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Category: Daily News

Quoting and Binding Comp Online Grows in Popularity

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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.

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More Major Publishers Admit to Fraudulent Journal Articles

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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.

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Jury Convicts Operators of Gardena Ambulance Company

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A federal jury in Los Angeles convicted the former owner, operator and managers of a Southern California ambulance company of health care fraud charges in connection with a Medicare fraud scheme of at least $2.4 million.

In health care fraud cases in the past, the prosecutions tended to be for “ghost billing,” for illegal kickbacks or for services clearly not provided. These past years have brought on a large number of new cases where the services were provided but there are allegations of “no medical necessity.” A recent example is the case filed against ProMed Medical Transportation in the Central District of California which was successfully prosecuted.

Yaroslav Proshak, aka Steven Proshak, 47, of Valley Village, California; Emilia Zverev, 58, of Van Nuys, California; and Sharetta Michelle Wallace, 37, of Inglewood, California, each were convicted this week of one count of conspiracy to commit health care fraud and five counts of health care fraud following a two-week trial. Proshak’s sentencing is scheduled for Nov. 24, 2015, and Zverev’s and Wallace’s sentencing is scheduled for Nov. 30, 2015, all before U.S. District Judge S. James Otero of the Central District of California, who presided over the trial.

Proshak owned and operated ProMed Medical Transportation, an ambulance transportation company in the greater Los Angeles area that provided non-emergency ambulance transportation services to Medicare beneficiaries, many of whom were dialysis patients. Zverev was the billing manager, and Wallace supervised ProMed’s emergency medical technicians (EMTs).

The evidence at trial demonstrated that, between May 2008, and October 2010, the defendants conspired to bill Medicare for ambulance transportation services for individuals whom the defendants knew did not need such services. In addition, the evidence showed that the defendants instructed EMTs who worked at ProMed to conceal the true medical conditions of patients they were transporting by altering requisite paperwork and creating fraudulent documents to justify the transportation services. According to the Indictment, the government contended that the owner and manager altered the “run sheets” completed during the ambulance transportation and instructed employees to alter the “run sheets” and to ensure that they did not write certain terms to indicate that they were ambulatory or able to walk.

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Uber Sued Over Lack of Workers’ Compensation Insurance

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An LA-based Uber driver who says he was beaten up by a customer filed a class action accusing the ride-hailing upstart of refusing to buy workers’ compensation insurance.

According to the report in Courthouse News Service, Uber driver and lead plaintiff Omar Zine on Friday sued Uber Technologies, Rasier LLC, Rasier-CA, Laju Choudhury, and a person identified only as Doe Assailant, in LA County Superior Court.

The California Labor Commission in June rejected Uber’s arguments that it is a “neutral technological platform,” finding that the company is “involved in every aspect of the operation.” Given that involvement, the commission determined that drivers are properly classified as employees and ordered Uber to pay driver Barbara Berwick $4,152 in reimbursable business expenses.

Nevertheless, the plaintiff alleges that Uber still classifies drivers as independent contractors so it can avoid covering them under workers’ compensation insurance. This lack of coverage meant he could not drive and earn income for weeks after a customer’s friend beat him up, according to the complaint.

The plaintiff says he was driving Choudhury and Doe in December 2014 when he and Doe got into an argument: “A verbal dispute occurred and Doe assailant escalated this situation by repeatedly, and viciously, punching and hitting plaintiff in the face and head. Attorneys say that the assailant used a metal pipe or similar object during the assault. “He is driving again, but is not able to go back to full-time work,” his attorney added. He is now allegedly permanently disabled and has struggled with depression, anxiety, sleeplessness, and humiliation after the “heinous beating” he suffered.

He also claims there are thousands of current and former drivers who are entitled to workers’ compensation benefits they never received because Uber misclassified them as independent contractors. Zine wants a declaration that Uber must classify all drivers as employees, restitution for himself and all class members for all the profits Uber made by failing to protect them with workers’ compensation coverage, and special, punitive and exemplary damages for unfair business practices, assault and battery.

Uber has been the target of several similar lawsuits since the 2013 suit brought by former drivers claiming they were misclassified as contractors. In June this year, Uber drivers Lori Kellett and David Cotoi of Los Angeles sued Uber for allegedly failing to pay overtime and regular wages and not providing them with meal and rest breaks. An administrative law judge in mid July recommended that Uber be fined $7.3 million for breaking several California laws, such as failing to report on disabled accessibility requirements and problems with drivers. Uber stated that it would appeal the ruling.

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One Week Left Before Medical and Provider Fraud Symposium

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On Thursday August 27 the San Bernardino District Attorney’s Office in association with the Employers’ Fraud Task Force and Floyd, Skeren and Kelly is presenting an educational symposium on Medical and Provider Fraud in the Workers’ Compensation System. Only one week remains to register for this event.Learn from law enforcement officials and workers’ compensation professionals, who’s gaming the system and what you can do about it. Here is the agenda for the day.

8:00 a.m. – Registration/Continental Breakfast/Networking
9:00 a.m. – Welcome and Introductions: David Simon, Lead Deputy DA, SBDA’s Office, Workers’ Compensation Fraud Unit
9:15 a.m. – Why do Some Doctors Cheat and Become Crooks: David C. Hall, Ph.D., QME Clinical Psychologist
9:50 a.m. – Medical Fraud and Abuse: Trends and Solutions: Laura Clifford, Executive Director, Employers’ Fraud Task Force
10:45 a.m. – Compounding Pharmacy Fraud: Suzanne Honor-Vangerov, Managing Attorney, Floyd, Skeren and Kelly; Tony Park, Attorney, California Pharmacy Law
11:45 a.m. – Suspected Fraudulent Claims Best Practices: David Simon, Lead Deputy DA, SBDA’s Office; Laureen Pedroza, Bureau Chief, Ca. Dept. of Ins. Fraud Division
1:15 p.m. – Current Trends with Liens: Suzanne Honor-Vangerov, Managing Attorney- Lien Unit, Floyd, Skeren and Kelly
1:50 p.m. – Up coding: Gary Auer, SIU Director, Anthem Blue Cross
2:30 p.m. – Chiropractor Rules, Regulations, Enforcement, Complaints: Robert Puleo, Executive Officer, State of California Board of Chiropractic Examiners and Maria Martinez, Special Investigator
3:25 p.m. – Ethics: Terry Smith Managing Partner, Floyd, Skeren and Kelly,Troy Slaten, Managing Partner and Robert Dudley, Attorney, Floyd, Skeren and Kelly

The symposium will take place at the Ontario Police Department, 2500 S. Archibald Ave, in Ontario, CA. The $55 registration fee includes continental breakfast and all materials. Register using the online form, or you can pay by mailing a check by printing and filling out this registration form (PDF). For additional information contact Laura Clifford lauraclifford@sbcglobal.net.

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DWC Advice for Panel Requests Between Sept 3 and October 1.

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The DWC will implement a new online panel process for represented initial panel requests on October 1, 2015. DWC will no longer accept or process paper submissions postmarked after September 3, 2015. The new process requires parties in a represented case to submit initial QME panel requests online and immediately receive a QME panel. The requesting party will then serve the panel request form, any required documentation and the QME panel on all parties with a proof of service.

The DWC has posted an online QME Form 106 Panel Request training video and FAQs on the Medical Unit website. The video demonstration details the way in which represented initial panel requests will be submitted using the new online system.

However, the question remains “what is the process for QME panel requests between September 3 and October 1?” We posed this question to the medical unit this week and received this response.

“The Medical Unit will not accept Form 106 panel requests between Sept. 3 and Oct. 1. All panel requests on paper Form 106 must be postmarked no later than Sept. 3, 2015. No panel requests will be processed for any represented initial panel requests postmarked after that date. This will give the Medical Unit an opportunity to process all of the paper requests. Pursuant to 8 CCR section 31.1(c), if the Medical Director is unable to issue a QME panel in a represented case within 30 calendar days from receipt of the request, parties may seek an order from a worker’s compensation administrative law judge. Although the Medical Unit will not process any represented initial panel requests submitted after Sept. 3, 2015, the parties will be able to generate a panel list automatically as of Oct. 1, 2015. Therefore, despite not processing any requests during that time period, the delay will be less than 30 calendar days for obtaining a panel list.”

What this means is that the DWC will utilize the time between September 3, 2015 and October 1, 2015 to process all current paper requests. Although the Unit will not process any paper panel requests submitted after September 3, 2015, you will be able to generate a panel list automatically as of October 1, 2015. The timing should be carefully managed.

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New Law Adds Insurance Industry Oversight

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Assembly Bill 553, authored by Assembly Member Tom Daly, was signed into law by Governor Brown. Sponsored by Insurance Commissioner Dave Jones, AB 553 establishes new oversight tools to reduce the number of insolvencies of insurance companies and bring U.S. standards for regulating insurance companies in compliance with established international standards.

“As the largest insurance market in the country, California is again leading the way in improving the regulation of insurance companies,” said Commissioner Jones. “AB 553 includes an urgency clause so California can have these new consumer protection tools in place as soon as possible. I’d like to thank Assembly Member Daly for authoring this important bill.”

Supported by insurance industry stakeholders, AB 553 improves oversight of the corporate governance of insurers by aligning state law with new and improved standards developed by the National Association of Insurance Commissioners (NAIC) in two key areas:

1) Improved oversight of the corporate governance policies and practices of insurance companies;including their board management structure, code of conduct, and risk-management processes. New disclosures and filings will assist the Commissioner in determining the overall financial and corporate capacity of companies to conduct business in California, and identify troubled companies quickly enough to avoid insurance company insolvencies that would jeopardize consumers.
2) Preserved national system of state-based insurance regulation by clarifying the role of state insurance departments as group-wide supervisors over multi-national insurance groups, as part of the Insurance Holding Company System Regulator Act.

The primary purpose of AB 553 is to make sure California insurance regulatory laws conform with national and international insurance regulatory laws and to provide the California Department of Insurance with additional resources for fulfilling its mission of overseeing the solvency of insurance companies.

The amendment to the Holding Company System Regulatory Act will clarify the roles of a group-wide supervisor between the states and the international insurance community.

AB 553 was approved by the Assembly and Senate unanimously. There was no opposition noted in the legislative record. As an “urgency statute” the bill takes effect immediately.

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More Than Half of Comp Costs Are Now Medical Benefits

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Workers’ compensation benefits as a share of payroll for injured workers continue to decline even as employment grows and overall employer costs increase, according to a new report from the National Academy of Social Insurance.

Historically, cash benefits have been a larger share of workers’ compensation benefits than medical payments to injured workers. Due to rising health care costs during the last 30 years, medical benefits now account for an increasing share of total workers’ compensation benefits, from 29 percent in 1980 to more than 50 percent in 2013. About 33 states currently spend more than half of their workers’ compensation spending on medical care for injured workers. California pays 54.7% of costs as medical benefits.

Despite the growth in employment following the Great Recession – and the significant uptick in employees eligible to receive workers’ compensation – benefits per $100 of covered payroll dropped to $0.98 in 2013, a 5 percent decrease from 2009. At the same time, the growing workforce has translated into rising workers’ compensation costs for employers – now $1.37 per $100 of covered payroll, a 5 percent increase from 2009.

Workers’ compensation benefits as a share of payroll were lower in 2013 than during almost any period in the last three decades, according to the report Workers’ Compensation: Benefits, Coverage, and Costs, 2013. Total workers’ compensation benefits in 2013 were $63.6 billion, while employer costs were $88.5 billion.

Benefits as a percent of payroll declined in 39 states between 2009 and 2013, continuing a national trend in lower benefits relative to payroll that began in the 1990s. “The decline is due to a drop in workplace injuries as well as changes in many state laws that made it more difficult for workers’ to qualify for benefits,” said John F. Burton, Professor Emeritus, Rutgers and Cornell University. “These state laws include more stringent compensation rules, the reduction of coverage for certain medical diagnoses, and new legal requirements that make it more difficult for workers to succeed in their claims for benefits.”

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DWC Sets Drug Formulary Meeting for September 14

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The DWC has scheduled a public meeting to discuss issues related to developing an evidence-based drug formulary for use in the workers’ compensation system. The meeting will be held on Monday, September 14, 2015 from 10 a.m. to noon at the Elihu Harris State Office Building Auditorium, 1515 Clay Street in Oakland.

This meeting is an opportunity for the public to provide input to the Division on developing and implementing a formulary. DWC will facilitate discussion on how to best achieve the intended goals of an evidence-based drug formulary in the workers’ compensation system, which include the following:

1) Improve appropriate care through the dispensing of evidenced-based medicine
2) Expedite pharmaceutical treatment for ill and injured workers
3) Reduce delays, including the reducing the need for elevated utilization review and independent medical review
4) Improve efficient delivery of medical benefits and reduce administrative costs.

At its most basic level, a formulary is a list of medicines. Traditionally, a formulary contained a collection of formulas for the compounding and testing of medication (a resource closer to what would be referred to as a pharmacopoeia today). Today, the main function of a prescription formulary is to specify particular medications that are approved to be prescribed under a particular public or private payment program. The development of prescription formularies is based on evaluations of efficacy, safety, and cost-effectiveness of drugs.

By the turn of the millennium, 156 countries had national or provincial essential medicines lists and 135 countries had national treatment guidelines and/or formulary manuals. In the US, where a system of private healthcare is in place, a formulary is a list of prescription drugs available to enrollees. When used appropriately, formularies can help manage drug costs. Most formularies cover at least one drug in each drug class, and encourage generic substitution (also known as a preferred drug list).

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“Most Wanted” Uninsured/Unlicensed Contracts Gets 9 Year Sentence

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Years of construction fraud and grand theft by scamming consumers out of thousands of dollars for asphalt driveway paving work will keep Alexander Pike Mitchell behind bars at least two additional years. Mitchell, who has a history of contracting without a license and abandoning jobs once he’s secured a down payment, pled guilty to three additional felony grand theft counts (Penal Code §487a) with a Harvey Waiver* on all dismissed accounts in Riverside Superior Court. Under a Harvey Waiver, the offender is required to pay restitution on all counts connected with the plea. Restitution orders are to be imposed based on the victim’s losses and benefits paid by the Victim Compensation Program.

The Contractors State License Board (CSLB) added Mitchell to its Most Wanted List in April 2013 after the San Diego County District Attorney’s Office issued a warrant for his arrest that included five counts of grand theft, diversion of funds, and two counts of elder abuse. Mitchell was suspected of scamming consumers in Santa Clara, Santa Cruz, Riverside, and San Diego counties.

On June 17, 2013, Mitchell pled guilty to two counts of grand theft in San Diego County Superior Court and agreed to pay victim restitution. He received a four-year sentence with a 50/50 split of the time, meaning he must serve two years in San Diego County Jail and two years on mandatory supervision. He was ordered to pay $9,300 in victim restitution in that case.

Shortly after that ruling, an additional 40-month state prison sentence was added to the term he already was serving for theft by false pretenses, operating without a contractor license with prior convictions, and a workers’ compensation insurance violation. Overall, Mitchell has been sentenced to serve a total of nine years and four months for all of his convictions.

“CSLB investigators find unscrupulous people like Alex Pike Mitchell every day,” said CSLB Registrar Cindi Christenson. “This is why we encourage everyone to check our website or call our toll-free line to make sure any contractor you’re considering is licensed and in good standing with CSLB.”

CSLB’s Most Wanted List was created as an added measure to protect California consumers from dishonest operators.

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