Category: Daily News

A new poll conducted by Employers Insurance found that more than one in 10 small business owners (13 percent) are concerned that one of their employees would commit workers’ compensation fraud by faking an injury or illness in order to collect benefits. It also found that nearly one-quarter of small business owners (24 percent) have installed surveillance cameras to monitor employees on the job and that one in five (21 percent) business owners feel unprepared or unsure of their ability to identify workers’ compensation fraud. .

The Insurance Journal reports that Ranney Pageler, vice president of fraud investigations at Employers, said the message of protecting your business from fraud resonates more loudly with those who have already been ripped off and seen their worker’s comp premiums rise. “You may have 90 percent of policyholders who aren’t paying attention,” he said, adding that for those who have been burned, “Boy, that is their hot button.” It’s a hot button for some agents too.

In the last 18 months Employers had three cases in California where workers’ comp fraud was proven because of videos, which showed the workers staging their injuries, according to Pageler. Two cases were in restaurant kitchens, and the other was in a warehouse, he said. The videos show the workers doing things like rearranging furniture or objects, kicking the objects, then screaming out in pain and getting hauled off in an ambulance. “That proves they weren’t injured, that they staged an accident,” he said.

By his account all three cases were investigated, criminal complaints were filed and convictions resulted in merely a matter of months – hyper-speed for the state’s unwieldy system. “All were decided well within a calendar year,” Pageler said. “What that (video) did was keep that claim from ever showing up on the policyholder’s experience rating.”

The reason there was no impact on the rating, or a corresponding premium increase, was because the cases were handled quickly, and total fraud was easily proved, he said. Unlike in partial fraud, a total fraud claim can be entirely removed retroactively with no impact to the rating.

For the survey, interviews were completed with a nationally representative sample of 501 small businesses that have fewer than 100 employees. Data were weighted by number of employees, region and industry to reflect the proportion of small businesses in the United States. The margin of error is +/-4.4%. Fieldwork was conducted from May 14 and 29, 2015.

General Reinsurance issued an excess insurance policy to San Francisco Bay Area Rapid Transit District (“BART”), which is a self-insured employer for workers’ compensation. This dispute arises out of a multiple myeloma workers’ compensation claim of a former BART employee, Michael Gonsolin who worked as a BART police officer. BART settled the case with Gonsolin at the WCAB which entered a Partial Order Approving Compromise and Release with Open Medical Award. One week after the settlement was approved BART sent a Notice of Claim to General Reinsurance, its excess carrier asking them to foot part of the bill.

BART contended that General Reinsurance was obligated to pay the claim because, as stipulated by the parties and approved by the WCAB, Gonsolin’s injury occurred during the policy period, and BART has reached its retention limit triggering General Reinsurance’s coverage. General Reinsurance contends that it has no obligation to pay because Gonsolin’s injury in fact occurred after its policy had ended.

In Phase One of the federal court trial, the Court had to decide whether the parties can litigate the date of injury; that is, whether for purposes of the application of the excess policy, General Reinsurance is bound by the decision of the WCAB. In the case of BART v General Reinsurance (Case No. 14-cv-01866-J) the Court held that it indeed had jurisdiction to adjudicate the correct date of injury, and that General Insurance was not bound by any determination at the WCAB.

Issue preclusion may operate as a bar to litigation of an issue that was decided in an earlier administrative proceeding “if the agency, acting in a judicial capacity, resolved disputed issues of fact properly before it, in a proceeding in which the parties had an adequate opportunity to litigate the factual issues.” Issue preclusion does not apply here because General Reinsurance was not in privity with BART in the workers’ compensation proceedings.”Plainly, General Reinsurance was not a party to the earlier proceedings.”

Phase Two of this case is set for bench trial on 2/1/2016 08:30 AM before Magistrate Judge Jacqueline Scott Corley. Clearly this case points to the need for an employer to have a strategy that would involve and bind the excess carrier to the outcome of the underlying WCAB case in order to avoid the double bind that seems to be developing in this case.

An aggravation of a medical condition as a result of treatment for an industrial injury can become a compensable consequence claim. Industrial injuries resulting in pain and inflammation are commonly treated with NSAID pain medications. But now the U.S. Food and Drug Administration (FDA) is strengthening an existing label warning that non-aspirin nonsteroidal anti-inflammatory drugs (NSAIDs) increase the chance of a heart attack or stroke.

“Based on our comprehensive review of new safety information, we are requiring updates to the drug labels of all prescription NSAIDs. As is the case with current prescription NSAID labels, the Drug Facts labels of over-the-counter (OTC) non-aspirin NSAIDs already contain information on heart attack and stroke risk. We will also request updates to the OTC non-aspirin NSAID Drug Facts labels.”

NSAIDs are widely used to treat pain and inflammation. NSAIDs are available by prescription and OTC. Examples of commonly used over-the-counter NSAIDs include ibuprofen (Motrin, Advil) and naproxen (Aleve); celecoxib (Celebrex), diclofenac (Cataflam, Voltaren) are prescription NSAIDs. Aspirin is also an NSAID, but it does not pose a risk of heart attack or stroke and is not covered by this new warning.

The risk of heart attack and stroke with NSAIDs, either of which can lead to death, was first described in 2005 in the Boxed Warning and Warnings and Precautions sections of the prescription drug labels. Since then, the FDA has reviewed a variety of new safety information on prescription and OTC NSAIDs. However, the FDA was not able to determine that the risk of any particular NSAID is definitely higher or lower than that of any other particular NSAID

The risk of heart attack and stroke achieved special notoriety with rofecoxib (Vioxx), a type of NSAID called a COX-2 inhibitor. It caused as many as 140,000 heart attacks in the U.S. during the five years it was on the market (Vioxx was removed from the market in 2004). The regrettable experience with Vioxx raised awareness about the cardiovascular risk of NSAIDs, and led to further studies showing that the risk is not limited to Vioxx but is associated with all NSAIDs.

NSAIDs can increase the risk of heart attack or stroke in patients with or without heart disease or risk factors for heart disease. A large number of studies support this finding, with varying estimates of how much the risk is increased, depending on the drugs and the doses studied. There is also an increased risk of heart failure with NSAID use.

This new FDA warding joins a list of two of the more common potential risks and complications of NSAIDs. Kidney damage and stomach problems. Most types of NSAIDs have a variety of other potential risks and complications associated with them. While most side effects are rare, some can be serious and even potentially fatal, so it is important for patients to remain aware of them and under supervision by a health professional.

The Division of Workers’ Compensation has posted on its rulemaking forum proposed revisions to the Workers’ Compensation Information System (WCIS) Regulations and the two California EDI (electronic data exchange) Implementation Guides published by DWC. The guides are the EDI Implementation Guide for First and Subsequent Reports of Injury (FROI/SROI) and the EDI Implementation Guide for Medical Bill Payment Records, Version 2.0.

Electronic Data Interchange (EDI) is the computer-to-computer exchange of data or information in a standardized format. In workers’ compensation, EDI refers to the electronic transmission of claims information from claims administrators (insurers, self-insured employers, and third party administrators) to a State Workers’ Compensation Agency.

Data are transmitted in a format standardized by the International Association of Industrial Accident Boards and Commissions (IAIABC). The IAIABC is a professional association of workers’ compensation specialists from the public and private sectors and has spearheaded the introduction of EDI in workers’ compensation. All collected data elements are reviewed for valid and standardized business definitions and formats.

The FROI/SROI Guide has not been updated since 2010 and is being revised to improve reporting efficiencies in response to feedback from trading partners and to increase the usefulness of the FROI/SROI data received by WCIS.

The EDI Implementation Guide for Medical Bill Payment Records, Version 2.0, was updated earlier this year but requires additional revisions to comply with reporting standards set forth in the IAIABC Workers’ Compensation Medical Bill Reporting Implementation Guide, Release 2.0, February 1, 2015 Publication. Compliance with this newer standard is essential to enable WCIS to collect data regarding compound and repackaged drugs. The proposed regulations and the draft revised Guides will be available on the DWC Forum for public comment until July 20, 2015.

Medical marijuana poses challenges for the workers compensation industry, but some experts and recent research say it could be an alterative to long-term opioid use. There’s a growing consensus among workers comp payers and doctors that any treatment that could reduce opioid dependency is something to look into, or something to keep an eye on.

Business Insurance reports that the Minnesota Department of Labor and Industry adopted a rule establishing criteria for long-term opioid treatment that also said medical marijuana is not an “illegal substance” for injured workers under state law. It remains illegal under federal law, however.

The U.S. Food and Drug Administration has not approved marijuana for any medical condition, so it’s difficult to compare its effects with other drugs used in workers comp, such as opioids, said Dr. Damon Raskin, a Pacific Palisades, California, internist who specializes in treating addiction and substance abuse. However, “the risk of death and other severe addiction issues with opiates make looking at (medical marijuana) more palatable,” he said. “Until I see good scientific evidence that this is something that works (for pain), it’s going to be hard to endorse,” Dr. Raskin said. “But if there’s a choice between opiates vs. medical marijuana, I will still pick medical marijuana if that helps the patient’s pain – If we can do anything except for opiates for pain, that’s ideal.”

But in a report published in a June issue of the Journal of the American Medical Association, Dr. Amy E. Thompson says “so far, evidence suggests that marijuana may be an effective treatment for chronic pain, neuropathic (nerve) pain and muscle spasms due to multiple sclerosis or paraplegia.”

In New Mexico, the state Court of Appeals has ruled three times since last year that medical marijuana is “reasonable and necessary” for injured workers and that it should be covered under workers comp. In each New Mexico case, physicians supported the use of medical marijuana when opioids and other medications failed to relieve injured workers’ chronic pain. In the most recent case, Sandra Lewis v. American General Media and Gallagher Bassett, Ms. Lewis’ health care provider opined that the “benefits of medical marijuana outweigh the risk of hyper doses of narcotic medications.”

Though medical marijuana is now considered a legal substance in Minnesota for workers comp, it won’t “be reasonable and necessary in all circumstances that it’s recommended,” Mr. Atchison said. “It provides a little guidance as to whether or not it’s still an illegal substance for the purpose of the law, but it doesn’t change the analysis that payers, insurers and employers have to go through when determining if treatment is compensable.”