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Category: Daily News

SEC Probes Staffing Company Workers’ Comp Reserves

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Barrett Business Services, the Vancouver, Wash.-based supplier of staffing and outsourced human resources services, is under investigation by federal authorities in a case involving the company’s workers’ compensation reserves. In a filing with the U.S. Securities and Exchange Commission, Barrett said the SEC has launched an investigation of the company’s “accounting practices with regard to its workers’ compensation reserves.” The news pushed the company’s stock down $14.54, or 29 percent, to $35.01 Tuesday.

The public filing by the company stated “BBSI has been informed by staff at the San Francisco office of the Division of Enforcement of the Securities and Exchange Commission (“SEC”) that it has obtained a Formal Order of Investigation in connection with its review of the Company’s accounting practices with regard to its workers’ compensation reserves. The Company is cooperating fully with the SEC staff in providing the requested information.”

During the company’s first-quarter earnings conference call in April, Michael Elich, president and CEO of Barrett, said the company continued to maintain a “proactive, positive position” related to workers’ compensation expense The context of the company’s discussion of workers’ compensation costs was its announcement in the third quarter of last year of an $80 million increase in reserves for payments of drawn-out workers’ compensation claims.

In the aftermath of that announcement, the company was hit with a shareholder class-action lawsuit alleging Barrett, Elich and Chief Financial Officer Jim Miller violated federal securities laws. The suit arose after the company’s stock price plummeted on the heels of its announcement of increased workers’ compensation reserves. In a filing with the SEC, the company said it will defend itself against the litigation and that it believes “the claims are covered under our directors and officers’ liability insurance, and we have notified our insurance carriers of the claims.”

Barrett has clients with employees in 22 states and the District of Columbia through a network of 54 branch locations in California, Oregon, Washington, Idaho, Arizona, Nevada, Utah, Colorado, Maryland, Delaware and North Carolina.

Pursuant to SB 863 and Labor Code section 3701.9, effective January 1, 2015, the Company no longer maintains a certificate to self-insure in the state of California and now maintains individual policies with ACE Group (“ACE”) for all California-based clients. The arrangement, typically known as a fronted program, provides BBSI a licensed, admitted insurance carrier in California to issue policies on behalf of BBSI without the intention of transferring any of the workers’ compensation risk for the first $5.0 million per claim. The risk of loss up to the first $5.0 million per claim is retained by BBSI through an indemnity agreement. While this portion of the risk of loss remains with BBSI, ACE assumes credit risk should BBSI be unable to satisfy its indemnification obligations to ACE. ACE also bears the economic burden for all costs in excess of $5.0 million per claim. The agreement is effective through January 2016 with the potential for continued annual renewals. The Company makes monthly payments into a trust account established between the Company and ACE related to the new ACE fronted insurance program to be set aside for the payment of future claims. The balance in the trust account was $78.0 million and $50.1 million at March 31, 2015 and December 31, 2014, respectively. The trust account balance is included as a component of the current and long-term restricted marketable securities and workers’ compensation deposits in the accompanying consolidated balance sheet.

The company offers “professional employer organization” services. Under that system, Barrett becomes a co-employer of a client’s workforce, handling payroll, payroll taxes, workers’ compensation coverage and other administrative functions. Its staffing services include on-demand or short-term staffing, contract staffing, long-term on-site management, and direct placement. Barrett’s clients include electronics manufacturers, light-manufacturing industries, transportation enterprises, food processors and telecommunications firms.

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Constitutional Challenge to SB 863 Temp Agency Insurance Requirement Fails

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Labor Code section 3701.9, was added in 2012 as part of SB 863. This provision prohibits temporary services employers (TSE’s) and leasing employers (LE’s) from self-insuring their workers’ compensation liability. These entities that were self-insured in 2012 when SB 863 was passed had to become insured by January 1, 2015.

The concern addressed by section 3701.9 is that a self-insured staffing company may grow rapidly during a calendar year without a concomitant increase in its workers’ compensation self-insurance deposit. Self-insured employers do not pay insurance premiums; instead, they post a security deposit each year. A self-insured employer would not have to increase the security deposit for its increased payroll until the following year, unlike a typical employer with workers’ compensation insurance, which is required to pay an increased premium on newly hired employees as soon as they are hired. When a self-insured employer’s security deposit is insufficient, the obligation for the loss falls on the Self-Insurers’ Security Fund (Fund) (§§ 3742, 3743) and other self-insured employers may be charged a pro rata share of the funding necessary to meet the obligations of an insolvent self-insurer.

Kimco is a TSE. Kimco provides staffing solutions to various industries, including financial, healthcare and technical/engineering. Kimco has an internal staff in California of 137 employees, an average weekly workforce of more than 4,500 employees, and has filled approximately 300,000 staffing positions in California. KimstaffHR is an LE. KimstaffHR’s corporate office employs 17 individuals in California. In addition, KimstaffHR has more than 2,000 client-based employees who provide services to more than 100 businesses in the state. Since 2003, Kimco and KimstaffHR have participated in the California workers’ compensation self-insurance program.

Kimco filed suit in 2013 against the State of California seeking to have Labor Code section 3701.9 declared unconstitutional claiming a violation of equal protection under the Fourteenth Amendment to the United States Constitution and deprivation of equal protection under the California Constitution (Cal. Const., art. 1, § 7). The gravamen of the complaint is that section 3701.9, which eliminated the right of TSE’s and LE’s to self-insure, is invalid because it singles out these employers and prohibits them from participating in California’s workers’ compensation self-insurance program. In doing so it claims section 3701.9 “treats similarly situated entities differently and arbitrarily, and irrationally distinguishes between them.”

When a statute is challenged on equal protection grounds, a court’s initial inquiry is twofold. It first must determine whether the state has adopted a classification that affects two or more similarly situated groups in an unequal manner. If a challenged statute affects similarly situated groups unequally, the court must then decide whether to apply the strict scrutiny or rational basis test in analyzing the statute’s constitutionality.

The State supported its demurrer to the complaint with a request for judicial notice of a complaint filed in 2011 by the Fund against Mainstay Business Solutions (Mainstay) and other defendants in the Sacramento Superior Court (the Mainstay complaint) as an illustration of the “rational basis” for section 3701.9. In that action, the Fund alleged that Mainstay obtained a certificate of consent to self-insure from the Department, and that Mainstay and another defendant established a “payroll mill” and assumed the role of a ” ‘paper’ employer for payroll and workers’ compensation purposes.” The scheme enabled the codefendants in that action to avoid their statutory obligation to purchase workers’ compensation insurance for their employees. The Fund further alleged that Mainstay now was insolvent, and the Fund had been forced to assume the workers’ compensation liabilities of about 700 injured California employees whose employers had contracted with Mainstay “to provide temporary or leased employees.” Based thereon, the State argued a rational basis exists for section 3701.9’s differentiating between worksite employers who manage their own workforce and those employers who are only nominal employers providing payroll and other services to worksite employers.

The trial court sustained the demurrer and dismissed the complaint. The Court of Appeal affirmed in the published case of Kimco Staffing Services v State of California.

TSE’s and LE’s can change the scope of their workers’ compensation risk dramatically during the course of a year, by taking on new clients and adding employees to their payroll. While a TSE’s or LE’s payroll may grow rapidly during a calendar year, the company’s self-insurance deposit would not be adjusted until the subsequent year. (§ 3701, subd. (c).) The potential for a rapid increase in the number of employees, coupled with the delay in adjusting the amount of the self-insurance security deposit, is a rational basis for excluding TSE’s and LE’s from the workers’ compensation self-insurance program.

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SB 863 Buyers Remorse?

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Three years ago, the Legislature enacted and Gov. Jerry Brown signed SB 863, a significant overhaul of California’s multibillion-dollar system of compensating workers for job-related injuries and illnesses. It followed a well-established pattern in workers’ compensation politics. An article in the Sacramento Bee points out that about once a decade, the complex system undergoes revision, usually when several of the five major stakeholder groups make a private deal that takes something away from the others.

In 2012, employers and labor unions, with the friendly neutrality of insurers, ganged up on lawyers who specialize in disability cases and on providers of medical care and rehabilitation. The bill’s major provisions tightened up standards for medical and rehabilitation services to save money and increased cash benefits for disabled workers. By all accounts, it worked, at least from the standpoint of supporters. The Workers Compensation Research Institute reported recently that the average medical payment per claim declined by 5 percent in 2013, after several years of increases.

Meanwhile, the California Workers Compensation Insurance Rating Bureau recommended, and Insurance Commissioner Dave Jones approved, a 5 percent reduction in base premiums paid by employers for coverage – although their costs would remain the nation’s highest, averaging $3.48 per $100 of payroll in the latest survey.

Not surprisingly, those on the losing side three years ago want changes without waiting the traditional decade for another workers’ comp revision.

That attitude is expressed in Senate Bill 563, carried by Sen. Richard Pan, a Sacramento Democrat who is also a physician. It would partially undo the 2012 legislation by softening “utilization review” of medical treatments, aimed at approving only those deemed to be medically necessary. The bill would exempt a request for medical treatment by a physician from these requirements if the request meets specified conditions, including that a final award of permanent disability made by the appeals board specifies the provision of future medical treatment and that the request for medical treatment is for medical treatment that is specified by the award.

The Senate Bill Analysis proclaims that “Recently, UR has come under some scrutiny by stakeholders, many of whom argue that it is leading to a significant number of injured workers being denied care. This claim, however, is not currently supported by the data. As was discussed at the Committee’s March 25th oversight hearing, a recent study by the California Workers’ Compensation Institute (CWCI) found that only approximately 25% of medical treatment requests go through UR , with approximately 75% of the medical treatment requests approved. Once the approvals from UR and Independent Medical Review (IMR) are included, more than 94% of treatment is approved in California’s workers’ compensation system.”

Despite this Committee finding, sponsors of SB 563 contend that without changes, the current system denies injured workers badly needed treatment. The bill zipped through the Senate Labor Committee, with all four Democrats voting for it, three of whom had voted for the 2012 overhaul.

Their change of heart might have something to do with the bill’s supporters, who include, as one would expect, medical providers and lawyers, but also, oddly, the California Labor Federation, a sponsor of the 2012 legislation. Another supporter, the California Medical Association (CMA), citing a survey from its members, argues that California’s workers’ compensation system is facing significant challenges and CMA is concerned that IMR may incentivize and allow the denial of necessary patient care. CMA also cites a recent ProPublica article on workers’ compensation as possible evidence that necessary home healthcare is being denied to injured workers.

Whatever the reasons for labor’s flip, the California Chamber of Commerce has tagged SB 563 as a “job killer,” saying it “undermines the entire medical treatment review process.”

It will be interesting to see what Kevin de León does. He carried the 2012 bill – and trumpeted it loudly – but has since become the Senate’s president pro tem with, shall we say, broader priorities. And if the bill reaches Brown’s desk, would he be willing to undo, at least partially, something he’s already checked off his bucket list of accomplishments?

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Heroin Easier to Get than Oxycontin in California

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The number of young adults admitted to California hospital emergency rooms with heroin poisoning increased sixfold over the past decade, the state said, the latest evidence of growing abuse of the highly addictive drug.

According to the article in Reuters Health, heroin abuse has been on the rise across the United States, in part because it has become easier to obtain than prescription opiates like Oxycontin. “It’s consistent with what we’re seeing in our narcotic treatment programs – just a lot more young people,” said Tom Renfree, who heads substance abuse disorder services for the County Behavioral Health Directors Association in Sacramento.

“There’s been a real spike.” About 1,300 young adults between the ages of 20 and 29 were seen in emergency rooms in the state with heroin poisoning in 2014, more than six times the roughly 200 seen in 2005, the California Office of Statewide Health Planning and Development said. Emergency room visits for adults ages 30 to 39 doubled during the same period, from about 300 to about 600. Teens also were seen in higher numbers, the data showed, with 367 treated in 2014 compared with about 250 in 2005.

The statistics do not include patients who were admitted to the hospital after treatment in the emergency room, and the state did not say whether the patients lived or died.

Heroin poisoning is most commonly caused by overdose, but it can also include instances in which the user has been poisoned by a substance used to cut the drug, or other adverse effects.

A recent report from the U.S. Centers for Disease Control and Prevention showed that deaths from heroin overdoses nearly tripled from 2010 to 2013 in the United States.

Powerful prescription painkillers have become pricier and harder to use. So addicts across the USA are turning to this more volatile drug. According to an article in USA Today, the new twist: Heroin is no longer just an inner-city plague. Heroin in Charlotte has become so easy to get that dealers deliver to the suburbs and run specials to attract their young, professional, upper-income customers. These lawyers, nurses, cops and ministers are showing up in the detox ward at Carolinas Medical Center, desperate to kick an opiate addiction that often starts with powerful prescription painkillers such as OxyContin and Vicodin.

The center analyzed the patients’ ZIP codes to find out where heroin had taken root, says Robert Martin, director of substance abuse services at the medical center. “Our heroin patients,” he said, “come from the five best neighborhoods.” What Martin and others like him are witnessing is a growing and more dangerous wave of drug addiction sweeping the country, ensnaring a new population – several hundred thousand Americans – in the heroin trap and importing crime to America’s suburbs. Feeding the frenzy: Prescription painkiller addicts are finding their drug of choice in short supply, so heroin becomes their drug of last resort.

As addicts move from legitimate prescriptions to the black market of pure, precisely measured narcotic pain pills to the dirty world of dealers, needles and kitchen table chemists, health officials and police are noting sharp increases in overdoses, crime and other public health problems.

Statistically it is likely that this phenomena exists in the world of workers’ compensation claimants, at least to some degree. Yet, has anyone actually seen a case of admitted heroin addiction come across the desk of those of us who manage claims? Indeed, it is rare to get a history of a claimant admitting to an addiction to any illegal substance, yet public health information defies the accuracy of the histories we are being given.

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Insurance Commissioner Approves Comp Rate Reduction

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Insurance Commissioner Dave Jones adopted and issued a revised advisory pure premium rate, lowering the benchmark to $2.46 per $100 of payroll for workers’ compensation insurance, effective July 1, 2015. The commissioner adopted the recommendation of the Workers’ Compensation Insurance Rating Bureau (WCIRB), which filed a recommendation to lower the advisory pure premium rate mid-year. Mid-year pure premium rate adjustments are not the norm-new data reflecting a significant change in underlying workers’ compensation costs is required before the commissioner will issue a mid-year adjustment.

Jones issued the mid-year advisory pure premium rate one week after a public hearing and careful review of the testimony and evidence submitted. The commissioner reduced the advisory pure premium rate mid-year, based on insurers’ cost data indicating that in 2014 there was a reduction in workers’ compensation insurers’ medical costs. The reductions in medical costs appear to be the result of SB 863 (De León), signed in 2012. The WCIRB noted that not all of the cost reductions projected from SB 863 have materialized. Other costs continue to rise, but those increases were offset by the reduction in medical costs.

The WCIRB’s pure premium advisory rate filing demonstrated that workers’ compensation insurers continue to charge premiums that are close to the estimated cost of providing benefits and adjusting expenses. The rates actually charged to employers, however, are on average lower than the rates filed by insurers. Workers’ compensation insurance rates are not set by the Department of Insurance. Under California law, workers’ compensation insurers set their own rates.

The WCIRB will evaluate workers’ compensation insurance costs again in the fall of this year when it files its 2016 pure premium rate benchmark recommendation with the Department of Insurance. That filing will provide an opportunity to assess whether medical costs continue to be lower and what changes, if any, there are in other costs in the system.

The commissioner’s pure premium decision is advisory only. Under California law, the commissioner does not set or have authority to reject workers’ compensation insurance rates. The commissioner’s advisory pure premium rate is not predictive of what an individual insurance company may charge its policyholders because the review of pure premium rates is just one component of insurance pricing.

The purpose of the pure premium benchmark rate process is to review costs in the workers’ compensation insurance system and to confirm that rates filed by insurance companies are adequate to cover benefits for injured workers.

The mid-year pure premium rate benchmark of $2.46 per $100 of payroll is a 10.2 percent reduction in the current benchmark and 5 percent lower than the average industry-filed pure premium rate as of January 1, 2015, which was $2.59 per $100 of payroll.

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DWC Posts Draft Home Health Care Fee Schedule

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The Division of Workers’ Compensation posted draft home health care fee schedule regulations on its forum.

California Senate Bill 863 requires the Administrative Director to establish a fee schedule for home health services. Home health services range from skilled nurses and therapy services provided by home health agencies to unskilled personal care or chore services that may be provided by personal care aides. The 2015 RAND study, Home Health Care for California’s Injured Workers – Options for Implementing a Fee Schedule, identifies options for a single fee schedule that would cover the full range of home health services.

Under the proposed regulations, home health care services shall be provided as medical treatment only if reasonably required to cure or relieve the injured employee from the effects of his or her injury and prescribed by a licensed physician and surgeon, in accordance with Labor Code section 4600, subdivision (h). Home health care services are subject to the utilization review and independent medical review processes set forth in Labor Code sections 4610 and 4610.5, et seq.

An in-home assessment of the injured worker’s need for home health care shall be performed by a qualified registered nurse, physical therapist or occupational therapist employed by a home health care agency. Assessments of an injured worker’s need for home health care will be performed using CMS’s OASIS (Outcome and ASsessment Information Set), a group of standard data elements used by CMS to assess patients’ needs for home health care services, which is incorporated by reference into the regulations.

Table A of the proposed regulations set forth a payment methodology and fees for skilled care by licensed medical professionals and unskilled personal and chore services for injured workers in the home setting. The lowest hourly rate specified on this Table is for chore services and Homemaker services NOS at $13.60 per hour. A home health aide or certified nurse assistant, is $17.10 per hour, and attendant care services show an hourly rate of $17.48.

The draft regulations will be posted on the DWC forum for a period of 10 days. Stakeholders and members of the workers’ compensation community are invited to comment on the draft regulations. Comments will be accepted on the forum until 5 p.m. on May 17, 2015.

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Simi Valley Insurance Broker Arrested for Fraud

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Steven Tinto, 50, of Simi Valley, was arraigned Monday on two felony charges of insurance fraud and grand theft. Tinto allegedly pocketed a client’s premium payment instead of forwarding the payment to the insurer and compounded his crime by issuing a bogus insurance certificate.

Steven Tinto transacted business as Outback Insurance Services. In January 2014, Tinto received a $1,500 premium payment on a workers’ compensation insurance policy from a licensed contractor. Instead of sending the payment to the insurer, Tinto pocketed the cash. When a client of the contractor requested proof of insurance, Tinto faxed a bogus insurance certificate that indicated the contractor was insured for $100,000. When the ruse was discovered by the policyholder, Tinto issued two checks to his client as a supposed refund of premium. Tinto’s checks were returned due to insufficient funds and the policyholder was left exposed to the potential risk of an uninsured loss.

This case was investigated by the California Department of Insurance and is being prosecuted by the Ventura County District Attorney’s Office. Tinto is due back in court on June 8, 2015 for a preliminary hearing. “This case serves as a reminder that fraud is a costly crime for insurers and consumers,” said Insurance Commissioner Dave Jones.”Tinto’s alleged theft left the policyholder at great financial risk and their workers in danger because Tinto did not forward the premium to the insurance company, leaving the consumer without coverage.” As of April 30, 2014 Steven Tinto is no longer a licensed agent by the California Department of Insurance.

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CCWC’s 13th Annual Conference Set For July 22-24

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The California Coalition on Workers’ Compensation (CCWC) announces three days of idea generation, education, and unparalleled networking opportunities – enhanced by the thrills and excitement of Disneyland® – at the CCWC 13th Annual Conference, taking place July 22-24 at Disney’s Grand Californian Hotel® and Spa. CCWC is dedicated to providing the leadership, education, and advocacy that are essential to an equitable and efficient workers’ compensation system. Each year, it demonstrate this focused commitment by presenting a content-rich conference that addresses all aspects of the industry. At the CCWC conference, you’ll find participants from the areas of human resources, health and safety, risk management, and claims – as well as medical professionals and service providers. It’s the place where leaders, key decision-makers, and employers gather to experience and share diverse perspectives, energetic interactions and enough stimulating input to keep ideas brewing and evolving long after the conference ends.

Among the many speakers over the three day event, David Lanier, the Secretary of the California Labor and Workforce Development Agency and Christine Baker, the Director of the Department of Industrial Relations will provide an update on the implementation of SB 863 and discuss other issues that are relevant to workers’ compensation stakeholders on the Thursday, July 23 session. CCWC’s advocacy will provide an update on California politics as it relates to workers’ compensation. They will also present a review of 2015 bills that affect the industry, offering information regarding the positions that the CCWC has taken on them.

Alfonso J. Moresi, Commissioner, Workers’ Compensation Appeals Board/Senior Partner, Law Office of Laughlin, Falbo, Levy and Moresi, Richard L. Newman, Chief Judge for the California Department of Industrial Relations, Division of Workers’ Compensation and Mark Priven, Principal, Bickmore Risk Services will present a lively discussion among experts about workers’ compensation in Northern and Southern California. What are the differences so many refer to, and why do the discrepancies exist when legislation, regulations, and case law are the same for all?

Tim East, Director, Corporate Risk Management, The Walt Disney Company will present his topic “China Today – Workers’ Compensation Is Born in the World’s Oldest Country.” For the past 10 years, China has emerged as a dominant economic and political power. Yet the country’s workers’ compensation system is only that old, becoming widely mandated in 2004. Learn what is taking shape in one of the world’s most populous nations and how workers’ compensation compares to our experience in California and the United States.

Saul Allweiss Esq. and Cathey Jackson from Safeway will discuss “How to Properly Assess Requests for Home Health Care through UR and IMR.” This informative session will cover a variety of topics, including responding to requests for home health care, applying best practices, and requiring physicians to quantify the nature and extent of the HHC and demonstrate the medical necessity. Additional areas of focus will include the timely submission of requests for HHC to UR, the need for complete documentation in response to requests for IMR, and appropriate reimbursement rates. Challenges presented by recent WCAB decisions in Neri-Hernandez and Patterson will also be discussed.

Jamie Berenson from Glauber/Berenson and Rene Folse and Todd Kelly from Floyd, Skeren and Kelly will provide a case law update. This session will focus on the latest and most impactful decisions at the board and present how both defense and applicant attorneys view them. These and many, many other notable speakers will present topics of interest at the three day event.

Minimum Continuing Legal Education (MCLE) credits are available to attorneys, and general continuing education credits are available to claims adjusters and CPDM/CCMP-designated individuals who attend the educational sessions. The specific number of credit hours will be determined by the State Bar of California and the Insurance Educational Association. Updates will be provided on the conference web page.

The California Coalition on Workers’ Compensation is a member-driven alliance that has gained prominence for extensive industry knowledge and an unwavering focus on advocacy and educational outreach. We are committed to applying these skills and services in ways that will have the most positive impact on the workers’ compensation industry. Strategically positioned at the forefront of legislative and regulatory reform, CCWC enjoys a vantage point that enables us to make our voices heard for the benefit of public and private sector employers and their workers throughout California. Our legislative advocates influence and incite change on behalf of our members, offering an invaluable benefit that affects the workers’ compensation arena in ways that no other organization can.

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Study Shows 17 % of Discharged ER Patients Given Opioids

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Experts say too many patients are being prescribed opioid painkillers by emergency room doctors, and a program created by Obamacare could be enabling the problem. A new study released this week and summarized by the Washington Examiner found 17 percent of nearly 20,000 patients were discharged from emergency rooms with an opioid prescription. Experts and lawmakers say a push under Obamacare for hospitals to get good patient satisfaction scores is one cause of the problem.

America is in the midst of an opioid “epidemic,” according to the Centers for Disease Control and Prevention. Painkillers killed more than 16,000 people in 2013. A huge part of the problem is the prescribing of painkillers, which quadrupled from 1999 to 2013. Emergency room prescriptions are part of this trend, but data are lacking on the reasons opioids are given out, according to the study published in the Annals of Emergency Medicine.

Patients with back pain got the most opioids, followed by those with abdominal pain. “The majority of prescriptions had small pill counts and almost exclusively immediate-release formulations,” according to the study. Oxycodone, the active ingredient in Oxycontin, was the most prescribed, with 52 percent.

Doctors may feel pressured by hospital administrators to prescribe opioids because it may lead to a better score on a patient satisfaction survey, experts said. A program created by Obamacare tied extra funding to high scores on the survey. “Their reimbursement and quality ratings are linked to ways patients rate them on categories,” said Dr. Andrew Kolodny, president of the doctor advocacy group Physicians for Responsible Opioid Prescribing. The survey has three questions about pain, including whether the physician adequately treated pain. While it sounds like a benign question, “it forces physicians and surgeons to not only ask about pain but be sure they are prescribing appropriate medication,” said Dr. David St. Peter, a hospitalist with Saratoga Hospital in New York. St. Peter works to admit patients to the hospital if they need further treatment after the emergency room. The Centers for Medicare and Medicaid Services recently announced publication of a five-star rating system for hospitals based in part on satisfaction survey scores.

This practice hasn’t gone unnoticed by Congress. Sens. Chuck Grassley, R-Iowa, and Dianne Feinstein, D-Calif., wrote to CMS last year that the surveys could impact opioid prescribing. The senators cited news reports of doctors in South Carolina admitting to prescribing more opioids in response to patient survey scores. “One hospital with low satisfaction scores even went so far as to offer Vicodin ‘goody bags’ to patients discharged from its emergency room in an effort to improve its scores,” the letter from the senators reads.

Emergency doctors face other challenges. For instance, opioid addicts will sometimes injure themselves just to get access to a small amount of painkillers, said Kolodny. It can be hard to tell whether the patient is actually hurt or an opioid addict, said St. Peter, who is also vice president of medical affairs for Pacira Pharmaceuticals, which markets a non-opioid painkiller for surgeries. He said that state databases that log prescriptions could help. For instance, a patient could get 90 Oxycontins from a primary doctor and arrive in the emergency room asking for painkillers a few days later. “That is a red flag,” he said.

Some emergency room doctors are starting to incorporate addiction treatment into their practice. For instance, a recent clinical trial involved 329 opioid addicts treated in the emergency room at a teaching hospital from 2009-13. Doctors assigned 215 of the patients to counseling or an intervention group, and the rest prescribed buprenorphine which helps treat opioid addiction.The group that got buprenorphine was more likely to reduce opioid use than the others, according to the study published last week in the Journal of the American Medical Association.

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Copy Service Fee Regulations Effective July 1

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The Office of Administrative Law (OAL) has approved the Division of Workers’ Compensation’s (DWC) final version of the Copy Service Fee Schedule. The effective date of the regulations is July 1, 2015.

“The new copy service fee schedule, which was mandated by SB 863, is a flat $180 fee for a set of records from a single custodian. By reducing the items and services that can be separately billed, we expect fewer disputes and prompter payments. If there are disagreements about a copy service bill, the disputes can now be handled through Independent Bill Review instead of the more time consuming and costly lien process,” said DWC Administrative Director Destie Overpeck.

The Copy Service Fee Schedule regulations include the following:

1) Instead of a per-page fee and itemized fees for subpoena preparation, mileage, and other related fees, a flat fee of $180 covers records of 500 pages and under and includes mileage, postage, delivery, phone calls, page numbering, witness fees, release of information fees, and subpoena preparation.
2) Separate charges are allocated for cancellations, certificates of no record, for records obtained from EDD and WCIRB, and for additional sets for records.
3) For copies above 500 pages, an additional 10 cents a page is allowed.
4) Bills for copy services must include provider tax ID numbers, professional photocopier numbers, and claim numbers and may include newly-created billing codes.
5) DWC fees for transcripts will no longer be estimated. It will cost $100 to order a transcript of 33 pages and under; transcripts over 33 pages will cost an additional $3 a page. DWC fees for Public Records Act requests requiring staff research will be charged at $85 an hour instead of $40.
6) DWC can dispose of paper adjudication documents after 20 years.

Although the Fee Regulations become effective on July 1, claim administrators should be aware that photocopiers are already regulated by statute in California. A “professional photocopier” is defined by section 22450 of the Business and Professions Code. This code requires that a professional photocopier shall be registered by the county clerk of the county in which he or she resides or has his or her principal place of business, and in which he or she maintains a branch office. A certificate of registration shall be accompanied by a bond of five thousand dollars ($5,000) which is executed by a corporate surety qualified to do business in this state and conditioned upon compliance with the provisions of this chapter and all laws governing the transmittal of confidential documentary information. The county clerk shall maintain a register of professional photocopiers, assign a number to each professional photocopier, and issue an identification card to each one. Additional cards for employees of professional photocopiers shall be issued. A professional photocopier shall be responsible at all times for maintaining the integrity and confidentiality of information obtained under the applicable codes in the transmittal or distribution of records to the authorized persons or entities. At least one person involved in the management of a professional photocopier shall be required to hold a current commission from the Secretary of State as a notary public in California.

All records transmitted or distributed by a professional photocopier shall be accompanied by a certificate containing the name, address, and registration number and county of registration of the professional photocopier as well as other mandated information specified in Business and Professions code 22462. A failure to comply with the professional photocopier requirements shall be punishable as a misdemeanor. It would be advisable for claim administrators to verify that all photocopied records comply with these provisions.

The text of the copy service fee regulations can be found on the DWC website..

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