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NLRB Says USC Student Athletes are USC, Pac-12 and NCAA Employees

In 2020, activism among players at academic Institutions sky-rocketed. In addition to social rights issues, player groups sought open communication between players and university and NCAA leadership, and, ultimately, a “college football players’ association” to represent them.

And these players at Academic Institutions have been gaining more power as they better understand their value in generating billions of dollars in revenue for their colleges and universities, athletic conferences, and the NCAA. And their litigation is being closely followed by employment law communities.

In February 2021, General Counsel for the National Labor Relations Board, Jennifer Abruzzo, issued a memorandum (GC 21-08) on the status of college athletes as “employees” under the National Labor Relations Act. Statutory Rights of Players at Academic Institutions (Student-Athletes) Under the National Labor Relations Act,.

The student athletes also found support from the United States Supreme Court when it decided Alston v NCAA 141 S. Ct. 2141 (2021) in June of last year. SCOTUS recognized that amateurism in college sports has changed significantly in recent decades, and ruled that the NCAA can’t use the‘amateurism’ label to break antitrust laws.

Justice Kavanaugh, in his concurring opinion in Alston, went further. He strongly suggested that the NCAA’s remaining compensation rules also violate antitrust laws and questioned “whether the NCAA and its member colleges can continue to justify not paying student athletes a fair share” of the billions of dollars in revenue that they generate. Moreover, he suggested that one mechanism by which colleges and students could resolve the difficult questions regarding compensation is by “engag[ing] in collective bargaining.”

This SCOTUS decision is likely a precursor to more changes to come in college athletics. Specifically, commentators argue that, as courts “continue to chip away at NCAA restrictions on benefits to student-athletes, more compensation that is untethered to academics brings student-athletes more fully within ‘employee status’ under the law.”

After these successful legal developments, a group that advocates for college athletes in California filed unfair labor practice charges in February 2022, with the National Labor Relations Board on behalf of football players and men’s and women’s basketball players at UCLA and the University of Southern California. The charges, made by the National College Players Association, also name the NCAA and the Pac-12 Conference, essentially claiming that the association and the conference jointly employ the athletes along with the schools.

The filings follow a similar effort started by another athlete-advocacy group, the College Basketball Players Association, which filed a charge against the NCAA. Both bids come in the wake of the National Labor Relations Board’s general counsel memorandum in September.

Following this filing, on December 15, 2022, the Regional Director of the Los Angeles Region of the National Labor Relations Board the NLRB’s Division of Advice has directed the NLRB Region to pursue the NCPA’s unfair labor practice (ULP) charges against USC, the Pac-12 Conference, and the NCAA as joint, statutory employers of USC football players, men’s basketball players, and women’s basketball players.

At the request of NLRB’s Division of Advice, the NCPA agreed to withdraw its ULP charge against UCLA, a state funded school, but will continue against USC a private institution, and the NLRB’s Los Angeles Region will now take action to force a settlement with the employers to end the ULPs or prosecute the employers and go to trial.

If upheld, USC football and basketball players’ employee status under joint employers (college,conference, and NCAA) will ultimately apply to all FBS football players and Division I basketball players at private schools.

If the Pac-12 and NCAA are found to be employers, it could open the doors for athletes at other Football Bowl Subdivision schools to argue that they are employees, even if they attend public schools such as UCLA.

The NCPA’s case with the NLRB is the latest in a string of unionization efforts among college athletes and their advocates. Another recent effort came in 2014 and 2015, when Northwestern football players attempted to unionize. The NLRB declined to accept jurisdiction in the case, however, saying at the time that it did not have jurisdiction over public schools.

Private Equity Invests $206B In 1,400 Healthcare Acquisitions in 2021

Private equity firms pool money from investors, ranging from wealthy people to college endowments and pension funds. They use that money to buy into businesses they hope to flip at a sizable profit, usually within three to seven years, by making them more efficient and lucrative.

Private equity is rapidly moving to reshape health care in America, coming off a banner year in 2021, when the deep-pocketed firms plowed $206 billion into more than 1,400 health care acquisitions, according to industry tracker PitchBook, and has poured nearly $1 trillion into nearly 8,000 health care transactions during the past decade.

And this might become a cost and quality control problem for workers’ compensation claim administrators.

And according to an analysis of this data and report by Kaiser Health News. these investors are buying into eye care clinics, dental management chains, physician practices, hospices, pet care providers, and thousands of other companies that render medical care nearly from cradle to grave. Private equity-backed groups have even set up special “obstetric emergency departments” at some hospitals, which can charge expectant mothers hundreds of dollars extra for routine perinatal care.

As private equity extends its reach into health care, evidence is mounting that the penetration has led to higher prices and diminished quality of care, a KHN investigation has found. KHN found that companies owned or managed by private equity firms have agreed to pay fines of more than $500 million since 2014 to settle at least 34 lawsuits filed under the False Claims Act, a federal law that punishes false billing submissions to the federal government with fines. Most of the time, the private equity owners have avoided liability.

Private equity has flocked to companies that treat autism, drug addiction, and other behavioral health conditions. The firms have made inroads into ancillary services such as diagnostic and urine-testing and software for managing billing and other aspects of medical practice.

Private equity has done so much buying that it now dominates several specialized medical services, such as anesthesiology and gastroenterology, in a few metropolitan areas, according to new research made available to KHN by the Nicholas C. Petris Center at UC-Berkeley.

New research by the University of California-Berkeley has identified “hot spots” where private equity firms have quietly moved from having a small foothold to controlling more than two-thirds of the market for physician services such as anesthesiology and gastroenterology in 2021. And KHN found that in San Antonio, more than two dozen gastroenterology offices are controlled by a private equity-backed group.

Whistleblowers and injured patients are turning to the courts to press allegations of misconduct or other improper business dealings. The lawsuits allege that some private equity firms, or companies they invested in, have boosted the bottom line by violating federal false claims and anti-kickback laws or through other profit-boosting strategies that could harm patients.

“Their model is to deliver short-term financial goals and in order to do that you have to cut corners,” said Mary Inman, an attorney who represents whistleblowers.

Federal regulators, meanwhile, are almost blind to the incursion, since private equity typically acquires practices and hospitals below the regulatory radar. KHN found that more than 90% of private equity takeovers or investments fall below the $101 million threshold that triggers an antitrust review by the Federal Trade Commission and the U.S. Justice Department.

Fund managers who back the deals often say they have the expertise to reduce waste and turn around inefficient, or moribund, businesses, and they tout their role in helping to finance new drugs and technologies expected to benefit patients in years to come.

Critics see a far less rosy picture. They argue that private equity’s playbook, while it may work in some industries, is ill suited for health care, when people’s lives are on the line.

These expansions can lead to higher prices for patients, said Yashaswini Singh, a researcher at the Bloomberg School of Public Health at Johns Hopkins University.  In a study of 578 physician practices in dermatology, ophthalmology, and gastroenterology published in JAMA Health Forum in September, Singh and her team tied private equity takeovers to an average increase of $71 per medical claim filed and a 9% increase in lengthy, more costly, patient visits.

Singh said in an interview that private equity may develop protocols that bring patients back to see physicians more often than in the past, which can drive up costs, or order more lucrative medical services, whether needed or not, that boost profits.

“There are more questions than answers,” Singh said. “It really is a black hole.”

WCIRB Reports Premiums Up 7% – But Combined Loss Ratio is 111%

The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) has released its Quarterly Experience Report – As of September 30, 2022. This report is an update on California statewide insurer experience valued as of September 30, 2022.

Highlights of the report include:

– – Despite continued declines in insurer rates, written premium for the first three quarters of 2022 is 15% above that for the same period of 2021. Much of the increase is being driven by higher employee wage levels and the continued economic recovery.
– – Premium on policies incepting in the first nine months of 2022 is 7 percent higher than premium on policies incepting in the first nine months of 2021.
– – The average charged rate for the first three quarters of 2022 is 7 percent below that for 2021 and the lowest in decades.
– – The projected loss ratio for 2021, including the cost of COVID-19 claims, is 6 points above that for 2020 and 13 points above that for 2019.
– – Projected loss ratios have been growing steadily since 2016, mostly due to declining insurer rate levels and modest increases in average claim severity.
– – The projected combined ratio for 2021, including COVID-19 claims, is 8 points higher than 2020 and 35 points higher than the low point in 2016.
– – Excluding COVID-19 claims, the projected combined ratio for 2021 is 111% and the projected ratio for 2020 is 101%, which are still higher than those of recent prior years.
– – Indemnity claims had been settling quicker through the first quarter of 2020, primarily driven by the reforms of SB 863 and SB 1160.
– – A significant surge in the share of COVID-19 claims occurred in December 2021 and January 2022, driven by the Omicron variant.
– – COVID-19 indemnity claim frequency dropped significantly following the January 2022 surge but modestly increased through July during the recent surge of infections in California.
– – Projected total indemnity claim severity for 2021, excluding COVID-19 claims, is 1% below 2020 but 13% above 2017.
– – Following several years of flat indemnity severities, the projected indemnity severity for 2021 is 1% higher than 2020 and 19% higher than 2017.
– – The projected medical severity for 2021 is 2% lower than 2020 but 12% higher than 2017.
– – Pharmaceutical costs per claim decreased by 84% from 2012 through 2021.

The information presented reflects a compilation of individual insurer submissions of information to the WCIRB. While the individual insurer data submissions are regularly checked for consistency and comparability with other data submitted by the insurer as well as with data submitted by other insurers, the WCIRB can make no warranty with respect to the information provided by third parties.

Factoring Decline in Life Expectancy When Reserving Lifetime Awards

Reserving is one of the most important aspects of claim handling. Whether it is a normal run of the mill lost time claim, or a claim with benefits payable over the remaining life of the insured worker, the goal is always the same: To accurately place the proper amount of money or reserves in the claim for the duration of the claim.

The claims examiner will typically take the periodic rate of benefits and the estimate of ongoing medical expense, and then compute the yearly estimated cost, and then multiply that by the number of years of anticipated remaining lifespan this worker is expected to have.

Life expectancy has increased in the U.S. for many decades, resulting in a lifetime reserve estimate increasing over time. A few years ago, this trend reversed, with data showing life expectancy in the U.S. was declining.

And now two annual reports released Thursday by the Center for Disease Control shows U.S. life expectancy is at a two-decade low and drug overdoses have risen five times in the last 20 years.

The drop was primarily due to increases in COVID-19 and drug overdose deaths. The data are featured in two new reports from CDC’s National Center for Health Statistics (NCHS).

The first report is “Mortality in the United States: 2021” which features the public release of final mortality data for 2021, and the report documents that there were 3,464,231 total deaths in the United States during 2021 – 80,502 more than the total reported in 2020.

The death rate for the entire U.S. population increased by 5.3% from 835.4 deaths per 100,000 population in 2020 to 879.7 in 2021. As a result, life expectancy at birth for the U.S. population decreased from 77 years in 2020 to 76.4 years in 2021.

The 10 leading causes of death in 2021 were largely unchanged from 2020, except chronic liver disease and cirrhosis became the 9th leading cause of death in 2021 while influenza and pneumonia dropped from the list of 10 leading causes. Heart disease remained the leading cause of death in the United States, followed by cancer and COVID-19.

Males’ life expectancy decreased slightly more than females by a difference of 5.8 years. Non-Hispanic American Indian or Alaska Native (AIAN) females had the highest death rate increase at 7.3%, with non-Hispanic white males coming in second at 7.2%, with AIAN males and black men still ranking at the top for overall deaths in 2021.

A second report, “Drug Overdose Deaths in the United States, 2001-2021,” showed that overdose deaths, which account for more than a third of all accidental deaths in the United States, have risen five-fold over the past two decades.

The official number of drug overdose deaths among residents in the United States for 2021 was 106,699, nearly 16% higher than the 91,799 deaths in 2020.

The CDC’s second report showed an increase in drug overdoses in all age categories of adults 25 and over between 2020 and 2021. Adults aged 34-44 had the highest rates at 53.9 per 100,000 but the 65 and over category saw the largest overall increase from 2020 to 2021 by 28%.

The rate of drug overdose deaths involving synthetic opioids other than methadone (drugs such as fentanyl, fentanyl analogs, and tramadol) increased 22% from 17.8 in 2020 to 21.8 in 2021.

From 2020 to 2021, the rate of drug overdose deaths involving cocaine increased 22% (from 6.0 to 7.3) and the rate for deaths involving psychostimulants with abuse potential (drugs such as methamphetamine) increased 33% (from 7.5 to 10.0).

The rate of drug overdose deaths involving heroin decreased 32% from 4.1 in 2020 to 2.8 in 2021.

Hospital Size and Teaching Status Produce Better Orthopedic Outcomes

In end-stage ankle arthritis, joint cartilage has worn away and pain occurs as bone rubs against bone. Although less common than arthritis of the hip or knee, the pain and disability of end-stage ankle arthritis affect patients as much as severely disabling physical conditions such as end-stage hip arthritis, end-stage kidney disease, and congestive heart failure.

End-stage arthritis of the ankle joint affects more than 50,000 people in the US. In up to 80% of cases, the condition is posttraumatic,with the 3 most common traumatic causes being rotational ankle fractures (37%), recurrent ankle instability (15%), and single sprain with continued pain (14%).

When conservative treatments do not provide enough relief, surgical options should be considered. Ankle replacement, or ankle arthroplasty, is a surgical procedure to replace the damaged articular surfaces of the human ankle joint with prosthetic components.

This procedure is becoming the treatment of choice for patients requiring arthroplasty, replacing the conventional use of arthrodesis, i.e. fusion of the bones. The restoration of range of motion is the key feature in favor of ankle replacement compared to arthrodesis.

The popularity and utilization of total ankle arthroplasty (TAA) as treatment for ankle arthritis has increased exponentially from 1998 to 2012.

Overall the outcomes have improved for TAA with the introduction of new-generation implants and this has increased the focus on optimizing other variables affecting outcomes for TAA. However, there is little data regarding other variables which affect TAA procedure outcomes

A new study was conducted in order to improve this current limited information, “The Impact of Hospital Size and Teaching Status on Outcomes Following Total Ankle Arthroplasty,” was published online in The Journal of Foot & Ankle Surgery last month. The purpose of this study was to examine the effects of hospital characteristics and teaching status on outcomes for total ankle arthroplasty (TAA).

The Nationwide Inpatient Sample (NIS) database was queried from 2002-2012 using the ICD-9 procedure code for TAA. A total weighted national estimate of 16,621 discharges for patients undergoing TAA was reported over the 10-year period.

The primary outcomes evaluated included: in-hospital mortality, length of stay, total hospital charges, discharge disposition, perioperative complications, and patient demographics.

Analyses were carried out based on hospital size: small, medium, and large; and teaching status: rural non-teaching, urban non-teaching, and urban teaching.

The analysis showed that the size of a hospital and teaching status produced better overall ankle arthroplasty patient outcomes. Rural, non-teaching hospitals had higher odds of perioperative complications. There were also significant differences in length of stay and total charges when comparing hospital sizes.

Overall, there is no increased risk of mortality after TAA regardless of hospital size or setting.

Vani J. Sabesan, M.D., FAAOS, FAOA, a shoulder and elbow/sports medicine specialist in Florida and his colleagues wrote in their study, “Our analyses demonstrated important factors affecting cost and resource utilization for total ankle arthroplasty, clearly additional work is needed to optimize this relationship, especially in the upcoming bundled payment.”

Fake Doctor Charged for 2nd Offense of Illegal Botox Injections

A Saratoga, California man has been charged with posing as a doctor to perform an unlicensed Botox injection on a woman, which comes on the heels of him avoiding a jail sentence after he was prosecuted for similar acts in Miami, according to authorities and court records.

The Mercury News reports that 37 year old Brody Amir Moazzeni faces one felony count of practicing medicine without certification. The case was filed in Santa Clara County, and he was arraigned December 14, and faces a maximum sentence of a year in county jail if convicted on the charge.

Deputy District Attorney Ann Huntley said the charge is based on an allegation by a 26-year-old Stockton woman who met Moazzeni – who in the South Bay criminal complaint has listed aliases of Amir Moazzeni and Gianni Muzzati – through the Bumble dating app.

According to the investigation, the woman said she knew the defendant as Gianni Muzzati, and that he told her he was a doctor opening his own cosmetic clinic. The two began a romantic relationship, and on Sept. 25, 2021, they met at a Sunnyvale hotel where Moazzeni allegedly offered to give her free Botox injections in her face and other injections in her torso.

Huntley said that a few weeks later, the woman noticed her right eyelid was drooping and saw an ophthalmologist who told her her procedure was not done properly. After she got her eyelid treated, Moazzeni continued to pressure her into letting him do more cosmetic work, leading her to question his qualifications.

He was implicated in a similar case in March 2021 when he was charged with practicing unlicensed medicine and sexual battery involving a woman in Miami Beach, Florida, according to court records there.

Court records show that Miami-Dade prosecutors initially filed at least seven felony and misdemeanor charges against Moazzeni, but ultimately pursued two felony counts and one misdemeanor count, all involving the unlicensed medicine accusations. Those same records show that Moazzeni was allowed to participate in a pretrial diversion program to avoid a potential conviction and jail time, and that his charges were dropped Sept. 23 after he completed the program.

That was two days before the reported Botox encounter in Sunnyvale that led to his criminal charge in Santa Clara County. The new alleged offense has no consequence for his case in Florida since it was dismissed, according to the Miami-Dade State Attorney’s Office.

Still, that overlap has Huntley and investigators concerned there could be other women who received unlicensed cosmetic work from Moazenni and suffered health problems as a result.

“Given the sensitive nature of how he manipulates women,” Huntley said, “these women might feel used and bamboozled because of the way they were taken advantage of.”

To this point, Huntley said, there is no evidence that the defendant ever asked for payment for the procedures.

Moazzeni is currently out of jail custody and is scheduled to return to court Feb. 28. Anyone with information about the case, or other people who might have received unlicensed medial procedures from the defendant, can contact Santa Clara County DA Investigator Krissi Durant at 408-792-2567.

WCAB Orders Attorney to Identify Name of Employer per Rule 10390(a)

Thomas David Williams suffered an industrial injury while employed by Mac Kenzie Electric Inc., who was insured by the State Compensation Insurance Fund. In addition to insured benefits paid by SCIF, Williams pursued a Serious and Willful Misconduct claim against the employer.

On August 2, 2021, the WCJ found in relevant part that defendant “MACKENZIE ELECTRICAL INC.” is guilty of Serious and willful Misconduct thereby entitling Williams to an increase in compensation and attorneys’ fees of 15% thereon..

On reconsideration, Williams contends that the award should have specified the dollar amount of $537,449.36 pursuant to the parties’ previous stipulations. Subsequently, Williams filed an amended Petition, requesting that the award be issued against “Mac Kenzie Electric Inc.” rather than “MacKenzie Electric Inc.”

The employer contends that the WCJ failed to apply the appropriate legal standard for serious and willful misconduct; that applicant did not meet his burden to prove serious and willful misconduct by defendant; that the WCJ did not address all of the evidence in her decision.

The employer’s Petition for Reconsideration was denied, but the applicant’s was granted in the panel decision of Williams v Mac Kenzie Electric Inc – ADJ2167155 (December 2022).

This case involved the often overlooked requirement that litigants must set forth “the party’s full legal name” on the pleadings they file in cases before the WCAB.

In deciding this case, the panel pointed out that WCAB Rule 10390(a) (Cal. Code Regs., tit. 8, §10390(a)) requires that any party that appears or files a pleading before the WCAB shall set forth “the party’s full legal name on the record of proceedings, pleading, [or] document.”

Pursuant to AD Rule 10205.5 (Cal. Code Regs., tit. 8, § 10205.5), the Division of Workers’ Compensation (DWC) maintains the “official participant record” or official address record (OAR) for all cases, and all parties must ensure at all times that they are correctly identified on the OAR.

Here, based on the panel;s review of the record, it was not clear from the record whether defendant is “MacKenzie Electric, Inc.” or “Mac Kenzie Electric, Inc.”

The panel further stated that “This conflict is particularly underscored by the circumstances here where the individuals appear to use both last names interchangeably, and there is no doubt that this information is within defendant’s knowledge. Instead, as noted previously, defendant failed to respond to the WCJ’s recommendation to change its name, thereby causing further delays. Moreover, as explained above, it is defendant’s responsibility to communicate with DWC as required by AD Rule 10205.5 to correct any discrepancies in its name.

The employer’s Petition for Reconsideration is by “MacKenzie Electric, Inc.,” “insured by State Compensation Insurance Fund” and is filed by an attorney for defendant State Compensation Fund, Marjorie A. Marenus. Throughout the Petition, defendant consistently refers to itself as “MacKenzie Electric,” and attached to the Petition is a declaration signed under penalty of perjury by “Patrick MacKenzie” and a declaration signed under penalty of perjury by “Denis MacKenzie.”3

In Exhibit R, titled as “Bill of Sale of John Deere 310D Backhoe Loader to Ed Ernst,” the bill of sale is on letterhead titled “MacKenzie Electric, Inc.” with license # 664395, the seller is listed as “Patrick MacKenzie, President” and the transferor is listed as “Patrick MacKenzie.” Yet, the California State License Board lists “Mac Kenzie Electric Inc” for license # 664395 and “Denis Anthony Mac Kenzie” and “Patrick Christopher Mac Kenzie” as personnel associated with the license. (See Evid. Code, § 452(c) [allowing judicial notice of official acts by an executive department].)

We strongly emphasize that defendant must comply with its obligations under WCAB Rule 10390(a) and AD Rule 10205.5. More significantly, failure to provide the correct information may impede applicant’s ability to proceed against defendant under section 5806. Again, if defendant is uncooperative, the WCJ should consider whether sanctions are appropriate.”

We direct defendant’s attorney Marjorie A. Marenus and State Compensation Insurance Fund to immediately review the OAR and make any necessary changes, and to promptly notify the WCJ thereafter.

In the meantime, we will leave the award intact, but we will also defer the issue to the WCJ to determine whether the name of the defendant should be changed, and upon return, the WCJ can consider whether to hold an evidentiary hearing.

Labor Commissioner Collects $1.3M for Bakersfield Contractor Violations

The Labor Commissioner’s Office collected $1,331,682 in wages and penalties, resulting from a prevailing wage assessment against Bakersfield-based subcontractor Grant Construction, Inc.

The wages collected will compensate 27 workers for unpaid prevailing wages while working on a farmworker housing construction project in the City of Wasco in Kern County.

The public works investigation determined that wage theft had occurred in the form of kickbacks and non-reporting of all hours worked. It found that a Grant Construction crew leader would collect the paychecks of the 27 workers, sign and cash them, and then pay the workers significantly less than the amount listed on their checks.

“The law requires that workers on construction projects with $1,000 or more public funds must be paid no less than the prevailing wage,” said Labor Commissioner Lilia García-Brower. “These workers held Grant Construction accountable for cheating them out of their legal wages.”

The City of Wasco hired Wallace & Smith Contractors as the prime contractor to build a $42 million farmworker housing complex with 66 apartments. Wallace & Smith Contractors hired subcontractor Grant Construction, Inc., to bring in carpenters and siding workers for the job.

The Labor Commissioner’s Office opened its investigation in February 2019 after a complaint of public works violation was filed by a worker claiming underpayment of wages and non-payment of travel and subsistence. The worker stated he was paid in cash for work performed on the project.

The investigation also confirmed that Grant Construction, Inc. failed to report all the workers and hours worked on the Certified Payroll Reports (CPR) and falsified the CPRs, paychecks, and paystubs.

The Labor Commissioner’s Office cited Grant Construction, Inc., in June 2020, for underpayment of prevailing wages to 27 workers, civil penalties, and training funds. The company was not required to pay liquidated damages because it timely deposited the full assessment amount in August 2020. However, the company requested a review of the assessment, and the hearing was held in May 2021.

The Department of Industrial Relations Director issued a decision upholding the assessment in May 2022. A judgment was entered on the decision of the Director in August of 2022 for a total of $1,389,395, including interest.

The Department of Industrial Relations’ Division of Labor Standards Enforcement, also known as the California Labor Commissioner’s Office, combats wage theft and unfair competition by investigating allegations of illegal and unfair business practices.

All workers employed on public works projects must be paid the prevailing wage determined by the Director of the Department of Industrial Relations (DIR), according to the project’s type of work and location. Failure to comply with public works requirements can result in civil penalties, criminal prosecution, or both. Employees with questions about their rights may call the Labor Commissioner’s Office at 833-LCO-INFO (833-526-4636).

The Labor Commissioner’s Office launched the Reaching Every Californian interdisciplinary outreach campaign in 2020. The campaign amplifies basic protections and builds pathways to affected populations, so workers and employers understand legal protections, obligations, and the Labor Commissioner’s enforcement procedures. Californians can follow the Labor Commissioner on Facebook and Twitter.

San Diego Pain Management Doctor and Office Manager Indicted

Dr. David J. Smith, a pain management physician, and his office manager, Julia Ann Oertle, are charged in a federal grand-jury indictment with perpetuating a long-running scheme to commit healthcare fraud and to manufacture and distribute adulterated fentanyl.

After his initial appearance in federal court, Smith’s bond was set at $1 million, secured by real property, with a limitation on his ability to practice medicine. Oertle was still at large.

According to allegations in the indictment, Smith purports to specialize in the installation and maintenance of intrathecal pain pumps which are surgically placed in a patient’s stomach with two catheters implanted on the spine; pain medicine is then infused into a reservoir in the pump periodically, and meted out directly into the spine.

Beginning in December 2017, Smith and Oertle began compounding fentanyl citrate into vials, in a room at Smith’s principal medical practice, San Diego Comprehensive Pain Management Center. According to the indictment, this compounding practice was grossly improper and resulted in the production of adulterated fentanyl. Smith nevertheless directed administration of this fentanyl to patients repeatedly.

The indictment alleges that beyond providing patients with adulterated fentanyl, Smith violated the applicable standards of care by, among other things, prescribing materially excessive quantities of fentanyl, prescribing unnecessary oral opioid medications in conjunction with pain-pump medication, and installing pain pumps in patients without proper assessments for patient need.

Smith then had false and fraudulent reimbursement claims submitted to Medicare for these administrations. Among other things, the claims were inflated by nearly 60 percent; they sought reimbursement for large volumes of unnecessarily manufactured fentanyl; they falsely represented that excess fentanyl had been discarded, when in fact it was used; and they did not disclose that the fentanyl was adulterated.

According to the indictment, Oertle illegally ordered fentanyl citrate for compounding; compounded fentanyl with Smith; and helped direct the illegal billing practices.

Smith has bad disciplinary charges brought against him by licensing authorities in both California and Nevada.

In June 2022 the Board of Medical Examiners of the state of Nevada, in disciplinary case 22-47823-1, alleged that Smith filed an application to practice medicine with them in September 2017. He was asked if he had ever been investigated by any other medical licensing board, and he answered “no” to that question. However, they claim he was “repeatedly” investigated by the California Medical Board prior to his application with them. Additionally he allegedly had malpractice cases pending against him that he did not disclose.

In proceedings before the California board, a final order and Decision dated August 25, 2020, in Case No. 800- 2015-013651, the California Board found that Smith committed acts of gross negligence, repeated negligent acts, failed to maintain adequate and accurate medical records, and unprofessional conduct in the care and treatment of multiple patients. The California Board found Smith incompetent in the care and treatment of a patient, and that he excessively prescribed controlled substances to three (3) patients.

Effective October 15, 2020, the California Board revoked Smith’s license to practice medicine in the State of California, with the order stayed, and he was placed on probation for seven (7) years subject to numerous terms and conditions.

In a subsequent California matter, a final order and Decision dated December 22, 2021, in Case No. 800-2018-042234, the California Board found that Smith committed acts of gross negligence in the care and treatment of three (3) patients, repeated negligent acts, excessively prescribed controlled substances, and failed to maintain adequate and accurate medical records in the care and treatment of two (2) patients, and unprofessional conduct.

Effective January 21, 2022, the California Board again revoked Respondent’s license to practice medicine in the State of California, with that order stayed, and was placed on probation for the duration of Respondent’s probation in the prior matter, Case No. 800-2015-013651, until the anticipated end date of October 14, 2027, subject to additional terms.

NLRB Reinstates Off-Duty Employee Rights to Access Employer’s Property

3-2 decision, in a closely followed employment law case, the National Labor Relations Board reinstated its prior 2011 standard, which applied a more expansive right of off-duty contractor employees to access publicly accessible areas of the primary employer’s workplace, for the purpose of engaging in organizing activity. The new decision overturns Bexar County I, 368 NLRB No. 46 (2019)

In this newest case, (Bexar County II) the San Antonio Symphony leases performance space from the Bexar County Performing Arts Center Foundation d/b/a Tobin Center for the Performing Arts.

On the evening of February 17, 2017, about a dozen Symphony employees sought to peacefully leaflet on the sidewalk in front of the main entrance to the Tobin Center. The Symphony employees had been distressed to learn that Ballet San Antonio had opted to use recorded music, rather than live music, for its production of Tchaikovsky’s Sleeping Beauty. The use of recorded music denies the Symphony employees the opportunity to work at the performance by playing the score. Because of financial difficulties, the Symphony had already had to furlough the Symphony employees for 3 weeks during the 2016–2017 season.

To raise awareness among Ballet San Antonio’s patrons about the use of recorded instead of live music, the Union decided to leaflet before the performances.

Event staff and San Antonio police officers at the Respondent’s direction immediately informed the Symphony employees that they could not distribute the leaflets anywhere on the Respondent’s property, including the sidewalks. The Symphony employees were forced to relocate across the street off the Tobin Center grounds onto a public sidewalk where there were fewer patrons.

This reaction lead to litigation before the NLRB, and two decisions, Bexar I – and after remand from an appellate court –  Bexar II.

Congress passed the National Labor Relations Act in 1935, during the New Deal era. Under section 7 of the NLRA employees’ rights include more than just the right to form a union. The NLRA protects any concerted employee activity undertaken for mutual aid. Employee actions have to meet several standards to deserve protection.

At issue in both Bexar I and II is the application of section 7. An underlying problem central to these two cases is that Section 7 only confers rights directly to employees, not to unions or their nonemployee organizers. The off-duty employees who work for a contractor of a property owner do not fit neatly into these categories.They are neither employees of the property owner nor are they nonemployees with no relationship to the property owner’s property where they work.

Precedent for the problem in the Bexar cases dates back to 2011, when the Board in New York New York considered whether off-duty food service employees had the right to engage in organizational leafleting of customers outside their employer’s place of business – not on their employer’s property, but in the public areas of a hotel-casino for which they and their employer provided services integral to the property owner’s business. (New York New York Hotel & Casino, 356 NLRB 907 (2011)).

In Bexar County I, the Board acknowledged that the New York New York test – which had been approved by the D.C. Circuit – controlled this case. Nonetheless, the Board overruled New York New York and announced a new standard to govern off-duty contractor employees’ access to the property where they regularly work (but that is not owned by their employer) to engage in Section 7 activity.

On appeal of Bexar I, the D.C. Circuit held that the Board’s new access standard was arbitrary. The court permitted the Board on remand to “decide whether to proceed with a version of the test it announced and sought to apply in this case or to develop a new test altogether.

On remand the NLRB noted its “agreement with the D.C. Circuit’s conclusion that the Bexar County I standard it established “is arbitrary in the way that it implements its new standard.” Part of the Board’s task in devising an access standard for off-duty contractor employees is to ensure that it only reaches those contractor employees with a sufficient connection to the property to merit Section 7 access rights.

The NLRB concluded in Bexar County II, that it would return to the New York New York Hotel & Casino, 356 NLRB 907 standard, which held that a “property owner may lawfully exclude [off duty contractor] employees only where the owner is able to demonstrate that their activity significantly interferes with his use of the property or where exclusion is justified by another legitimate business reason, including, but not limited to, the need to maintain production and discipline (as those terms have come to be defined in the Board’s case law).

Applying the New York New York test here, the NRLB affirmed the judge’s finding that Bexar County violated Section 8(a)(1) by excluding the Symphony employees from the Respondent’s property to distribute union leaflets to the Respondent’s patrons about an issue affecting the Symphony employees’ terms and conditions of employment, specifically their number of hours of work. “They had a Section 7 right to inform the public about Ballet San Antonio’s use of recorded instead of live music, which directly affected the Symphony employees’ working conditions.”

“In order to protect contractor employees’ Section 7 rights, we believe that it is appropriate for us to apply the New York New York test to this case and to all pending cases.”