductions in average medical payments at the 3- and 6-month benchmarks between 2013 and 2014, the recent results suggest that key provisions of the SB 863 medical reforms (i.e., the phase-in of the RBRVS fee schedule beginning in January 2014; the reinstatement of lien filing fees, the reductions in ambulatory surgery center fees, and the adoption of the IMR dispute resolution process) did have an immediate effect on the cost of medical services rendered during the initial period following the injury. The ultimate impact of the 2012 reforms on longer term treatment costs remains to be seen.

However the medical management/medical cost containment (MCC) expenses triggered by reforms skyrocketed over this same time period. Measured at 24-months post injury, average MCC payments rose from $685 in 2002 to $1,003 in 2005 (+46.5 percent), then increased over the next 7 years to a record $2,333 in 2012 — a net increase of 240.7 percent from 2002.

There was an immediate decline in average TD payments that coincided with the implementation of the 104-week cap in April 2004. By 2005, however, average TD payments at 24 months had already started trending up again, and by 2006 average first-year payments were also up sharply. It was not until 2008 that the 24-month TD benefits surpassed the pre-reform 2004 level, and it was not until 2009 that average first-year payments exceeded the pre-SB 899 amount.

There was a net increase of 152 percent in the average amount paid for first-year med-legal reports between 2002 and 2013.

Implant Fraud Strikes Again!

The allegations in the Pacific Hospital of Long Beach criminal and civil litigation claims that fake hardware has been implanted in the spines of hundreds of victims. These allegations raise questions about surgeries in general. For example, it is now common to have hip or knee implants, or stents placed in an artery. Yet does anyone know who manufactured the surgical part, why that part was selected over any other part, what was the manufacturers warranty or if that was the best choice at the time it was made? Or, was it chosen because of kickbacks or other reasons? Consumers spend hours choosing the latest flat panel TV, but essentially zero time learning about a costly surgical part before it is implanted. Yet recent news continues to provoke questions about how surgeons select surgical products.

For example, the United States Attorney announced that Dr. Paul S. Singh, 55, of Tehachapi, pleaded guilty to mail fraud for a scheme to defraud his patients and their insurers by implanting and billing for unapproved intrauterine devices (IUDs). Singh had an office in Tehachapi. He provided obstetric and gynecological services to women. One form of birth control he provided were IUDs, which the Food and Drug Administration (FDA) regulates. The FDA has approved only one IUD that uses copper as its active ingredient, the ParaGard T-380A, which was sold only by its manufacturer and not available on third-party websites. The insertion of a non-FDA-approved copper IUD risks a patient’s safety. It can result in an increased risk of pelvic inflammatory disease, ectopic pregnancy, hysterectomy, and other serious complications.

According to court documents, Singh bought unapproved IUDs on the Internet but fraudulently billed his patients and their insurers as if he had inserted FDA-approved IUDs, all without the permission or consent of his patients, Singh was sent multiple bulletins and newsletters warning against the use of unapproved IUDs. He was also warned that products sold by online pharmacies were not identical to the ParaGard T-380A and had not been approved as safe and effective by the FDA. In spite of the warnings, Singh purchased unapproved IUDs from online retailers and implanted them in numerous patients without their consent.

In August 2010, agents from the FDA confronted Singh about his history of implanting unapproved IUDs. During the meeting, Singh agreed to stop implanting them in his patients. Agents later conducted a search warrant of Singh’s office in 2012 and learned that he had continued to implant unapproved IUDs in his patients.

Singh failed to advise his patients of the risks of unapproved IUDs or of the fact that one had been implanted in them. According to the plea agreement, many of Singh’s patients later complained to him and other doctors about medical complications they associated with Singh’s insertion of the IUD. In multiple instances, Singh responded to such complaints by re-inserting the IUD rather than removing it. Some patients ultimately had to switch doctors in order to have the IUD removed. Singh profited from the implanting unapproved IUDs by billing his patients and their insurers for the higher cost of approved IUDs, which was false and fraudulent.

Singh is scheduled to be sentenced by United States District Judge Anthony W. Ishii on November 23, 2015. Singh faces a maximum statutory penalty of 20 years in prison and a $250,000 fine.

Insurer to Pay $6 Million Fine

Geico, a large multi-line insurer licensed in California, has agreed to pay $6 million dollars and implement several changes to their business practices, as part of a settlement with the California Department of Insurance. The settlement stems from a petition in which Consumer Federation of California alleged Geico’s online premium quoting system was discriminatory and misleading to consumers.

Based on information obtained through extensive testing of the Geico website, Consumer Federation of California discovered the insurer misrepresented a $100,000/$300,000 limit quote as being a lowest-limits quote, when in fact, it was not. Consumer Federation of California alleged in their petition that these higher policy limits were only quoted to certain consumers, based on their education level, occupation and gender.

Though insurers may also offer and sell policies with higher limits, California law requires insurers to offer a minimum limits policy of $15,000/$30,000. Geico’s online premium quoting system was inaccurately describing quotes for higher limits as the lowest limits.

Insurance Commissioner Dave Jones issued an order approving the settlement agreement and requiring Geico to discontinue using consumers’ education level or occupation to quote coverage limits, and to offer a quote for a $15,000/$30,000 policy to certain consumers for the next three years. The insurer has also agreed to submit to twice-yearly audits of their website for the next three years, to ensure they are complying with the law.

Owner of Three LA Clinics Pleads Guilty in Fraud Case

The owner and operator of three medical clinics located in Los Angeles pleaded guilty last week to submitting more than $4.5 million in fraudulent claims to Medicare.

Hovik Simitian, 48, of Los Angeles, pleaded guilty before U.S. District Court Judge Beverly Reid O’Connell of the Central District of California to one count of conspiracy to commit health care fraud. Sentencing has been scheduled for Nov. 16, 2015.

Simitian owned and operated three medical clinics that were located in the Los Angeles area: Columbia Medical Group Inc., Life Care Medical Clinic and Safe Health Medical Clinic, all in the same office buillding. In connection with his guilty plea, Simitian admitted that, from approximately February 2010 through June 2014, he and his co-conspirators paid cash kickbacks to patient recruiters who brought Medicare beneficiaries to the clinics. Simitian also admitted that he and his co-conspirators billed Medicare for lab tests and other services that either were not medically necessary or were not actually provided to the Medicare beneficiaries, and that, to support the bills to Medicare, he and others created false documentation reflecting that the services had been provided.

Simitian further admitted that, between February 2010 and June 2014, he and his co-conspirators submitted approximately $4,526,791 in false and fraudulent claims to Medicare.Medicare paid approximately $1,668,559 of those claims.

Quoting and Binding Comp Online Grows in Popularity

Since the platform emerged in the 1990s, the popularity of online workers’ compensation programs has grown along with carrier appetites – for reasons beyond simple convenience. This growth demonstrates that quoting and binding entirely online has clear advantages for the insured, agent and underwriter, including quick turn-around times and capturing detailed data.

According to the report in PropertyCasualty360, online workers’ compensation programs may currently comprise a small percentage of the total workers’ compensation market, but they are excellent for addressing the insurance needs of certain types of businesses. Internet workers’ compensation best serves small to mid-sized employers as a stand-alone coverage. This typically means manufacturers, artisan contractors, service industry risks and others that can be easily pre-qualified through carrier-specific underwriting rules.

Agents and brokers, increasingly accustomed to always-available, online platforms, have developed high expectations for the speed of quoting and binding. Speed benefits everyone – faster quoting frees up underwriters to focus on servicing, while giving agents more time to focus on generating new business.

With online portals, agents don’t need to submit paperwork and wait for a desk underwriter to approve it. Instead, they enter information and quickly get a quote – sometimes instantly. When they receive the quote, they also receive in real time the documents needed to present that quote, such as the rating worksheet details and the Accord application. They have the option to bind the account, giving them the ability to quickly move on to the next proposal. This is the closest agents can get to “one-stop shopping;” with everything handled through the Internet portal.

Carriers’ Internet workers’ compensation programs have pre-defined underwriting rules built-in. Once the agents understand those rules, they can significantly reduce the time they spend trying to pre-qualify accounts; they understand which accounts would not usually pre-qualify.

For underwriters, Internet workers’ compensation programs allow access to an enormous amount of data. That’s because data can be captured through online submissions. This data allows underwriters to use analytics to confirm they are attracting the right risks while getting the underwriting results they expect. Using analytics to determine your specific underwriting appetite, is a critical part of the Internet process. There are large amounts of data stored within most Internet programs that can be used not only to determine missed opportunities but also to identify areas that need improvement.

More Major Publishers Admit to Fraudulent Journal Articles

UR and IMR supports its decision on treatment guidelines derived from peer reviewed published medical journal articles. This sounds like a straight forward process. But, now there is a marked increase in the number of scientific and medical articles being retracted because of fraud, or suspected fraud. According to Retraction Watch, “[t]he number of papers retracted by all publishers for fake peer reviews since 2012 is now approximately 250, with another 32 flagged for peer review fraud . . . but not yet retracted.” Retraction Watch estimates that approximately 1,500 papers have been retracted overall since 2012.

This week a major publisher of scientific and medical articles has confirmed that it is retracting 64 articles from 10 of its subscription journals based on concerns that the peer review process was “compromised.” The publisher, Springer, issued this statement:

“Springer confirms that 64 articles are being retracted from 10 Springer subscription journals, after editorial checks spotted fake email addresses, and subsequent internal investigations uncovered fabricated peer review reports. After a thorough investigation we have strong reason to believe that the peer review process on these 64 articles was compromised. We reported this to the Committee on Publishing Ethics (COPE) immediately. Attempts to manipulate peer review have affected journals across a number of publishers as detailed by COPE in their December 2014 statement. Springer has made COPE aware of the findings of its own internal investigations and has followed COPE’s recommendations, as outlined in their statement, for dealing with this issue. Springer will continue to participate and do whatever we can to support COPE’s efforts in this matter.”

The Springer journal collection includes more than 2.500 English-language and close to 200 German-language journals. Springer is also home to the largest portfolio of open access journals, including the journals from BioMed Central and the SpringerOpen portfolio. The announcement from Springer about the 64 retracted articles is brief – it does not say which papers were withdrawn or where they were published. Nor does it identify the source of the fake reviews The announcement comes nine months after 43 studies were retracted by BioMed Central (one of Springer’s imprints) for the same reason.